Mid Cap Fund
|As of 11/27/2023|
|Total Net Assets:||$135.66 Million (9/30/23)|
|Morningstar Category:||Mid Cap Growth|
|Benchmark Index:||Russell Midcap Growth|
Fund Fact Sheet Q3 2023
PM Commentary Q3 2023
Fund Objective & Investment Strategy
The investment objective of the Buffalo Mid Cap Fund is long-term growth of capital. The Fund normally invests at least 80% of its net assets in equity securities, consisting of common stocks, preferred stocks, convertible preferred stocks, warrants and rights of medium capitalization (“mid-cap”) companies. The Fund defines mid-cap companies as those companies that, at the time of purchase, have market capitalizations within the range of the Russell Midcap Growth Index.
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.
Josh West, Portfolio Manager
Overall Morningstar Rating™ of BUFMX based on risk-adjusted returns among 521 Mid-Cap Growth funds as of 10/31/23.
Morningstar Sustainability Rating™ of BUFMX out of 1,599 US Equity Mid Cap funds as of 8/31/23, based on 99% of AUM
Carbon Metric Rating of BUFMX as of 8/31/23 in the Mid Cap Growth category, based on 99% of AUM; long positions only
Historical Sustainability Score Rank of BUFMX
|As of 10/31/23||3 MO||YTD||1 YR||3 YR||5 YR||10 YR||15 YR||20 YR||Since Inception|
|BUFFALO MID CAP FUND - Investor||-13.03||4.51||4.72||1.40||8.59||6.96||10.94||8.01||7.70|
|BUFFALO MID CAP FUND - Institutional||-13.28||4.63||4.83||1.55||8.74||7.12||11.10||8.17||7.85|
|Russell Midcap Growth Index||-12.70||4.28||3.35||0.79||8.09||9.09||12.71||9.34||8.57|
|Lipper Mid Cap Growth Index||-14.18||0.51||-0.76||-1.98||5.89||7.68||11.10||8.45||7.50|
|As of 9/30/23||3 MO||YTD||1 YR||3 YR||5 YR||10 YR||15 YR||20 YR||Since Inception|
|BUFFALO MID CAP FUND - Investor||-5.71||11.16||17.94||3.51||7.25||7.93||9.63||8.84||8.03|
|BUFFALO MID CAP FUND - Institutional||-5.73||11.24||18.07||3.62||7.40||8.09||9.79||9.00||8.19|
|Russell Midcap Growth Index||-5.22||9.88||17.47||2.61||6.97||9.94||11.25||10.05||8.86|
|Lipper Mid Cap Growth Index||-5.49||7.16||12.58||0.09||5.12||8.68||9.88||9.21||7.84|
|BUFFALO MID CAP FUND - Investor||29.25||5.85||-0.52||5.93||13.66||-7.30||37.98||34.18||14.61||-27.80|
|BUFFALO MID CAP FUND - Institutional||29.45||6.00||-0.37||6.08||13.82||-7.16||38.16||34.42||14.73||-27.69|
|Russell Midcap Growth Index||35.74||11.90||-0.20||7.33||25.27||-4.75||35.47||35.59||12.73||-26.72|
|Morningstar U.S. Mid Growth Index||34.07||9.77||-0.71||6.46||25.67||-3.16||36.01||46.17||14.97||-32.37|
3 Year Risk Metrics
|BUFMX vs Russell Midcap Growth Index (As of 9/30/23)|
Hypothetical Growth of $10,000
|(As of 9/30/23)||
|# of Holdings||59|
|Median Market Cap||$14.74 B|
|Weighted Average Market Cap||$23.59 B|
|3-Yr Annualized Turnover Ratio||22.70%|
|% of Holdings with Free Cash Flow||84.75%|
Top 10 Holdings
|Name of Holding||Ticker||Sector||% of Net
|Gartner, Inc.||IT||Information Technology||3.94|
|MSCI Inc. Class A||MSCI||Financials||3.46|
|CoStar Group, Inc.||CSGP||Industrials||3.45|
|CBRE Group, Inc. Class A||CBRE||Real Estate||3.11|
|IQVIA Holdings Inc||IQV||Health Care||3.06|
|Verisk Analytics Inc||VRSK||Industrials||2.94|
|ON Semiconductor Corporation||ON||Information Technology||2.79|
|Kinsale Capital Group, Inc.||KNSL||Financials||2.53|
|TOP 10 HOLDINGS TOTAL||31.00%|
As of 9/30/23. 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 9/30/23. Market Cap percentages may not equal 100% due to rounding.
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.
We construct our portfolios based on our own proprietary investment strategy.
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 Morningstar Rating does not include any adjustment for sales loads. 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.
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The Buffalo Mid Cap Fund (BUFMX) received 3 stars among 521 for the 3-year, 4 stars among 493 for the 5-year, and 3 stars among 396 Mid-Cap Growth funds for the 10-year period ending 10/31/23. Other share classes may have different performance characteristics.
Morningstar Sustainability Rating™
The Morningstar Sustainability Rating™ is intended to measure how well the issuing companies of the securities within a fund’s portfolio holdings are managing their financially material environmental, social and governance, or ESG, risks relative to the fund’s Morningstar Global Category peers. The Morningstar Sustainability Rating calculation is a five -step process. First, each fund with at least 67% of assets covered by a company-level ESG Risk Score from Sustainalytics receives a Morningstar Portfolio Sustainability Score. The Morningstar Portfolio Sustainability Score is an asset weighted average of company-level ESG Risk Scores. The Portfolio Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk. Second, the Historical Sustainability Score is an exponential weighted moving average of the Portfolio Sustainability Scores over the past 12 months. The process rescales the current Portfolio Sustainability Score to reflect the consistency of the scores. The Historical Sustainability Score ranges between 0 to 100, with a higher score indicating that a fund has, on average, more of its assets invested in companies with high ESG Risk, on a consistent historical basis. Third, the Morningstar Sustainability Rating is then assigned to all scored funds within Morningstar Global Categories in which at least thirty (30) funds receive a Historical Sustainability Score and is determined by each fund’s Morningstar Sustainability Rating Score rank within the following distribution: High (highest 10%), Above Average (next 22.5%), Average (next 35%), Below Average (next 22.5%), and Low (lowest 10%). Fourth, Morningstar applies a 1% rating buffer from the previous month to increase rating stability. This means a fund must move 1% beyond the rating breakpoint to change ratings. Fifth, they adjust downward positive Sustainability Ratings to funds with high ESG Risk scores. The logic is as follows: If Portfolio Sustainability score is above 40, then the fund receives a Low Sustainability Rating. If Portfolio Sustainability score is above 35 and preliminary rating is Average or better, then the fund is downgraded to Below Average. If the Portfolio Sustainability score is above 30 and preliminary rating is Above Average, then the fund is downgraded to Average. If the Portfolio Sustainability score is below 30, then no adjustment is made. The Morningstar Sustainability Rating is depicted by globe icons where High equals 5 globes and Low equals 1 globe. Since a Sustainability Rating is assigned to all funds that meet the above criteria, the rating it is not limited to funds with explicit sustainable or responsible investment mandates. Morningstar updates its Sustainability Ratings monthly. The Portfolio Sustainability Score is calculated when Morningstar receives a new portfolio. Then, the Historical Sustainability Score and the Sustainability Rating is calculated one month and six business days after the reported as-of date of the most recent portfolio. As part of the evaluation process, Morningstar uses Sustainalytics’ ESG scores from the same month as the portfolio as-of date. Please click on http://corporate1.morningstar.com/SustainableInvesting/ for more detailed information about the Morningstar Sustainability Rating methodology and calculation frequency. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.
Morningstar Low Carbon Designation™
The Morningstar® Low Carbon Designation™ is intended to allow investors to easily identify low-carbon funds across the global universe. The designation is an indicator that the companies held in a portfolio are in general alignment with the transition to a low-carbon economy. The designation is given to portfolios that have low carbon-risk scores and low levels of exposure to fossil fuels. To determine carbon-risk scores and fossil fuel involvement, Morningstar uses Sustainalytics' company-level data. The Morningstar® Portfolio Carbon Risk Score™ measures the risk that companies in a portfolio face from the transition to a low-carbon economy. The Morningstar® Portfolio Fossil Fuel Involvement™ percentage assesses the degree to which a portfolio is exposed to thermal coal extraction and power generation as well as oil and gas production, power generation, and products & services. To receive a Morningstar Portfolio Carbon Risk Score, at least 67% of portfolio assets must have a carbon-risk rating from Sustainalytics. The percentage of assets covered is rescaled to 100% before calculating the score. To receive the designation, a portfolio must meet two criteria: 1) a 12-month trailing average Morningstar Portfolio Carbon Risk Score below 10 and 2) a 12-month trailing average exposure to fossil fuels less than 7% of assets, which is approximately a 33% underweighting to the global equity universe. Funds receive the Low Carbon designation based on the most recent quarterly calculations of their 12- month trailing average Morningstar Portfolio Carbon Risk Scores and Morningstar Portfolio Fossil Fuel Involvement. Funds holding the Low Carbon designation that no longer meet the criteria will not receive the designation for the subsequent quarter. All Morningstar Portfolio Carbon Metrics, including the Morningstar Portfolio Carbon Risk Score, Morningstar Portfolio Fossil Fuel Involvement, and the Morningstar Low Carbon Designation, are calculated quarterly. Please visit http://corporate1.morningstar.com/SustainableInvesting/ for more detail information about the Morningstar Low Carbon Designation and its calculation. Sustainalytics is an independent ESG and corporate governance research, ratings, and analysis firm. Morningstar, Inc. holds a non-controlling ownership interest in Sustainalytics.