Quick Facts
Inception Date:5/19/1995
Total Net Assets:$71.23 Million  (9/30/18)
Expense Ratio:0.94%
Category:Large Cap Growth
Benchmark:Morningstar U.S. Large Growth
Related Material:
   Fund Fact Sheet Q3 2018
   PM Commentary Q3 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 11/30/18.

Investment Style

Performance (%)

As of 11/30/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO LARGE CAP FUND-6.416.686.9912.0512.1616.138.609.56
  Morningstar U.S. Large Growth Index-5.9212.2413.3313.4913.7516.908.77-
  Russell 1000 Growth Index-7.467.758.5913.9713.0416.549.589.19
  Lipper Large Cap Growth Fund Index-7.318.218.7412.4111.5215.358.518.14
  Morningstar Large Growth Category-7.246.957.6311.6010.7614.988.798.33
As of 9/30/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO LARGE CAP FUND7.9713.8121.2617.0315.0713.379.539.93
  Morningstar U.S. Large Growth Index7.1620.3829.1120.0317.2314.299.59-
  Russell 1000 Growth Index9.1717.0926.3020.5516.5814.3110.679.65
  Lipper Large Cap Growth Fund Index7.5617.3524.9518.9714.9612.889.608.58
  Morningstar Large Growth Category7.5415.6423.1817.6814.0212.609.848.76

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 9/30/18)
Upside Capture82.67
Downside Capture84.26
Sharpe Ratio1.63
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 9/30/18) 
# of Holdings48
Median Market Cap$57.94 B
Weighted Average Market Cap$298.10 B
3-Yr Annualized Turnover Ratio36.32%
% of Holdings with Free Cash Flow83.33%
Active Share62.68%
Top 10 Holdings
Name of HoldingTickerSector% of Net
AmazonAMZNConsumer Discretionary6.21%
Alphabet (A)GOOGLTechnology4.72%
CME GroupCMEFinancials3.04%
Lowe'sLOWConsumer Discretionary2.46%
EquinixEQIXReal Estate2.41%
Alnylam PharmaceuticalsALNYHealth Care2.36%
As of 6/30/18. Top 10 Holdings for the quarter are not disclosed until 60 days after quarter end. Those listed are for the previous quarter. Fund holdings are subject to change and are not recommendations to buy or sell any securities.
Sector Weighting

As of 9/30/18. 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 9/30/18. Market Cap percentages may not equal 100% due to rounding.


Alex Hancock, CFA
Portfolio Manager

20 Years of Experience

 View full bio



(As of 9/30/18) — U.S. economic strength and solid corporate earnings growth drove healthy equity returns in the 3rd quarter. The widely-followed S&P 500 Index had a total return of 7.71%, its best quarterly gain since 2013. In September, initial jobless claims fell to the lowest level since 1969, wages grew at the fastest rate since 2009, consumer confidence reached the highest level since 2000, and the National Federation of Independent Business (NFIB) survey of small business optimism was at an all-time high (the survey dates back to 1974). Against this strong economic backdrop, the Federal Reserve raised the targeted federal funds rate by another 25 basis points to a range of 2.00% to 2.25%. Slowly rising interest rates led to flat bond returns.

The divergence between domestic and international equity market performance continued during the quarter, with the MSCI EAFE Index advancing just 1.35%. The Russell 3000 Index gained 7.12% in the 3rd quarter. By style, growth continued to outperform value, with the Russell 3000 Growth Index increasing 8.88% compared to the Russell 3000 Value Index’s advance of 5.39%. Large caps did better than small caps as the Russell 1000 Index returned 7.42%, the Russell Midcap Index returned 5.00%, and the Russell 2000 Index returned 3.58% in the quarter. Every economic sector was positive this quarter, with Health Care and Industrials the top performers, while Materials and Energy lagged the indexes.


(As of 9/30/18) — The Buffalo Large Cap Fund returned 7.97% in the quarter, outperforming the Morningstar U.S. Large Growth Index, which returned 7.16% during the period. Stock selection within the Information Technology and Consumer sectors were key drivers of outperformance, partially offset by weakness in several Health Care holdings.

The Buffalo Large Cap Fund’s outperformance relative to the Index was driven by holdings in Technology, Consumer Discretionary, Consumer Staples, Real Estate, Energy, Financials, and Telecom. Outperformance in these sectors was offset, in part, by below-index returns in Health Care, Industrials, and Materials. The Fund continues to focus on investing in high-quality growth stocks with relatively-attractive valuations, which we believe should be a key driver of above-index risk-adjusted returns over the long term.

The Fund ended the quarter with 48 holdings (excluding cash) representing 47 companies, up from 46 holdings representing 45 companies at the end of the previous quarter. The cash position ended the period at about 4% of fund assets, unchanged from the prior quarter. During the quarter we exited one holding and initiated three new positions in the Fund.

Amazon shares increased 18% during the quarter, making the stock the biggest contributor to the Fund’s return. The company continued to grow revenue in excess of expectations with strength across its various businesses including ecommerce and Web Services. Investors believe the company has a long runway to continue to gain share at the expense of many traditional businesses.

Microsoft was another strong performer during the quarter. The company reported strong results in Intelligent Cloud and Personal Computing and appears poised for strong performance in these business lines in coming quarters.

Apple was also among the largest contributors to performance during the period. The company continued to generate strong growth amidst robust demand for its products including the next generation iPhone.

The largest detractor from performance was Portola Pharmaceuticals, which declined 29% during the quarter. The company’s shares sold off after lowering investor expectations for sales of its drug Bevyxxa for the treatment of thrombosis. The near-term outlook for another of the company’s drugs Andexxa (for treatment of uncontrolled bleeding) remains stronger.

Another underperformer was athenahealth. The company has been viewed as a likely takeout candidate, but its shares drifted down during the quarter on news reports that potential buyout price would likely be lower than investors were initially hoping.


(As of 9/30/18) — As the 4th quarter begins, significant uncertainty about the direction of the stock market exists, driven by factors including: (i) the upcoming midterm elections in November and possible Democratic gains in the Congress; (ii) the ultimate outcome of the trade dispute with China and the impact it will have on earnings of large U.S.-based companies; (iii) the potential for continued interest rate hikes; and (iv) the fact that many stocks are trading at elevated valuations after the multi-year bull market. This uncertainty is offset, in part, by continued strength in the U.S. economy and job markets.

Amidst this uncertainty, we continue to be diligent in our process of finding large-cap growth companies that could benefit from long-term trends while still trading at reasonable valuations. We are seeking to reduce holdings that have appreciated above our target price and redeploy capital into investments with better risk-reward tradeoffs. As always, we appreciate your support and confidence in our investment process 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.

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 1115 for the five-year, and 4 stars among 804 Large Growth funds for the ten-year period ending 11/30/18.

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.