Quick Facts
Inception Date:4/14/19987/1/2019
Expense Ratio:1.01%0.86%
Total Net Assets:$555.49 Million  (12/31/19)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q4 2019
   PM Commentary Q4 2019
   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 574 Small Growth funds as of 2/29/20.

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, Portfolio Manager

Recent Recognition
Featured Articles & Reports




“Journal Report – Investing in Funds & ETFs”

November 4, 2019

Performance (%)

As of 2/29/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor-3.37-5.347.8513.979.5011.098.529.8211.53
BUFFALO SMALL CAP FUND - Institutional-3.29-5.278.0714.169.6711.268.699.9911.70
  Morningstar U.S. Small Growth Index-5.78-6.26-0.109.947.7312.668.743.905.92
  Lipper Small Cap Growth Fund Index-6.14-7.241.5311.238.3112.
  Morningstar Small Growth Category-5.38-7.120.319.427.4811.898.436.157.07
As of 12/31/193 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor12.9940.9740.9719.0611.3611.898.6711.5011.91
BUFFALO SMALL CAP FUND - Institutional12.9841.1741.1719.2411.5312.068.8311.6712.07
  Morningstar U.S. Small Growth Index9.1127.6027.6014.2110.2613.428.995.736.28
  Lipper Small Cap Growth Fund Index8.3530.2530.2516.0110.8012.898.515.917.26
  Morningstar Small Growth Category9.4127.6627.6613.499.6112.217.947.237.49
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 12/31/19)
Upside Capture128.16
Downside Capture104.20
Sharpe Ratio0.92
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 12/31/19) 
# of Holdings76
Median Market Cap$2.36 B
Weighted Average Market Cap$3.11 B
3-Yr Annualized Turnover Ratio48.21%
% of Holdings with Free Cash Flow56.58%
% of Holdings with No Net Debt50.00%
Active Share88.01%
Top 10 Holdings
Name of HoldingTickerSector% of Net
eHealthEHTHFinancial Services3.09%
PROS HoldingsPROTechnology2.42%
ICF IntlICFIIndustrials2.31%
NateraNTRAHealth Care2.29%
Lumentum HoldingsLITETechnology2.13%
Kornit DigitalKRNTIndustrials2.06%
Generac HoldingsGNRCIndustrials2.05%
CyrusOneCONEReal Estate1.99%
Monolithic Power SystemsMPWRTechnology1.97%
Repligen CorpRGENIndustrials1.96%
As of 12/31/19. 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 12/31/19. 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 12/31/19. 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 12/31/19) — The combination of a U.S. Federal Reserve (Fed) interest rate cut, an improving economic outlook, and easing trade tensions, sent equity markets sharply higher in the 4th quarter. The S&P 500 Index advanced 9.10% during the period, which brought the full-year (2019) gain to 31.49%. The Fed cut interest rates three times in 2019, erasing the brief yield curve inversion and assuaging fears of a recession. The economy continued to add new jobs at a strong pace and unemployment declined to 3.5%. Consumer spending remained healthy, and there is optimism for better business investment following the announced “phase one” trade deal with China.

Similar to the S&P 500 Index, the broad-based Russell 3000 Index returned 9.04% during the quarter. Growth outperformed value, as the Russell 3000 Growth Index returned 10.62% compared to a return of 7.41% for the Russell 3000 Value Index. Smaller companies outperformed larger companies, as one would expect in a “risk-on” period. The Russell Microcap Index surged 13.45% and the Russell 2000 Index advanced 9.94%. Large company benchmarks such as the Russell 1000 Index advanced 9.04% while the Russell Midcap Index produced a return of 7.06%. Technology and Health Care were the best performing sectors in the quarter, while more defensive areas of the market lagged such as Real Estate and Utilities. Higher long-term interest rates weighed on high-quality bond proxies – the safe haven 10-year U.S. Treasury Bond produced a return of -1.74% during the quarter.


(As of 12/31/19) — The Buffalo Small Cap Fund produced a return of 12.99% during the quarter, outperforming the Morningstar U.S. Small Growth Index, which gained 9.11% during the same timeframe. Stock selection in Information Technology and Consumer Discretionary were key drivers of relative outperformance. Results were offset, in part, by weakness in the Real Estate and Telecom sectors.

For full year 2019, the Fund returned 40.97%, outperforming the Index return of 27.60% by over 13%. Calendar year outperformance was broad-based, driven by strong stock selection in Information Technology, Health Care, and Industrials. Results were slightly offset by weakness in Consumer Discretionary and Real Estate.

During quarter, the sectors contributing the most to the Index’s return were Health Care, Technology, and Consumer Discretionary. Health Care was particularly strong after experiencing weakness in the September quarter. The rebound in Health Care was driven by several factors including significant merger and acquisition (M&A) activity, which included six small- and mid-sized biotechnology companies during the quarter that lifted valuation multiples across the sector. Additionally, moderate Democrats, who are perceived to be friendlier to health care stocks, regained the polling lead over more progressive candidates in the Democratic primary, which reduced investor concern over pharmaceutical pricing pressure.


eHealth was the Fund’s top contributor, with the stock increasing by 44% for the quarter. The company provides an online exchange where individuals and small businesses purchase health insurance. Strong performance has been driven by improved productivity from its sales force, solid enrollment growth in all segments, and optimism that recent investments will help sustain growth into the future. We remain optimistic about the long-term outlook for the stock as the company pursues the fast-growing Medicare-related health insurance market.


CyrusOne was the largest detractor to results during the quarter. The data center operator has reported consistently-strong operating performance, and its shares were bid up heavily in the September quarter on anticipation that it would be acquired. The stock sold off in October when company management reported they are not currently pursuing a sale and subsequently the potential “M&A premium” was let out of the share price.


(As of 12/31/19) — Looking forward, we remain optimistic about the environment for small cap growth stocks in 2020. While absolute performance was strong in 2019, the small cap asset class lagged behind large caps overall. The S&P 500 Index returned 31.49% in 2019, which outperformed the Morningstar U.S. Small Growth Index return of 27.60% by nearly 4%. Although earnings of small cap stocks are poised to grow at a faster rate than large caps in 2020, we believe small caps are trading at relatively-favorable valuation when compared to large caps. This disparity could be a source of outperformance for the small cap asset class if valuations revert to more normalized levels.

In terms of portfolio positioning, Technology and Health Care are the two largest sectors in the Fund. Within Technology, component companies appear poised for accelerated growth out of an inventory correction, and many service and software companies are benefiting from digital transformations of corporate customers and a shift away from legacy, on-premise solutions to cloud-first providers. In the Health Care sector, we are positive on diagnostic companies due to more accurate tests and screens from newer, less-invasive technologies. We also favor suppliers into pharma and biotech companies as the research and development spending environment from these companies remains strong. Suppliers typically have less binary-event risk and better near-term revenue and cash flow characteristics than their customers, a risk-reward trade-off we prefer.

In spite of the overall optimistic tone in the marketplace, we recognize several factors that could drive volatility and downside risk. A policy misstep by the Fed or from key political figures are leading concerns. In 2019, the Fed’s pivot on monetary policy demonstrated willingness by our nation’s central bank to be flexible and “data-dependent” by cutting rates three times when there were signs of slowing economic activity.

While trade dynamics seem to change on a daily basis, the rhetoric has died down considerably, and the U.S. and China appear set to ink a phase one agreement. With the presidential election less than a year away, we think it is unlikely President Trump re-escalates the trade war again before November. We believe that we are likely in the later innings of an abnormal economic cycle that has produced below-trend growth and a longer expansionary phase compared to historical averages. Signals that this economic expansionary period is slowing or ending would likely lead to significant market volatility. Furthermore, after the strong returns of 2019, many small caps are now trading at high absolute valuations as we enter 2020. These elevated valuations could serve to enhance small cap volatility as these factors play out.

Within this context, we have been managing the Fund actively, seeking to deploy capital into stocks that we believe have the most favorable risk/reward trade-offs. The Fund finished the year with 76 holdings (excluding cash), up from 73 at the end of the 3rd quarter. We continue to identify investment opportunities in smaller companies with strong secular growth opportunities that, in our opinion, could benefit from long-term trends trading at attractive valuations. As always, we appreciate your continued support and confidence in our investment capabilities over the long haul.

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 574 for the 3-year, 4 stars among 502 for the 5-year, and 2 stars among 381 Small Growth funds for the 10-year period ending 2/29/20.

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. ©2020 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.