Quick Facts
Inception Date:5/19/19957/1/2019
Expense Ratio:0.94%0.79%
Total Net Assets:$74.14 Million  (9/30/19)
Category:Large Cap Growth
Benchmark:Morningstar U.S. Large Growth
Related Material:
   Fund Fact Sheet Q3 2019
   PM Commentary Q2 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 — 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™ of BUFEX based on risk-adjusted returns among 1,243 Large Growth funds as of 9/30/19.

Investment Style

Performance (%)

As of 9/30/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO LARGE CAP FUND - Investor0.9821.705.1914.1113.0113.119.559.73
BUFFALO LARGE CAP FUND - Institutional1.0521.865.3714.2813.1913.289.719.90
  Morningstar U.S. Large Growth Index-0.0921.493.8917.8113.3914.999.82-
  Lipper Large Cap Growth Fund Index-0.4221.162.7615.9612.0413.379.278.33
  Morningstar Large Growth Category-0.4720.541.8714.6211.0413.139.338.47
As of 9/30/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO LARGE CAP FUND - Investor0.9821.705.1914.1113.0113.119.559.73
BUFFALO LARGE CAP FUND - Institutional1.0521.865.3714.2813.1913.289.719.90
  Morningstar U.S. Large Growth Index-0.0921.493.8917.8113.3914.999.82-
  Lipper Large Cap Growth Fund Index-0.4221.162.7615.9612.0413.379.278.33
  Morningstar Large Growth Category-0.4720.541.8714.6211.0413.139.338.47
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 9/30/19)
Upside Capture86.12
Downside Capture99.73
Sharpe Ratio1.01
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 9/30/19) 
# of Holdings52
Median Market Cap$50.63 B
Weighted Average Market Cap$307.73 B
3-Yr Annualized Turnover Ratio20.00%
% of Holdings with Free Cash Flow86.54%
Active Share57.40%
Top 10 Holdings
Name of HoldingTickerSector% of Net
AmazonAMZNConsumer Discretionary6.49%
Alphabet (A)GOOGLTechnology4.25%
CME GroupCMEFinancials2.98%
EquinixEQIXReal Estate2.65%
DanaherDHRHealth Care2.40%
Intercontinental ExchangeICEFinancial Services2.30%
As of 6/30/19. 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 9/30/19. 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 9/30/19. Market Cap percentages may not equal 100% due to rounding.


Alex Hancock, CFA
Portfolio Manager

21 Years of Experience

 View full bio


(As of 6/30/19) — The S&P 500 Index posted its best 1st half of a calendar year since 1997, rising 18.54% from January 1 to June 30. During the most recent quarter, the index was in negative territory for the first two months (April and May) then rose 7.05% in the final month, marking the best June since 1955, and finished with a return of 4.30% for the quarter.

Central banks and trade policies continued to drive financial markets during the period. The threat of increasing tariffs against China and Mexico contributed to the sell-off early in the quarter, and the June rally was largely a result of dovish central bank commentary, leading investors to anticipate rate cuts in the coming months.

The Russell 3000 Index returned 4.10% in the quarter. By style, growth outpaced value, with the Russell 3000 Growth Index up 4.50% and the Russell 3000 Value Index up 3.68%. Large caps generally outperformed small caps in the quarter. The Russell 1000 Index returned 4.25%, just ahead of the Russell Mid Cap Index return of 4.13%. The Russell 2000 returned 2.10% during the quarter. Financials were the best performing sector, followed by Materials and Information Technology. Energy was the only sector to post a negative return, driven by a decline in oil prices. Health Care and Real Estate also underperformed relative to the broad market.

(As of 6/30/19) — The Buffalo Large Cap Fund (the “Fund”) returned 4.77% in the 2nd quarter underperforming the Morningstar U.S. Large Growth Index (the “Index”), which returned 5.05% during the same time period. In spite of significant intra-quarter volatility, most sectors generated positive returns for the period. Our stock selection within the Consumer and Health Care sectors was a key driver of relative underperformance, partially offset by comparatively strong performance in Financials and Materials.

The Fund ended the quarter with 51 holdings (excluding cash) representing 50 companies, up from 48 holdings representing 47 companies at the end of the previous quarter. The cash position ended the period at about 5% of Fund assets, in line with the prior quarter. During the period we initiated three new positions in the Fund.

With a 14% return in the 2nd quarter, Microsoft was the biggest contributor to the Fund’s overall performance. The company continues to report solid operating results, and its Azure (cloud infrastructure) and Office 365 segments appear poised for strong growth in coming quarters.

Qualcomm was another top-performing position during the quarter, returning 33%. In mid-April the company announced an agreement to settle litigation with Apple and paved the way for Apple to use Qualcomm’s 5G modems in upcoming iPhone models. While this agreement led to a very strong upward move for Qualcomm’s share price, there was a significant reversal in the quarter when the Federal Trade Commission (FTC) issued a ruling that questioned its licensing agreements with some of its large customers.

CME was also among the best performing investments in the Fund during the quarter, returning 18%. The company has an appealing business model and generated strong volume growth in many of its asset classes, including interest rates and equities, but was partially offset by some pressure in the pricing rate of some of its contracts.

Alphabet, the parent company of Google, was the largest detractor from performance in the quarter, with both of its share classes declining about 8%. While the company retains its dominance in search and generates strong free cash flow, its 1st quarter results were weak due to a revenue miss driven by decelerating growth in Google Properties and Google Other.

Mylan was also underperformer whose stock declined 33%. Mylan is a large generic drug maker whose stock has struggled due to pricing pressure on generic drugs and manufacturing issues related to the EpiPen device. In its 1st quarter results, the company reported weaker-than-expected revenues (especially in Europe), and consensus estimates for the remainder of 2019 remain under pressure.

Another detractor from the Fund’s performance in the quarter was Alnylam, which declined by 22%. The company is a leader in RNA interference and has launched Onpattro, a drug to treat amyloidosis. While the long-term potential for the company’s products remain strong, its stock has been hurt by the potential for increased competition, a Chief Financial Officer (CFO) transition, and the expected need for a large capital raise in the relative near term.

(As of 6/30/19) — Looking forward into the 2nd half of 2019 and beyond we are cautiously optimistic about the outlook for large cap stocks. There is still significant uncertainty in the market about President Trump’s trade stance, which could cause volatility, but we believe all sides have an interest in reaching an agreement, and recent rhetoric has become more positive.

While there has been some mixed data on the health of the U.S. economy and Gross Domestic Product (GDP) growth, the job market remains broadly strong, and investors have been cheered by the increased dovish stance from the Federal Reserve and outlook for interest rate cuts. The risk of increased government scrutiny and regulation of some of the largest technology companies is a risk through the 2020 election cycle that we will watch closely. Along these same lines, we also expect continued volatility in the Health Care sector as the prospect of more pricing pressure could intensify in the election cycle as well.

Within this context, we have been managing the Fund cautiously yet actively, seeking to deploy capital into investment ideas which we believe have the most favorable risk/reward trade-offs. We will continue with our strategy of identifying investment candidates among large cap companies with strong secular growth opportunities that can benefit from long-term trends and trade at attractive valuations. As always, we appreciate your continued confidence in our investment capabilities 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.


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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 1,243 for the 3-year, 4 stars among 1,110 for the 5-year, and 3 stars among 822 Large Growth funds for the 10-year period ending 9/30/19.

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. ©2019 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.