Quick Facts
Inception Date:12/17/2001
Total Net Assets:$118.20 Million  (12/31/18)
Expense Ratio:1.02%
Category:Mid Cap Growth
Benchmark:Morningstar U.S. Mid Growth
Related Material:
   Fund Fact Sheet Q4 2018
   PM Commentary Q4 2018
   Summary Prospectus
Fund Objective & Investment Strategy

The investment objective of the Buffalo Mid Cap Fund is long-term growth of capital. The Mid Cap Fund normally invests at least 80% of its net assets in equity securities, consisting of domestic common stocks and preferred stocks of medium capitalization (“mid-cap”) companies — companies, at the time of purchase, with market caps between $4.5B and $30B.

The Fund managers seek to identify companies for the Mid 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.


Our focus has always been on investing in secular growth companies we believe are attractively-priced with strong balance sheets. We remain convinced the inefficiencies inherent in the small and mid-cap market spectrum, in addition to where we are in the economic cycle, are best suited for disciplined, active management of the portfolio.

Chris Carter, Portfolio Manager

Morningstar Rating


Overall Morningstar Rating™ based on risk-adjusted returns among 547 Mid-cap Growth funds as of 1/31/19.

Investment Style

Performance (%)

As of 1/31/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO MID CAP FUND4.2110.51-2.4910.275.6013.487.547.58
  Morningstar U.S. Mid Growth Index3.5511.281.8216.319.7316.309.628.25
  Russell Midcap Growth Index3.9511.490.5115.6010.2616.929.548.82
  Lipper Mid Cap Growth Index2.0410.440.9015.909.2315.469.077.98
  Morningstar Mid-Cap Growth Category1.6310.69-1.8714.208.3014.998.477.10
As of 12/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO MID CAP FUND-16.67-7.30-7.303.733.2811.677.156.99
  Morningstar U.S. Mid Growth Index-17.26-3.16-
  Russell Midcap Growth Index-15.99-4.75-4.758.597.4215.128.988.17
  Lipper Mid Cap Growth Index-16.46-3.53-3.538.886.6413.748.537.40
  Morningstar Mid-Cap Growth Category-17.57-6.65-6.657.275.6113.167.956.50

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. Mid Growth Index has replaced the Russell Midcap 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. Mid Growth Index (As of 12/31/18)
Upside Capture73.10
Downside Capture98.52
Sharpe Ratio0.21
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 Holdings61
Median Market Cap$10.64 B
Weighted Average Market Cap$15.97 B
3-Yr Annualized Turnover Ratio51.15%
% of Holdings with Free Cash Flow85.25%
% of Holdings with No Net Debt34.43%
Active Share84.58%
Top 10 Holdings
Name of HoldingTickerSector% of Net
Bio TechneTECHHealth Care2.82%
Verisk AnalyticsVRSKIndustrials2.72%
Ligand PharmaceuticalsLGNDHealth Care2.34%
Exact SciencesEXASHealth Care2.31%
Norwegian Cruise LinesNCLHConsumer Discretionary2.31%
Palo Alto NetworksPANWTechnology2.30%
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.


Chris Carter, CFA
Portfolio Manager

10 Years of Experience

 View full bio

Josh West, CFA
Portfolio Manager

14 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) — In the 4th quarter, the Buffalo Mid Cap Fund returned -16.67%, bettering the benchmark Morningstar U.S. Mid Growth Index return of -17.26%. The Fund’s outperformance was driven by favorable stock selection within the Technology and Financial sectors.

Among the top contributors during the 4th quarter were Red Hat and Chicago Mercantile Exchange. Red Hat’s share price was boosted by an agreement to be acquired by IBM. The acquisition is expected to close during the 2nd half of 2019. IBM‘s acquisition of Red Hat is aimed at boosting its presence in cloud architectures where it has lagged behind peers like Microsoft, Amazon, and Google, causing the company to lose market share. Red Hat will bring IBM immediate credibility in cloud architectures and enable it to build a software and services business that is agnostic to the cloud host (i.e. Microsoft, Amazon, Google).

Chicago Mercantile Exchange was a beneficiary of financial market turmoil, which bodes well for the volumes in a number of financial instruments offered for trade on its exchange. Equity and bond markets saw a very steep increase in volatility in the 4th quarter, leading to an increase in volumes traded on its exchanges.

The biggest detractors in the period were Bio-Techne and Ligand Pharmaceuticals. While each was among top contributors in prior quarters, the markets sell-off seemed to hit some of the previous top performers particularly hard, although incremental concerns drove these two to be leading detractors.

For Ligand Pharmaceuticals, the company reported a record year for profit that included a big boost from several milestone payments. These milestone payments are more unpredictable in nature than its royalty business which is based off sales of approved drugs in market. Concern increased as 2019 drew nearer, with many wondering how it would compare to the record year in 2018. The company sought to assuage concern in December by guiding to 2019 numbers that were ahead of consensus estimates for the company.

Bio-Techne shares sold off on its quarterly report at the end of October. Disappointment in the quarter centered around management delaying the revenue ramp of a recent acquisition, Exosome Diagnostics, based on a delay in Medicare reimbursement approval. It is not uncommon for new diagnostic tests to have a slow launch. In health care, key opinion leaders often form recommendations on new treatments or tests that then spur reimbursement discussions, but the timeline for such a chain of events is dependent on factors outside of a management control.


(As of 12/31/18) — Despite the significant sell-off in markets across the world in the 4th quarter, we still see a positive environment for equities. The economic data points to a slowdown off of a robust year of economic growth spurred by tax reform, but has yet to suggest a recession is imminent. Further, corporate profitability has remained strong, and, given the negative performance of the market in 2018, valuations are more attractive entering 2019 than they were entering 2018. The potential for trade negotiations with China to devolve into a trade war remains the most significant risk to the stock market and economic expansion. This risk is closely followed by the potential for the Federal Reserve to overshoot on interest rate increases, where the three rate increases in 2018 has started to negatively impact housing and lending. Despite these risks, our outlook for returns in 2019 is positive.

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 Mid Cap Fund received 2 stars among 547 for the three-year, 2 stars among 492 for the five-year, and 2 stars among 345 Mid-Cap 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.