Inception Date
  May 19, 1995

Total Fund Assets
  $69.05 Million  (3/31/18)

Expense Ratio

Benchmark Index
  Russell 1000 Growth


Overall Morningstar™ rating out of 1,213 Large Growth funds as of 3/31/18 (derived from a weighted average of the fund’s three-, five-, and ten-year risk adjusted return measure).


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.

Risk vs Category



The Morningstar™ Risk vs Category rating is an assessment of the variations in a fund’s monthly returns, with an emphasis on downside variations, in comparison to the 1,213 funds in the Large Growth category, as of 3/31/18.

Large Cap News

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Investment Strategy

The investment objective of the Buffalo Large Cap Fund is long-term growth of capital. The Large Cap Fund normally invests at least 80% of its net assets 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 or equal to the lesser of $10 billion or the median market capitalization of companies in the S&P 500 Index.


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.

~ Elizabeth Jones, Portfolio Manager


Performance (%)

As of 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Large Cap Fund0.170.1715.4110.4714.8310.3810.349.55
  Russell 1000 Growth Index1.421.4221.2512.9015.5311.3410.889.18
  Lipper Large Cap Growth Fund Index2.982.9823.1411.7014.779.829.808.15
  Morningstar Large Growth2.302.3020.4110.6413.819.8710.248.37
As of 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Large Cap Fund0.170.1715.4110.4714.8310.3810.349.55
  Russell 1000 Growth Index1.421.4221.2512.9015.5311.3410.889.18
  Lipper Large Cap Growth Fund Index2.982.9823.1411.7014.779.829.808.15
  Morningstar Large Growth2.302.3020.4110.6413.819.8710.248.37
YearBuffalo Large Cap FundRussell 1000 Growth IndexMorningstar Large Growth Category
(As of 3/31/18)

vs Russell 1000 Growth Index
Upside Capture85.19
Downside Capture94.52
Sharpe Ratio0.97

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.

Growth of $10k

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.


(As of 3/31/18)

# of Holdings46
Median Market Cap$54.99 B
Weighted Average Market Cap$218.21 B
3-Yr Annualized Turnover Ratio47.78%
% of Holdings with Free Cash Flow82.61%
% of Holdings with No Net Debt28.26%
Active Share70.77%
Name of HoldingTickerSector% of Net Assets
Amazon.comAMZNConsumer Discretionary5.18%
Alphabet (A)GOOGLTechnology4.13%
Alnylam PharmaceuticalsALNYHealth Care2.86%
CME GroupCMEFinancials2.66%
View Full Holdings

As of 12/31/17. 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.

Buffalo publishes this listing of securities held as of the most recent calendar-quarter end, with a 30 or 60 day lag depending on the portfolio. Buffalo may exclude any portion of holdings from publication when deemed in the best interest of the portfolio.

The portfolio data and its presentation here may differ from the complete schedules of investments in regulatory filings due to differing accounting and reporting requirements.

As of 3/31/18. 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.

As of 3/31/18. Market Cap percentages may not equal 100% due to rounding.


Commentary for Q1 2018   (As of 3/31/18)


(As of 12/31/17) — Equity markets ended 2017 on a strong note. The 4th quarter saw a continuation of trends that have influenced the market all year. Investor optimism about improving global economic growth and strong corporate earnings led to another quarter of higher stock prices and low volatility. Strong holiday sales and the passage of tax reform legislation also provided tailwinds to equity markets. The CBOE Volatility Index continued to hover near record lows, and, for the first time since 1958, U.S. equities delivered positive returns in every single month of the year.

The Russell 3000 Index produced a total return of 6.34% in the 4th quarter. Growth continued to outperform value, with the Russell 3000 Growth Index up 7.61%, beating the 5.08% return from the Russell 3000 Value. Large companies generally outperformed smaller companies during the quarter. The Russell 1000 returned 6.59%, the Russell Midcap Index returned 6.07%, the Russell 2000 returned 3.34%, and the Russell Microcap Index returned 1.80%. Consumer Discretionary and Technology were the best performing sectors in the 4th quarter. Consumer Staples, Health Care, and Utilities underperformed.


(As of 12/31/17) — The Buffalo Large Cap Fund returned 6.54% in the 4th quarter of 2017, underperforming the Russell 1000 Growth Index that appreciated 7.86%. An overweight allocation to the healthcare sector was the primary driver of the underperformance since the sector was flat in the period. In addition, the underweighting of information technology stocks, a sector that was strong, hurt performance in the period.

For the year the Buffalo Large Cap Fund returned 24.86%, short of its benchmark the Russell 1000 Growth Index, which rose 30.21%.

The underperformance versus the benchmark is disappointing yet not totally unexpected. Information Technology was the best performing sector in the benchmark and the fund is underweight this sector. We have consistently been underweight information technology (IT) given the volatility of the stocks in the sector and the limited number of companies with a sustainable competitive advantage. We believe limiting the IT investment to the highest quality companies will generated superior risk adjusted returns over the intermediate to long term.

The Buffalo Large Cap Fund ended the year with 46 holdings representing 45 companies, as we hold both the Class A and Class C shares of Alphabet. We exited one position and added another resulting in only modest turnover in the quarter. The end of year cash weighting in the fund is 4.8%, within the typical range of 3-5%.

Top contributors in the period were Amazon, Microsoft, and Intel.

Amazon continued to deliver top line growth exceeding expectations, driven by increasing penetration of Amazon Prime membership. An estimated 85 million plus people are Prime members in the U.S., and Prime members spend at least twice as much on the website as non-members. The Prime members are driving an acceleration of top line growth.

Microsoft is transitioning to a cloud service provider from a packaged software company. In the 3rd quarter the company reaped the benefits of this transition with a profound top and bottom line earnings’ beat.

Intel was added to the portfolio in mid-2017, after the stock sold off due to concerns about slowing growth in its server market. However, the sell off was short lived, after a strong 3rd quarter earnings’ report dispelled those fears.

Top detractors were Electronics Arts, CVS, and Schlumberger.

Many electronic gaming companies like Electronic Arts have benefited selling in-game virtual merchandise. These micro-transactions have driven both top line growth and margins. In a recent game launch, Battlefront II, Electronic Arts’ management pulled all micro-transactions just days prior, after negative feedback during beta testing. This change modestly impacted consensus’ models for fiscal 2019 revenue and earnings, and the stock sold off. However, we believe that in-game purchases will be offered for this game during fiscal 2019 after retooling the offering and that the intermediate to long term growth opportunity for Electronic Arts is intact.

CVS sold off in the quarter after announcing the acquisition of Aetna, a managed care company. While in the long term this acquisition makes strategic sense, in the near-term, the move, rightly or wrongly, signaled to investors that the company’s current businesses have limited growth opportunities. While CVS faced increased competition and pricing pressure in 2017 we believe the company offers economies of scale and that growth will accelerate in 2018.

Schlumberger’s underperformance in the period is not clear cut since both the energy sector and crude oil experienced meaningful appreciation in the quarter. The company did modestly miss earnings expectations in the 3rd quarter due to weaker-than-expected incremental margins, but we believe a bigger issue for investors is the company’s recent strategy to take an ownership position in some smaller oil fields, as opposed to being simply a service provider. And while we are cautious on these investments, we believe the company’s exposure is limited. On a brighter note, Schlumberger has significant exposure to international markets which are showing early signs of recovery, and this improvement should drive growth in late 2018 and 2019.


(As of 12/31/17) — The market environment for equities remains favorable. Interest rates, inflation, and unemployment remain low, while corporate earnings grind higher, buoyed by broadening global growth and recent U.S. corporate tax reform. Growing cash flows combined with foreign cash repatriation should drive improved business investment and more aggressive capital allocation activity including mergers and acquisitions, buybacks, and dividend increases.

As growth strengthens, inflation expectations and the pace at which the Fed intends to normalize interest rates and the central bank balance sheet could introduce market volatility. We stand poised to capitalize when and where we see an opportunity to improve risk-adjusted expected returns within the portfolio.

Economic conditions may ebb and flow, but the Buffalo Large Cap Fund remains committed to investing in companies that are beneficiaries of the Buffalo Secular Growth Trends. A portfolio comprised of secular growth companies should outperform across the business cycle since each holding’s growth drivers are less dependent on the overall macroeconomic environment.

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. Fund holdings and sector allocations are subject to change and are not 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.

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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 1213 for the three-year, 4 stars among 1099 for the five-year, and 3 stars among 779 Large Growth funds for the ten-year period ending 3/31/18.

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.