Quick Facts
InvestorInstitutional
Ticker:BUFBXBUIBX
Inception Date:8/12/19947/1/2019
Expense Ratio:1.01%0.86%
Total Net Assets:$444.61 Million  (6/30/21)
Category:Large Cap Value
Benchmark:Morningstar Moderately Aggressive Target Risk Index
Dividend Distribution:Monthly
Related Material:
   Fund Fact Sheet Q2 2021
   PM Commentary Q2 2021
   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 151 Allocation 85%+ Equity funds as of 8/31/21.

Investment Style

Performance (%)

As of 8/31/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO FLEXIBLE INCOME FUND - Investor2.7518.7725.067.118.588.166.946.957.38
BUFFALO FLEXIBLE INCOME FUND - Institutional2.7918.9025.247.258.738.327.107.107.54
  Morningstar Moderately Aggressive Target Risk Index3.0012.7424.9912.4112.1910.388.018.29-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
6.37
9.10
2.28
14.45
20.99
4.64
21.53
29.04
10.26
14.26
19.22
6.82
14.00
19.00
6.49
12.81
16.76
6.90
9.60
11.16
7.27
8.57
9.25
7.54
9.46
10.80
7.44
  Lipper Mixed-Asset Target Allocation Moderate Funds Index3.2110.7719.3710.829.818.646.586.347.41
  Morningstar Allocation 85%+ Equity Category4.1316.7431.3213.0513.1611.827.857.328.05
As of 6/30/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO FLEXIBLE INCOME FUND - Investor7.8417.6729.928.108.677.807.056.737.39
BUFFALO FLEXIBLE INCOME FUND - Institutional7.8217.7730.118.248.827.967.216.887.55
  Morningstar Moderately Aggressive Target Risk Index5.8810.2032.5512.7912.559.428.027.91-
  Combined Index
    Morningstar U.S. Large Cap Index (60%)
    ICE BofAML U.S. High Yield Index (40%)
6.63
9.20
2.77
10.17
14.47
3.70
30.43
40.31
15.62
14.79
19.89
7.15
14.06
18.57
7.30
11.77
15.29
6.50
9.55
10.99
7.39
8.16
8.52
7.62
9.37
10.64
7.46
  Lipper Mixed-Asset Target Allocation Moderate Funds Index4.848.1524.3110.949.917.896.606.077.37
  Morningstar Allocation 85%+ Equity Category6.7513.3840.7713.5913.5210.487.746.857.99

 2011201220132014201520162017201820192020
BUFFALO FLEXIBLE INCOME FUND - Investor9.6310.3116.683.59-1.979.9013.21-7.0018.76-2.24
BUFFALO FLEXIBLE INCOME FUND - Institutional9.7910.4716.853.75-1.8310.0713.38-6.8618.87-2.10
  Morningstar Moderately Aggressive Target Risk Index-1.9314.3320.184.97-2.4010.2118.89-6.7422.9513.51
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 (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
8/17/218/18/21$17.28 (Inv)

$17.27 (Inst)
$0.03512588

$0.03721368
-

-
-

-
$0.03512588

$0.03721368
7/19/217/20/21$17.09 (Inv)

$17.08 (Inst)
$0.00589869

$0.00819299
-

-
-

-
$0.00589869

$0.00819299
6/17/216/18/21$16.99 (Inv)

$16.98 (Inst)
$0.03934585

$0.04149178
-

-
-

-
$0.03934585

$0.04149178
5/17/215/18/21$17.19 (Inv)

$17.18 (Inst)
$0.02426012

$0.02622444
-

-
-

-
$0.02426012

$0.02622444
4/19/214/20/21$16.65 (Inv)

$16.64 (Inst)
$0.00847721

$0.01071978
-

-
-

-
$0.00847721

$0.01071978
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 6/30/21) 
 
# of Equity Holdings48
# of Fixed Holdings2
Median Market Cap$67.09 B
Weighted Average Market Cap$296.40 B
3-Yr Annualized Turnover Ratio3.70%
Average Duration1.28 years
Average Maturity9.41 years
30-day SEC Yield1.82%
Top 10 Holdings
HoldingTicker / MaturitySector% of Net
Assets
MicrosoftMSFTTechnology7.47%
Nuance Communications11/1/35, 1.500%Communications3.85%
ChevronCVXEnergy3.57%
Costco WholesaleCOSTConsumer Staples2.90%
Johnson & JohnsonJNJHealth Care2.89%
Eli Lilly & CoLLYHealth Care2.85%
Digital Realty TrustDLRReal Estate2.82%
Hess CorpHESEnergy2.81%
QualcommQCOMTechnology2.80%
ConocoPhillipsCOPEnergy2.72%
TOP 10 HOLDINGS TOTAL34.68%
As of 3/31/21. 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 6/30/21. 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 6/30/21. 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 6/30/21) — Equity markets moved higher for the fifth consecutive quarter, as the S&P 500 Index returned 8.55%, raising the year-to-date return to 15.25%. The COVID-19 vaccine rollout has helped fuel an economic comeback while corporate earnings are improving. The vaccine adoption around the world is encouraging, and over 50% of the U.S. population is now vaccinated. Capital markets continued to be supported by significant spending from Congress and aggressive monetary policy from the Federal Reserve (the Fed). The 2nd quarter was marked by outperformance of growth stocks, overcoming investor concerns of rising inflation and potential interest rate hikes in the prior quarter. Hawkish comments from the Fed replaced inflation worries with concerns about the magnitude and duration of the economic recovery. Long duration growth companies were beneficiaries as yields on the 10-Year and 30-Year Treasuries declined during the period after climbing for the previous four months.

The broad market Russell 3000 Index advanced 8.24% in the quarter. Growth stocks outperformed Value stocks, as the Russell 3000 Growth Index surged 11.38% compared to the Russell 3000 Value Index gain of 5.16%. Relative performance was correlated with market cap size in the quarter, as the large cap Russell 1000 Index returned 8.54%, the Russell Midcap Index advanced 7.50%, the small cap Russell 2000 Index returned 4.29%, and the Russell Microcap Index finished 4.14% higher.

All economic sectors produced positive returns during the period with the exception of Telecom Services. Real Estate, Information Technology, and Energy led the advance followed by Financials and Health Care. More defensive areas, such as Telecom Services, Utilities, and Consumer Staples, trailed on a relative basis.

PERFORMANCE COMMENTARY

(As of 6/30/21) — The Buffalo Flexible Income Fund (BUFBX) returned 7.82% in the quarter, compared to a return of 5.88% for the Morningstar Moderately Aggressive Target Risk Index.

Top Contributors

The top three contributors to the Fund’s performance during the quarter were Microsoft, Nuance Communications, and Hess. Microsoft’s share appreciation reflects its market leadership positions in software, cloud computing, and gaming. Over the past year, the company has executed well, resulting in positive earnings revisions and a favorable growth outlook. Nuance Communications announced during the quarter that it had agreed to be acquired by Microsoft for a premium. Hess’ share appreciation reflects the increase in oil prices due to a resumption in travel, as the travel restrictions around the pandemic have been eased in various geographies.

Top Detractors

The top three detractors from the portfolio’s results were Intel, Clorox, and HollyFrontier. Intel’s share price weakness reflects weak sales growth, concerns about personal computer competition, weaker gross margins, slower data center growth, and announced expansion into foundry. Clorox shares declined due to tougher comparisons, as cleaning products saw strong demand in 2020 due to the pandemic, and higher raw material prices which compressed margins. HollyFrontier shares declined in the quarter due to market skepticism around its acquisition of a West Coast refining asset (Puget Sound refinery) and the suspension of its dividend for a year to maintain balance sheet flexibility and strength.

OUTLOOK

(As of 6/30/21) — The stock market continued to advance during the quarter and ended the period at a record high. New COVID-19 infections, hospitalizations, and deaths have declined in the U.S. as vaccines have been approved and administered. This has allowed the relaxing of COVID-related closures and restrictions. Workers are gradually returning to the office, and consumers are emerging from their homes and venturing back out. The pent-up demand aided by additional fiscal stimulus checks, and continued central banks’ accommodative policies, provide a favorable tailwind for the economy. Although the Fed continues to indicate that it is holding off raising interest rates, investors are mindful for any signs of inflation. While some prices have gone up, the Fed believes these are transitory. As the year continues to unfold, investors will also be focused on the following topics: prospects for passage of an announced infrastructure agreement, vaccination rates, booster shots, how COVID-19 variants will spread or be contained, if COVID-19 lockdowns resume, and how long monetary policy will remain accommodative.

We remain focused on wide-moat, large-capitalization, dividend-paying companies trading at reasonable valuations, in our view. As stock market volatility spikes, we will look for opportunities to find companies that fit our investment criteria, as we continue to follow our process of finding new investment ideas and to be ready when market declines provide better entry points.

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 136 for the 5-year, and 1 star among 96 Allocation 85%+ Equity funds for the 10-year period ending 8/31/21.

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.