Quick Facts
Inception Date:4/14/19987/1/2019
Expense Ratio:1.02%0.87%
Total Net Assets:$1.13 Billion  (3/31/21)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q4 2020
   PM Commentary Q4 2020
   Summary Prospectus
For a full transcript of this video, click here.
Finding Premier Growth Companies

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.

“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 576 Small Growth funds as of 3/31/21.

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, that, at the time of purchase, have 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, Co-Portfolio Manager

Recent Recognition
Featured Articles & Reports


“This Small-Cap Fund Is Performing Big”

March 9, 2021





Performance (%)

As of 3/31/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor6.296.29120.7831.9127.4516.0111.7313.1714.02
BUFFALO SMALL CAP FUND - Institutional6.326.32121.1432.1027.6316.1811.9013.3414.19
  Morningstar U.S. Small Growth Index-0.42-0.4281.9218.4819.4313.3610.259.477.59
  Lipper Small Cap Growth Fund Index4.834.8389.9620.1720.4913.479.979.488.58
  Morningstar Small Growth Category6.936.9395.9720.4920.4613.4310.3310.548.86
As of 3/31/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor6.296.29120.7831.9127.4516.0111.7313.1714.02
BUFFALO SMALL CAP FUND - Institutional6.326.32121.1432.1027.6316.1811.9013.3414.19
  Morningstar U.S. Small Growth Index-0.42-0.4281.9218.4819.4313.3610.259.477.59
  Lipper Small Cap Growth Fund Index4.834.8389.9620.1720.4913.479.979.488.58
  Morningstar Small Growth Category6.936.9395.9720.4920.4613.4310.3310.548.86
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 12/31/20)
Upside Capture136.40
Downside Capture98.45
Sharpe Ratio1.07
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 12/31/20) 
# of Holdings81
Median Market Cap$3.25 B
Weighted Average Market Cap$3.95 B
3-Yr Annualized Turnover Ratio62.35%
% of Holdings with Free Cash Flow49.38%
Active Share90.09%
Top 10 Holdings
Name of HoldingTickerSector% of Net
NateraNTRAHealth Care3.70%
CareDxCDNAHealth Care2.52%
Penn National GamingPENNConsumer Discretionary2.50%
Kornit DigitalKRNTIndustrials2.30%
Ligand PharmaceuticalsLGNDHealth Care2.06%
Palomar HoldingsPLMRFinancials1.97%
Air Transport Services GroupATSGIndustrials1.95%
ICF IntlICFIIndustrials1.85%
LovesacLOVEConsumer Discretionary1.84%
As of 9/30/20. 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 12/31/20. 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 12/31/20. Market Cap percentages may not equal 100% due to rounding.


Jamie Cuellar, CFA
Portfolio Manager

29 Years of Experience

 View full bio

Bob Male, CFA
Portfolio Manager

35 Years of Experience

 View full bio



(As of 12/31/20) — Equity markets extended their rally in the 4th quarter, with the S&P 500 Index returning 12.15%. This capped the end to a historic year in which the S&P advanced 18.40% despite the world suffering through a global pandemic. The biggest news in the quarter was the U.S. Food and Drug Administration’s (FDA) approval of two separate vaccines, following very encouraging clinical results. This helped investors look beyond worsening COVID-19 trends and provided hope that an end to the pandemic could be in sight.

The Russell 3000 Index increased 14.68% in the quarter. Value stocks led the advance, as the Russell 3000 Value Index advanced 17.21% compared to the Russell 3000 Growth Index return of 12.41% during the period. Relative performance was inversely correlated by market cap in the quarter (i.e., small caps outperformed big caps). The Russell 1000 Index delivered a return of 13.69% compared to the Russell Mid Cap Index return of 19.91%. Smaller market cap indexes surged even more as the Russell 2000 Index returned 31.37% and the Russell Micro Cap Index returned 31.39%. Cyclically-sensitive sectors such as Energy, Financials, Industrials, and Materials performed best in the quarter. The more defensive areas like Telecom Services, Consumer Staples, Utilities, and Healthcare lagged. All sectors produced positive absolute results.


(As of 12/31/20) — The Buffalo Small Cap Fund (BUFSX) generated a return of 31.36% during the quarter, outperforming the Morningstar U.S. Small Growth Index, which increased 28.12% during same time period. Strong stock selection in Consumer Discretionary, Health Care, and Information Technology were the biggest contributors to outperformance relative to the Index. Meanwhile, negative stock selection in the Financial sector served as a slight offset to performance.

During the quarter, small cap stocks reversed the trend of the first three quarters of 2020, and outperformed large cap stocks by a wide margin. Small cap value stocks also reversed the trend of underperformance in the first three quarters of 2020, and outperformed small cap growth stocks during the period. For the calendar year of 2020, the Fund returned 66.36% and outperformed the Index return of 43.52%.


CareDx was the top contributing stock for the Fund, posting a return of nearly 91% during the quarter. The company is a leader in testing and monitoring solutions for post-transplant patients. In spite of COVID-19 headwinds, the company generated strong growth in product and testing services in 2020. The company has also made large strategic investments that could help to set it up for meaningful growth in 2021 and beyond.

Upwork was another top stock during the period, returning around 98%. The company serves as a platform to match freelance workers with companies needing specialized work or temporary workers. A new management team installed in 2020 has adjusted the company’s business model to accelerate demand. The proliferation of “work from home” has also been a driver of demand for the company’s platform.


Palomar was the largest detracting position in the Fund during the quarter. The company is a provider of insurance services and has been a strong performer since its April 2019 initial offering. In October, its share price declined upon preannouncing above-expected policy losses due to hurricane damage on the Gulf Coast. Since that time, the company has taken steps to lower its wind exposure in the Gulf Coast region. By our analysis, the company has a very strong growth outlook into 2021, and we remain optimistic about its long-term fundamental prospects.


(As of 12/31/20) — Looking forward into 2021, we believe many factors point to cautious optimism for small cap growth stocks and the overall market, but perhaps with elevated volatility. Although the January special elections in Georgia have tipped control of the Senate (and, by extension, both houses of Congress) to Democrats, the Democratic majorities are slim, and far narrower than many investors feared leading up to the November election. Given this narrow majority, it will likely be difficult for the Congress to pass sweeping legislation (tax, regulatory, etc.) that would be viewed as negatives for many companies in the small cap universe. Some sectors such as alternative energy and infrastructure could be poised for improved growth in 2021 given the newly elected leadership in the Senate and White House. Control of Congress by the Democrats already appears to be driving some investor flows into small cap companies due to the likelihood of increased stimulus spending, which will likely be beneficial to small caps as they are viewed as more cyclical. We also believe that the “big tech” stocks, which make up an outsized portion of the broad market indexes, could receive more regulatory scrutiny by Democrat-led Congress in coming quarters. This could benefit small cap growth if investors reallocate away from “big tech” into small caps, or if it creates opportunities for market share gain for smaller competitors.

While the initial state-by-state rollout of the vaccines appears sluggish, we think it is likely that much of the vulnerable population in the U.S. can be vaccinated by the end of June. We believe there is large pent-up demand for travel, events, and consumer spending, and many companies in these sectors will see strong earnings growth this year. The jobless rate stands at 6.7%, far below the April 2020 peak of nearly 15%. The state of the U.S. economy will depend, in part, on success in treating the COVID-19 pandemic, but it seems that the U.S. economy will continue to heal and many small cap companies will continue to benefit from continued improvement in consumer confidence. At the same time, U.S. stock markets indexes are near all-time highs, and many stocks are trading at elevated valuations relative to historical averages. We do not expect significant multiple expansion in small caps from current levels, and high valuations could expose stock prices to heightened volatility as 2021 unfolds.

Within the framework above, we are optimistic about the prospects for our small cap growth investments in 2021. We continue to manage the portfolio actively and will allocate capital to opportunities we believe have the best risk/reward tradeoffs. As always, we will reduce or sell positions that have traded above a market cap that we believe is no longer reflective of a small cap company or where valuations appear to be excessive. One of the things we are doing is looking to invest in high-quality companies whose organic growth has been pressured in the near-term by the pandemic-driven slowdown, but still possess strong business models and balance sheets. We believe many of these businesses are using the downturn as an opportunity to operate more efficiently, gain market share, and find new opportunities for growth once the economy returns to a post-COVID “normal”. Many of these have traded up since positive vaccine data was announced but still appear to be poised for strong performance in 2021.

Our time-tested strategy of investing in premier companies, which could benefit from long-term trends and also trade at attractive valuations, in our opinion, remains the cornerstone of our work, and we appreciate your continued confidence in our efforts.

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
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Retirement Information
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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 5 stars among 576 for the 3-year, 4 stars among 503 for the 5-year, and 4 stars among 379 Small Growth funds for the 10-year period ending 3/31/21.

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.