Quick Facts
Investor Institutional
Daily Pricing:  
As of 6/8/2023  
NAV: $10.26 $10.25
$ Change: $0.01 $0.01
% Change:
0.10% 0.10%
3.87% 3.93%
Inception Date: 5/19/1995 7/1/2019
Expense Ratio: 1.02% 0.87%
Total Net Assets: $309.29 Million  (3/31/23)
Morningstar Category: High Yield Bond
Benchmark Index: ICE BofA U.S. High Yield
Dividend Distribution: Monthly
Related Material:
   Fund Fact Sheet Q1 2023
   PM Commentary Q1 2023
   Summary Prospectus
Fund Objective & Investment Process

The investment objective of the Buffalo High Yield Fund is primarily current income, with long-term growth of capital as a secondary objective. The High Yield Fund normally invests at least 80% of its net assets in higher-yielding, higher-risk debt securities rated below investment grade by the major rating agencies (or in similar unrated securities), commonly known as “junk bonds”. Debt securities can include fixed and floating rate bonds as well as bank debt and convertible debt securities.

While the Fund maintains flexibility to invest in bonds of varying maturities, the Fund generally holds bonds with intermediate-term maturities. With respect to the remaining 20% of the Fund’s net assets, the Fund may invest in investment grade debt securities, U.S. Treasury Securities (typically with maturities of 60 days or less), money market funds, and equity investments, including dividend paying stocks and convertible preferred stocks.


Our team brings many years of credit research experience to the bond market. We are proud to have provided our shareholders with what we believe is a conservative approach to investing in high yield bonds since 1995.

Jeff Sitzmann, Portfolio Manager

Morningstar Rating


Overall Morningstar Rating™ of BUFHX based on risk-adjusted returns among 619 High Yield Bond funds as of 4/30/23.

Performance (%)

As of 4/30/233 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO HIGH YIELD FUND - Investor0.583.201.647.434.424.245.845.876.58
BUFFALO HIGH YIELD FUND - Institutional0.613.251.797.594.564.395.996.036.74
  ICE BofA U.S. High Yield Index0.794.741.124.893.133.946.196.706.49
  Lipper High Yield Bond Funds Index0.504.320.635.272.933.535.245.865.40
  Morningstar High Yield Bond Category0.474.040.554.652.623.155.075.725.31
As of 12/31/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO HIGH YIELD FUND - Investor3.98-5.53-5.532.893.644.385.516.086.54
BUFFALO HIGH YIELD FUND - Institutional4.02-5.39-5.393.053.784.535.666.236.70
  ICE BofA U.S. High Yield Index4.01-11.17-11.17-
  Lipper High Yield Bond Funds Index3.91-10.28-10.28-0.151.993.594.956.215.31
  Morningstar High Yield Bond Category3.91-10.09-10.09-0.211.743.204.806.025.23

BUFFALO HIGH YIELD FUND - Investor9.401.961.806.655.98-2.2612.329.275.53-5.53
BUFFALO HIGH YIELD FUND - Institutional9.562.111.956.816.14-2.1212.409.435.69-5.39
  ICE BofAML U.S. High Yield Index7.422.50-4.6417.497.48-2.2614.416.175.36-11.17
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.
3 Year Risk Metrics
BUFHX vs ICE BofA U.S. High Yield Index (As of 3/31/23)
Upside Capture84.49
Downside Capture54.32
Sharpe Ratio1.13
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.
Net Investment
Short-Term Capital
Long-Term Capital
5/17/235/18/23$10.16 (Inv)

$10.15 (Inst)




4/17/234/18/23$10.23 (Inv)

$10.22 (Inst)




3/17/233/20/23$10.03 (Inv)

$10.02 (Inst)




2/17/232/21/23$10.17 (Inv)

$10.16 (Inst)




1/17/231/18/23$10.31 (Inv)

$10.30 (Inst)




2023 Distribution Dates:

Net Investment Income, if any – Record Date (6/20/23); Payment Date (6/21/23)

Net Investment Income, if any – Record Date (7/17/23); Payment Date (7/18/23)

Net Investment Income, if any – Record Date (8/17/23); Payment Date (8/18/23)

Net Investment Income, if any – Record Date (9/18/23); Payment Date (9/19/23)

Net Investment Income, if any – Record Date (10/17/23); Payment Date (10/18/23)

Net Investment Income, if any – Record Date (11/17/23); Payment Date (11/20/23)

Capital Gains, if any – Record Date (12/4/23); Payment Date (12/5/23)

Net Investment Income, if any – Record Date (12/18/23); Payment Date (12/19/23)
For historical distributions, click here.


Portfolio Characteristics
(As of 3/31/23) 
# of Holdings137
3-Yr Annualized Turnover Ratio46.47%
Average Duration2.86 years
Average Maturity7.91 years
30-day SEC Yield7.67%
Top 10 Holdings
Name of HoldingMaturity Date% of Net
MPLX3 Month LIBOR +4.652%, 8/15/233.05%
Northern Oil & Gas8.125%, 3/1/283.03%
DirecTV Financing1 Month LIBOR + 5.000%, 8/2/272.94%
Talos Production12.000%, 1/15/262.19%
CoreCivic8.250%, 4/15/262.14%
Portillo's1st Lien Term Loan, 9/6/242.07%
Penn Virginia Escrow9.250%, 8/15/261.90%
Matador Resources5.875%, 9/15/261.83%
The Geo Group1 Month SOFR + 7.125%1.74%
Maxar Technologies1 Month SOFR + 4.250%1.73%
As of 12/31/22. 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.
Asset Allocation
Percentages of Total Assets as of 3/31/23. Allocation percentages may not equal 100% due to rounding.
Sector Weighting
As of 3/31/23. 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.
Duration Breakout (%)*
10+ Years0.00
7-10 Years0.00
5-7 Years3.48
3-5 Years30.76
1-3 Years35.44
0-1 Years9.23
*Excludes Bank Loans and Converts.
Credit Quality
Quality Breakout (%)
All ratings are as of 3/31/23. Moody’s is the rating source for the Quality Breakout Table. A credit rating is an assessment provided by a nationally recognized statistical rating organization (NRSRO), such as Moody’s or Standard & Poor’s. The firm evaluates the of credit worthiness of an issuer with respect to debt obligations, including specific securities, money market instruments, or other bonds. Ratings are measured on a scale that generally ranges from Aaa (highest grade) to C (lowest grade); ratings are subject to change without notice. Unassigned rating indicates that the debtor was not rated by an NRSRO and should not be interpreted as indicating low quality.


Paul Dlugosch, CFA
Portfolio Manager

26 Years of Experience

 View full bio

Jeff Sitzmann, CFA
Portfolio Manager

36 Years of Experience

 View full bio

Jeff Deardorff, CFA
Portfolio Manager

26 Years of Experience

 View full bio



(As of 3/31/23) — The U.S. high yield sector generated its second consecutive positive quarter after posting three consecutive losing quarters. In January and February, investors became more optimistic that the previous aggressive US Federal Reserve actions were taming inflation more quickly than expected and lower rated credits outperformed. However, in March, the US regional bank turmoil caused a surge in spreads (drop in prices) in fixed income, which induced steady outflows of assets and stifled new issuance activity. Despite this volatility, March still produced positive returns for the high yield sector. According to JP Morgan, high yield bonds ended the quarter at a yield to worst of 8.76%, down 47 basis points (bps) from the beginning of the quarter and compared to the record low of 4.22% in July 2021. The 10-year Treasury yield declined 41 bps to 3.47% and produced a positive return of 3.50% during the quarter while the S&P 500 Index posted a gain of 7.50% over the same period.

High yield funds saw quarterly cash outflows of -$16.0 billion in the quarter which compares to -$27.2 billion of outflows during the first quarter of 2022. High yield new issuance for the quarter was $40.5 billion compared to $46.5 billion in the first quarter of 2022. Capital market conditions steadily improved in January amid a sharp decline in yields. Twenty-five high yield bonds priced in January totaling $20.5 billion, the heaviest activity since January 2022’s $27.9 billion. An average of $7.2 billion priced per month over the previous 11 months. February started out well but quickly tapered off due to rising yields, but still managed to produce eighteen deals for $14.4 billion. March was very quiet amid the banking turmoil and Fed rate decision with only $5.6 billion issued. New loan issuance was healthy in Jan ($13.7 billion), February was very active ($38.9 billion) and more in-line in March ($17.4 billion) for a total of $70.3 billion for the quarter.

According to JPMorgan, CCC rated bonds outperformed both B and BB rated issues during the quarter (CCC = 5.00%, B = 4.08%, BB = 3.80%), which helps to explain the index outperformance of the fund. Broadcasting and Telecom were the only two industries in the U.S. high yield universe that generated negative returns during the first quarter. According to data from JP Morgan, the Gaming/Leisure industry was the best performer with a positive 6.04% return and Broadcasting was the worst performing sector delivering negative returns of -1.09%.

According to data from JP Morgan, the U.S. high yield market’s spread to worst for the period was 499bps, 12bps tighter than the fourth quarter of 2022 and 63bps tighter than its 20-year historical average of 562bps. The yield to worst for the high yield market at quarter end was 8.76%, above the 20-year average of 7.82%, but below the 9.23% yield at the end of the fourth quarter 2022.


(As of 3/31/23) — The Buffalo High Yield Fund advanced 2.36% for the quarter ending March 31, 2023, trailing the ICE BofA U.S. High Yield Index which gained 3.73% and under-performing the Lipper High Yield Bond Funds Index which gained 3.35% for the three-month period.

Fund Composition by Asset Class
Straight Corporates68.3%69.4%69.6%68.4%67.6%
Bank Loans18.5%18.9%19.1%19.1%21.5%
Preferred Stock2.7%2.9%2.5%2.2%2.7%
Convertible Preferred0.0%0.0%0.0%0.0%0.0%
Common Stocks0.0%0.0%0.0%0.0%0.0%

Approximate Rate and Contribution of Return from the Fund’s Various Asset Classes in 1Q23
Contribution to Return
Straight Corporates1.98%
Bank Loans0.25%
Preferred Stocks0.18%
Convertible PreferredN/A
Common StocksN/A


The fund’s three top contributors were the Ranger Oil 9.25% 2026 corporate bonds, the Vista Outdoors 4.50% 2029 corporate bonds and the Northern Oil & Gas 8.125% 2028 corporate bonds. In February, Baytex Energy announced it was acquiring Ranger Oil for cash and stock. The bonds traded just under par prior to the announcement and promptly traded up to around $106 which is near its 106.94 call price on 8/15/23. These bonds will be redeemed when the acquisition is finalized. Vista Outdoors 4.50% was trading in the mid 70’s to start the year and caught a strong bid throughout January rallying over 6 points into the low $80’s. Vista is one of the largest manufacturers of small caliber ammunition (Remington) as well as outdoor recreational brands like Camelbak, Bell Helmets, and Bushnell. It is a BB credit that was trading at CCC-type yields because Environmental, social, and governance (ESG) mandates prevent some investors from owning ammunition. The bonds of Northern Oil & Gas 8.125% is the largest position in the fund and the bond price improved 3.5% during the quarter, in line with the ~3.7% return for the Energy sector.


The Tutor Perini 6.875% 2025 corporate bonds, the Consensus Cloud 6.0% 2026 corporate bonds, and the Scripps 5.375% 2031 corporate bonds were the worst performers during the quarter. Tutor Perini reported disappointing earnings in March citing canceled projects and an adverse legal ruling. The fund liquidated its position in the bonds during the quarter. Consensus Cloud sold off in late February after posting disappointing earnings compounded by the market selloff in early March. Scripps bonds also came under pressure after the company reported weaker than expected earnings in February compounded by the entire Broadcasting sector declining during the quarter.

(As of 3/31/23) — We are focused first and foremost on the Federal Reserve’s balancing act between taming inflation while avoiding a recession, economic weakness globally, and the geopolitical uncertainty caused by the ongoing conflict in Ukraine. We are managing the fund cautiously yet actively, focusing on higher-quality issuers with defensive business models and manageable credit metrics. We will continue to deploy the fund’s cash in opportunities that we believe offer the most appealing risk/reward tradeoff with a bias toward shorter durations and less levered credits. Additionally, we believe bank loans offer a more defensive position as they provide senior positioning in the capital structure and less interest rate sensitivity due to their floating rate structures. Finally, while we continue to look for opportunities in convertible bonds and preferred stocks, the increased level of bond yields for traditional bonds/loans in conjunction with the increased volatility of the underlying equities makes these types of securities less appealing to us at this time. We ended the quarter with 137 positions, up from the previous quarter’s level of 128 (excluding cash).
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.


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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 High Yield Fund (BUFHX) received 5 stars among 619 for the 3-year, 5 stars among 572 for the 5-year, and 5 stars among 410 High Yield Bond funds for the 10-year period ending 4/30/23.

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. ©2022 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.