Quick Facts
Inception Date:5/19/19957/1/2019
Expense Ratio:0.95%0.81%
Total Net Assets:$106.30 Million  (12/31/20)
Category:Large Cap Growth
Benchmark:Morningstar U.S. Large Growth
Related Material:
   Fund Fact Sheet Q4 2020
   PM Commentary Q3 2020
   Summary Prospectus
Fund Ojbective & Investment Process

The investment objective of the Buffalo Large Cap Fund is long-term growth of capital. The Large Cap Fund invests primarily in equity securities, consisting of domestic common and preferred stocks of large capitalization (“large-cap”) companies, that, at time of purchase by the Fund, have a market capitalization greater than $30 billion.

The Fund managers seek to identify companies for the Large Cap Fund’s portfolio that are expected to experience growth based on the identification of long-term, measurable secular trends, and which, as a result, the managers believe may have potential revenue growth in excess of the gross domestic product growth rate.

Companies are screened using in-depth, in-house research to identify those which the managers believe have favorable attributes, including attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages.


We don’t manage to our benchmark so we don’t have too much concentration in any one single trend. We also manage based on valuation, trimming positions when they approach their potential upside and adding to them as they get closer to the potential downside.

Alex Hancock, Portfolio Manager

Morningstar Rating


Overall Morningstar Rating™ of BUFEX based on risk-adjusted returns among 1,197 Large Growth funds as of 12/31/20.

Investment Style

Performance (%)

As of 12/31/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO LARGE CAP FUND - Investor9.8828.0828.0818.4117.2514.6811.017.6610.64
BUFFALO LARGE CAP FUND - Institutional9.9128.2828.2818.5917.4314.8511.177.8210.81
  Morningstar U.S. Large Growth Index8.8938.8638.8624.1320.6217.4412.196.62-
  Lipper Large Cap Growth Fund Index11.1838.6038.6022.5919.5515.8011.157.079.71
  Morningstar Large Growth Category12.5035.8635.8620.5018.3015.1411.067.919.69
As of 12/31/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO LARGE CAP FUND - Investor9.8828.0828.0818.4117.2514.6811.017.6610.64
BUFFALO LARGE CAP FUND - Institutional9.9128.2828.2818.5917.4314.8511.177.8210.81
  Morningstar U.S. Large Growth Index8.8938.8638.8624.1320.6217.4412.196.62-
  Lipper Large Cap Growth Fund Index11.1838.6038.6022.5919.5515.8011.157.079.71
  Morningstar Large Growth Category12.5035.8635.8620.5018.3015.1411.067.919.69
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
BUFEX vs Morningstar U.S. Large Growth Index (As of 12/31/20)
Upside Capture81.92
Downside Capture100.97
Sharpe Ratio0.92
Hypothetical Growth of $10,000
This chart illustrates the performance of a hypothetical $10,000 investment made in the Fund on the inception date of the benchmark index (6/30/97). Assumes reinvestment of dividends and capital gains. This chart does not imply future performance.


Portfolio Characteristics
(As of 12/31/20) 
# of Holdings52
Median Market Cap$73.96 B
Weighted Average Market Cap$556.84 B
3-Yr Annualized Turnover Ratio12.88%
% of Holdings with Free Cash Flow82.69%
Active Share65.27%
Top 10 Holdings
Name of HoldingTickerSector% of Net
AmazonAMZNConsumer Discretionary7.73%
Alphabet (A)GOOGLTechnology4.12%
VisaVFinancial Services2.69%
DanaherDHRHealth Care2.59%
EquinixEQIXReal Estate2.56%
S&P GlobalSPGIFinancial Services2.31%
PayPalPYPLFinancial Services2.22%
As of 9/30/20. 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 12/31/20. 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.
Market Capitalization
As of 12/31/20. Market Cap percentages may not equal 100% due to rounding.


Alex Hancock, CFA
Portfolio Manager

23 Years of Experience

 View full bio



(As of 9/30/20) — Equity markets sustained their momentum in the 3rd quarter, with the S&P 500 Index returning 8.93%. Macro data continued to improve, and companies broadly reported earnings that proved to be more resilient than expectations. While the U.S. experienced another spike in COVID-19 cases during the quarter and tragically surpassed 200,000 deaths, positive news on vaccines and therapy fronts continued to provide hope for investors.

The Russell 3000 Index increased 9.21% in the quarter. Growth continued to outperform value, as the Russell 3000 Growth Index advanced 12.86%, compared to the Russell 3000 Value Index return of 5.41%. Relative performance was correlated with market cap size in the quarter, with the large cap Russell 1000 Index delivering a return of 9.47%, compared to the Russell Mid Cap Index return of 7.46%, the smaller cap Russell 2000 Index return of 4.93%, and the Russell Micro Cap Index return of 3.69%. More cyclically-exposed Consumer Discretionary, Materials, and Industrial sectors performed best in the quarter. Energy was the sole declining sector, hurt by lingering weakness in oil demand.


(As of 9/30/20) — The Buffalo Large Cap Fund (BUFEX) returned 11.26% during the September quarter, but lagged the Morningstar U.S. Large Growth Index’s gain of 13.83%. Poor stock selection in the Consumer Discretionary and Information Technology sectors was the leading cause of underperformance compared to our benchmark, which was offset, in part, by relatively strong stock selection in Industrials. After lagging small cap growth in the June quarter, this trend reversed itself in the September quarter with large growth outperforming small growth by about 6%. Large growth also continued to outperform large value as the Index outperformed value by about 9%. Within the Index, IT and Consumer Discretionary were the top performers, reflecting the continued dominance or FAANGMT stocks (Facebook, Amazon, Apple, Netflix, Google, Microsoft, Tesla).


Apple was the top-contributing stock for the Fund during the 3rd quarter, with the stock returning 27%. Demand for the company’s devices has remained strong in the downturn, and the upcoming launch of the iPhone 12 with 5G technology appears poised to generate strong growth. The company is also continuing its favorable mix shift to high margin digital services products, which could help drive significant earnings growth in 2021 and beyond.

Amazon was another top contributor, with shares increasing by 14% during the period. Demand for Amazon’s delivery services remained strong as consumers continued to avoid brick-and-mortar stores in the pandemic environment to shift spending online. The company’s web services division is also well positioned for continued growth, driven by the need for cloud computing in an increased remote work environment.


Illumina was the Fund’s worst-performing stock in the quarter. Performance was weak, in part, due to a lack of clarity in how successful the company’s COVID-19 testing programs will be and that consensus estimates may be too high. The company also announced a large and dilutive acquisition in the cancer testing space which was poorly received by the investor community.


(As of 9/30/20) — Similar to the March and June quarters, large cap stocks experienced elevated volatility in the 3rd quarter. The Fund returned nearly 16% between the months of July and August and declined over 4% in the month of September as the overall market sell off pressured many large cap stocks.

Looking forward and into 2021, we believe large caps are poised to experience continued volatility driven by factors including:

1. Trajectory of the U.S. economy’s recovery. While the September unemployment rate in the U.S. declined to 7.9% (down from 14.7% in April), the rate of job gains has slowed in recent months, and we believe any signs that the U.S. economy is growing at a rate below consensus could pressure many large cap stocks owned by the Fund.

2. Future government fiscal and monetary stimulus. While we believe that the aggressive policy response to the virus from the Federal Reserve and Congress earlier in 2020 helped to prevent a deeper recession, future stimulus agreement appears uncertain in the pre-election political environment. We believe that individual consumers could suffer if no deal is reached, which could have widespread impacts on many market sectors.

3. Corporate earnings. Many of the FAANGMT stocks, which are large positions in the Fund, have performed well in the “stay and work from home” environment of 2020, and these stocks appear poised to report strong earnings for the 3rd quarter. At the same time, this earnings season will reveal more about how companies with more cyclical business models are performing. Many companies in industries such as bricks-and-mortar retail and restaurants will likely continue to report very weak results this quarter, with an uncertain path to return to pre-pandemic levels.

4. COVID-19 infection and vaccine development. At this point in mid-October, many areas in the U.S. continue to report growth in infections, and signs are emerging that we may be entering a “third wave” of this pandemic. While improved testing and treatments will likely help many states avoid further lockdowns, a surge in infections would be a clear negative for large cap stocks and the overall market. At the same time, we believe that positive data on a vaccine could help the stock market rerate, and value names that have suffered the most in 2020 would strongly outperform the broad market in this scenario.

5. November election. While the Democratic party appears poised to make significant gains in the November election, the ultimate outcome remains uncertain. If the Democratic party wins control of all three branches of government, large cap stocks could be pressured due to potential increases in taxes, and selected health care names could decline due to pricing pressure on their business models. Names focused on green energy would likely perform well in this scenario. Many of the “big tech” companies, which are large positions in the Fund, could be pressured if Democrats aggressively seek to increase regulation of their business models. Along these lines, any election result for the president in which there is no clear winner would likely lead to significant downward pressure on the markets.

Mindful of the risks described above, we are cautiously optimistic about the prospects for our large cap growth stocks in coming months but believe many of our holdings could see significant volatility in coming periods. The Fund finished the quarter with 54 holdings (representing 53 companies) and a cash position of about 4%. We are continuing to actively manage the portfolio to try to position it for outperformance by allocating capital to opportunities that we believe have the best risk/reward tradeoffs. As always, we will look to reduce or sell those securities which we consider to be fully valued and replace them with other large cap stocks with a better risk/reward opportunity. We expect many of our holdings to emerge from the downturn with stronger businesses when the world economies return to more normalized levels. Our time-tested strategy of investing in premier companies, which could benefit from long-term trends and trade at relatively attractive valuations, remains the cornerstone of our work, and we appreciate your continued confidence in our efforts.

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 Large Cap Fund received 3 stars among 1,197 for the 3-year, 3 stars among 1,070 for the 5-year, and 3 stars among 789 Large Growth funds for the 10-year period ending 12/31/20.

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. ©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 Morningstar Style Box™ reveals a fund’s investment strategy by showing its investment style and market capitalization based on the fund’s portfolio holdings.