Ticker
  BUFBX

Inception Date
  August 12, 1994

Total Fund Assets
  $698.35 Million  (3/31/18)

Expense Ratio
  1.01%

Benchmark Index
  ICE BofA ML Combined Index

MORNINGSTAR RATING

Overall Morningstar™ rating out of 318 Allocation–70% to 85% Equity funds as of 3/31/18 (derived from a weighted average of the fund’s three-, five-, and ten-year risk adjusted return measure).

INVESTMENT STYLE

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.

RISK VS CATEGORY

 

LowHigh

The Morningstar™ Risk vs Category rating is an assessment of the variations in a fund’s monthly returns, with an emphasis on downside variations, in comparison to the 318 funds in the Allocation–-70% to 85% Equity category, as of 3/31/18.

INVEST NOW

It's easy to open an account or add to your existing account.

Select the platform of your choice by clicking one of the links below:

  BUFFALO FUNDS (direct)


  CHARLES SCHWAB & CO.


  FIDELITY INVESTMENTS


  TD AMERITRADE


Buffalo Funds are also available on hundreds of other platforms.

Investment Strategy

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.

|

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

Read More...

Performance (%)

As of 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(8/12/94)
Buffalo Flexible Income Fund-3.45-3.457.575.305.746.488.757.20
  BofA ML Combined Index
    S&P 500 Index (60%)
    ICE BofA ML HY Master II Index (40%)
-0.82
-0.76
-0.91
-0.82
-0.76
-0.91
9.87
13.99
3.69
8.54
10.78
5.18
9.99
13.31
5.01
8.94
9.49
8.12
9.37
10.10
8.27
8.87
9.76
7.53
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-1.07-1.077.605.226.585.596.796.96
  Morningstar Allocation--70% to 85% Equity-1.14-1.149.755.637.746.157.937.15
As of July 27, 2017 the Bank of America Merrill Combined Index (60% S&P 500 Index / 40% ICE Bank of America Merrill Lynch High Yield Master II Index) has replaced the S&P 500 Index as the Fund’s primary benchmark. The Advisor believes the new index is more appropriate given the Fund’s holdings.
As of 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(8/12/94)
Buffalo Flexible Income Fund-3.45-3.457.575.305.746.488.757.20
  BofA ML Combined Index
    S&P 500 Index (60%)
    ICE BofA ML HY Master II Index (40%)
-0.82
-0.76
-0.91
-0.82
-0.76
-0.91
9.87
13.99
3.69
8.54
10.78
5.18
9.99
13.31
5.01
8.94
9.49
8.12
9.37
10.10
8.27
8.87
9.76
7.53
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-1.07-1.077.605.226.585.596.796.96
  Morningstar Allocation--70% to 85% Equity-1.14-1.149.755.637.746.157.937.15
As of July 27, 2017 the Bank of America Merrill Combined Index (60% S&P 500 Index / 40% Bank of America Merrill Lynch High Yield Master II Index) has replaced the S&P 500 Index as the Fund’s primary benchmark. The Advisor believes the new index is more appropriate given the Fund’s holdings.
YearBuffalo Flexible IncomeICE BofA ML Combined IndexS&P 500 Index (60%)ICE BofA ML HY Master II Index (40%)Morningstar Allocation -- 70% to 85% Equity
201713.2116.0921.837.4816.21
20169.9014.1711.9617.496.03
2015-1.97-1.031.38-4.64-0.95
20143.599.2113.692.507.00
201316.6822.4032.397.4234.93
201210.3115.8316.0015.5814.07
20119.633.022.114.38-3.96
201011.6815.1115.0615.1924.61
200931.0738.8826.4657.5139.11
2008-29.47-32.76-37.00-26.39-43.77

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.

Growth of $10k

This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the Inception Date. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.

Portfolio

(As of 3/31/18)

# of Equity Holdings55
# of Fixed Holdings17
Median Market Cap$62.70 B
Weighted Average Market Cap$145.53 B
3-Yr Annualized Turnover Ratio2.70%
Average Duration1.52 years
Average Maturity4.27 years
30-day SEC Yield2.27%
HoldingTickerSector% of Portfolio
Lions Gate Entmt Cv (1.25% 4/15/2018)--4.52%
HollyFrontierHFCEnergy4.03%
BoeingBAIndustrials3.54%
IntelINTCTechnology3.38%
MicrosoftMSFTTechnology3.19%
AT&TTCommunications3.04%
VerizonVZConsumer Staples2.79%
Exxon MobilXOMEnergy2.79%
ConocoPhillipsCOPEnergy2.71%
Johnson & JohnsonJNJHealth Care2.61%
TOP 10 HOLDINGS TOTAL32.60%
View Full Holdings

As of 12/31/17. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Those listed are for the previous quarter. Fund holdings are subject to change and are not recommendations to buy or sell any securities.

Buffalo publishes this listing of securities held as of the most recent calendar-quarter end, with a 30 or 60 day lag depending on the portfolio. Buffalo may exclude any portion of holdings from publication when deemed in the best interest of the portfolio.

The portfolio data and its presentation here may differ from the complete schedules of investments in regulatory filings due to differing accounting and reporting requirements.

As of 3/31/18. 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.

As of 3/31/18. Allocation percentages may not equal 100% due to rounding.

Commentary

Commentary for Q1 2018   (As of 3/31/18)

CAPITAL MARKET OVERVIEW

(As of 12/31/17) — Equity markets ended 2017 on a strong note. The 4th quarter saw a continuation of trends that have influenced the market all year. Investor optimism about continued global economic growth and strong corporate earnings led to another quarter of higher stock prices. Strong holiday sales and the passage of tax reform legislation also provided tailwinds to equity markets. The CBOE Volatility Index continued to hover near record lows, and, for the first time since 1958, U.S. equities delivered positive returns in every single month of the year.

The S&P 500 Index produced a total return of 6.64% in the 4th quarter. Growth continued to outperform value, with the Russell 3000 Growth Index up 7.61%, beating the 5.08% return from the Russell 3000 Value. Large companies generally outperformed smaller companies during the quarter. The Russell 1000 returned 6.59%, the Russell Midcap Index returned 6.07%, the Russell 2000 returned 3.34%, and the Russell Microcap Index returned 1.80%. Consumer discretionary and technology were the best performing sectors in the 4th quarter. Utilities, health care, and consumer staples underperformed.

PERFORMANCE COMMENTARY

(As of 12/31/17) — The Buffalo Flexible Income Fund produced a return 5.50% for the quarter and unperformed the S&P 500 Index return of 6.64% but outperformed the ICE Bank of America Merrill Lynch High Yield Master II Index return of 0.41%. The fund’s peer group index, the Lipper Mixed-Asset Allocation Moderate Funds Index, produced a return of 3.17% for the quarter.

The equity portion of the portfolio outperformed the S&P 500 Index with a total return of 6.69% for the quarter. The relative outperformance was primarily driven by the energy and information technology sectors. The outperformance within energy was driven by security selection. Specific energy securities that provided positive relative performance included HollyFrontier, Marathon Petroleum, Helmerich and Payne, and BP. HollyFrontier and Marathon are refiners that benefited from refining margins and crude differentials. HollyFrontier also benefited from an improved operating environment associated with higher oil prices, which has led to better pricing and utilization for their products, while BP was also a beneficiary of higher oil prices.

The relative outperformance within the information technology sector was due to security selection. Specifically, Intel benefited from good earnings (margin expansion), positive trends in its data center segment, and stability in its PC segment.

The top three contributors to the fund’s performance during the quarter were HollyFrontier, Intel, and Boeing while the top three detractors were General Electric, Pitney Bowes, and GlaxoSmithKline.

The fixed income portion of the fund generated a return of 1.32% and outperformed the ICE Bank of America Merrill Lynch High Yield Master II Index return of 0.42%. Relative outperformance was led by the consumer discretionary and information technology sectors. Within the consumer discretionary sector, the primary driver of outperformance was the portfolio’s Lions Gate Entertainment convertible bond investment, which advanced due to better earnings guidance, driven by better-than-expected STARZ subscribers and cord cutting. The information technology segment outperformance was driven by both sector allocation and security selection. Bankrate refinanced their capital structure, which led to positive performance, and Nuance Communications 1.5% convert appreciated due to strong earnings driven by its healthcare segment, as well as positive bookings guidance.

The top individual contributors to the fund’s fixed income performance included Lions Gate Entertainment 1.25% convertible notes, Nuance 1.5% convertible notes, and Valeant’s 6.375% senior notes. The largest relative detractors to the fixed income return were Medicines Company 2.50% convertible bonds, Consolidated Communications 6.5% senior notes, and Cornerstone on Demand 1.5% convertible notes.

OUTLOOK

(As of 12/31/17) — We believe the market could experience more volatility in the coming quarters, as the Federal Reserve continues with its desire to normalize interest rates, along with a focus on the likelihood of the Trump administration to enact infrastructure spending, deregulation, and corporate tax reform. Prospective tailwinds for the economy include further job growth, wage increases, lower tax rates, and simply more optimism from both businesses and consumers; all of which could lead to higher Gross Domestic Product (GDP) growth. On the other hand, possible headwinds include potential strengthening of the U.S. dollar, further increases in interest rates, and stock price valuation metrics that are above historical market averages, leading us to believe that the stock market may have a hard time achieving further multiple expansion.

Despite the expectation of more volatility, we continue to focus on wide moat, large-capitalization companies that are trading at reasonable valuations, in our view. As always, the fund will continue to focus on competitively advantaged companies that can be purchased at a fair price, in our opinion. As the stock market has continued to climb, it is getting harder to find companies that fit our investment criteria, but we continue follow our process of finding new investment ideas and are ready when market declines provide better opportunities.

Within the fixed income portion of the fund, we continue to focus on higher quality, below investment grade credit securities. With credit yield spreads at cycle lows, in our opinion, we are being selective and disciplined with purchases, as we do not anticipate much price appreciation within fixed income markets, in general.

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. Fund holdings and sector allocations are subject to change and are not recommendations to buy or sell any security. Earnings growth is not representative of the fund’s future performance.

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.

Sign Up for Automatic Updates

Stay up-to-date with the most recent media coverage and press releases about the Buffalo Funds.

FOR FINANCIAL PROFESSIONALS

Terms of Use – Email lists are created for use by U.S. investment professionals only and are published strictly for informational purposes. Providing access to the content of these emails does not explicitly or implicitly constitute a solicitation of services or products of the Buffalo Funds, Kornitzer Capital Management, or any of their affiliates. The information contained in the emails is not intended for distribution to, or for use by, investment professionals in a jurisdiction where distribution or purchase is not authorized. The information contained in these emails is not appropriate for use by individual investors. By registering for any of these emails, you agree to Buffalo's terms and conditions and that you are qualified as an institutional investor or otherwise member of a registered broker/dealer, registered investment advisor, or investment consulting firm.

FOR INDIVIDUAL INVESTORS

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 received 2 stars among 318 for the three-year, 2 stars among 276 for the five-year, and 4 stars among 203 Allocation--70% to 85% Equity funds for the ten-year period ending 3/31/18.

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.

©2018 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.

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.