Quick Facts
Inception Date:4/14/19987/1/2019
Expense Ratio:1.01%0.86%
Total Net Assets:$527.80 Million  (7/1/19)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q2 2019
   PM Commentary Q2 2019
   Summary Prospectus
For a full transcript of this video, click here.
Finding Premier Growth Companies

Portfolio Managers Jamie Cuellar and Bob Male discuss how their approach to finding companies, that are rapidly growing and benefit from long term trends, is the foundation for the Buffalo Small Cap Fund investment strategy.

“I think what really differentiates us is our process, where we combine the top-down work of looking at trends provided with the bottoms-up fundamental research we do on each company.”
  ~ Jamie Cuellar, CFA

Morningstar Rating


Overall Morningstar Rating™ of BUFSX based on risk-adjusted returns among 584 Small Growth funds as of 8/31/19.

Investment Style
Fund Objective & Investment Strategy
The investment objective of the Buffalo Small Cap Fund is long-term growth of capital. The Fund normally invests at least 80% of its net assets in equity securities, consisting of domestic common stocks and preferred stocks, of small capitalization (“small-cap”) companies — companies, at the time of purchase, with market capitalizations within the range of the Morningstar U.S. Small Growth Index.

The Fund managers seek to identify companies for the Small 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 attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages.

An actively-managed portfolio of smaller-capitalization, rapidly-growing companies that can benefit from positive, long-term trends remains an excellent way to exploit an inefficient market.

Bob Male, Portfolio Manager

Featured Articles & Reports

Performance (%)

As of 8/31/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO SMALL CAP FUND - Investor6.8927.60-5.7515.859.5611.249.3911.58
BUFFALO SMALL CAP FUND - Institutional6.9027.69-5.6316.019.7111.409.5511.75
  Morningstar U.S. Small Growth Index5.7020.74-6.3812.819.4513.8210.086.11
  Russell 2000 Growth Index4.0616.30-11.0210.628.0613.069.505.96
  Lipper Small Cap Growth Fund Index4.3121.99-4.4114.1810.0913.509.447.05
  Morningstar Small Growth Category3.9818.37-7.9112.438.9313.189.527.23
As of 6/30/193 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
BUFFALO SMALL CAP FUND - Investor6.4429.685.3019.669.0012.538.8511.77
BUFFALO SMALL CAP FUND - Institutional6.4829.775.4619.849.1712.709.0111.93
  Morningstar U.S. Small Growth Index2.4722.383.4715.789.5014.849.096.23
  Russell 2000 Growth Index2.7520.36-0.4914.698.6314.418.906.18
  Lipper Small Cap Growth Fund Index5.1825.096.9517.6610.3314.698.717.24
  Morningstar Small Growth Category4.1221.823.2216.129.1814.478.977.44
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
BUFSX vs Morningstar U.S. Small Growth Index (As of 6/30/19)
Upside Capture119.37
Downside Capture106.18
Sharpe Ratio0.93
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 6/30/19) 
# of Holdings78
Median Market Cap$2.26 B
Weighted Average Market Cap$2.99 B
3-Yr Annualized Turnover Ratio47.61%
% of Holdings with Free Cash Flow63.64%
% of Holdings with No Net Debt50.65%
Active Share89.84%
Top 10 Holdings
Name of HoldingTickerSector% of Net
PROS HoldingsPROTechnology2.51%
Kornit DigitalKRNTIndustrials2.46%
CatalentCTLTHealth Care2.43%
NateraNTRAHealth Care2.33%
RepligenRGENHealth Care2.33%
Bio TechneTECHHealth Care2.17%
Air Transport ServicesATSGIndustrials2.11%
As of 6/30/19. 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 6/30/19. 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 6/30/19. Market Cap percentages may not equal 100% due to rounding.


Jamie Cuellar, CFA
Portfolio Manager

27 Years of Experience

 View full bio

Bob Male, CFA
Portfolio Manager

33 Years of Experience

 View full bio

Alex Hancock, CFA
Portfolio Manager

21 Years of Experience

 View full bio


(As of 6/30/19) — The S&P 500 Index posted its best 1st half of a calendar year since 1997, rising 18.54% from January 1 to June 30. During the most recent quarter, the index was in negative territory for the first two months (April and May) then rose 7.05% in the final month, marking the best June since 1955, and finished with a return of 4.30% for the quarter.

Central banks and trade policies continued to drive financial markets during the period. The threat of increasing tariffs against China and Mexico contributed to the sell-off early in the quarter, and the June rally was largely a result of dovish central bank commentary, leading investors to anticipate rate cuts in the coming months.

The Russell 3000 Index returned 4.10% in the quarter. By style, growth outpaced value, with the Russell 3000 Growth Index up 4.50% and the Russell 3000 Value Index up 3.68%. Large caps generally outperformed small caps in the quarter. The Russell 1000 Index returned 4.25%, just ahead of the Russell Mid Cap Index return of 4.13%. The Russell 2000 returned 2.10% during the quarter. Financials were the best performing sector, followed by Materials and Information Technology. Energy was the only sector to post a negative return, driven by a decline in oil prices. Health Care and Real Estate also underperformed relative to the broad market.

(As of 6/30/19) — Following very strong returns in the 1st quarter of 2019, small cap stocks continued their upward trajectory this period. However, investor uncertainty about U.S. trade policy and future economic growth did cause significant intra-quarter volatility. Most small cap sectors gained, led by Industrials, Consumer, Financials, and Technology while Energy was the worst performing sector. Health Care also lagged due, in part, to investor fear about the prospect for pricing legislation, which could impact the business models of many companies in the sector.

The Buffalo Small Cap Fund (the “Fund”) gained 6.44% during the quarter, significantly outperforming the Morningstar U.S. Small Growth Index (the “Index”), which gained 2.47%. Health Care and Technology were the Fund’s top-performing sectors relative to the Index, providing almost 4% of outperformance. Stock selection within Telecom and the portfolio’s underweight position to Energy also contributed significantly to the outperformance. Poor stock selection in Consumer Discretionary and Consumer Staples were the largest sources of underperformance relative to the Index during the quarter.

Pros Holdings was the Fund’s top contributor, with the stock increasing 50% during the quarter. The company is a leading provider of AI-powered software that helps customers optimize revenue. It has rapidly grown its subscription revenue and has significant room for more growth among its customers in the air travel, eCommerce, and B2B sectors.

Repligen was the second best-performing position for the Fund during the quarter, with the stock increasing 46%. The company is a pure-play bioprocessor with products that serve the makers of biologic drugs. During the quarter, Repligen announced acceleration in the organic growth of its core business, as well as a large and accretive acquisition in the process analytics space, which helped to drive the share price higher.

Kornit Digital was also a top contributor during the quarter, with the stock gaining 33%. The company is a leader in digital ink printers used by companies in the textile industry. The company has reported improved customer adoption as the transition from analog to digital printing in textiles is in its infancy, as well as traction with newer systems, which increase throughput and are made for other materials like polyester.

At Home Group, a retailer of home furnishings, was the worst performing investment during the quarter. In June, during the company’s earnings report, management cited headwinds to its business including tariff impacts, markdowns on seasonal products, and a slowing sales outlook, all of which led to investor pessimism and a large decline in the stock.

(As of 6/30/19) — Looking forward into the 2nd half of 2019 and beyond, we are cautiously optimistic about the outlook for small cap stocks in the U.S. There is still significant uncertainty in the market about President Trump’s trade stance, which could cause volatility, but we believe all sides have an interest in reaching an agreement, and recent rhetoric has become more positive. While there has been some mixed data on the health of the U.S. economy and gross domestic product (GDP) growth, the job market remains broadly strong, and investors have been cheered by the increased dovish stance from the Federal Reserve and outlook for interest rate cuts.

We note that small caps have lagged large caps by around 7% for the 12 month period ending June 30, 2019, with the Morningstar U.S. Large Growth Index advancing 11.43% versus the Morningstar U.S. Small Growth Index’s advance of 3.47%. This dispersion in performance has helped create an environment in which the valuations of small cap stocks are now more attractive than large cap stocks and could help to drive relative outperformance of smaller cap stocks in coming quarters.

Within this context, we have been managing the Fund actively, seeking to deploy capital into ideas which we believe have the most favorable risk/reward trade-offs. The portfolio ended the period with 77 positions (excluding cash), up from 72 at the end of the 1st quarter. We will continue with our strategy of identifying investment candidates among small cap companies with strong secular growth opportunities that can benefit from long term trends and trade at attractive valuations. As always, we appreciate your continued 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. Earnings growth is not representative of the fund’s future performance.


General Account
  New Account Application
  New Account Application - Entity
  Change or Add Account Details
  Cost Basis Method Election
  Power of Attorney
Individual Retirement Account (IRA) Forms
  IRA Account Application
  IRA Beneficiary Addition / Change
  IRA Required Minimum Distribution (RMD)
  IRA / Qualified Plan Distribution Request
  IRA Transfer
Coverdell Education Savings Accounts (ESA) Forms
  Coverdell ESA Application
  Coverdell ESA Distribution Request
  Coverdell ESA Transfer
Retirement Information
  Retirement Savings Options for Individuals

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 Small Cap Fund (BUFSX) received 4 stars among 584 for the 3-year, 3 stars among 521 for the 5-year, and 2 stars among 399 Small Growth funds for the 10-year period ending 8/31/19.

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. ©2019 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.

Diversification does not assure a profit, nor does it protect against a loss in a declining market.

Active investing has higher management fees because of the manager’s increased level of involvement while passive investing has lower management and operating fees. Investing in both actively and passively managed mutual funds involves risk and principal loss is possible. Both actively and passively managed mutual funds generally have daily liquidity. There are no guarantees regarding the performance of actively and passively managed mutual funds. Actively managed mutual funds may have higher portfolio turnover than passively managed funds. Excessive turnover can limit returns and can incur capital gains.