Inception Date
  December 17, 2001

Total Fund Assets
  $156.13 Million  (3/31/18)

Expense Ratio

Benchmark Index
  Russell Midcap Growth


Overall Morningstar™ rating out of 539 Mid-cap Growth funds as of 5/31/18 (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 539 funds in the Mid-Cap Growth category, as of 5/31/18.


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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 5/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Mid Cap Fund3.146.1714.055.599.368.339.588.13
  Russell Midcap Growth Index2.594.9918.429.9913.009.5811.159.12
  Lipper Mid Cap Growth Index4.076.8319.1810.1212.598.6810.548.34
  Morningstar Mid-Cap Growth3.605.8518.749.3411.958.6410.147.57
As of 3/31/183 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
Buffalo Mid Cap Fund2.792.7911.694.779.769.1810.798.00
  Russell Midcap Growth Index2.172.1719.749.1713.3110.6112.129.04
  Lipper Mid Cap Growth Index3.243.2420.359.1912.549.5511.378.20
  Morningstar Mid-Cap Growth2.152.1518.348.2811.949.3911.027.42
YearBuffalo Mid Cap FundRussell Midcap Growth IndexMorningstar Mid-Cap Growth Category
(As of 3/31/18)

vs Russell Midcap Growth Index
Upside Capture76.74
Downside Capture101.57
Sharpe Ratio0.40

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 3/31/18)

# of Holdings67
Median Market Cap$12.11 B
Weighted Average Market Cap$18.14 B
3-Yr Annualized Turnover Ratio49.28%
% of Holdings with Free Cash Flow79.10%
% of Holdings with No Net Debt35.82%
Active Share84.72%
Name of HoldingTickerSector% of Net Assets
Verisk AnalyticsVRSKIndustrials2.44%
CME GroupCMEFinancials2.16%
ZoetisZTSHealth Care2.08%
F5 NetworksFFIVTechnology2.03%
EquinixEQIXReal Estate2.02%
LKQLKQConsumer Discretionary1.85%
Air Products & ChemicalsXNYSMaterials1.85%
View Full Holdings

As of 12/31/17. 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 3/31/18. 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.

As of 3/31/18. Market Cap percentages may not equal 100% due to rounding.


Commentary for Q1 2018   (As of 3/31/18)


(As of 3/31/18) — The long streak of low volatility and positive stock market returns ended in the 1st quarter of 2018. Strong gains in January were erased in February and March, leaving the S&P 500 Index down 0.76% for the quarter. Volatility as measured by the Cboe Volatility Index (VIX) was up about 80% in the 1st quarter after falling for the last three years. Investor worries about increasing interest rates, possible trade wars, and threatened government action against large technology companies, offset generally strong economic data and corporate earnings growth.

The Russell 3000 Index declined 0.64% in the quarter, and, broadly speaking, small cap companies outperformed large cap companies during the period. The Russell Microcap Index advanced 0.68% and the Russell 2000 Index finished the period nearly flat, edging down just 0.08%. Moving up the market cap spectrum, performance worsened – the Russell Mid Cap Index was down 0.46% and the larger cap Russell 1000 Index declined 0.69%. Growth outperformed value by a wide margin during the quarter as the Russell 3000 Growth Index advanced 1.48% compared to a decline of 2.82% for the Russell 3000 Value Index. Technology and Consumer Discretionary were the best performing sectors, while Consumer Staples and Energy were the worst performing.


(As of 3/31/18) — The Buffalo Mid Cap Fund produced a return of 2.79% in the first quarter, outperforming the Russell Midcap Growth Index return of 2.17%. The Fund’s outperformance was mainly driven by our stock selection in the Information Technology and Financials sectors.

Among the top contributors during the quarter were Zendesk, ServiceNow, and Proofpoint. Each of these top contributors are software companies, an industry that benefited from strong IT spending and less cyclical concerns than the balance of the technology sector, mostly comprised of semiconductor and equipment companies. This backdrop, combined with company-specific fundamentals, drove the top contributors higher.

Zendesk recognized a return on its investment in selling solutions to larger corporations when it reported billings growth of over 40%, marking the 2nd consecutive quarter of accelerated growth. The strong results and guidance for 2018 have reduced a key bear argument that the company would not be able to gain traction with larger enterprises.

ServiceNow continued to make progress on expanding its dollar share of IT budgets among Global 2000 enterprises. Importantly, its emerging products continued to grow share of new bookings, showing that it has a significant opportunity beyond its core IT services management product.

Proofpoint also reported strong growth in the quarter and provided guidance for 2018, forecasting another year of growth of roughly 30%. The company has benefited (and expects to continue to benefit) from two megatrends in technology, security and cloud. Its core product of email security is able to operate in the cloud and has benefited from Microsoft’s Office 365 initiative, which is moving Office products into the cloud.

The largest detractors in the period were Portola Pharmaceuticals, Forum Energy Technologies, and FMC Corporation.

Portola Pharmaceuticals is a biotechnology company with a drug, AndexXa, that is awaiting decision from the U.S. Food and Drug Administration (FDA) on whether it is approved for market or not. During the quarter, Portola disclosed the FDA had submitted an inquiry on Andexxa suggesting a randomized clinical trial be performed, a reversal of previous communication from 2016. However, it is unclear whether the FDA would require such a trial pre- or post-approval. The stock sold off reflecting increased concern on the probability of AndexXa’s approval.

Forum Energy Technologies shares were weak following a disappointing earnings release and weak guidance. Weak spending from their oil and gas customers continued to be the culprit. They have started to see improving orders and expect revenues to follow in the second half of the year.

Announced capacity increases at a competing lithium producer drove shares of FMC Corporation lower in the quarter. A strong quarterly report in February and raised guidance in late March did little to boost the stock. Their Agriculture business is improving and the lithium business will be divested via a spin-off later this year.


(As of 3/31/18) — The solid economic backdrop, with low inflation and unemployment, should support strong corporate earnings growth. Lower tax rates for businesses should continue to provide stimulus to the economy, as many corporations have announced plans to invest tax savings in capital equipment and higher compensation for employees. In the absence of a sharp rise in inflation, strong earnings growth should create a healthy environment for equities.

While we continue to monitor the risks associated with rising interest rates and protectionist trade policies, we are hopeful that the recent return of volatility to equity markets could present opportunities to invest in attractive businesses that we previously viewed as too expensive. We remain focused on investing in competitively-advantaged companies with strong long-term growth opportunities, when they are trading at attractive valuations.

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 1 star among 539 for the three-year, 2 stars among 480 for the five-year, and 3 stars among 343 Mid-Cap Growth funds for the ten-year period ending 5/31/18.

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.