Quick Facts
Inception Date:5/19/1995
Total Net Assets:$60.27 Million  (12/31/18)
Expense Ratio:0.94%
Category:Large Cap Growth
Benchmark:Morningstar U.S. Large Growth
Related Material:
   Fund Fact Sheet Q4 2018
   PM Commentary Q4 2018
   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 — a company, at time of purchase by the Fund, with 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™ based on risk-adjusted returns among 1,252 Large Growth funds as of 1/31/19.

Investment Style

Performance (%)

As of 1/31/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO LARGE CAP FUND0.597.01-1.3614.5711.6316.338.199.42
  Morningstar U.S. Large Growth Index2.479.182.3916.9213.7417.268.45-
  Russell 1000 Growth Index0.688.990.2416.6012.9716.869.169.11
  Lipper Large Cap Growth Fund Index2.019.330.4816.1511.4815.728.228.10
  Morningstar Large Growth Category1.409.10-0.6214.9510.6515.358.408.26
As of 12/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO LARGE CAP FUND-13.57-1.63-1.639.519.6714.927.889.15
  Morningstar U.S. Large Growth Index-14.482.942.9411.1811.1015.927.91-
  Russell 1000 Growth Index-15.89-1.51-1.5111.1510.4015.298.688.74
  Lipper Large Cap Growth Fund Index-15.19-0.47-0.479.688.9814.097.717.73
  Morningstar Large Growth Category-15.43-2.09-2.098.988.1613.747.917.90

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.

As of July 27, 2018 the Morningstar U.S. Large Growth Index has replaced the Russell 1000 Growth Index as the Fund’s primary benchmark. The Advisor believes that the new index is more appropriate given the Fund’s holdings.

3 Year Risk Metrics
vs Morningstar U.S. Large Growth Index (As of 12/31/18)
Upside Capture85.62
Downside Capture90.98
Sharpe Ratio0.72
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 Characteristics
(As of 12/31/18) 
# of Holdings49
Median Market Cap$49.96 B
Weighted Average Market Cap$210.06 B
3-Yr Annualized Turnover Ratio34.55%
% of Holdings with Free Cash Flow81.63%
Active Share60.67%
Top 10 Holdings
Name of HoldingTickerSector% of Net
AmazonAMZNConsumer Discretionary6.99%
Alphabet (A)GOOGLTechnology4.82%
CME GroupCMEFinancials3.01%
Lowe'sLOWConsumer Discretionary2.82%
EquinixEQIXReal Estate2.32%
As of 9/30/18. 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 12/31/18. 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 12/31/18. Market Cap percentages may not equal 100% due to rounding.


Alex Hancock, CFA
Portfolio Manager

21 Years of Experience

 View full bio



(As of 12/31/18) — The 4th quarter of 2018 was a rough period for equity markets, with steep declines dragging full year returns into negative territory. The S&P 500 Index declined -13.52% during the quarter, driven by fears of tightening monetary policy, escalating trade tensions, slowing global economic growth, and margin pressure from higher labor and freight costs. Investors sought safety in government bonds, driving the yield on the 10-year Treasury down from 3.06% at the end of the 3rd quarter to 2.68% at the end of the 4th quarter.

In a reversal of the year-to-date trend, value outperformed growth in the period, as the Russell 3000 Value Index declined -12.24% compared to a -16.33% drop in the Russell 3000 Growth Index. Large companies held up better than smaller companies during the quarter, as the Russell 1000 Index fell -13.82%, the Russell Midcap Index was down -15.37%, and the small cap Russell 2000 Index was down -20.20%. The only sector to post a positive return in the 4th quarter was Utilities. Real Estate, Consumer Staples, and Health Care were down but outperformed the market. Energy was the worst performing sector, driven by steep declines in crude oil. Technology, Industrials, and Consumer Discretionary also underperformed the broad market.


(As of 12/31/18) — The Buffalo Large Cap Fund declined by -13.57% in the quarter but outperformed the Morningstar U.S. Large Growth Index, which declined -14.48%. Stock selection within the Health Care and Financials segments of the portfolio was a key driver of outperformance, partially offset by weakness in several Materials and Industrial holdings.

The Fund ended the quarter with 49 holdings (excluding cash) representing 48 companies, up from 48 holdings representing 47 companies at the end of the previous quarter. The cash position ended the period at about 3% of Fund assets, down slightly from the prior quarter. During the quarter we initiated one new position in the portfolio.

Relative to the Index, the Fund outperformed in the sectors of Financials, Health Care, Materials, Energy, Consumer Staples, and Technology. The Fund’s cash position also served as a cushion in the midst of the declining markets. These sources of outperformance were offset, in part, by weakness in Real Estate, Industrials, Telecommunications, and Consumer Discretionary.

CME Group generated a return of 11% during the quarter, and the stock was the biggest contributor to the Fund’s performance results. The environment of macro uncertainty and market volatility helped drive increased trade volumes on the company’s exchanges, and hence the stock held up better during the quarterly market downturn than other securities.

Xilinx was another strong performer, returning 6% in the period. The company’s platforms are positioned to grow in markets such as data center and 5G communications, and its business seemed relatively well-insulated from a slowing semiconductor demand environment that has impacted many less diversified microchip companies.

Roche Holding was the third best performing holding in the Fund during the quarter. In recent years, this stock has been a laggard in the Health Care space, but investors are becoming more optimistic about the company’s drug pipeline, relatively stable nature of its marketed drugs, and opportunity to expand margins in coming periods.

Amazon was the largest detractor from performance in the quarter, declining by -25%. The company had been one of the top performing investments in the first nine months of the year, increasing by 71%, but suffered during the period driven by investor fears of a growth slowdown and multiple contraction which coincided with the overall market declines. We remain confident in the long-term outlook for the company, driven by our optimism for continued growth in internet retail, web services, and ad revenue.

Another larger detractor from performance in the quarter was Apple, which declined by -30%. The company’s shares suffered as many signs, such as weak guidance coming out of the company’s supply chain, suggested that the newest generation of iPhones was not selling as well as initially hoped (especially in China). While we believe the long-term outlook for Apple remains bright, on January 3rd, 2019, the company pre-announced a weak 4th quarter.


(As of 12/31/18) — Despite market declines and high volatility, Fund management continues to focus on investing in high-quality growth stocks across industries with relatively attractive valuations, in our opinion, which we believe could be a key driver of above-index risk-adjusted returns over the long term.

As calendar year 2019 begins, significant uncertainty about the direction of large cap growth stocks exists, driven by factors including: (i) the ultimate outcome of the trade dispute with China as many of our large-cap names have outsized exposure to the Chinese market; (ii) the resolution of the budget war between President Trump and the newly elected Democratic House; (iii) mixed signals about the health of the U.S. economy as the prolonged economic expansion is at risk of slowing down or reversing; and (iv) lack of clarity about the Fed’s ultimate path to continue to raise interest rates.

These uncertainties are offset, in part, by apparent continued strength in the U.S. job market and the fact that valuations of many large-cap stocks are lower due to recent market declines.

As always, we continue to be diligent in our process of finding large-cap growth companies that can potentially benefit from long-term trends while still trading at reasonable valuations, in our opinion. We are seeking to reduce weightings in positions that have appreciated above our target price, and redeploy capital into those investments we believe have better risk-reward tradeoffs.

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.

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 1252 for the three-year, 4 stars among 1110 for the five-year, and 4 stars among 802 Large Growth funds for the ten-year period ending 1/31/19.

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. ©2018 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.