Inception Date
  May 19, 1995

Total Fund Assets
  $204.37 Million  (3/31/18)

Expense Ratio

Benchmark Index
  Russell 1000 Growth


Overall Morningstar™ rating out of 1,213 Large Growth funds as of 3/31/18 (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.




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 1,213 funds in the Large Growth category, as of 3/31/18.


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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 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Growth Fund2.402.4016.389.1813.1510.5910.9310.03
  Russell 1000 Growth Index1.421.4221.2512.9015.5311.3410.889.18
  Lipper Large Cap Growth Fund Index2.982.9823.1411.7014.779.829.808.15
  Morningstar Large Growth2.302.3020.4110.6413.819.8710.248.37
As of 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Growth Fund2.402.4016.389.1813.1510.5910.9310.03
  Russell 1000 Growth Index1.421.4221.2512.9015.5311.3410.889.18
  Lipper Large Cap Growth Fund Index2.982.9823.1411.7014.779.829.808.15
  Morningstar Large Growth2.302.3020.4110.6413.819.8710.248.37
YearBuffalo Growth FundRussell 1000 Growth IndexMorningstar Large Growth Category
(As of 3/31/18)

vs Russell 1000 Growth Index
Upside Capture76.92
Downside Capture90.36
Sharpe Ratio0.89

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 3/31/18)

# of Holdings58
Median Market Cap$60.12 B
Weighted Average Market Cap$205.26 B
3-Yr Annualized Turnover Ratio30.86%
% of Holdings with Free Cash Flow85.00%
% of Holdings with No Net Debt38.33%
Active Share62.22%
Name of HoldingTickerSector% of Net Assets
Amazon.comAMZNConsumer Discretionary4.14%
Align TechnologyALGNHealth Care2.22%
NikeNKEConsumer Discretionary2.20%
Abbott LabsABTHealth Care2.10%
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. Market Cap percentages may not equal 100% due to rounding.


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


(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 improving global economic growth and strong corporate earnings led to another quarter of higher stock prices and low volatility. Strong holiday sales and the passage of tax reform legislation also provided tailwinds to equity markets during the period. The Chicago Board of Options Exchange Volatility (CBOE) Index continued to hover near record lows, and, for the first time since 1958, the S&P 500 Index delivered positive returns in every single month of the year.

The Russell 3000 Index produced a total return of 6.34% in the fourth quarter. Growth continued to outperform value, as the Russell 3000 Growth Index advanced 7.61% and outperformed the Russell 3000 Value Index return of 5.08%. Large companies generally outperformed smaller companies during the quarter. The Russell 1000 Index returned 6.59%, the Russell Midcap Index returned 6.07%, the Russell 2000 Index returned 3.34%, and the Russell Microcap Index returned 1.80%. Consumer discretionary and technology were the best performing sectors while utilities, health care, and consumer staples underperformed in the quarter.


(As of 12/31/17) — The Buffalo Growth Fund gained 6.08% during the fourth quarter, underperforming the Russell 1000 Growth Index return of 7.86%. Driving the underperformance was the fund’s relative underweight in the consumer staples and discretionary sectors, which had strong performance during the quarter from being beneficiaries of the passing of the corporate tax bill. Stock selection within the energy sector also detracted from relative results. The fund was overweight financials and health care, while underweight information technology, consumer staples, and consumer discretionary.

Amazon.com (AMZN) reported a strong 3rd quarter, and gave 4th quarter guidance above expectations, as the Prime membership ecosystem continued to drive accelerated growth. We believe the company continues to be best positioned to benefit from the secular shift to online commerce.

Align Technology (ALGN), the maker of clear aligners for dental malocclusions and a long-term holding in the fund, continued to grow its business faster than expectations. We believe the global market for clear aligners continues to be vastly under-penetrated, and provides a long runway of growth for the company.

Merck’s (MRK) stock declined considerably during the quarter as the company announced a delay in reporting its lung cancer drug candidate trial results until early 2019. While investors had speculated a delay was imminent, the length of the announced delay was longer than expected. Merck extended the duration of the clinical trial to gather overall survival data, which if superior, would allow it to remain the gold standard for lung cancer drugs regardless of other competitive treatments.

CVS Health (CVS) was negatively impacted by rumors that Amazon might be entering into the pharmacy business. In an effort to counter the possibility, CVS announced a merger with Aetna (AET), one of the largest managed-care organization in the U.S. This combination should allow CVS to better deliver cost-controlled care in a more efficient hub setting, and allow it to have better control over the patient’s behavior to deliver best outcomes. The deal is expected to close during second-half 2018 barring any major regulatory issues.


(As of 12/31/17) — The market environment for equities remains favorable, in our view. Interest rates, inflation and unemployment remain low while corporate earnings grind higher buoyed by broadening global growth and recent U.S. corporate tax reform. Growing cash flows combined with foreign cash repatriation should drive improved business investment and more aggressive capital allocation activity including mergers and acquisitions (M&A), buybacks, and dividend increases. As growth strengthens in the U.S. economy, inflation expectations and the pace at which the Fed intends to normalize interest rates and the central bank balance sheet could introduce market volatility. We stand poised to capitalize when and where we see an opportunity to improve risk-adjusted expected returns within the portfolio.

While “normalization” is under way in the U.S., central banks throughout the world have been reluctant to follow, thus far, despite the world’s synchronized economic expansion. In Europe, economists have increased that region’s economic growth expectations for 2018, the European Central Bank (ECB) plans to continue injecting $35.5 billion into the economy each month through its current quantitative easing program. ECB’s economists projected in December that the eurozone’s economy will grow 2.3% in 2018, a big increase from the 1.8% growth projected as recently as this past September. As long as the world economies experience moderate growth with low inflationary pressures, equities should continue to perform well in 2018.

Regardless of the ebb and flow of economic conditions, we continue to be focused on investing in attractively priced, financially strong, well-managed companies that are experiencing above market revenue growth potential operating in the tailwind of secular growth trend opportunities.

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 1213 for the three-year, 3 stars among 1099 for the five-year, and 3 stars among 779 Large Growth 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.