Quick Facts
InvestorInstitutional
Ticker:BUFBXBUIBX
Inception Date:8/12/19947/1/2019
Expense Ratio:1.01%0.86%
Total Net Assets:$590.23 Million  (12/31/19)
Category:Large Cap Value
Benchmark:Morningstar Moderately Aggressive Target Risk
Dividend Distribution:Monthly
Related Material:
   Fund Fact Sheet Q4 2019
   PM Commentary Q4 2019
   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 309 Allocation 70-85% Equity funds as of 2/29/20.

Investment Style

Performance (%)

As of 2/29/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(8/12/94)
BUFFALO FLEXIBLE INCOME FUND - Investor-8.24-10.89-4.302.893.307.005.975.856.72
BUFFALO FLEXIBLE INCOME FUND - Institutional-8.27-10.88-4.223.023.447.156.126.006.88
  Morningstar Moderately Aggressive Target Risk Index-4.70-7.254.176.535.768.366.766.12-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
-2.57
-4.63
0.51
-5.12
-7.50
-1.55
8.30
9.90
5.91
8.40
10.82
4.76
7.93
9.78
5.16
10.55
12.81
7.15
7.89
8.55
6.91
6.05
5.46
6.93
8.63
9.46
7.39
  Lipper Mixed-Asset Target Allocation Moderate Funds Index-2.44-4.185.635.434.656.995.405.286.76
  Morningstar Allocation 70-85% Equity Category-4.84-7.073.025.074.367.725.764.856.80
As of 12/31/193 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
(8/12/94)
BUFFALO FLEXIBLE INCOME FUND - Investor4.6418.7618.767.736.148.206.966.627.25
BUFFALO FLEXIBLE INCOME FUND - Institutional4.6218.8718.877.876.298.367.116.777.41
  Morningstar Moderately Aggressive Target Risk Index6.8722.9522.9510.887.969.077.366.40-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
6.81
9.61
2.61
24.83
31.77
14.41
24.83
31.77
14.41
12.13
16.00
6.32
9.69
12.07
6.13
11.15
13.58
7.50
8.30
9.09
7.11
6.15
5.57
7.01
8.92
9.86
7.51
  Lipper Mixed-Asset Target Allocation Moderate Funds Index4.6918.2218.228.316.097.445.715.286.99
  Morningstar Allocation 70-85% Equity Category6.1121.0821.089.065.977.995.976.537.15
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. Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.
Distributions
2020 Distribution Dates:

Record Date: April 17, 2020 | Payable Date: April 20, 2020

Record Date: May 18, 2020 | Payable Date: May 19, 2020

Record Date: June 17, 2020 | Payable Date: June 18, 2020

Record Date: July 17, 2020 | Payable Date: July 20, 2020

Record Date: August 17, 2020 | Payable Date: August 18, 2020

Record Date: September 17, 2020 | Payable Date: September 18, 2020

Record Date: October 19, 2020 | Payable Date: October 20, 2020

Record Date: November 17, 2020 | Payable Date: November 18, 2020

Record Date: December 17, 2020 | Payable Date: December 18, 2020


Record
Date
Payable
Date
Distribution
NAV
Net Investment
Income
Short-Term Capital
Gains
Long-Term Capital
Gains
Distribution
Total
3/17/203/18/20$11.18 (Inv)

$11.17 (Inst)
$0.02710948

$0.02877999
-

-
-

-
$0.02710948

$0.02877999
2/18/202/19/20$16.01 (Inv)

$16.01 (Inst)
$0.02114417

$0.02219948
-

-
-

-
$0.02114417

$0.02219948
1/17/201/21/20$16.04 (Inv)

$16.04 (Inst)
$0.01794007

$0.02027910
-

-
-

-
$0.01794007

$0.02027910
For historical distributions, click here.

Portfolio

Portfolio Characteristics
(As of 12/31/19) 
 
# of Equity Holdings59
# of Fixed Holdings6
Median Market Cap$52.23 B
Weighted Average Market Cap$181.95 B
3-Yr Annualized Turnover Ratio3.70%
Average Duration1.52 years
Average Maturity5.29 years
30-day SEC Yield2.19%
Top 10 Holdings
HoldingTickerSector% of Net
Assets
MicrosoftMSFTTechnology4.81%
BoeingBAIndustrials3.86%
ChevronCVXEnergy3.06%
IntelINTCTechnology3.04%
Procter & GamblePGConsumer Staples2.75%
Johnson & JohnsonJNJHealth Care2.72%
Coca ColaKOConsumer Staples2.58%
VerizonVZTelecommunication2.50%
Costco WholesaleCOSTConsumer Staples2.49%
Truist FinancialTFCFinancials2.48%
TOP 10 HOLDINGS TOTAL30.29%
As of 12/31/19. 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 12/31/19. 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 12/31/19. Allocation percentages may not equal 100% due to rounding.

Management

John Kornitzer
Portfolio Manager

51 Years of Experience

 View full bio

Paul Dlugosch, CFA
Portfolio Manager

22 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 12/31/19) — The combination of a U.S. Federal Reserve (Fed) interest rate cut, an improving economic outlook, and easing trade tensions, sent equity markets sharply higher in the 4th quarter. The S&P 500 Index advanced 9.10% during the period, which brought the full-year (2019) gain to 31.49%. The Fed cut interest rates three times in 2019, erasing the brief yield curve inversion and assuaging fears of a recession. The economy continued to add new jobs at a strong pace and unemployment declined to 3.5%. Consumer spending remained healthy, and there is optimism for better business investment following the announced “phase one” trade deal with China.

Similar to the S&P 500 Index, the broad-based Russell 3000 Index returned 9.04% during the quarter. Growth outperformed value, as the Russell 3000 Growth Index returned 10.62% compared to a return of 7.41% for the Russell 3000 Value Index. Smaller companies outperformed larger companies, as one would expect in a “risk-on” period. The Russell Microcap Index surged 13.45% and the Russell 2000 Index advanced 9.94%. Large company benchmarks such as the Russell 1000 Index advanced 9.04% while the Russell Midcap Index produced a return of 7.06%. Technology and Health Care were the best performing sectors in the quarter, while more defensive areas of the market lagged such as Real Estate and Utilities. Higher long-term interest rates weighed on high-quality bond proxies – the safe haven 10-year U.S. Treasury Bond produced a return of -1.74% during the quarter.

PERFORMANCE COMMENTARY

(As of 12/31/19) — The Buffalo Flexible Income Fund produced a return of 4.64% for the quarter, underperforming the Morningstar Moderately Aggressive Target Risk Index return of 6.87%. The Fund’s peer group index, the Lipper Mixed-Asset Allocation Moderate Funds Index, produced a return of 4.69% for the quarter.

PORTFOLIO PERFORMANCE

The equity portion of the portfolio produced a return of 4.62%. The top three contributors to the Fund’s performance during the quarter were Home Depot, Schlumberger, and McDonald’s. Relative underperformance compared to the Morningstar U.S. Large Cap Index was primarily driven by stock selection in the Information Technology, Consumer Staples, and Industrial sectors. Underperformance within the Information Technology segment was driven by an underweight position to the sector and the fact that Fund did not own Apple, a large weight in the benchmark, which negatively-influenced relative performance. The underperformance within the Consumer Staples segment was driven by security selection and included General Mills, Clorox, and Kimberly Clark. Meanwhile, Boeing drove underperformance within the Industrial sector. The company has been negatively impacted by the grounding of the 737 MAX airplane and the uncertainty of when it will return to production, delivery, and service.

OUTLOOK

(As of 12/31/19) — The healthy gains in the stock market during the quarter were primarily driven by expansion in market valuation metrics, as corporate earnings have been relatively flat. Key drivers for further stock market advancement are likely to be driven by how Middle East conflicts play out, the upcoming domestic election cycle, and improved corporate earnings growth.

We continue to be diligent in our process of seeking wide moat, large capitalization, income-producing securities trading at reasonable valuations, by our analysis. Given that we believe the U.S. is in the later stages of the current economic cycle, we find ourselves confronted with relatively low spread and yield levels. This backdrop has resulted in a bond allocation that is close to the low end of our expected range in terms of the Fund’s overall asset mix of stocks, bonds, and cash. Within the fixed income portion of the portfolio, we continue to focus on high-quality, non-investment grade issuers with defensive business models and manageable credit metrics. As always, we appreciate your support and confidence in our investment process over the long term.

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 2 stars among 309 for the 3-year, 2 stars among 273 for the 5-year, and 2 stars among 193 Allocation 70-85% Equity funds for the 10-year period ending 2/29/20.

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. ©2020 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.