Quick Facts
InvestorInstitutional
Ticker:BUFBXBUIBX
Inception Date:8/12/19947/1/2019
Expense Ratio:1.02%0.87%
Total Net Assets:$425.68 Million  (3/31/21)
Category:Large Cap Value
Benchmark:Morningstar Moderately Aggressive Target Risk
Dividend Distribution:Monthly
Related Material:
   Fund Fact Sheet Q4 2020
   PM Commentary Q4 2020
   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.

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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 151 Allocation 85%+ Equity funds as of 3/31/21.

Investment Style

Performance (%)

As of 3/31/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(8/12/94)
BUFFALO FLEXIBLE INCOME FUND - Investor9.119.1140.946.867.827.126.686.757.16
BUFFALO FLEXIBLE INCOME FUND - Institutional9.239.2341.157.027.997.286.846.917.32
  Morningstar Moderately Aggressive Target Risk Index4.084.0845.1310.9611.818.847.557.82-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
3.26
4.83
0.90
3.26
4.83
0.90
42.54
55.35
23.31
13.29
17.80
6.53
13.41
17.06
7.94
11.11
14.31
6.31
9.04
10.25
7.21
7.94
8.33
7.35
9.20
10.38
7.42
  Lipper Mixed-Asset Target Allocation Moderate Funds Index3.153.1533.649.519.347.466.226.017.25
  Morningstar Allocation 85%+ Equity Category6.306.3057.9911.7712.379.797.136.937.80
As of 3/31/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(8/12/94)
BUFFALO FLEXIBLE INCOME FUND - Investor9.119.1140.946.867.827.126.686.757.16
BUFFALO FLEXIBLE INCOME FUND - Institutional9.239.2341.157.027.997.286.846.917.32
  Morningstar Moderately Aggressive Target Risk Index4.084.0845.1310.9611.818.847.557.82-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
3.26
4.83
0.90
3.26
4.83
0.90
42.54
55.35
23.31
13.29
17.80
6.53
13.41
17.06
7.94
11.11
14.31
6.31
9.04
10.25
7.21
7.94
8.33
7.35
9.20
10.38
7.42
  Lipper Mixed-Asset Target Allocation Moderate Funds Index3.153.1533.649.519.347.466.226.017.25
  Morningstar Allocation 85%+ Equity Category6.306.3057.9911.7712.379.797.136.937.80
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 inception date of the benchmark index (1/1/99). Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.
Distributions
2021 Distribution Dates:

— Record Date (4/19/21); Payment Date (4/20/21) – Ordinary Income & Capital Gains, if any

— Record Date (5/17/21); Payment Date (5/18/21) – Ordinary Income & Capital Gains, if any

— Record Date (6/17/21); Payment Date (6/18/21) – Ordinary Income & Capital Gains, if any

— Record Date (7/19/21); Payment Date (7/20/21) – Ordinary Income & Capital Gains, if any

— Record Date (8/17/21); Payment Date (8/18/21) – Ordinary Income & Capital Gains, if any

— Record Date (9/17/21); Payment Date (9/20/21) – Ordinary Income & Capital Gains, if any

— Record Date (10/18/21); Payment Date (10/19/21) – Ordinary Income & Capital Gains, if any

— Record Date (11/17/21); Payment Date (11/18/21) – Ordinary Income & Capital Gains, if any

— Record Date (12/2/21); Payment Date (12/3/21) – Capital Gains, if any

— Record Date (12/17/21); Payment Date (12/20/21) – Ordinary Income, if any
Record
Date
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
3/17/213/18/21$16.01 (Inv)

$16.00 (Inst)
$0.03984988

$0.04170871
-

-
-

-
$0.03984988

$0.04170871
2/17/212/18/21$15.82 (Inv)

$15.82 (Inst)
$0.03172344

$0.03362171
-

-
-

-
$0.03172344

$0.03362171
1/19/211/20/21$15.71 (Inv)

$15.70 (Inst)
$0.01013286

$0.01221186
-

-
-

-
$0.01013286

$0.01221186
For historical distributions, click here.

Portfolio

Portfolio Characteristics
(As of 12/31/20) 
 
# of Equity Holdings50
# of Fixed Holdings2
Median Market Cap$57.23 B
Weighted Average Market Cap$250.28 B
3-Yr Annualized Turnover Ratio4.12%
Average Duration0.67 years
Average Maturity9.90 years
30-day SEC Yield2.24%
Top 10 Holdings
HoldingTicker / MaturitySector% of Net
Assets
MicrosoftMSFTTechnology7.95%
Costco WholesaleCOSTConsumer Staples3.46%
Johnson & JohnsonJNJHealth Care3.45%
IntelINTCTechnology3.41%
VerizonVZCommunications3.12%
Nuance Communications11/1/35, 1.500%Communications3.11%
Digital Realty TrustDLRReal Estate3.05%
PepsiCoPEPConsumer Staples3.04%
Waste ManagementWMIndustrials2.90%
Procter & GamblePGConsumer Staples2.88%
TOP 10 HOLDINGS TOTAL36.37%
As of 9/30/20. 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 12/31/20. 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 12/31/20. Allocation percentages may not equal 100% due to rounding.

Management

John Kornitzer
Portfolio Manager

53 Years of Experience

 View full bio

Paul Dlugosch, CFA
Portfolio Manager

24 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 12/31/20) — Equity markets extended their rally in the 4th quarter, with the S&P 500 Index returning 12.15%. This capped the end to a historic year in which the S&P advanced 18.40% despite the world suffering through a global pandemic. The biggest news in the quarter was the U.S. Food and Drug Administration’s (FDA) approval of two separate vaccines, following very encouraging clinical results. This helped investors look beyond worsening COVID-19 trends and provided hope that an end to the pandemic could be in sight.

The Russell 3000 Index increased 14.68% in the quarter. Value stocks led the advance, as the Russell 3000 Value Index advanced 17.21% compared to the Russell 3000 Growth Index return of 12.41% during the period. Relative performance was inversely correlated by market cap in the quarter (i.e., small caps outperformed big caps). The Russell 1000 Index delivered a return of 13.69% compared to the Russell Mid Cap Index return of 19.91%. Smaller market cap indexes surged even more as the Russell 2000 Index returned 31.37% and the Russell Micro Cap Index returned 31.39%. Cyclically-sensitive sectors such as Energy, Financials, Industrials, and Materials performed best in the quarter. The more defensive areas like Telecom Services, Consumer Staples, Utilities, and Healthcare lagged. All sectors produced positive absolute results.

PERFORMANCE COMMENTARY

(As of 12/31/20) — The Buffalo Flexible Income Fund (BUFBX) posted a return of 10.23% in the quarter, but underperformed the Morningstar Moderately Aggressive Target Risk Index return of 13.41% and the S&P 500 Index return of 12.15%.

The top contributors for the Fund during the quarter were Nuance 1.5% convertible bonds, Qualcomm, and Truist. Nuance benefited from positive earnings and guidance, as it showed continued momentum with its cloud transition, positive signs on the adoption of another one its software platforms, Dragon Ambient Experience (DAX), and the divestiture of some slower growth businesses. Qualcomm increased during the quarter due to improved clarity around its legal settlement, positive earnings and guidance as well its role in the upcoming transition to 5G. Truist’s positive return reflects good earnings and investor expectations that a steeper yield curve will result in better future earnings.

The top detractors from the Fund during the quarter were Kimberly Clark, Digital Realty, and Intel. Kimberly Clark provided weak earnings, and there are concerns around rising input costs (pulp), competition, and tougher 2021 earnings comparisons, though some of its business lines benefited in 2020 due to COVID. Digital Realty reported good earnings in the quarter, but the stock reflected a lot of good news and the outlook was not as glowing as some investors had expected. Intel was negatively-impacted by weak earnings and an announcement by Apple that it would begin using some of its own chips in certain products.

OUTLOOK

(As of 12/31/20) — The stock market ended the quarter at a record high on the expectations that the economy can recover from the COVID-19 pandemic. The double-digit stock market gain came despite rising cases and deaths due to COVID-19. The market favorably reacted to continued central banks’ accommodative policies, the conclusion of the U.S. presidential election, approval of COVID-19 vaccines, passage of another fiscal stimulus package, and an agreement on Great Britain’s exit from the European Union. As the new year begins the market will be focused on the change in the administration, potential for additional fiscal stimulus, vaccine rollouts, lockdowns to bend the COVID-19 curve, and how long monetary policy will remain accommodative.

Despite the uncertainty created by the pandemic, we remain focused on large capitalization, dividend-paying companies trading at reasonable valuations, in our view.

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 1 star among 151 for the 3-year, 1 star among 133 for the 5-year, and 1 star among 92 Allocation 85%+ Equity funds for the 10-year period ending 3/31/21.

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. ©2021 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.