Quick Facts

(As of 3/31/17)

Ticker
  BUFIX

Inception Date
  September 28th, 2007

Total Fund Assets
  $203.2 M

Expense Ratio
  1.06%

Benchmark Index
  Russell Global (ex US)

MORNINGSTAR RATING

Overall Morningstar™ rating out of 324 Foreign Large Growth funds as of 3-31-2017 (derived from a weighted average of the fund’s three-, five-, and ten-year risk adjusted return measure, if applicable).

INVESTMENT STYLE

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.

RISK VS CATEGORY

LOW HIGH

RECENT NEWS

Buffalo International Fund – “Ones to Watch”

The Buffalo International Fund and co-managers William Kornitzer and Nicole Kornitzer were featured in the “Ones to Watch” section of the most recent issue of the CityWire magazine.

Overview

Investment Strategy

The investment objective of the Buffalo International Fund is long-term growth of capital. The International Fund invests primarily in equity securities of established companies that are economically tied to various countries throughout the world (excluding the U.S.). For purposes of the International Fund’s investments, “foreign securities” means those securities issued by companies:

  • Organized under the laws of, or with a principal office in, a country other than the U.S. and issue securities for which the principal trading market is in a country other than the U.S.; or
  • That derive at least 50% of their revenues or profits from goods produced or sold, investments made, or services provided in a country other than the U.S., or have at least 50% of their assets in a country other than the U.S.
  • Under normal circumstances, the International Fund does not expect its investments in emerging markets to exceed 35% of its net assets.
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When it comes to investing internationally, we believe our approach to stock selection is distinct. We are focused on finding good companies and aren’t constrained by benchmark alignment to countries or industries. Our approach is based on finding companies with sound business models, exposure to long-term secular growth trends, and attractive risk/return growth and valuation characteristics, which we can own for the long-term.

~ Bill Kornitzer, Portfolio Manager

Read More...

Performance

(As of 3/31/17)3 MOYTD1 YR3 YR5 YRSince Inception
(9/28/07)
Buffalo International Fund10.6310.6313.463.676.673.22
Russell Global (ex US) Index8.128.1213.130.984.860.56
Lipper International Fund Index8.108.1011.701.136.010.82
Morningstar Foreign Large Growth9.169.168.601.075.49-
Each Morningstar category average represents a universe of funds with similar objectives.
(As of 3/31/17)3 MOYTD1 YR3 YR5 YRSince Inception
(9/28/07)
Buffalo International Fund10.6310.6313.463.676.673.22
Russell Global (ex US) Index8.128.1213.130.984.860.56
Lipper International Fund Index8.108.1011.701.136.010.82
Morningstar Foreign Large Growth9.169.168.601.075.49-
Each Morningstar category average represents a universe of funds with similar objectives.
YearBuffalo International FundRussell Global (ex US) IndexMorningstar Foreign Large Growth
20163.194.39-2.14
2015-0.45-4.400.95
2014-2.04-3.58-3.92
201319.2916.2318.58
201219.0117.2017.70
2011-13.82-14.41-12.30
201013.7313.5114.78
200946.4545.0338.02
2008-40.82-46.86-46.56
2007*0.70-0.59-0.17
* Partial year. Inception to year-end.
Each Morningstar category average represents a universe of funds with similar objectives.
(As of 3/31/17)
vs Russell Global (ex US) Index
Upside Capture91.97
Downside Capture81.31
Alpha2.42
Beta0.85
Standard Deviation11.38
Sharpe Ratio0.31

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.

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.

Portfolio

(As of 3/31/17)
# of Holdings73
Median Market Cap$22.27 B
Weighted Average Market Cap$46.79 B
3-Yr Annualized Turnover Ratio10.52%
HoldingTickerSector% of Portfolio
Fresenius SE & Co KGaA FREHealth Care3.30%
SAP SE ADR SAPTechnology2.78%
Taiwan Semiconductor Manufacturing Ltd ADR TSMTechnology2.51%
Linde AG LINMaterials2.43%
HeidelbergCement AG HEIMaterials2.10%
Broadcom Ltd AVGOTechnology2.08%
Kering KERConsumer Discretionary2.07%
InterXion Holding NV INXNTechnology2.04%
Henkel AG & Co KGaA HENConsumer Staples2.03%
Diageo PLC ADR DEOConsumer Staples1.99%
TOP 10 HOLDINGS TOTAL23.33%
View Full Holdings

As of 12/31/16. 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 3/31/17. 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.

TOP 10 COUNTRIES 
TOP 10 TOTAL81.4%
Germany26.3%
France15.6%
United Kingdom9.5%
Switzerland7.4%
Japan6.3%
Netherlands5.8%
Italy2.9%
Taiwan2.6%
Bermuda2.6%
Singapore2.4%
As of 12/31/16. 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.

Commentary

CAPITAL MARKET OVERVIEW

International capital markets got off to a volatile start in 2016 with the Russell Global ex-U.S. Index dropping over 11% and West Texas Intermediate (WTI) Crude Oil down almost 30% by mid-February. Concerns about soft Chinese economic growth contributed to equity market weakness early in the year, and the energy complex was struggling to resolve its oversupplied condition. Meanwhile, perceived “safe-haven” assets performed strongly as U.S. 10-year Treasury notes advanced and gold appreciated over 15% during the same period. Economic concerns and a falling stock market led the Central Banks to continue to add support to asset prices. From mid-February, with help from the Central Banks and the Chinese government adding support, began a period of steadily rising prices and declining volatility that would continue through the end of the year with only brief interruptions from Britain’s vote to leave the European Union (BREXIT) and malaise ahead of the U.S. elections. Interestingly, perceived ”safe-haven” assets continued to perform strongly as gold and U.S. Treasuries rallied alongside equities into the summer and largely held those gains into the fall. The fourth quarter of 2016 began with this uneasy disequilibrium of fear and loathing still largely intact, but sentiment changed dramatically with Donald Trump’s surprise election victory. The election outcome created expectations of pro-growth policies and deregulation that drove accelerating gains in stock prices around the world, higher interest rates and associated declines in the prices of both Treasury bonds and gold, all of which generally persisted through the end of 2016.

The value sector had a good year, as energy prices rebounded. The U.S. stock market outperformed international markets generally and was reflective of a shift toward perceived “safe-havens” and an aversion to international exposure as increasing optimism for the U.S. economy with the potential for lower U.S. corporate tax rates following the election drove investor sentiment. For the year and for the fourth quarter, Energy and Materials were the best performing sectors as expectations for infrastructure investment and increasing investor risk appetite following the election contributed to the reversal of prior-year underperformance that was already underway. Health Care and Staples were the worst performing sectors for the year, as concerns about political backlash against rising drug prices contributed to declines in Pharmaceutical & Biotech stocks and the general shift toward “risk on” investing moved allocations away from the perceived safety of Consumer Staples.

PERFORMANCE COMMENTARY

In the fourth quarter of 2016, the Buffalo International Fund returned -3.93%, trailing the benchmark Russell Global ex-U.S. return of -1.63%. For the full year, the fund returned 3.19%, trailing the benchmark return of 4.39%. In the quarter, the cyclical rally after the U.S. election cost the fund performance relative to the benchmark as did our portfolio underweight to international banks. The surprise in the election sparked many cyclical segments of the market, where the fund has an underweight position relative to the index. International banks performed extremely well as “risk-on” and the expectations of higher net interest margins drove the sector outweighed concerns of capital adequacy and business models. The fund is positioned to hedge in downside markets rather than maximize potential upside leverage in a sluggish growth environment.

Among the top contributors during the quarter were LVMH, Kering and Criteo. Shares in both LVMH and Kering rallied on earnings expectations for luxury consumer discretionary stocks. Criteo shares sharply rebounded from the prior quarter as initial fears sparked by a short report and concerns around header-bidding faded.

Detractors in the period included Teva, Wirecard and Symrise. Teva’s shares declined as management delivered cautious commentary on 2017 growth and margin prospects as the acquisition of the Actavis generic business didn’t have the expected synergies. Drug pricing pressures continued in the political climate and also weighed on the company’s stock. Meanwhile Wirecard’s stock was pressured on renewed interest by short sellers, though we haven’t seen any changes to the company’s longterm prospects to warrant such action. Symrise’s performance in the quarter was driven primarily by a shift in sentiment that favored a move toward cyclicals and U.S. dollar exposure, and away from the perceived stability of companies operating in the Consumer Staples sector.

OUTLOOK

Having shrugged off the mid-year post-BREXIT hysteria, and gotten passed a Fed rate hike in December, the outlook for global growth remained sluggish, although with some signs of upside driven by improvement in U.S. sentiment and fiscal spending. In Asia, Japan has struggled to stimulate economic growth through numerous monetary policy measures, while China, has struggled to transition from an export driven economy to a local consumer driven economy with the help of extensive lending through an overextended banking channel. In Europe, political movements in multiple countries have gained momentum by questioning membership status to the European Union (EU). With more European elections on deck for this year, the initial political uncertainty in Europe is a potential headwind to growth, which we expect to ameliorate throughout the year.

While we remain unsure of the underlying economic benefit of further central bank (CB) intervention, they (the CBs) continue to remain committed to do what is necessary. However, with the rebound in commodity prices and a shift in tone toward actual fiscal stimulus and lower taxes in the U.S., inflation gauges have continued to increase, and central banks have begun to acknowledge the possibility of less aggressive policies. Despite a changing tone, market participants continue to have faith in governments and central banks to do right.

Overall, we enter 2017 modestly positive on the prospects for improving international growth. We are taking incremental risks where it makes sense, but continue to keep an eye towards hedging capital from potential downside risks. Outperformance of more cyclically sensitive value stocks reflected some of the same drivers that were in place earlier in the year, as well as increasingly optimistic expectations for economic growth, following the U.S. election. Our investment process favors a long-term secular growth perspective coupled within the context of our country specific macro analyses. We will look for opportunities to buy or add to companies that are exposed to secular growth, improving balance sheets and sustainable business models and whose valuation will potentially provide appropriate prospective returns for our investors.

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.

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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FOR INDIVIDUAL INVESTORS

The Morningstar RatingTM 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 RatingTM 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 International Fund received 4 stars among 324 for the three-year and 4 stars among 276 Foreign Large Growth funds for the five-year period ended 3/31/17.

©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.