Inception Date
  December 17, 2001

Total Fund Assets
  $177.06 Million  (12/31/17)

Expense Ratio

Benchmark Index
  Russell Midcap Growth


Overall Morningstar™ rating out of 562 Mid-cap Growth funds as of 12/31/17 (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



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 562 funds in the Mid-Cap Growth category, as of 12/31/17.


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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.

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

Performance (%)

As of 12/31/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Mid Cap Fund3.8813.6613.666.2010.387.0210.327.95
  Russell Midcap Growth Index6.8125.2725.2710.3015.309.1011.969.04
  Lipper Mid Cap Growth Index5.7925.9025.909.8314.317.7111.028.12
  Morningstar Mid-Cap Growth6.0223.9123.919.4013.737.6710.687.40
As of 12/31/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Mid Cap Fund3.8813.6613.666.2010.387.0210.327.95
  Russell Midcap Growth Index6.8125.2725.2710.3015.309.1011.969.04
  Lipper Mid Cap Growth Index5.7925.9025.909.8314.317.7111.028.12
  Morningstar Mid-Cap Growth6.0223.9123.919.4013.737.6710.687.40
YearBuffalo Mid Cap FundRussell Midcap Growth IndexMorningstar Mid-Cap Growth Category
(As of 12/31/17)

vs Russell Midcap Growth Index
Upside Capture81.75
Downside Capture105.72
Sharpe Ratio0.52

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 12/31/17)

# of Holdings72
Median Market Cap$12.25 B
Weighted Average Market Cap$16.58 B
3-Yr Annualized Turnover Ratio50.82%
% of Holdings with Free Cash Flow81.69%
% of Holdings with No Net Debt33.80%
Active Share84.09%
Name of HoldingTickerSector% of Net Assets
ZoetisZTSHealth Care2.02%
Verisk AnalyticsVRSKIndustrials1.92%
CME GroupCMEFinancials1.83%
EquinixEQIXReal Estate1.81%
Bio-TechneTECHHealth Care1.75%
Air Products & ChemicalsXNYSMaterials1.55%
Nielsen HoldingsNLSNIndustrials1.55%
Kansas City SouthernKSUIndustrials1.54%
View Full Holdings

As of 9/30/17. 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 9/30/17. 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 9/30/17. Market Cap percentages may not equal 100% due to rounding.


Equity markets continued their strong start to the year during the 2nd quarter, primarily driven by strong corporate earnings growth. The Russell 3000 Index advanced 3.02% in the 2nd quarter. As reported during the June 30 period, earnings from S&P 500 Index companies were up 14% year-over-year in the 1st 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 continued 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 2.31% for the quarter, which underperformed the Russell Midcap Growth Index return of 5.28%. The Index was primarily driven higher by contributions from the information technology and industrials sectors. The majority of the Fund’s relative underperformance was the result of both difficult stock selection and an unfavorable sector allocation effect.

Stock selection and an underweight allocation in information technology had the biggest negative impact on the Fund’s relative performance. Stocks the Fund owned that underperformed included Sabre Corporation, which declined about 15.5% during the quarter. The company disappointed when they announced a slowdown in their airline solutions business due to the halting of an implementation at Air Berlin, Alitalia’s bankruptcy, and the loss of a Southwest Airlines domestic contract. These developments, coupled with increased investments in new products and technology, are expected to weigh on growth and margins in the near term.

Other large relative detractors from the information technology area were companies or sub-industries within the index that the Fund did not own or was underweight. Most notably was the Fund’s underweight exposure to semiconductor and semiconductor equipment companies as well as IT services, both areas that negatively affected relative performance of the Fund. Within semiconductors and semiconductor equipment, the Fund’s non-ownership of Lam Research was a large relative detractor as the stock advanced 31.6% for the quarter. Despite temptations to chase this year’s benchmark leaders such as Lam Research, we continue to deploy capital to where we see a more favorable long-term risk/reward tradeoff.

Stock selection within the consumer discretionary sector was another area that negatively impacted relative performance during the period. AMC Entertainment was the largest detractor within our portfolio as the company’s shares declined just over 40% during the quarter. The decline in AMC reflects investor concerns surrounding premium video on demand (PVOD) and its potential impact on theater industry revenues, as well as a weaker than expected box office.

On a constructive note, stock selection among the Fund’s industrials companies was positive during the quarter. Shares of Trex and FMC Corp advanced 33% and 23%, respectively. Trex’s revenues continued to benefit from healthy repair and remodel activity, as well as increased market share of wood alternatives. Additionally, the company’s focus on efficient manufacturing, cost cutting initiatives, and capacity utilization boded well for margins. Meanwhile FMC, the 2nd largest producer of lithium batteries by revenue, continued to benefit from strong demand from electronics and automobile manufactures. In addition, the company is buying a portion of DuPont’s crop protection unit which should make FMC the 5th largest crop protection company in the world, and potentially provides some upside accretion relative to original expectations.


We believe the market could experience more volatility in the coming quarters as the Federal Reserve continues to normalize interest rates, along with a focus on the ability of the Trump administration to enact infrastructure spending, deregulation, and corporate tax reform. Prospective tailwinds for the economy include further job growth, wage increases, lower tax rates, and simply more optimism from both businesses and consumers; all of which could lead to higher Gross Domestic Product (GDP) growth. On the other hand, potential headwinds include potential strengthening of the U.S. dollar, further increases in interest rates, and valuation metrics that are above historical market averages, leading us to believe that the stock market may have a hard time achieving further multiple expansion.

Despite the expectation of more volatility, 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 should potentially benefit from identified long-term trends that pass our disciplined valuation criteria. Going forward, we will continue to reduce positions with unfavorable risk-reward scenarios. We appreciate your continued support and 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. 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 562 for the three-year, 1 stars among 490 for the five-year, and 3 stars among 362 Mid-Cap Growth funds for the ten-year period ending 12/31/17.

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.

©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.