Quick Facts
Investor Institutional
Ticker: BUFIX BUIIX
Daily Pricing:  
As of 5/24/2022  
NAV: $18.49 $18.51
$ Change: $-0.15 $-0.15
% Change:
-0.80% -0.80%
YTD:
-21.05% -21.00%
Inception Date: 9/28/2007 7/1/2019
Expense Ratio: 1.04% 0.89%
Total Net Assets: $579.76 Million  (3/31/22)
Morningstar Category: Foreign Large Cap Growth
Benchmark Index: FTSE All World Ex-US
Related Material:
   Fund Fact Sheet Q1 2022
   PM Commentary Q1 2022
   Summary Prospectus
Fund Objective & Investment Philosophy

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.

In selecting securities for the International Fund, the Fund managers use a bottom-up approach in choosing investments, seeking companies expected to experience growth based on the identification of long-term, measurable industry, technological, global or other trends. Companies are screened using in-depth, in-house research to identify those which the Fund managers believe have favorable attributes, including: attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages.

In making portfolio selections the Fund managers will also consider the economic, political and market conditions of the various countries in which the Fund may invest.

Morningstar Ratings

       

Overall Morningstar Rating™ of BUFIX based on risk-adjusted returns among 392 Foreign Large Growth funds as of 4/30/22.

Morningstar Sustainability Rating™ of BUFIX out of 7,493 Global Equity Large Cap funds as of 3/31/22, based on 99% of AUM

Carbon Metric Rating of BUFIX as of 3/31/22 in the Foreign Large Growth category, based on 91% of AUM; long positions only

%

Historical Sustainability Score Rank of BUFIX

PM Insights


International Equities
— The New Market Leaders?

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The Case for Investing Internationally

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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.

Nicole Kornitzer, Portfolio Manager

Performance (%)

As of 4/30/223 MOYTD1 YR3 YR5 YR10 YRSince Inception
BUFFALO INTERNATIONAL FUND - Investor-11.43-18.92-10.537.858.538.115.24
BUFFALO INTERNATIONAL FUND - Institutional-11.38-18.86-10.358.018.698.275.39
  FTSE All World Ex-US Index-7.51-10.87-9.395.255.615.762.61
  Morningstar Global Markets ex-US Index-7.53-11.35-10.044.785.20--
  Lipper International Fund Index-10.38-14.27-10.705.085.156.072.48
  Morningstar Foreign Large Growth Category-12.96-20.61-17.855.306.443.302.67
As of 3/31/223 MOYTD1 YR3 YR5 YR10 YRSince Inception
BUFFALO INTERNATIONAL FUND - Investor-11.83-11.831.9412.6311.118.875.88
BUFFALO INTERNATIONAL FUND - Institutional-11.78-11.782.0812.8011.289.036.04
  FTSE All World Ex-US Index-12.79-12.79-8.799.257.426.263.02
  Morningstar Global Markets ex-US Index-5.49-5.49-1.087.937.02--
  Lipper International Fund Index-8.20-8.20-2.478.717.226.612.98
  Morningstar Foreign Large Growth Category-13.43-13.43-6.839.628.927.293.31

 2012201320142015201620172018201920202021
BUFFALO INTERNATIONAL FUND - Investor19.0119.29-2.04-0.453.1929.33-8.8528.0219.1018.21
BUFFALO INTERNATIONAL FUND - Institutional19.1819.46-1.89-0.303.3429.53-8.7128.2019.2418.42
  FTSE All World Ex-US Index17.8115.62-3.04-4.465.1227.47-13.8722.2011.528.66
  Morningstar Global Markets ex-US Index17.3615.71-3.62-3.655.4527.37-14.1721.5711.178.41
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
BUFIX vs FTSE All World Ex-US Index (As of 3/31/22)
Upside Capture114.74
Downside Capture93.36
Alpha4.86
Beta0.95
Sharpe Ratio0.69
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.

Portfolio

Portfolio Characteristics
(As of 3/31/22) 
 
# of Holdings81
Median Market Cap$37.88 B
Weighted Average Market Cap$89.00 B
3-Yr Annualized Turnover Ratio13.16%
Active Share91.35%
Market Capitalization
As of 3/31/22. Market Cap percentages may not equal 100% due to rounding.
Top 10 Holdings
Name of HoldingTickerCountrySector% of Net
Assets
Schneider ElectricSU FPFranceIndustrials2.65%
ASML HoldingASMLNetherlandsTechnology2.62%
Ashtead GroupAHT LNEnglandIndustrials2.59%
MerckMRK GRGermanyHealth Care2.47%
LindeLIN GRIrelandMaterials2.46%
Taiwan SemiconductorTSMTaiwan, Province of ChinaTechnology2.36%
Sartorius Stedim BiotechDIM FPFranceHealth Care2.33%
HexagonHEXA B SSSwedenTechnology2.32%
AonAONEnglandFinancials2.18%
SiemensSIE GRGermanyIndustrials2.05%
TOP 10 HOLDINGS TOTAL24.03%
As of 12/31/21. 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.
Sector Weighting
As of 3/31/22. 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.
Countries
TOP 10 COUNTRIES% of Portfolio
Net Assets
Germany19.93%
France16.88%
Ireland9.06%
Netherlands8.39%
United Kingdom7.60%
Switzerland7.08%
Japan6.22%
Sweden2.51%
Luxembourg2.40%
Taiwan, Province of China2.36%
TOP 10 TOTAL82.43%
As of 12/31/21.
MARKET CLASSIFICATION
Emerging Markets:4.96%
Developed Markets:95.04%
As of 12/31/21.

Management

Nicole Kornitzer, CFA
Portfolio Manager

22 Years of Experience

 View full bio

Pat Srinivas
International Equity Research Analyst

16 Years of Experience

 View full bio

Commentary

CAPITAL MARKET OVERVIEW

(As of 3/31/22) — Global capital markets pulled back in the quarter, shocked by Russia’s unexpected invasion of Ukraine that generated devastating consequences, above all, human loss and suffering. As the war unfolded throughout the quarter, it became clear that the affects would multiply. With both countries being substantial commodity exporters, inflation and supply chain concerns, that were already present before the war, intensified.

Among developed markets, Eurozone market performance was sharply negative. The Eurozone has high dependence on Russian oil, gas, and coal exports, and the invasion caused a spike in energy prices and fears over the continuity of supply. It is perceived that the effects would slow growth in the region and delay the post-pandemic economic recovery. At the same time, the European Central Bank outlined plans to end bond purchases and indicated that interest rate increases could come this year to combat rising inflation.

In Asia, the Japanese market declined, and more extensively in U.S. dollar terms due to the weakening yen. Japan is not yet raising interest rates; thus the attraction of the yen carry trade has returned. Meanwhile, Hong Kong’s market performance was also negative, as the city faced a full-blown wave of the omicron strain of coronavirus, and was forced to implement social distancing restrictions to control it.

Emerging markets, as a whole, were also in the red. Not only were Chinese markets weak in the face of rising COVID-19 cases and ensuing mobility restrictions, but commodity-importing countries, particularly those dependent on energy and wheat imports, saw their stock markets decline with rising commodity prices. However, with inflation abound, Latin American markets and other commodity-exporting countries like Brazil were strong-performing markets in the quarter.

While the S&P 5OO Index declined -4.60% during the quarter, the MSCI ACWI ex USA Index was down -5.44% (in USD terms) and the developed country MSCI EAFE Index declined -5.91% (in USD terms).

PERFORMANCE COMMENTARY

(As of 3/31/22) — The Buffalo International Fund (BUFIX) produced a return of -11.83% for the quarter, a result that underperformed the MSCI ACWI ex USA Growth Index return of -10.71%, and underperformed the more broad Morningstar Global Markets ex-US Index return of -5.49%.

Value stocks outperformed growth stocks by a significant amount in the period. Compared to the Morningstar Global Markets ex-US Index, the Buffalo International Fund’s focus on growth stocks was a hindrance to performance. The Fund’s overweight position in the Technology sector detracted from relative results as Technology underperformed in the quarter. On the other hand, Energy, Financials, and Materials outperformed in the quarter, but the Fund is generally underweight these sectors. The portfolio’s overweight to European markets also weighed on relative performance, as well as the underweight position to the strongly performing Brazilian market.

TOP CONTRIBUTORS

Top contributors in the period included Thales SA, Aon Plc, and Astrazeneca Plc.

Thales is a French company that engages in the manufacture, marketing, and sale of electronic equipment and systems for aeronautics, naval, and defense sectors. The company is a beneficiary of trends in security and cyber defense, and is a potential post-pandemic recovery story supplying electronic systems to the commercial aviation industry. Following the Russian invasion of Ukraine, the stock price soared as investors piled into defense-related stocks. We believe Thales will now also benefit from increased defense spending in the Eurozone.

Aon is a global provider of risk and insurance brokerage consulting. This business should continue to thrive, as the company has a strong market position in several growth areas, and a small part of its business can benefit from rising interest rates.

Astrazeneca, one of the largest multinational pharmaceutical companies, saw its stock perform especially well post the Ukraine invasion, as the industry was viewed as somewhat of a safe haven. We like the company’s stable revenue growth outlook post the acquisition of Alexion, and are optimistic about the pipeline of new therapies.

TOP DETRACTORS

Top detractors in the quarter were Ashtead Group Plc, Omron Corporation, and Sartorius Stedim Biotech SA.

Ashtead, an equipment rental company that operates in the U.S. and the U.K., declined on fears of a weakening economy. In spite of the pullback, we continue to like the company’s long-term growth prospects through increased rental penetration and market share gains from smaller peers. Ashtead has scale in a fragmented market, affording them advantages such as the ability to spend more on IT and logistics that help make their offerings more attractive. The increasing cost of owning, operating, and complying with laws surrounding new equipment makes rental a preferable alternative in our view. Strong demand and tight supply of equipment should keep rental rates strong.

Omron, an automation stock headquartered in Japan, experienced weak stock performance due to chip shortages and logistics disruptions that caused them to report lower than expected profits and announce lower forward guidance due to a slower recovery. We expect the chip shortage to gradually resolve which should help boost near-term results.

Sartorius Stedim Biotech, a provider of equipment for the production of biopharmaceuticals, saw its share price decline partially on concerns around biotech funding. We believe these fears are overblown. Sartorius profits from increasing penetration of single-use products, a trend that is set to continue and a specialty of Sartorius Stedim. Biopharmaceuticals now comprise roughly one-third of the global pharmaceutical market, and 40% of the industry’s pipeline. We still like this business area with its high recurring revenues and pricing power.

OUTLOOK

(As of 3/31/22) — In the wake of Russia’s invasion of Ukraine, and continued COVID-related restrictions in China, the outlook for global growth in 2022 has weakened. Following war-related disruptions to supply chains, inflationary pressures for energy, food, and materials have intensified around the globe. Energy has been the strongest contributor in Europe, and annual inflation in the Eurozone has now risen to 7.5%, 4% of which is coming from higher energy costs. Raw materials and food prices are also on the rise, and many regions of the world will feel the effects. Furthermore, ongoing efforts to control the pandemic in China will put continued pressure on supply chains, and may cause even more meaningful disruption should the pandemic spread further. With inflationary forces and the ensuing rate increases by central banks to curb them, there is the risk that demand destruction will eventually ensue. A global recession is becoming a more likely event, and stagflation, the dreaded occurrence of inflation coupled with lack of growth, has many investors concerned.

Despite the dark clouds overhead, we keep in mind some positive points. Outside of China, the resolution of the pandemic and the increasing movement of people can be a force for economic growth. Consumers in developed markets within Europe and Asia have pent up savings and the means to spend. Though costs are rising, the strong desire to return to a more active life may offset hesitations about spending related to an uncertain future. In the Eurozone, while inflation is stoked by high energy costs, the pressures on the labor market are not as intense as seen in the U.S. Thus labor cost inflation has so far not been of great concern. We believe supply shortages that have contributed to inflation should eventually ease. It may be that inflation peaks near or mid-term and then begins to settle into a more acceptable level. And while energy costs may remain high through the “energy transition” in Europe, European officials seek to help lower-income consumers manage those costs. European companies will need to focus ever more on energy efficiency measures, and the green energy revolution that was already underway in Europe will most likely be accelerated. This will bring some added costs for companies, but is not entirely unexpected. It should also herald some new business and investment opportunities.

In times of slowing growth, as in boom times, we press on with our time-tested investment approach. While it is difficult to predict the future macroeconomic or geopolitical environment, we try to understand the existing conditions and plan for the associated risks within our existing framework. Our investment process is centered on bottoms-up investing. We seek out high-quality companies that have sound, sustainable business models, competitive advantages, and can benefit from secular growth drivers throughout the business cycle. We prefer businesses that have strong balance sheets and generate strong free cash flow. In an inflationary environment, we also favor companies that have the means to pass along cost pressures, such as companies with high recurring revenues or companies whose products make up a small cost of a larger product. We also pay close attention to the valuation multiples of the companies in our portfolio and seek out opportunities during periods of market weakness or volatility to buy high quality growth companies at attractive valuations, that should provide us opportunity to post superior risk-adjusted returns over the long term.

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.
International Fund News

Kiplinger: Top-Performing Mutual Funds

Kiplinger recognized the Buffalo Flexible Income and International Funds as “Top-Performing Mutual Funds” in their recent fund analysis.

Kiplinger: Top-Performing Mutual Funds

Kiplinger recognized the Buffalo Flexible Income and International Funds as “Top-Performing Mutual Funds” in their recent fund analysis.

Kiplinger: Top-Performing Mutual Funds

Kiplinger recognized the Buffalo Flexible Income, International, and Small Cap Funds as “Top-Performing Mutual Funds” in their recent fund analysis.

Recent Recognition
  • Investor’s Business Daily “Best Mutual Funds List” – April 21, 2022
  • Kiplinger’s “Top Performing Mutual Funds” – April 18, 2022
  • Kiplinger’s “Top Performing Mutual Funds” – March 10, 2022
  • Kiplinger’s “Top Performing Mutual Funds” – January 24, 2022
  • Kiplinger’s “Top Performing Mutual Funds” – December 21, 2021
  • Kiplinger’s “Top Performing Mutual Funds” – November 18, 2021
  • Kiplinger’s “Top Performing Mutual Funds” – August 18, 2021
  • Investor’s Business Daily “Best Mutual Funds List” – March 22, 2021
  • Investor’s Business Daily “Best Mutual Funds List” – March 23, 2020
  • Citywire “Top 20 Female Portfolio Managers in the U.S.” – December 20, 2019
  • Kiplinger Top-Performing Mutual Fund (5 Years) – November 15, 2019
  • US News & World Reports – Best Mutual Funds – August 15, 2019
  • Zacks “4 Non-U.S. Mutual Funds to Buy Now” – July 3, 2019
  • Zacks “3 Non-U.S. Mutual Funds Worth Taking a Look” – May 3, 2019
  • Morningstar 5-star Overall Rating – March 31, 2019out of 373 Foreign Large Growth funds*
  • Morningstar 5-star Overall Rating – December 31, 2018out of 364 Foreign Large Growth funds*
  • Zacks “Consider These Non-U.S. Mutual Funds for Excellent Returns” – October 25, 2018
  • Morningstar 5-star Overall Rating – September 30, 2018out of 347 Foreign Large Growth funds*
  • Citywire “Winning Women – Top 20 Female Portfolio Managers in the U.S.” – August 31, 2018
  • Citywire “International Stars to Watch” – August 10, 2018
  • Morningstar 5-star Overall Rating – September 30, 2017out of 325 Foreign Large Growth funds*
  • Zacks “Four #1 Non-U.S. Mutual Funds” – September 22, 2017
  • Citywire “Alpha Female 2017 – The Top Female Fund Managers in 7 Major Markets” – August 8, 2017
  • Zacks “3 Strong Buy Non-U.S. Mutual Funds” – June 7, 2017

*Overall Morningstar Rating derived from a weighted average of the fund’s 3-, 5-, and 10-year risk adjusted return.

Literature

General Account
Forms
Investor
Class
Institutional
Class
Both
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

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.

Morningstar Rating™

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 Morningstar Rating does not include any adjustment for sales loads. 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.

©2021 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 Buffalo International Fund (BUFIX) received 4 stars among 392 for the 3-year, 4 stars among 349 for the 5-year, and 4 stars among 223 Foreign Large Growth funds for the 10-year period ending 4/30/22. Other share classes may have different performance characteristics based on risk-adjusted returns.
Morningstar Sustainability Rating™

The Morningstar Sustainability Rating™ is intended to measure how well the issuing companies of the securities within a fund’s portfolio holdings are managing their financially material environmental, social and governance, or ESG, risks relative to the fund’s Morningstar Global Category peers. The Morningstar Sustainability Rating calculation is a five -step process. First, each fund with at least 67% of assets covered by a company-level ESG Risk Score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. The Morningstar Portfolio Sustainability Score is an asset weighted average of company-level ESG Risk Scores. The Portfolio Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk. Second, the Historical Sustainability Score is an exponential weighted moving average of the Portfolio Sustainability Scores over the past 12 months. The process rescales the current Portfolio Sustainability Score to reflect the consistency of the scores. The Historical Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk, on a consistent historical basis. Third, the Morningstar Sustainability Rating is then assigned to all scored funds within Morningstar Global Categories in which at least thirty (30) funds receive a Historical Sustainability Score and is determined by each fund’s Morningstar Sustainability Rating Score rank within the following distribution: High (highest 10%), Above Average (next 22.5%), Average (next 35%), Below Average (next 22.5%), and Low (lowest 10%). Fourth, Morningstar applies a 1% rating buffer from the previous month to increase rating stability. This means a fund must move 1% beyond the rating breakpoint to change ratings. Fifth, they adjust downward positive Sustainability Ratings to funds with high ESG Risk scores. The logic is as follows: If Portfolio Sustainability score is above 40, then the fund receives a Low Sustainability Rating. If Portfolio Sustainability score is above 35 and preliminary rating is Average or better, then the fund is downgraded to Below Average. If the Portfolio Sustainability score is above 30 and preliminary rating is Above Average, then the fund is downgraded to Average. If the Portfolio Sustainability score is below 30, then no adjustment is made. The Morningstar Sustainability Rating is depicted by globe icons where High equals 5 globes and Low equals 1 globe. Since a Sustainability Rating is assigned to all funds that meet the above criteria, the rating it is not limited to funds with explicit sustainable or responsible investment mandates. Morningstar updates its Sustainability Ratings monthly. The Portfolio Sustainability Score is calculated when Morningstar receives a new portfolio. Then, the Historical Sustainability Score and the Sustainability Rating is calculated one month and six business days after the reported as-of date of the most recent portfolio. As part of the evaluation process, Morningstar uses Sustainalytics’ ESG scores from the same month as the portfolio as-of date. Please click on http://corporate1.morningstar.com/SustainableInvesting/ for more detailed information about the Morningstar Sustainability Rating methodology and calculation frequency. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.

Morningstar Low Carbon Designation™

The Morningstar® Low Carbon Designation™ is intended to allow investors to easily identify low-carbon funds across the global universe. The designation is an indicator that the companies held in a portfolio are in general alignment with the transition to a low-carbon economy. The designation is given to portfolios that have low carbon-risk scores and low levels of exposure to fossil fuels. To determine carbon-risk scores and fossil fuel involvement, Morningstar uses Sustainalytics' company-level data. The Morningstar® Portfolio Carbon Risk Score™ measures the risk that companies in a portfolio face from the transition to a low-carbon economy. The Morningstar® Portfolio Fossil Fuel Involvement™ percentage assesses the degree to which a portfolio is exposed to thermal coal extraction and power generation as well as oil and gas production, power generation, and products & services. To receive a Morningstar Portfolio Carbon Risk Score, at least 67% of portfolio assets must have a carbon-risk rating from Sustainalytics. The percentage of assets covered is rescaled to 100% before calculating the score. To receive the designation, a portfolio must meet two criteria: 1) a 12-month trailing average Morningstar Portfolio Carbon Risk Score below 10 and 2) a 12-month trailing average exposure to fossil fuels less than 7% of assets, which is approximately a 33% underweighting to the global equity universe. Funds receive the Low Carbon designation based on the most recent quarterly calculations of their 12- month trailing average Morningstar Portfolio Carbon Risk Scores and Morningstar Portfolio Fossil Fuel Involvement. Funds holding the Low Carbon designation that no longer meet the criteria will not receive the designation for the subsequent quarter. All Morningstar Portfolio Carbon Metrics, including the Morningstar Portfolio Carbon Risk Score, Morningstar Portfolio Fossil Fuel Involvement, and the Morningstar Low Carbon Designation, are calculated quarterly. Please visit http://corporate1.morningstar.com/SustainableInvesting/ for more detail information about the Morningstar Low Carbon Designation and its calculation. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.