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 1,269 Large Growth funds as of 5/31/18 (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 1,269 funds in the Large Growth category, as of 5/31/18.


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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 5/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Growth Fund4.469.4419.9911.0713.2810.2410.2410.28
  Russell 1000 Growth Index1.886.2321.0213.9315.6910.8910.339.33
  Lipper Large Cap Growth Fund Index2.117.9121.2212.7514.959.389.288.31
  Morningstar Large Growth1.986.7319.8211.4713.829.339.558.52
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 Holdings60
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 3/31/18) — The long streak of low volatility and positive stock market returns ended in the 1st quarter of 2018. Strong gains in January were erased in February and March, leaving the S&P 500 Index down 0.76% for the quarter. Volatility as measured by the Cboe Volatility Index (VIX) was up about 80% in the 1st quarter after falling for the last three years. Investor worries about increasing interest rates, possible trade wars, and threatened government action against large technology companies, offset generally strong economic data and corporate earnings growth.

The Russell 3000 Index declined 0.64% in the quarter, and, broadly speaking, small cap companies outperformed large cap companies during the period. The Russell Microcap Index advanced 0.68% and the Russell 2000 Index finished the period nearly flat, edging down just 0.08%. Moving up the market cap spectrum, performance worsened – the Russell Mid Cap Index was down 0.46% and the larger cap Russell 1000 Index declined 0.69%. Growth outperformed value by a wide margin during the quarter as the Russell 3000 Growth Index advanced 1.48% compared to a decline of 2.82% for the Russell 3000 Value Index. Technology and Consumer Discretionary were the best performing sectors, while Consumer Staples and Energy were the worst performing.


(As of 3/31/18) — The Buffalo Growth Fund gained 2.40% during the quarter, outperforming the benchmark Russell 1000 Growth Index return of 1.42%. The Fund outperformed the benchmark with help from positive stock selection in the Consumer Discretionary and Technology sectors. In Consumer Discretionary our Ecommerce-related investments like Amazon and Booking.com performed well, while within Technology our software stocks like Adobe, Microsoft, and Red Hat boosted returns.

The Fund was also aided by a positive sector allocation effect due to our overweight in Financials, the best performing sector within the Index and our underweight in Consumer Staples, a benchmark sector that declined nearly 5% in the quarter. Rising interest rate expectations have lifted Financials while weighing on bond proxies like Staples. Meanwhile, negative stock selection in Industrials was a modest headwind as this sector was negatively impacted by moderating Global Purchasing Managers’ Index (PMI) data that is signaling continued expansion but cooling from the red-hot pace seen in late 2017.

Align Technology, the maker of clear aligners for dental malocclusion and a long term holding in the Fund, continued to grow in excess of expectations. We believe robust growth is sustainable over the intermediate to long term as the company has expanded its products to address nearly 70% of the orthodontic market, while less than 15% of the orthodontic market has converted from metal braces to clear aligners.

Amazon continued to gobble up retail and cloud computing dollar share, which fueled another quarter of robust price appreciation. Higher margin business segments like Amazon Web Services (AWS) and advertising outperformed expectations leading to more positive-than-expected overall corporate margin. The company continued to be a prime beneficiary of the transition to online commerce and cloud computing.

Portola Pharmaceuticals’s stock price fell during the quarter after it received communications from the U.S. Food & Drug Administration (FDA) asking for additional information in the ongoing evaluation of its AndexXa drug, an antidote to commonly-prescribed blood thinners (factor Xa inhibitors) in patients who experience life threatening bleeds. The FDA request for additional information led many on Wall Street to speculate that commercialization of the drug may be delayed. Despite any potential delay, we believe the drug still has good odds of eventual approval given the significant unmet need and strong clinical data.

Biogen stock was weak after experiencing multiple setbacks in its new drug pipeline during the quarter. First, they announced a promising Alzheimer’s drug in development was experiencing greater-than-anticipated variability in phase III trials, followed by news later in the quarter that a multiple sclerosis (MS) drug, one of many in its MS franchise, was being taken off market due to safety concerns. While disappointing in the near term, we think Biogen’s growth prospects for the existing drug portfolio, focused on multiple sclerosis, neurology, and oncology, offer better-than-average growth at a discount to the average multiple of large cap biotech peers.


(As of 3/31/18) — The market environment for equities remains favorable. 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, central banks should continue the process of delicately weaning markets off easy money. They, in effect, are ceding control to free markets, which are much more unforgiving than the market has become accustomed to these last several years. As market stabilization forces wane, the market is likely to become more volatile and data point driven. Day-to-day concerns, like a global trade war breaking out for instance, can subject the market to potentially big swings following each data point that validates or contradicts the climate of opinion.

As volatility picks up, the environment could evolve into more of a stock picker’s market, where a steady hand and active management could hold advantage over passive investment strategies. We stand poised to capitalize where we see near term stock price volatility present an opportunity to improve risk-adjusted expected returns within the portfolio.

Economic conditions may ebb and flow, but our distinct focus for the Buffalo Growth Fund is to hitch our wagon to the secular trend stars, in our opinion the best ideas the growth equity team has identified: attractively-priced, financially-strong, well-managed companies across all market cap segments, which we believe are favorably-positioned to harvest the lion’s share of big secular growth trend potential.

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 3 stars among 1269 for the three-year, 3 stars among 1151 for the five-year, and 3 stars among 836 Large Growth funds for the ten-year period ending 5/31/18.

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.