Quick Facts
Inception Date:5/19/19957/1/2019
Expense Ratio:0.94%0.79%
Total Net Assets:$89.88 Million  (12/31/19)
Category:Large Cap Growth
Benchmark:Morningstar U.S. Large Growth
Related Material:
   Fund Fact Sheet Q4 2019
   PM Commentary Q4 2019
   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 1,215 Large Growth funds as of 2/29/20.

Investment Style

Performance (%)

As of 2/29/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO LARGE CAP FUND - Investor-3.24-5.5111.7412.8210.4512.869.076.919.67
BUFFALO LARGE CAP FUND - Institutional-3.18-5.4811.9313.0010.6213.
  Morningstar U.S. Large Growth Index0.92-2.4515.8817.8212.7215.1010.102.60-
  Lipper Large Cap Growth Fund Index-1.14-3.8513.2515.7511.3413.449.213.938.44
  Morningstar Large Growth Category-2.33-4.7910.7813.5010.0413.019.125.368.50
As of 12/31/193 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO LARGE CAP FUND - Investor8.2731.7731.7717.4113.1413.389.337.339.98
BUFFALO LARGE CAP FUND - Institutional8.3031.9831.9817.5913.3113.559.507.4910.15
  Morningstar U.S. Large Growth Index10.1433.8133.8121.7914.6415.0410.012.77-
  Lipper Large Cap Growth Fund Index10.0933.3933.3920.5213.2013.669.284.188.67
  Morningstar Large Growth Category9.3531.7131.7118.1011.9812.898.656.348.77
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 12/31/19)
Upside Capture81.14
Downside Capture97.67
Sharpe Ratio1.30
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 12/31/19) 
# of Holdings54
Median Market Cap$54.60 B
Weighted Average Market Cap$308.26 B
3-Yr Annualized Turnover Ratio29.17%
% of Holdings with Free Cash Flow90.74%
Active Share54.37%
Top 10 Holdings
Name of HoldingTickerSector% of Net
AmazonAMZNConsumer Discretionary5.11%
Alphabet (A)GOOGLTechnology4.24%
VisaVFinancial Services2.98%
CME GroupCMEFinancial Services2.49%
EquinixEQIXReal Estate2.43%
S&P GlobalSPGIFinancial Services2.16%
DanaherDHRHealth Care2.07%
Intercontinental ExchangeICEFinancial Services2.00%
As of 12/31/19. 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 12/31/19. 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 12/31/19. Market Cap percentages may not equal 100% due to rounding.


Alex Hancock, CFA
Portfolio Manager

21 Years of Experience

 View full bio



(As of 12/31/19) — The combination of a U.S. Federal Reserve (Fed) interest rate cut, an improving economic outlook, and easing trade tensions, sent equity markets sharply higher in the 4th quarter. The S&P 500 Index advanced 9.10% during the period, which brought the full-year (2019) gain to 31.49%. The Fed cut interest rates three times in 2019, erasing the brief yield curve inversion and assuaging fears of a recession. The economy continued to add new jobs at a strong pace and unemployment declined to 3.5%. Consumer spending remained healthy, and there is optimism for better business investment following the announced “phase one” trade deal with China.

Similar to the S&P 500 Index, the broad-based Russell 3000 Index returned 9.04% during the quarter. Growth outperformed value, as the Russell 3000 Growth Index returned 10.62% compared to a return of 7.41% for the Russell 3000 Value Index. Smaller companies outperformed larger companies, as one would expect in a “risk-on” period. The Russell Microcap Index surged 13.45% and the Russell 2000 Index advanced 9.94%. Large company benchmarks such as the Russell 1000 Index advanced 9.04% while the Russell Midcap Index produced a return of 7.06%. Technology and Health Care were the best performing sectors in the quarter, while more defensive areas of the market lagged such as Real Estate and Utilities. Higher long-term interest rates weighed on high-quality bond proxies – the safe haven 10-year U.S. Treasury Bond produced a return of -1.74% during the quarter.


(As of 12/31/19) — The Buffalo Large Cap Fund produced a return of 8.27% during the quarter, under-performing the Morningstar U.S. Large Growth Index, which gained 10.14%. Although the Fund produced strong absolute performance during the period, stock selection in Financials and Consumer Discretionary were the primary detractors to relative performance, which was offset, in part, by relative strength in Consumer Staples and Real Estate.

The Fund ended the quarter with 54 holdings (excluding cash) representing 53 companies, up from 52 holdings representing 51 companies at the end of the previous quarter. The cash position ended the period at about 7% of Fund assets. We initiated three new positions in the Fund, and eliminated one holding during the quarter.


Apple was the top-contributing investment for the Fund during the quarter, returning 31%. In spite of exposure to the trade war with China, Apple was a consistent strong performer throughout the year. Sources of this strength included high-margin services growth leading to favorable revenue mix, a positive outlook for new products including wearables and next generation iPhones, and signs that the U.S. is likely to deescalate the trade war with China and reach a “phase one” trade agreement in the New Year.

Microsoft was also a top contributor for the Fund during quarter, returning 13%. The company has generated strong growth across all product lines including server and cloud products and office commercial products. The company appeared well-positioned to continue this steady growth in upcoming quarters.

Alphabet (parent of Google) was also among the best-performing investments for the Fund in the quarter, returning almost 10%. After seeing slowing growth earlier in 2019, the company reported strength in its core advertising business and continues to maintain a very strong competitive position.


CME delivered the largest drag on the Fund’s results during the quarter. While the company has a strong competitive position and very appealing business model, it struggled due to light organic growth on its trading platforms. Reported trading volumes in products such as equity index futures, interest rate futures, and foreign exchange market suggest weakness in 4th quarter results relative to investor expectations.

Under Armour was also a weak performer for the Fund. The company has struggled with inventories, gross margin pressure, and disappointing revenue growth for the past several years. Recent disclosure about an accounting probe negatively-impacted the stock when management reported 3rd quarter earnings in November. Although shares have subsequently rallied, the company’s path for returning to sustained growth remains unclear.


(As of 12/31/19) — Looking forward, we remain optimistic about the environment for large cap growth stocks but believe several factors could drive volatility ahead. A policy misstep by the Fed or from key political figures is a concern. In 2019, the Fed’s pivot on monetary policy demonstrated willingness by our nation’s central bank to be flexible and “data-dependent” by cutting rates three times when there were signs of slowing economic activity.

While trade dynamics seem to change on a daily basis, the rhetoric has died down considerably, and the U.S. and China appear set to ink a phase one agreement. With the presidential election less than a year away, we think it is unlikely President Trump re-escalates the trade war again before November. We believe that we are likely in the later innings of an abnormal economic cycle that has produced below-trend growth and a longer expansionary timeline compared to historical averages. Any sign that the current economic expansion is slowing or ending would likely lead to significant market volatility. We also expect the 2020 political cycle to drive volatility in some of the Fund’s investments. The risk that Democratic primary voters nominate a progressive candidate could pressure many large caps, especially those with large weightings in the index such as the “FAANG” stocks due to fear of increased regulation. Furthermore, after the strong returns of 2019 driven primarily by multiple expansion, many large caps are now trading at high absolute valuations as we enter 2020. These elevated valuations could serve to enhance market volatility as these factors play out.

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 1,215 for the 3-year, 3 stars among 1,072 for the 5-year, and 3 stars among 809 Large Growth funds for the 10-year period ending 2/29/20.

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.