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 Q1 2021
   PM Commentary Q1 2021
   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 582 Small Growth funds as of 5/31/21.

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
ESG Integration

Management of the Buffalo Small Cap Fund integrates ESG (Environmental, Social, and Governance) related factors into the investment decision making process. ESG-related factors material to the risk and return of investments are explicitly considered, alongside traditional financial factors, when making investment decisions.

Learn More About ESG Integration

Featured Articles & Reports




Performance (%)

As of 5/31/213 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor-2.958.9366.4728.7927.4116.1812.5312.4814.03
BUFFALO SMALL CAP FUND - Institutional-2.909.0066.7228.9827.6016.3612.7012.6414.20
  Morningstar U.S. Small Growth Index-5.98-1.5541.1315.8418.0513.0010.698.557.48
  Lipper Small Cap Growth Fund Index0.466.5051.1918.2519.9913.4210.538.868.59
  Morningstar Small Growth Category-0.258.9456.5818.4819.8613.3710.879.908.87
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 3/31/21)
Upside Capture151.93
Downside Capture99.16
Sharpe Ratio1.12
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 3/31/21) 
# of Holdings80
Median Market Cap$3.11 B
Weighted Average Market Cap$3.51 B
3-Yr Annualized Turnover Ratio57.67%
% of Holdings with Free Cash Flow60.76%
Active Share87.71%
Top 10 Holdings
Name of HoldingTickerSector% of Net
NateraNTRAHealth Care2.98%
CareDxCDNAHealth Care2.38%
Kornit DigitalKRNTIndustrials1.93%
Penn National GamingPENNConsumer Discretionary1.90%
Halozyme TherapeuticsHALOHealth Care1.84%
LovesacLOVEConsumer Discretionary1.83%
Air Transport Services GroupATSGIndustrials1.74%
Guess?GESConsumer Discretionary1.73%
As of 12/31/20. 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 3/31/21. 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 3/31/21. 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 3/31/21) — Equity markets continued to move higher in the 1st quarter of 2021, with the S&P 500 Index returning 6.17%. The period was marked by outperformance of value stocks as the market rotation that began in the last quarter of 2020 became even more pronounced. The vaccination rollout, combined with prospects for more fiscal stimulus, bolstered optimism towards companies that could benefit from the economy reopening. Additionally, an 80+ basis point move higher in the 10-Year U.S. Treasury yield during the quarter left sentiment towards growth stocks relatively more subdued.

The broad market Russell 3000 Index advanced 6.35% in the quarter. Value outperformed growth for the second straight quarter, with the Russell 3000 Value Index up 11.89% compared to the Russell 3000 Growth Index returning 1.19%. Relative performance was inversely-correlated with market cap size in the quarter, with the Russell Micro Cap Index up 23.89%, the small cap Russell 2000 Index up 12.70%, the Russell Midcap Index up 8.14%, and the large cap Russell 1000 Index returning 5.91%. The more cyclically-sensitive Energy, Financial, and Industrial sectors performed best in the quarter. Consumer Staples, Information Technology, and Utilities were the bottom three performing sectors. All sectors produced positive returns.


(As of 3/31/21) — It was a tough period for small cap growth as the rotation into value continued across the market cap spectrum. The Russell 2000 Index experienced the best returns from the more cyclical Energy, Industrials, Materials, and Consumer Discretionary sectors, with negative returns posted in traditional growth havens Health Care and Information Technology.

Despite the rotation into value, the Buffalo Small Cap Fund (BUFSX) gained 6.29% during the quarter, outperforming the Morningstar U.S. Small Growth Index’s decline of 0.42%. Stock selection in Health Care drove the majority of the outperformance due to better relative performance in biotechnology, pharmaceuticals, and life sciences tools. The success in Health Care was fairly broad based as four of the Fund’s top 10 contributors were Health Care positions. Technology, Industrials, and Consumer Discretionary were also solid relative contributors and offset slight underperformance in Financials. As usual, stock selection drove outperformance with minimal sector allocation impact. Mergers and acquisitions were also a source of upside as the Fund held shares of Genmark Diagnostics, which received a buyout offer from Roche during the quarter.


Cambium Networks was the largest relative performer during the quarter. The maker of wireless access solutions for communications networks continued to show solid growth, as the spending environment for their solutions remained robust due to recent spectrum auctions and new product introductions by the company. We continue to be excited about the outlook for communications equipment spending, especially in fixed wireless access, due to greatly improved technology and a superior cost profile especially for rural customers where fiber is less economical.

Ligand Pharmaceuticals was also a large contributor during the quarter. This producer of drug delivery and discovery platforms for biotech and pharma customers has been a multi-year holding for the Fund, and we had recently been perplexed by the stock’s rising short interest and poor performance despite continued solid execution and increasing estimates. As it turns out, Ligand was one of the stocks targeted by troubled hedge fund, Melvin Capital, in addition to other stocks like GameStop, iRobot, and Bed Bath & Beyond. As GameStop shares went higher as a result of a large short squeeze and word of Melvin’s other short positions got out, Ligand also rose on a short squeeze and settled at around $150 a share from its prior levels in the $80-100 range. We continue to believe the company’s OmniAb antibody discovery platform is not being valued correctly by the market and should see excellent growth over the next few years.


Array Technologies was the largest underperformer this quarter. The producer of solar tracker systems that optimize the efficiency of solar panels for utilities modulated its expectations for international markets, largely due to a lingering impact from COVID, as entry into some markets remains difficult. We continue to believe there is a sizable opportunity for the company to further penetrate international markets with their differentiated product in a high growth industry and therefore remain positive on the shares.


(As of 3/31/21) — The outlook for the Fund remains generally positive, as robust monetary and fiscal stimulus provides an inviting backdrop for investors. While a quick rise in interest rates has given some pause on growth stocks and facilitated a catchup trade for value stocks, we do not believe the prospect of a low single digit yield on a 10-year government bond is going to provide a suitable enough return for investors to begin to abandon equities. 2021 should continue to benefit from a recovering economy with above average gross domestic product (GDP) growth, but as we return to pre-COVID levels, we believe economic growth likely gets stymied, as higher federal debt levels and higher taxes eventually slow the economy, which may again command premium multiples on companies that can grow faster than the market. While there is also chatter about increases in inflation ruining the party, we believe we are still a ways away from seeing enough inflation sustaining at a level that gets the Federal Reserve concerned enough to take action on interest rates. Meanwhile, COVID variants and the durability of responses to vaccinations remain a wildcard, but the rapid dissemination of vaccines by the new administration is definitely a positive for economic recovery and a return to normalcy. Higher tax rates will be required to pay for the additional fiscal stimulus and could take a small bite out of earnings growth, but we do not believe there is enough political capital or will to raise taxes high enough to choke the market.

We continue to believe that we are in the early stages of a small cap outperformance cycle, beginning with the market lows in March 2020, as small caps have historically outperformed coming out of recessionary periods and periods of market dislocation. The past 7 small cap leadership cycles have averaged 6 years in length and have driven significant outperformance relative to large caps, according to data from Jefferies.

We continue to follow our discipline of selling stocks that have become too large in market cap (generally in the $10-12 billion range) and trimming or selling positions where we feel the downside risk greatly exceeds our upside opportunity. Over the past few quarters, we have increased portfolio holdings in cyclical growth companies, a move that helped our relative performance during the market rotation to value and cyclicals. In March, we witnessed an acceleration in the move to value at the expense of growth and are starting to see more compelling valuations in high secular growth companies that had previously become rather expensive. We also are starting to see some attractive valuations in companies that were perceived to be COVID beneficiaries but have recently sold off on fears of tough comparisons over the next few quarters. As usual, we continue to look for ways to optimize the portfolio, and we remain engaged with evaluating new companies. We appreciate your continued support as shareholders.

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 5 stars among 582 for the 3-year, 5 stars among 506 for the 5-year, and 4 stars among 385 Small Growth funds for the 10-year period ending 5/31/21.

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.