Ticker
  BUFSX

Inception Date
  April 14, 1998

Total Fund Assets
  $569.19 Million  (12/31/17)

Expense Ratio
  1.02%

Benchmark Index
  Russell 2000 Growth

MORNINGSTAR RATING

Overall Morningstar™ rating out of 609 Small 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).

INVESTMENT STYLE

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

 

LowHigh

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 609 funds in the Small Growth category, as of 12/31/17.

SMALL CAP FUND NEWS

Discovery Fund Webcast – September 2017

During this webcast, we covered:
• How innovative companies can lead to above average growth
• Key objectives of the Fund and their impact on current performance
• Our proprietary portfolio management process
• Fund performance YTD

Small Cap Fund Webcast – June 2017

During this webcast, we covered:
• Our proprietary portfolio management process
• Personnel changes made in 2015 and the people managing the Fund
• Key objectives over the last few years and their impact on current performance
• Fund performance YTD
• Fund outlook for the 2nd half of 2017 & beyond

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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.

~ Jamie Cuellar, Portfolio Manager

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Investment Strategy

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 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 Russell 2000 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 favorable attributes, including attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages.

*** This presentation is only available to registered financial professionals ***

Performance (%)

As of 12/31/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(4/14/98)
Buffalo Small Cap Fund3.8027.0727.078.8511.688.3711.4811.57
  Russell 2000 Growth Index4.5922.1722.1710.2815.219.1911.576.19
  Lipper Small Cap Growth Fund Index6.1624.7724.7710.0913.927.8410.326.79
  Morningstar Small Growth4.7021.5021.509.9713.968.4211.027.28
As of 12/31/173 MOYTD1 YR3 YR5 YR10 YR15 YRSince Inception
(4/14/98)
Buffalo Small Cap Fund3.8027.0727.078.8511.688.3711.4811.57
  Russell 2000 Growth Index4.5922.1722.1710.2815.219.1911.57619
  Lipper Small Cap Growth Fund Index6.1624.7724.7710.0913.927.8410.326.79
  Morningstar Small Growth9.6621.2222.3410.6714.458.3810.557.28
YearBuffalo Small Cap FundRussell 2000 Growth IndexMorningstar Small Growth Category
201727.0722.1721.22
20166.2211.3211.20
2015-4.46-1.38-2.41
2014-6.555.602.44
201344.1543.3040.91
201219.9314.5913.15
2011-4.66-2.91-3.55
201016.5929.0926.98
200937.4934.4735.46
2008-29.84-38.54-41.55
(As of 12/31/17)

vs Russell 2000 Growth Index
Upside Capture91.01
Downside Capture96.93
Alpha-0.38
Beta0.91
Sharpe Ratio0.60

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.

Portfolio

(As of 12/31/17)

# of Holdings76
Median Market Cap$2.30 B
Weighted Average Market Cap$2.90 B
3-Yr Annualized Turnover Ratio41.32%
% of Holdings with Free Cash Flow67.11%
% of Holdings with No Net Debt44.74%
Active Share89.70%
Name of HoldingTickerSector% of Net Assets
CaviumCAVMTechnology2.42%
CatalentCTLTHealth Care2.26%
Five9FIVNTechnology2.21%
Monolithic Power SystemsMPWRTechnology2.18%
Exact SciencesEXASHealth Care2.11%
HubSpotHUBSTechnology2.06%
HealthEquityHQYHealth Care2.01%
Bio-TechneTECHHealth Care1.98%
Generac HoldingsGNRCIndustrials1.95%
CyrusOneCONEReal Estate1.83%
TOP 10 HOLDINGS TOTAL21.00%
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.

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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FOR FINANCIAL PROFESSIONALS

Terms of Use – Email lists are created for use by U.S. investment professionals only and are published strictly for informational purposes. Providing access to the content of these emails does not explicitly or implicitly constitute a solicitation of services or products of the Buffalo Funds, Kornitzer Capital Management, or any of their affiliates. The information contained in the emails is not intended for distribution to, or for use by, investment professionals in a jurisdiction where distribution or purchase is not authorized. The information contained in these emails is not appropriate for use by individual investors. By registering for any of these emails, you agree to Buffalo's terms and conditions and that you are qualified as an institutional investor or otherwise member of a registered broker/dealer, registered investment advisor, or investment consulting firm.

FOR INDIVIDUAL INVESTORS

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 received 3 stars among 609 for the three-year, 2 stars among 544 for the five-year, and 3 stars among 406 Small 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.