Quick Facts
Inception Date:5/19/19957/1/2019
Expense Ratio:0.95%0.81%
Total Net Assets:$101.18 Million  (9/30/20)
Category:Large Cap Growth
Benchmark:Morningstar U.S. Large Growth
Related Material:
   Fund Fact Sheet Q3 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 1,229 Large Growth funds as of 9/30/20.

Investment Style

Performance (%)

As of 9/30/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO LARGE CAP FUND - Investor11.2616.5626.2117.2016.3014.9510.557.1910.34
BUFFALO LARGE CAP FUND - Institutional11.3216.7226.4117.3916.4815.1210.727.3510.51
  Morningstar U.S. Large Growth Index13.8327.5240.4523.5120.3417.7911.774.39-
  Lipper Large Cap Growth Fund Index12.3924.6737.4220.8418.9115.9010.635.429.35
  Morningstar Large Growth Category11.5420.6432.1318.2216.9915.0110.396.509.28
As of 9/30/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO LARGE CAP FUND - Investor11.2616.5626.2117.2016.3014.9510.557.1910.34
BUFFALO LARGE CAP FUND - Institutional11.3216.7226.4117.3916.4815.1210.727.3510.51
  Morningstar U.S. Large Growth Index13.8327.5240.4523.5120.3417.7911.774.39-
  Lipper Large Cap Growth Fund Index12.3924.6737.4220.8418.9115.9010.635.429.35
  Morningstar Large Growth Category11.5420.6432.1318.2216.9915.0110.396.509.28
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 9/30/20)
Upside Capture81.77
Downside Capture103.88
Sharpe Ratio0.88
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 9/30/20) 
# of Holdings54
Median Market Cap$65.45 B
Weighted Average Market Cap$541.43 B
3-Yr Annualized Turnover Ratio12.00%
% of Holdings with Free Cash Flow81.48%
Active Share62.21%
Top 10 Holdings
Name of HoldingTickerSector% of Net
AmazonAMZNConsumer Discretionary7.61%
Alphabet (A)GOOGLTechnology4.48%
VisaVFinancial Services2.92%
EquinixEQIXReal Estate2.66%
DanaherDHRHealth Care2.38%
S&P GlobalSPGIFinancial Services2.37%
PayPalPYPLFinancial Services2.20%
As of 6/30/20. 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 9/30/20. 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 9/30/20. Market Cap percentages may not equal 100% due to rounding.


Alex Hancock, CFA
Portfolio Manager

21 Years of Experience

 View full bio



(As of 6/30/20) — Equity markets rebounded sharply in the 2nd quarter following steep losses in the previous period. The S&P 500 Index produced a return of 20.54%, marking the best quarterly performance results in 20 years. Stimulus efforts by the Federal Reserve (the “Fed”) and the U.S. Treasury Department to limit COVID-related economic damage helped equity markets find a floor in late March. Declining COVID-19 case counts, optimism about treatment and potential vaccines, along with better-than-expected economic data also contributed to improved investor sentiment during the period. Although confirmed virus cases began spiking again in the final days of June, it was not enough to undo the best quarterly market results since the dot-com boom.

The broad market Russell 3000 Index advanced 22.03% in the quarter, and Growth outperformed Value as the Russell 3000 Growth Index moved up 27.99% during the period, compared to the Russell 3000 Value Index’s advance of 14.55%. Relative performance was inversely-correlated by market cap as the Russell Micro Cap Index advanced 30.54%, well above the large cap Russell 1000 Index’s return of 21.82%. Meanwhile the small cap Russell 2000 Index and the Russell Mid Cap Index were up 25.42% and 24.61%, respectively. The best performing sectors were Technology, Consumer Discretionary, and Energy while the less cyclically exposed, more defensive areas like Utilities, Telecommunication, and Consumer Staples lagged in the quarter.


(As of 6/30/20) — The Buffalo Large Cap Fund (BUFEX) returned 24.25% during the quarter, but lagged the Morningstar U.S. Large Growth Index’s gain of 26.60%. Poor stock selection in the Consumer Discretionary and Financials sectors was the leading cause of underperformance compared to our benchmark, which was offset, in part, by strong Fund results in Information Technology. While large cap growth stocks outperformed small cap growth stocks during the broad market selloff of the 1st quarter, this trend reversed itself in the 2nd quarter, and large cap growth underperformed small cap growth by about 7%. However, large cap growth outperformed large cap value by a wide margin in both of the first two quarters of this year. Within the Index, Materials, Consumer Discretionary, and IT were the strongest sectors, all reversing sharp declines from the 1st quarter, reflecting investor optimism about a potential economic rebound and recovery.


Microsoft was the top-contributing stock for the Fund during the quarter, with the stock returning 29%. The company’s business has been insulated from COVID-19 slowdowns, amidst the increase in remote work and learning. Growth in its cloud services and Office 365 products also remained strong. We believe the company’s growth outlook over the next several quarters is solid regardless of the trajectory of the COVID-19 pandemic.

Amazon was another top contributor, with shares increasing by 41%. Demand for Amazon’s delivery services accelerated as consumers avoided brick-and-mortar stores in the pandemic environment. The company’s web services division was also well positioned for continued growth, driven by the need for cloud computing in a remote work environment.


Biogen underperformed during the quarter, after losing a courtroom decision in June that could lead to the loss of patent protection for Tecfidera, a key drug treatment for multiple sclerosis. There is also significant uncertainty regarding the potential approval of its Alzheimer’s drug Acucanumab, but we expect more clarity on this in coming quarters. While the risk/reward tradeoff for the stock appears favorable at current levels, Biogen remains a relatively small position in the Fund, given our expectation that upcoming news flow will drive significant volatility in the company’s shares.


(As of 6/30/20) — The first two quarters of 2020 were turbulent for investors, and we expect the trend of elevated volatility to continue into the 2nd half of the year. We believe the trajectory of the COVID-19 pandemic will be a key driver of market direction. The gradual reopening of the U.S. economy has coincided with a surge of virus cases in Sunbelt states and California. Investors will closely watch evolving data on infection rates, hospitalization rates, and deaths, and, while we believe that state and federal governments will resist shutting down economies again, any signs that the U.S. is returning to broad-based quarantines would likely lead the stock market downward.

We are also closely watching for news on treatments, as well as indications of a promising vaccine, and expect to see more data within the next several months. Any sign that an effective vaccine could be rolled out in the near term would be a binary event, and we would expect the market, especially the value stocks that have lagged growth in the 1st half of 2020, to rerate and trade sharply upward.

The trajectory of the U.S. economy and potential recovery in the job market remains another question mark. While jobless claims in June have pointed to a sharp recovery in the U.S. job market, employment remains far below pre-pandemic levels, and any efforts to reinstate quarantines could derail the recovery.

We are also paying close attention to the upcoming elections in November. Recent signs suggest larger Democratic Party gains than what we would have predicted at the start of 2020. Large Democratic gains could lead to factors such as higher corporate taxes, an increased focus on prescription drug prices, and regulatory pressure on the business models of the mega-cap technology companies that have been market leaders in recent years.

Other factors that could drive market volatility in coming months include: (i) the extension or expiration of various government stimulus efforts this summer and fall; (ii) expansion of the protest movements that swept across numerous large cities in June; and (iii) the upcoming earnings season. Earnings announcements will give us a better sense of the declines and balance sheet stress experienced by corporate America due to the pandemic-related shutdowns.

Within the framework above, we are cautiously optimistic about the prospects for economic recovery in the U.S., but expect significant volatility in large cap growth stocks in coming months.

We finished the June quarter with 54 holdings, up from 52 at the start of the quarter. During the period, we sold out of two positions, and initiated four new ones. We are continuing to manage the Fund actively, allocating capital to ideas we believe have the best risk/reward tradeoffs, and reducing those that are less favorable. We also continue to invest in companies whose organic growth is pressured in the near-term by pandemic-driven slowdown, but whose business models and balance sheets are strong. We believe many of these businesses can use the downturn as an opportunity to operate more efficiently, gain market share, and find new opportunities for growth. We expect many of these holdings to emerge from the downturn with stronger, higher-margin businesses after the U.S. economy returns to more normalized levels.

Our time-tested strategy of investing in premier large cap growth companies, which could benefit from long-term trends and trade at 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 1,229 for the 3-year, 3 stars among 1,095 for the 5-year, and 3 stars among 813 Large Growth funds for the 10-year period ending 9/30/20.

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. ©2020 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.