Inception Date
  May 19, 1995

Total Fund Assets
  $244.82 Million  (9/30/17)

Expense Ratio

Benchmark Index
  Russell 1000 Growth


Overall Morningstar™ rating out of 1,226 Large Growth funds as of 11/30/17 (derived from a weighted average of the fund’s three-, five-, and ten-year risk adjusted return measure).


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.



Low High

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 1,226 funds in the Large Growth category, as of 11/30/17.


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Investment Strategy

The investment objective of the Buffalo Growth Fund is long-term growth of capital. The Growth Fund invests in domestic common stocks and other U.S. equity securities, including preferred stock, convertible securities, warrants and rights, with a goal of maintaining at least 75% of the equity weighting of the Fund’s portfolio in companies with market capitalizations greater than $5 billion or the median of the Russell 1000 Growth Index, whichever is lower. Capitalization of the Russell 1000 Growth Index changes due to market conditions and index composition.

With respect to the remaining 25% of the equity weighting of the Fund’s portfolio, the Fund may invest in companies of any size, including, but not limited to, those with market capitalizations less than the lower of the median of the Russell 1000® Growth Index or $5 billion.


We believe that actively investing in a relatively concentrated portfolio of great American companies will lead to superior wealth creation over time.

We look for companies that could benefit from secular market trends, combined with the ability to extend competitive advantages across borders, to serve large, profitable and fast-growing markets abroad.

~ Dave Carlsen, Portfolio Manager


Performance (%)

As of 11/30/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Growth Fund7.7022.4923.479.3314.648.989.7410.06
  Russell 1000 Growth Index8.4229.2130.8113.1017.149.8710.119.22
  Lipper Large Cap Growth Fund Index6.9531.2131.2511.3515.928.168.918.11
  Morningstar Large Growth7.2526.8727.6910.5315.258.199.388.13
As of 9/30/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Growth Fund3.3215.7014.259.0612.988.0810.569.86
  Russell 1000 Growth Index5.9020.7221.9412.6915.269.0810.658.96
  Lipper Large Cap Growth Fund Index5.6423.8321.4411.1914.287.569.337.90
  Morningstar Large Growth5.2919.8519.7510.3613.707.559.928.16
YearBuffalo Growth FundRussell 1000 Growth IndexMorningstar Large Growth Category
(As of 9/30/17)

vs Russell 1000 Growth Index
Upside Capture78.09
Downside Capture92.82
Sharpe Ratio0.90

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.


(As of 9/30/17)

# of Holdings55
Median Market Cap$71.88 B
Weighted Average Market Cap$196.85 B
3-Yr Annualized Turnover Ratio27.04%
% of Holdings with Free Cash Flow76.36%
% of Holdings with No Net Debt25.45%
Active Share66.98%
Name of HoldingTickerSector% of Net Assets
Alphabet CGOOGTechnology3.48%
Amazon.comAMZNConsumer Discretionary3.23%
Alphabet AGOOGLTechnology2.99%
Home DepotHDConsumer Discretionary2.71%
Intercontinental ExchangeICEFinancials2.68%
Abbot LaboratoriesABTHealth Care2.61%
View Full Holdings

As of 6/30/17. 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 6/30/17. 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 3/31/17. Market Cap percentages may not equal 100% due to rounding.


Equity markets continued their winning streak in the 3rd quarter of 2017 with the S&P 500 Index posting its 8th consecutive quarterly gain. Investors have been encouraged by the synchronized upswing in global economic growth. For the first time since 2007, all 45 countries tracked by the Organization for Economic Cooperation and Development (OECD) are on pace to grow this year, with the growth rates expected to accelerate in 33 of those countries. This economic backdrop, in conjunction with strong corporate earnings and a renewed focus on tax reform, helped the reflation trade regain momentum in the quarter.

The reflation trade, also known as the “Trump trade”, pushed shares of banks, industrials, and smaller companies higher, while expectations of another interest rate increase by the Federal Reserve drove relative weakness in Treasury bonds and their stock market proxies, such as utility companies. The U.S. dollar also strengthened during the period against most major foreign currencies. Furthermore, strong demand and slowing production of oil in the U.S. drove West Texas Intermediate crude prices up 12.2% in the period.

The Russell 3000 Index, a broad market performance benchmark, produced a total return of 4.57% during the quarter. Growth stocks outperformed value stocks, as the Russell 3000 Growth Index advanced 5.93% compared to a gain of 3.27% for the Russell 3000 Value Index. Shares of smaller-capitalized companies generally outperformed larger companies during the quarter. The Russell Microcap Index and the smaller-cap Russell 2000 Index climbed 6.65% and 5.67% respectively during the period, while the Russell Midcap Index advanced by 3.47%, and the larger-cap Russell 1000 Index increased by 4.48%. Technology and energy were the best performing sectors, while consumer staples and consumer discretionary sectors lagged.


With this as the backdrop, the Buffalo Growth Fund returned 3.32% in the third quarter compared to the benchmark Russell 1000 Growth Index return of 5.90%. Relative to the benchmark, financials and health care ended the quarter as the largest overweight sectors, while information technology and consumer staples were the most underweight.

Among the top contributors, Facebook shares earned the top spot during the quarter. The company has shaken off concerns over decelerating growth, which sprung from an earnings call in the fourth quarter of last year. Despite lower ad unit growth, Facebook’s sales and profit growth continued to exceed expectations. The strength this year has been from ad pricing, which has accelerated, while ad unit growth has declined. Next, Align Technology shares continued to rally on another strong quarter in which the company reported accelerating revenue growth. The dental aligner company is deriving increased growth from markets where it has low penetration (U.S. teen; international) providing confidence that it has ample room for additional growth. Finally, Visa shares received a boost from earnings and growth that exceeded expectations. The company has benefited from its Visa Europe acquisition last year. Visa’s plans to accelerate growth and expand margin in Europe has happened more quickly, boosting results for the company.

Detractors in the period included Chipotle Mexican Grill, Amerisource Bergen, and Under Armour. Chipotle shares came under pressure as the recovery in same store sales from the food-born illness outbreak of 2015 has been slower, raising concern over whether sales will ever fully recover. The company announced new menu items, digital ordering improvements, and a new marketing campaign as the company aims to reengage customers and improve sales. Next, Amerisource Bergen shares traded lower on concerns of a weaker pricing environment for branded and generic drugs. In addition, management disclosed incremental expense growth in 2018 related to the opening of four new distribution centers. Finally, shares of Under Armour traded lower as sales growth in North America has been under pressure. The company has responded with plans for tighter expense control and a focus on product innovation to improve both growth and profitability in 2018.


Although the Federal Reserve raised rates for the 2nd time this year in June, overall economic growth remains below previous cycles and signs of an acceleration in growth remain scant. President Trump’s plans for stimulating economic growth have not yet materialized. In addition, the Federal Reserve has signaled another rate hike is likely before year end. In past cycles, there has typically been a broadening out of economic growth that has spurred expansion prior to Federal Reserve taking rates higher. However, the path of this economic cycle is unique, perhaps due to the unprecedented measures taken to avert a deeper financial crisis during the Great Recession of 2008. During this expansion growth has been more limited, adding to the attractiveness of premier growth companies that have sustained high growth despite a difficult environment.

Given this environment, we continue to be opportunistic in the pursuit of owning high quality growth companies, while exercising caution to not overpay for prospective growth that we believe is already priced for perfection.

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.

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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 Growth Fund received 2 stars among 1226 for the three-year, 3 stars among 1110 for the five-year, and 3 stars among 786 Large Growth funds for the ten-year period ending 11/30/17.

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.

©2017 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.