Inception Date
  December 17, 2001

Total Fund Assets
  $192.29 Million  (9/30/17)

Expense Ratio

Benchmark Index
  Russell Midcap Growth


Overall Morningstar™ rating out of 563 Mid-cap Growth funds as of 9/30/17 (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


Low High

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 563 funds in the Mid-Cap Growth category, as of 9/30/17.

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 within the range of the Russell Midcap® Growth Index ($1.1 billion to $28.6 billion, as of 6/30/16).


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.

~ Robert Male, Portfolio Manager

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Performance (%)

As of 9/30/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Mid Cap Fund2.319.4110.626.1910.596.0710.697.82
  Russell Midcap Growth Index5.2817.2917.829.9614.188.2012.128.73
  Lipper Mid Cap Growth Index4.2919.0019.809.8413.217.1010.947.87
  Morningstar Mid-Cap Growth4.6316.8418.189.1312.626.9210.607.12
As of 9/30/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Mid Cap Fund2.319.4110.626.1910.596.0710.697.82
  Russell Midcap Growth Index5.2817.2917.829.9614.188.2012.128.73
  Lipper Mid Cap Growth Index4.2919.0019.809.8413.217.1010.947.87
  Morningstar Mid-Cap Growth4.6316.8418.189.1312.626.9210.607.12
YearBuffalo Mid Cap FundRussell Midcap Growth IndexMorningstar Mid-Cap Growth Category
(As of 6/30/17)

vs Russell Midcap Growth Index
Upside Capture84.00
Downside Capture107.66
Standard Deviation11.81
Sharpe Ratio0.31

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 6/30/17)

# of Holdings82
Median Market Cap$8.30 B
Weighted Average Market Cap$12.62 B
3-Yr Annualized Turnover Ratio41.82%
% of Holdings with Free Cash Flow82.35%
% of Holdings with No Net Debt32.94%
Active Share84.07%
Name of HoldingTickerSector% of Net Assets
Kansas City SouthernKSUIndustrials2.25%
ZoetisZTSHealth Care2.00%
EquinixEQIXReal Estate1.95%
Verisk AnalyticsVRSKIndustrials1.93%
AmeriSourceBergenABCHealth Care1.92%
Bio-TechneTECHHealth Care1.88%
Air Products & ChemicalsXNYSMaterials1.81%
Nielsen HoldingsNLSNIndustrials1.74%
CME GroupCMEFinancials1.67%
View Full Holdings

As of 6/30/17. 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 6/30/17. 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 6/30/17. Market Cap percentages may not equal 100% due to rounding.


Equity markets continued their strong start to the year during the second quarter, primarily driven by strong corporate earnings growth. The Russell 3000 Index advanced 3.02% in the second quarter. As reported during the June 30 period, earnings from S&P 500 Index companies were up 14% year-over-year in the first quarter, the strongest growth reading since 2011.

Broadly speaking, growth stocks continued their outperformance relative to value stocks, while cyclical stocks that rallied to end 2016 underperformed as investors continue to discount the likelihood of government infrastructure spending and comprehensive tax reform.

The yield on the U.S. 10-year Treasury ended the June 30 period at 2.298%, a decline from its recent high of 2.609% in March due in large part to weaker inflation readings. In contrast, the outlook for growth and interest rate expectations improved in much of the rest of the world, which has driven the trade weighted U.S. dollar down 5.6% year to date. Oil entered bear market territory, with crude prices declining 9% during the quarter in response to stronger than expected inventory levels and rising U.S. production.

As mentioned above investors continued to favor growth over value, and the Russell 3000 Growth Index climbed 4.65% during the period compared to the more modest gain of 1.29% for the Russell 3000 Value Index. By size, microcaps were the best performers with the Russell Microcap Index gaining 3.83%. Meanwhile the large cap Russell 1000 Index gained 3.06%, followed by the Russell Midcap Index at 2.70% and the Russell 2000 Index finishing with a gain of 2.46% during the period.

In general health care was the best performing sector as the chances for legislation to repeal or reform the Affordable Care Act appeared to diminish, and investors reacted by bidding up health care stocks. The technology sector was also a strong performer as the market continued to reward the strong earnings growth produced in this area. Conversely, energy was the worst performing sector driven by the decline in oil prices mentioned above.


The Buffalo Mid Cap Fund generated a return of 2.23% for the quarter, which underperformed the Russell Midcap Growth Index return of 4.21%. The index was primarily driven higher by contributions from the health care and information technology sectors. The majority of the fund’s relative underperformance was a result of both difficult stock selection and an underweight sector allocation in the information technology sector.

Our attention to valuation has led us to trim stocks that continued to move higher, and this was especially the case within information technology. Despite temptations to chase this year’s benchmark winners with high growth, high valuation profiles we continue to deploy capital to areas where we see a more favorable risk/reward tradeoff. The fund’s relative underperformance within information technology was heavily influenced by not owning Nvidia, the benchmark’s largest holding. Nvidia produced a return 44% for the index in the 2nd quarter and ended the period with a market capitalization of $86 billion. Due to its large capitalization status, Nvidia was removed from the Russell Midcap Growth Index near the end of the quarter, but has been a significant driver of the benchmark’s return year-to-date.

Stock selection in consumer discretionary and an overweight allocation to energy also negatively impacted relative performance. Positive stock selection in consumer staples and industrials helped partially offset performance in the areas mentioned above. Stocks the fund did own that contributed to underperformance in the IT sector included Inphi and Akamai. Inphi declined approximately 17% for the fund during the quarter. The company’s earnings release in early May indicated an optical inventory correction in China, which led to lower guidance for the year and drove lower earnings estimates and price targets by the analyst community. Akamai also reported weak guidance in early May and indicated their media business (~1/3rd of revenue) would decline more than expected. This news was roughly a month after the company lowered their expectation for long-term margins. Hence, the stock dropped roughly 16% the day of their earnings announcement.

The fund’s consumer staples sector performed well during the quarter. Whole Foods was the sectors top contributor for the fund due to Amazon.com’s $13.7 billion offer to acquire the company. Whole Foods gives Amazon.com the brick and mortar presence needed to ramp up their Prime Fresh grocery delivery services and provide locations for customers who prefer to pick up their pre-ordered groceries. It is also likely that Amazon.com will use Whole Foods private label brands to further drive private label packaged food penetration in the U.S. Constellation Brands also performed well for the fund driven by strong organic growth of the company’s imported Mexican beers including Corona, Modelo, and Pacifico. In addition, the market’s belief that a border adjustment tax on imports would not be enacted also helped the stock.


For the back half of the year, we expect the market could experience increased volatility as the Federal Reserve continues with its plan to normalize interest rates along with a continued focus on the ability of the Trump administration to enact infrastructure spending, deregulation, health care and corporate tax reform. For various reasons, President Trump continues to be a lightning rod for the media, and health care reform seems less likely each day. We believe that in the near-term, attention will turn to the administration’s ability to enact tax reform and any potential headwinds will be met with increased volatility in the markets.

We continue to spend considerable time analyzing companies that could provide greater risk-adjusted return potential to the portfolio. In addition, we remain true to our process of identifying companies that will potentially benefit from identified long-term trends and pass our disciplined valuation criteria. Going forward, we will continue to reduce positions with unfavorable risk reward scenarios.

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 Mid Cap Fund received 2 stars among 563 for the three-year, 2 stars among 484 for the five-year, and 2 stars among 362 Mid-Cap Growth funds for the ten-year period ending 9/30/17.

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.

©2017 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.