Quick Facts
Investor Institutional
Ticker: BUFBX BUIBX
Daily Pricing:  
As of 9/29/2022  
NAV: $16.82 $16.81
$ Change: $-0.17 $-0.17
% Change:
-1.00% -1.00%
YTD:
-7.37% -7.27%
Inception Date: 8/12/1994 7/1/2019
Expense Ratio: 1.01% 0.86%
Total Net Assets: $460.41 Million  (6/30/22)
Morningstar Category: Large Value
Benchmark Index: Russell 3000
Dividend Distribution: Monthly
Related Material:
   Fund Fact Sheet Q2 2022
   PM Commentary Q2 2022
   Summary Prospectus
Fund Objective & Investment Process

The investment objective of the Buffalo Flexible Income Fund is primarily the generation of high current income and, as a secondary objective, the long-term growth of capital. To pursue its investment objectives, the Flexible Income Fund invests in both debt and equity securities.

The allocation of assets invested in each type of security is designed to balance income and long-term capital appreciation with reduced volatility of returns. The Flexible Income Fund expects to change its allocation mix over time based on the Fund managers’ view of economic conditions and underlying security values.

The Fund maintains a flexible investment policy which allows it to invest in debt securities with varying maturities. However, it is anticipated that the dollar-weighted average maturity of debt securities that the Fund purchases will not exceed 15 years.

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Our investment strategy seeks to generate yield for any investor needing monthly income with capital appreciation, and we use many methods to address potential downside risks.

John Kornitzer, Portfolio Manager

Morningstar Rating

       

Overall Morningstar Rating™ of BUFBX based on risk-adjusted returns among 1,154 Large Value funds as of 8/31/22.

Investment Style

Performance (%)

As of 8/31/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO FLEXIBLE INCOME FUND - Investor-5.81-0.978.3910.858.837.606.698.477.42
BUFFALO FLEXIBLE INCOME FUND - Institutional-5.77-0.838.6111.048.997.766.858.637.58
  Russell 3000 Index-3.51-16.92-13.2811.9011.2912.778.889.859.98
  Morningstar Moderately Aggressive Target Risk Index-5.00-15.60-14.635.995.977.75---
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-3.82-13.11-11.805.055.166.394.966.146.66
  Morningstar Large Value Category-5.89-8.83-4.799.678.3110.226.698.10-
As of 6/30/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO FLEXIBLE INCOME FUND - Investor-6.34-2.677.529.388.767.696.547.927.40
BUFFALO FLEXIBLE INCOME FUND - Institutional-6.37-2.607.689.528.917.846.698.087.56
  Russell 3000 Index-16.70-21.10-13.879.7710.6012.578.369.149.84
  Morningstar Moderately Aggressive Target Risk Index-13.36-17.76-14.894.615.957.82---
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-10.52-14.90-11.524.375.096.464.755.876.62
  Morningstar Large Value Category-11.24-11.33-4.847.957.8410.266.257.50-

 2012201320142015201620172018201920202021
BUFFALO FLEXIBLE INCOME FUND - Investor10.3116.683.59-1.979.9013.21-7.0018.76-2.2430.00
BUFFALO FLEXIBLE INCOME FUND - Institutional10.4716.853.75-1.8310.0713.38-6.8618.87-2.1030.21
  Russell 3000 Index16.4233.5512.560.4812.7421.13-5.2431.0220.8925.66
  Morningstar Moderately Aggressive Target Risk Index14.3320.184.97-2.4010.2118.89-6.7422.9513.5114.04
For performance prior to 7/1/19 (Inception Date of Institutional Class), performance of the Investor Class shares is used and includes expenses not applicable and lower than those of Investor Class shares.Performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance of the fund may be lower of higher than the performance quoted and can be obtained here. Performance is annualized for periods greater than 1 year. Each Morningstar category average represents a universe of funds with similar objectives.
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the Fund’s inception date. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.
Distributions
Record
Date
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
9/19/229/20/22$17.57 (Inv)

$17.57 (Inst)
$0.03790711

$0.04037947
-

-
-

-
$0.03790711

$0.04037947
8/17/228/18/22$18.82 (Inv)

$18.82 (Inst)
$0.03362030

$0.03585815
-

-
-

-
$0.03362030

$0.03585815
7/18/227/19/22$17.86 (Inv)

$17.85 (Inst)
$0.00688834

$0.00913984
-

-
-

-
$0.00688834

$0.00913984
6/17/226/21/22$17.63 (Inv)

$17.62 (Inst)
$0.04338733

$0.04578480
-

-
-

-
$0.04338733

$0.04578480
5/17/225/18/22$18.35 (Inv)

$18.34 (Inst)
$0.02507198

$0.02735278
-

-
-

-
$0.02507198

$0.02735278
4/18/224/19/22$19.37 (Inv)

$19.37 (Inst)
$0.00510800

$0.00652534
-

-
-

-
$0.00510800

$0.00652534
3/17/223/18/22$18.58 (Inv)

$18.57 (Inst)
$0.00875767

$0.01084725
-

-
-

-
$0.00875767

$0.01084725
2/17/222/18/22$17.95 (Inv)

$17.94 (Inst)
$0.01556058

$0.01779806
-

-
-

-
$0.01556058

$0.01779806
1/18/221/19/22$18.47 (Inv)

$18.46 (Inst)
$0.01406056

$0.01646594
-

-
-

-
$0.01406056

$0.01646594
2022 Distribution Dates:

Net Investment Income, if any – Record Date (10/17/22); Payment Date (10/18/22)

Net Investment Income, if any – Record Date (11/17/22); Payment Date (11/18/22)

Capital Gains, if any – Record Date (12/2/22); Payment Date (12/5/22)

Net Investment Income, if any – Record Date (12/19/22); Payment Date (12/20/22)
For historical distributions, click here.

Portfolio

Portfolio Characteristics
(As of 6/30/22) 
 
# of Holdings56
Median Market Cap$63.33 B
Weighted Average Market Cap$339.53 B
3-Yr Annualized Turnover Ratio3.54%
30-day SEC Yield1.93%
Top 10 Holdings
HoldingTicker / MaturitySector% of Net
Assets
MicrosoftMSFTTechnology8.49%
ChevronCVXEnergy4.15%
Hess CorpHESEnergy3.60%
ConocoPhillipsCOPEnergy3.57%
Costco WholesaleCOSTConsumer Staples3.53%
APA CorpAPAEnergy3.37%
Eli Lilly & CoLLYHealth Care3.04%
PfizerPFEHealth Care2.85%
QualcommQCOMTechnology2.81%
ExxonMobilXOMEnergy2.78%
TOP 10 HOLDINGS TOTAL38.19%
As of 3/31/22. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting
As of 6/30/22. Security weightings are subject to change and are not recommendations to buy or sell any securities. Sector Allocation may not equal 100% due to rounding.
Asset Allocation
As of 6/30/22. Allocation percentages may not equal 100% due to rounding.

Management

John Kornitzer
Portfolio Manager

54 Years of Experience

 View full bio

Paul Dlugosch, CFA
Portfolio Manager

25 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 6/30/22) — The stock market extended year-to-date losses during the 2nd quarter. Inflation, rising interest rates, and economic uncertainty continued to be major headwinds for investors as recession talks gained traction. The S&P 500 Index fell -16.10% during the quarter, bringing the total return for the first half of the year to -19.96%. News headlines, which included energy shortages, the war in Ukraine, China’s COVID lockdowns, and the potential for softer corporate earnings next quarter, added to the pessimistic market sentiment. However, the Federal Reserve’s hawkish stance on inflation, expectations for additional interest rate increases, and a reduction in the size of its balance sheet, continued to signal confidence in the U.S. economy moving forward.

The broad-based Russell 3000 Index declined -16.70% in the quarter. Value stocks fell less than growth stocks as the Russell 3000 Value Index returned -12.41%, versus a return of -20.83% for the Russell 3000 Growth Index. Relative performance slightly favored market cap size as large caps outperformed small caps in the quarter. Larger cap stocks, as measured by the Russell 1000 Index, returned -16.67% compared to the smaller cap Russell 2000 Index return of -17.20% and the Russell Microcap Index return of -18.96%. There were no advancing economic sectors for the quarter, but Consumer Staples, Energy, Utilities, and Healthcare held up better on a relative basis. Consumer Discretionary, Information Technology and Communication Services areas lagged.

PERFORMANCE COMMENTARY

(As of 6/30/22) — The Buffalo Flexible Income Fund (BUFBX) declined 6.34% for the quarter compared to a loss of 16.70% for the Russell 3000 Index.

Top Contributors

The top three contributors to the Fund’s performance during the quarter were Eli Lilly, AT&T, and General Mills. All three companies operate within defensive industries which typically outperform when the broad market declines significantly, as it has this year. Additionally, Eli Lilly, a manufacturer and marketer of pharmaceutical products, reported good 1st quarter earnings as well as positive data from its phase III drug Tirzepatide, which is being developed as a treatment for diabetes and obesity. Shares of General Mills advanced in the quarter as management reported strong earnings and provided a good outlook for its fiscal 2023.

Top Detractors

The top three detractors were Microsoft, APA, and Costco. All of these companies operate in more cyclical industries which tend to underperform when markets decline. Microsoft reported decent financial results during the quarter, but rising interest rates resulted in a lower valuation multiple, and currency headwinds led to a reduction of management’s financial guidance moving forward. APA, which operates in the oil and gas industries, benefited earlier this year from rising commodities prices, but shares pulled back this quarter, as oil declined from very elevated levels. The retailer Costco declined primarily due to investor concerns around softer consumer spending and higher costs associated with inflation when two of the leading retailers, Walmart and Target, mentioned both of these concerns on their earnings calls during the period.

OUTLOOK

(As of 6/30/22) — Investors are increasingly concerned about the economy, as inflation continues to rise and Federal Reserve (the “Fed”) policy remains hawkish. The Fed implemented two rate increases during the quarter to curb demand and slow the pace of rising prices. Stocks declined as the Fed has indicated that inflation is its top priority and will raise rates even if it causes an economic slowdown. Stock market performance is likely to reflect how well the Fed can manage a soft-landing. Although layoff announcements have ticked up, healthy employment reports and elevated job openings indicate the economy remains resilient. Investors also may start to look beyond the current round of increases and start to price in expectations for when the Fed will shift its policy. We will be ready to take advantage of opportunities created by stock market volatility using market declines as attractive entry points for long-term investors./p>

The opinions expressed are those of the Portfolio Manager(s) and are subject to change, are not guaranteed and should not be considered recommendations to buy or sell any security. Earnings growth is not representative of the fund’s future performance.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

Fundamental Approach

We get to know the companies we invest in and learn how they run their business.

Top-Down & Bottom-Up

We identify Top-Down broad, secular growth trends and search for companies from the Bottom-Up.

Proprietary Philosophy

We construct our portfolios based on our own proprietary investment strategy.

Disciplined Investing

Sticking to our disciplined investment strategy ensures we maintain a consistent, balanced approach.

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating™ for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating™ metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods.

The Buffalo Flexible Income Fund (BUFBX) received 4 stars among 1154 for the 3-year, 4 stars among 1082 for the 5-year, and 1 stars among 785 Large Value funds for the 10-year period ending 8/31/22.

In each Morningstar Category, the 10% of funds with the lowest measured risk are described as Low Risk, the next 22.5% Below Average, the middle 35% Average, the next 22.5% Above Average, and the top 10% High. Morningstar Risk is measured for up to three time periods (three, five, and 10 years). These separate measures are then weighted and averaged to produce an overall measure for the fund. Funds with less than three years of performance history are not rated. ©2022 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. The Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.

Bond ratings are grades given to bonds that indicates their credit quality as determined by a private independent rating service such as [Standard & Poor’s or Moody’s, etc.]. The firm evaluates a bond issuer’s financial strength, or its ability to pay a bond’s principal and interest in a timely fashion. Ratings are expressed as letters ranging from ‘AAA’, which is the highest grade, to ‘D’, which is the lowest grade. Not Rated category includes holdings that are not rated by any rating agencies.