Quick Facts
Inception Date:12/17/20017/1/2019
Expense Ratio:1.02%0.87%
Total Net Assets:$175.04 Million  (12/31/19)
Category:Mid Cap Growth
Benchmark:Morningstar U.S. Mid Growth
Related Material:
   Fund Fact Sheet Q4 2019
   PM Commentary Q4 2019
   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, that, at the time of purchase, have 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™ of BUFMX based on risk-adjusted returns among 568 Mid-Cap Growth funds as of 2/29/20.

Investment Style

Performance (%)

As of 2/29/203 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO MID CAP FUND - Investor-3.67-4.8111.819.946.5710.188.148.13
BUFFALO MID CAP FUND - Institutional-3.66-4.8111.9410.096.7210.348.308.29
  Morningstar U.S. Mid Growth Index-3.07-4.429.5413.979.5213.419.978.67
  Lipper Mid Cap Growth Index-3.56-4.868.5113.139.2912.439.488.34
  Morningstar Mid-Cap Growth Category-4.03-5.506.8011.188.2212.148.827.37
As of 12/31/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO MID CAP FUND - Investor5.8937.9837.9813.288.9010.838.368.51
BUFFALO MID CAP FUND - Institutional5.8938.1638.1613.459.0610.998.528.67
  Morningstar U.S. Mid Growth Index8.3136.0136.0118.2911.8414.0410.279.02
  Lipper Mid Cap Growth Index7.5533.8333.8317.5811.3313.029.708.72
  Morningstar Mid-Cap Growth Category8.0532.3032.3015.429.9812.198.467.78
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
BUFMX vs Morningstar U.S. Mid Growth Index (As of 12/31/19)
Upside Capture73.99
Downside Capture92.34
Sharpe Ratio0.87
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 12/31/19) 
# of Holdings62
Median Market Cap$13.75 B
Weighted Average Market Cap$19.18 B
3-Yr Annualized Turnover Ratio51.99%
% of Holdings with Free Cash Flow88.71%
% of Holdings with No Net Debt29.03%
Active Share78.68%
Top 10 Holdings
Name of HoldingTickerSector% of Net
IHS MarkitINFOIndustrials3.15%
CoStar GroupCSGPReal Estate3.00%
Palo Alto NetworksPANWTechnology2.47%
CBRE GroupCBREReal Estate2.45%
Verisk AnalyticsVRSKIndustrials2.39%
Tyler TechnologiesTYLTechnology2.24%
EPAM SystemsEPAMTechnology2.24%
As of 12/31/19. 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 12/31/19. 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 12/31/19. 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 12/31/19) — The combination of a U.S. Federal Reserve (Fed) interest rate cut, an improving economic outlook, and easing trade tensions, sent equity markets sharply higher in the 4th quarter. The S&P 500 Index advanced 9.10% during the period, which brought the full-year (2019) gain to 31.49%. The Fed cut interest rates three times in 2019, erasing the brief yield curve inversion and assuaging fears of a recession. The economy continued to add new jobs at a strong pace and unemployment declined to 3.5%. Consumer spending remained healthy, and there is optimism for better business investment following the announced “phase one” trade deal with China.

Similar to the S&P 500 Index, the broad-based Russell 3000 Index returned 9.04% during the quarter. Growth outperformed value, as the Russell 3000 Growth Index returned 10.62% compared to a return of 7.41% for the Russell 3000 Value Index. Smaller companies outperformed larger companies, as one would expect in a “risk-on” period. The Russell Microcap Index surged 13.45% and the Russell 2000 Index advanced 9.94%. Large company benchmarks such as the Russell 1000 Index advanced 9.04% while the Russell Midcap Index produced a return of 7.06%. Technology and Health Care were the best performing sectors in the quarter, while more defensive areas of the market lagged such as Real Estate and Utilities. Higher long-term interest rates weighed on high-quality bond proxies – the safe haven 10-year U.S. Treasury Bond produced a return of -1.74% during the quarter.


(As of 12/31/19) — In the 4th quarter of 2019, the Buffalo Mid Cap Growth Fund returned 5.89%, lagging the benchmark Morningstar U.S. Mid Growth Index return of 8.31%. The Fund’s underperformance was due to selection in the Health Care, Consumer Discretionary, and Industrial sectors.


Among the top contributors during the quarter were MSCI, Lam Research, and IHS Markit. MSCI was boosted by earnings that beat investor expectations, the announcement of a 10-year contract renewal with BlackRock, and in response to the strong performance of international equities (which drives a large percentage of their asset-based fees). Lam Research shares gained on a stronger earnings outlook and the belief that the semiconductor capital spending cycle has bottomed. IHS Markit presented a 2020 outlook that was well received by investors, as was their capital allocation plan. The company expects to generate increasing amounts of free cash flow and plans to initiate a dividend and increase share repurchases.


The biggest detractors in the period were Expedia, RealPage, and Verisk Analytics.

Expedia shares traded lower when management’s outlook for growth and margins were reduced, citing Google’s increasing competition in travel as a primary cause. In a stunning move, the company’s board differed with management’s assessment of the company’s growth potential, leading to the resignation of the CEO and CFO, which, given the board’s more optimistic view of growth, led to a partial recovery in the stock.

RealPage also detracted from performance during the quarter as project implementation delays continue to cause revenues to slip into future periods. We believe these delays are driven by larger, more complicated deals and better product penetration into their clients and not by any lack of demand or competitive issues. Eventually, they should be able to convert pipeline into revenues quicker, boosting revenue growth and rewarding shareholders.

Verisk reported solid earnings during the period, but company management also announced a negative verdict in a patent infringement lawsuit. They plan to appeal the ruling and look for alternative, non-infringing ways to continue offering customers a similar product. Given that the affected aerial imagery / roof reports represented about 1% of revenues, we do not consider the setback to be material even in a worst case scenario.


(As of 12/31/19) — At the start of 2019 the market was coming off a significant sell-off from the 4th quarter of 2018. Federal Reserve interest rate increases and rising trade tensions with China drove fears of decelerating economic growth. However, the Fed reversed course by cutting interest rates three times over the last year. While the tensions with China did result in a trade war of sorts, it was deescalated with a “Phase One” trade deal agreement near the end of the year. In 2020, trade relations with China and the negotiation of a more comprehensive trade deal will continue to be a risk. In addition, the Manufacturing PMI Index has recorded several consecutive readings below 50, which has historically been a good warning indicator of weaker economic growth and a possible recession in the near future. However, it is possible that the interest rate cuts by the Federal Reserve and “Phase One” trade resolution between the U.S. and China will help the economy avoid recession. This backdrop, combined with robust investment returns in 2019, has sharpened our focus on the health of the economy and sustainability of earnings growth in 2020.

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 Mid Cap Fund (BUFMX) received 3 stars among 568 for the 3-year, 2 stars among 502 for the 5-year, and 2 stars among 385 Mid-Cap Growth funds for the 10-year period ending 2/29/20.

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. ©2020 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.