Quick Facts
Investor Institutional
Daily Pricing:  
As of 6/24/2022  
NAV: $13.66 $13.73
$ Change: $0.36 $0.36
% Change:
2.71% 2.69%
-28.59% -28.53%
Inception Date: 4/14/1998 7/1/2019
Expense Ratio: 1.01% 0.86%
Total Net Assets: $979.06 Million  (3/31/22)
Morningstar Category: Small Cap Growth
Benchmark Index: Russell 2000 Growth
Related Material:
   Fund Fact Sheet Q1 2022
   PM Commentary Q1 2022
   Summary Prospectus



Portfolio Managers Jamie Cuellar and Bob Male discuss the foundation for the Buffalo Small Cap Fund investment strategy – finding companies that are rapidly growing and can benefit from long term trends.


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, Co-Portfolio Manager

“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

Listen to the Portfolio Managers discuss their Investment Philosophy

Morningstar Rating


Overall Morningstar Rating™ of BUFSX based on risk-adjusted returns among 585 Small Growth funds as of 5/31/22.

Investment Style
Fund Objective & Investment Philosophy

The investment objective of the Buffalo Small Cap Fund is long-term growth of capital. The Small Cap 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 small capitalization (“small-cap”) companies. The Small Cap Fund defines small-cap companies as those that, at the time of purchase, have market capitalizations within the range of the Russell 2000 Growth Index.

The Fund managers seek to identify companies for the 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.

Recent Recognition
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Performance (%)

As of 5/31/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor-13.74-27.13-29.8614.4913.3312.388.499.6811.76
BUFFALO SMALL CAP FUND - Institutional-13.73-27.07-29.7714.6613.4912.548.669.8411.93
  Russell 2000 Growth Index-13.53-24.79-25.716.186.8710.557.228.21  5.87
  Morningstar U.S. Small Growth Index-15.13-27.95-27.554.577.0310.357.24--
  Lipper Small Cap Growth Fund Index-12.51-22.91-19.499.5811.2311.977.848.45  7.25
  Morningstar Small Growth Category-13.21-24.23-22.349.4710.0411.517.988.98  7.34
As of 3/31/223 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor-15.79-15.79-16.9319.3417.5413.5110.0010.2212.52
BUFFALO SMALL CAP FUND - Institutional-15.72-15.72-16.7919.5217.7213.6810.1710.3812.69
  Russell 2000 Growth Index-12.63-12.63-14.339.8810.3311.218.818.57  6.58
  Morningstar U.S. Small Growth Index-13.37-13.37-13.879.5611.6311.499.12--
  Lipper Small Cap Growth Fund Index-11.96-11.96-6.6013.9014.6112.559.338.81  7.90
  Morningstar Small Growth Category-12.78-12.78-9.0213.8713.6912.209.519.38  8.03

BUFFALO SMALL CAP FUND - Investor19.9344.15-6.55-4.466.2227.07-5.7840.9766.364.85
BUFFALO SMALL CAP FUND - Institutional20.1144.36-6.41-4.326.3727.26-5.6441.1766.604.97
  Russell 2000 Growth Index14.5943.305.60-1.3811.3222.17-9.3128.4834.632.83
  Morningstar U.S. Small Growth Index14.5041.862.46-0.189.6123.77-5.6727.6043.52-1.00
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 Russell 2000 Growth Index (As of 3/31/22)
Upside Capture138.19
Downside Capture97.31
Sharpe Ratio0.72
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 3/31/22) 
# of Holdings76
Median Market Cap$1.99 B
Weighted Average Market Cap$3.02 B
3-Yr Annualized Turnover Ratio63.65%
% of Holdings with Free Cash Flow68.42%
Active Share91.82%
Top 10 Holdings
Name of HoldingTickerSector% of Net
ICF IntlICFIIndustrials2.40%
Tenable HoldingsTENBTechnology2.17%
DoubleVerify HoldingsDVTechnology1.93%
Halozyme TherapeuticsHALOHealth Care1.89%
Syneos HealthSYNHHealth Care1.89%
Everi HoldingsEVRIConsumer Discretionary1.87%
Advanced Drain SystemsWMSIndustrials1.87%
As of 12/31/21. 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 3/31/22. 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 3/31/22. Market Cap percentages may not equal 100% due to rounding.


Jamie Cuellar, CFA
Portfolio Manager

30 Years of Experience

 View full bio

Bob Male, CFA
Portfolio Manager

36 Years of Experience

 View full bio



(As of 3/31/22) — The equity market, as measured by the S&P 500 Index, suffered its second quarterly decline since the onset of the COVID-19 pandemic, over two years ago, producing a return of -4.60% during the January–March period. Weak capital market performance can be largely attributed to the Federal Reserve’s decision to raise interest rates and reduce the size of its balance sheet, also known as quantitative tightening. Other headwinds, including the war in Ukraine, significant inflation, and persistent supply chain bottlenecks, only added to the backdrop of uncertainty for domestic and global markets.

The broad-based Russell 3000 Index fell -5.28% in the quarter. Value stocks outperformed growth stocks by a large amount, as the Russell 3000 Value Index returned -0.85% compared to a decline of -9.25% for the Russell 3000 Growth Index. Large cap stocks fell less than smaller cap stocks during the quarter, as the Russell 1000 Index declined -5.13%, followed by a return of -5.68% for the Russell Midcap Index, and -7.53% for the small cap Russell 2000 Index. Energy stocks surged during the period on rising oil prices while the more defensive Utilities and Telecommunication Services sectors were also modestly positive. The Consumer Discretionary and Technology areas of the market were the largest underperformers due to inflation and rising rates.


(As of 3/31/22) — The Buffalo Small Cap Fund (BUFSX) declined -15.79% for the quarter, underperforming the Morningstar U.S. Small Growth Index’s return of -13.37%. Relative weakness in the Technology sector was responsible for most of the underperformance. Although the portfolio performed relatively well in software where we believed valuations were most extended, the communications equipment, IT services, and semiconductor industries all underperformed the Index and drove the underperformance in that sector.


Contributors to results that somewhat offset negative performance included HealthEquity and TransMedics Group. HealthEquity uses a technology-enabled platform that provides solutions for managing healthcare savings accounts (HSAs), health reimbursement arrangements (HRAs), flexible spending accounts (FSAs), COBRA, commuter benefits, and employer-sponsored programs. The company is experiencing strong growth in HSA accounts, and interchange fees are increasing as consumers begin to increase healthcare spending after a lull during COVID. The company continues to be a share gainer in HSAs and is a beneficiary of higher interest rates, as the company retains part of the yield generated from customer deposits into HSAs.

TransMedics Group is a commercial-stage medical technology company that developed the Organ Care System (“OCS”) to replace a decades-old standard of care (cold storage) used in organ transplantation. The OCS transforms organ preservation from a static state to a dynamic environment that enables new capabilities, including organ optimization and assessment, which increases the supply of viable organs for transplant. The company recently reported a strong quarter driven by a very good uptake for heart and liver indications.


The two largest detractors from performance at the security level in the quarter were Calix and Vicor. Calix, a leading provider of broadband access communication systems and software to communication service providers (CSPs), was one of the Fund’s best performing stocks in 2021 but shares sold off in Q1, as the market punished last year’s winners early in the quarter. Despite the pullback, we believe the company is in the early stages of a multi-year cyclical upturn and therefore have added to the investment position on the share price weakness.

Within semiconductors, Vicor, which designs, develops, manufactures and markets modular power components and complete power systems, experienced weakness in the quarter due to supply chain issues and competitive concerns. We continue to hold a small position in the company and believe the stock may become more timely in the back half of the year once additional manufacturing capacity comes online.

Within IT services, two “adtech” investments, DoubleVerify and Digital Turbine, declined due to concerns about the ad cycle given the macroeconomic environment. There is also investor concern that there has been an oversupply of “adtech” companies coming to market after an active IPO and de-SPAC calendar in 2021. DoubleVerify and Digital Turbine are growing faster than peers, enjoy strong profitability, and have unique competitive positions and remain portfolio positions.

Energy, while not a large part of the small cap marketplace, also contributed to relative underperformance during the period. Energy significantly outperformed, producing a sector return of nearly +14% versus a decline of -13.37% for the full benchmark. The high cyclicality, poor cash flow characteristics, combined with a lack of favorable long-term trend drivers (all features we typically avoid through our investment approach) makes most Energy companies unattractive in our view, and therefore our underweight position was a drag on relative performance.


(As of 3/31/22) — Inflation is running at levels not seen in decades and is the Federal Reserve primary concern. Factors fueling inflation include a tight labor market, supply chain disruptions, Russian sanctions due to the war, and a strong demand backdrop. As the Federal Reserve (the “Fed”) continues to raise interest rates and begins quantitative tightening, inflation levels will hopefully move lower and economic growth could moderate. Furthermore, any easing in supply chain disruptions should contribute to lower inflation levels as well.

Small cap growth stocks are discounting higher interest rates and valuation levels in certain parts of the market are becoming more attractive. As the supply chain disruptions ease and labor productivity and participation rates continue to improve, a rotation back into attractively-priced, well-managed small cap growth stocks should occur.

The hawkish Fed policy and geo-political uncertainty has increased investor angst, which is creating attractive opportunities for long-term investors. While the Buffalo Small Cap Fund historically underperforms during market rotations away from growth towards value and during macro risk-off markets, as stock pickers, we find resolve in environments like these where growth has been mispriced, by our analysis. As always, we will continue to look for companies that are well-managed with scalable attractive business models that benefit from long-term trends. We are well positioned to take advantage of the movement back into small cap growth stocks and are looking forward to moving past some of these issued caused by the pandemic. We continue to appreciate your interest in the Fund.

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 Small Cap Fund (BUFSX) received 4 stars among 585 for the 3-year, 4 stars among 533 for the 5-year, and 3 stars among 395 Small Growth funds for the 10-year period ending 5/31/22, based on risk-adjusted returns.

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. ©2021 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.