Quick Facts
Inception Date:4/14/19987/1/2019
Expense Ratio:1.02%0.87%
Total Net Assets:$955.84 Million  (12/31/20)
Category:Small Cap Growth
Benchmark:Morningstar U.S. Small Growth
Related Material:
   Fund Fact Sheet Q4 2020
   PM Commentary Q3 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 12/31/20.

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, Co-Portfolio Manager

Recent Recognition
Featured Articles & Reports






“Journal Report – Investing in Funds & ETFs”

November 4, 2019

Performance (%)

As of 12/31/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor31.3666.3666.3630.2524.4315.9412.1812.7313.88
BUFFALO SMALL CAP FUND - Institutional31.3466.6066.6030.4424.6116.1112.3512.9014.05
  Morningstar U.S. Small Growth Index28.1243.5243.5219.9818.5714.4411.238.357.70
  Lipper Small Cap Growth Fund Index24.3237.3637.3619.9118.4113.8910.478.098.45
  Morningstar Small Growth Category27.2538.6238.6218.7617.7513.6910.749.338.64
As of 12/31/203 MOYTD1 YR3 YR5 YR10 YR15 YR20 YRSince Inception
BUFFALO SMALL CAP FUND - Investor31.3666.3666.3630.2524.4315.9412.1812.7313.88
BUFFALO SMALL CAP FUND - Institutional31.3466.6066.6030.4424.6116.1112.3512.9014.05
  Morningstar U.S. Small Growth Index28.1243.5243.5219.9818.5714.4411.238.357.70
  Lipper Small Cap Growth Fund Index24.3237.3637.3619.9118.4113.8910.478.098.45
  Morningstar Small Growth Category27.2538.6238.6218.7617.7513.6910.749.338.64
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

Alex Hancock, CFA
Portfolio Manager

23 Years of Experience

 View full bio



(As of 9/30/20) — Equity markets sustained their momentum in the 3rd quarter, with the S&P 500 Index returning 8.93%. Macro data continued to improve, and companies broadly reported earnings that proved to be more resilient than expectations. While the U.S. experienced another spike in COVID-19 cases during the quarter and tragically surpassed 200,000 deaths, positive news on vaccines and therapy fronts continued to provide hope for investors.

The Russell 3000 Index increased 9.21% in the quarter. Growth continued to outperform value, as the Russell 3000 Growth Index advanced 12.86%, compared to the Russell 3000 Value Index return of 5.41%. Relative performance was correlated with market cap size in the quarter, with the large cap Russell 1000 Index delivering a return of 9.47%, compared to the Russell Mid Cap Index return of 7.46%, the smaller cap Russell 2000 Index return of 4.93%, and the Russell Micro Cap Index return of 3.69%. More cyclically-exposed Consumer Discretionary, Materials, and Industrial sectors performed best in the quarter. Energy was the sole declining sector, hurt by lingering weakness in oil demand.


(As of 9/30/20) — The Buffalo Small Cap Fund (BUFSX) generated a return of 9.91% during the 3rd quarter, outperforming the Morningstar U.S. Small Growth Index, which increased 7.35% during same time period. Strong stock selection in Information Technology, Consumer Discretionary, Telecommunication Services, and Financials were the biggest contributors to outperformance relative to the Index. Meanwhile, negative stock selection in the Health Care sector was a slight offset to performance. Although small caps rebounded stronger and outperformed large cap growth in the 2nd quarter, all cap ranges generated positive returns in the 3rd quarter, with larger cap indices performing the best.


Penn National Gaming was the best performing stock for the Fund in the 3rd quarter, producing a return of over 140%. The company is an owner and manager of gaming and racing properties, sports betting operations, and video gaming terminals, including 41 properties in 19 states. Additionally, the company recently purchased a 36% equity interest in Barstool Sports, a leading digital sports, entertainment, and media platform. The combination of Barstool’s audience, brand, and marketing engine, along with Penn’s large geographic footprint, create an unrivaled omni-channel offering, in our opinion. The company launched an online sports betting app called Barstool Sports in the 3rd quarter with great success. Penn’s stock performance in the quarter was driven by better-than-expected pre-announced 3rd quarter margins and revenue growth, as well as the large opportunity in the company’s omni-channel offering created by the Barstool Sports partnership.

Livongo Health continued to move higher and was another strong contributor to performance, returning just over 83% in the quarter. The company is a leading provider of technology solutions for remote monitoring of patients with chronic medical conditions. In the current environment of COVID-19 quarantines, demand for the company’s solutions remains solid. Strong operating performance along with increased investor willingness to pay higher multiples for companies with solutions that benefit from the pandemic, helped drive the stock to all-time highs in the quarter. During the quarter Livongo and Teladoc Health announced plans to merge, and we exited the position, as the combined company graduated beyond the portfolio’s capitalization range.


PaySign was the largest detractor from Fund performance during the quarter. The company is a vertically-integrated prepaid debit card and payment provider, mainly serving plasma donation centers and pharmaceutical customers. The company reported 2nd quarter results that were negatively-impacted by increased consumer stimulus, reducing the incentive for plasma donations as well as tightened budgets negatively impacting the company’s Pharma unit. We believe the weakness is temporary and PaySign’s operating environment should improve as stimulus declines and doctor visits increase. The company’s main competitor, Wirecard, remains weakened due to suspected fraud which should allow PaySign to continue to take market share.


(As of 9/30/20) — Like the March and June quarters, small cap stocks experienced elevated volatility in the September quarter. The Fund returned nearly 10% between the months of July and August but declined slightly in the month of September as the overall market sold off. Looking forward, we believe volatility is likely to remain in place in the near term through the November election, but many factors point to optimism for small caps and the overall markets this quarter and beyond.

Given the market’s rapid recovery from March lows, future returns depend significantly on the trajectory of corporate earnings into 2021. While “work from home” companies and sectors with exposure to housing have fared well this year, we believe that many companies have adapted their businesses and are poised to report encouraging results in this environment of improving business spending and consumer confidence. While the rate of job gains has slowed in recent months, the September unemployment rate in the U.S. declined to 7.9% (down from 14.7% in April), and we are optimistic the job market will continue to mend in coming months. Positive information flow on additional COVID-19 treatment options, vaccine progress and testing capacity could continue to allow the market to grind higher allowing investors to look beyond near-term infection numbers. Positive vaccine data could help the stock market rerate, and value companies that have not participated in the rally, could begin to outperform the growth leaders, which have been pushed to relatively high valuation levels.

While the Democratic party appears poised to make significant gains in the November election, the ultimate outcome remains uncertain. If the Democratic party wins control of all three branches of government, stocks could see some pressure due to the potential for higher tax rates, increased regulation, and potential pricing pressure in some health care companies. At the same time, if a Biden administration seeks to rein in the business models of large cap technology stocks, some small cap technology stocks, especially in the internet arena, could potentially benefit if the large caps lose their dominance. Finally, regardless of which party wins the presidency, fiscal and monetary policy remain extremely accommodative worldwide. We believe that the Federal Reserve and Congress’ aggressive policy response to the virus earlier in 2020 helped to prevent a deeper recession, and while further stimulus before the election is uncertain, we believe it is likely that we will see an agreement that will benefit consumers before year-end, which could be beneficial to some stocks in the Fund.

Within the framework above, we are cautiously optimistic about the prospects for our small cap growth stocks in coming months but believe the factors above will likely drive significant volatility. We finished the September quarter with 77 holdings, up slightly from 75 at the end of the June quarter. We are continuing to manage the Fund actively to try to position it for continued outperformance by allocating capital to opportunities that we believe have the best risk/reward tradeoffs. As always, we will look to reduce or sell those holdings that either have traded above a market cap that we believe is no longer reflective of a small cap company (typically around $10–12 billion) or are considered to be fully valued, and replace them with small cap stocks with a better risk/reward opportunity.

We also continue to invest in companies whose organic growth has been pressured in the near-term by pandemic-driven slowdown but whose business models and balance sheets are strong. We believe many of these businesses can use the downturn as an opportunity to operate more efficiently, gain market share, and find new opportunities for growth. We expect many of these holdings to emerge from the downturn with stronger, higher-margin businesses when the U.S. economy returns to more normalized levels. These are also the companies that could lead the market upward if an effective vaccine gains widespread distribution in the near-term, and we have made some adjustments to our portfolio for this possibility. Our time-tested strategy of investing in premier companies, which could benefit from long-term trends and trade at attractive valuations, remains the cornerstone of our work. 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.


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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 576 for the 3-year, 4 stars among 505 for the 5-year, and 4 stars among 381 Small Growth funds for the 10-year period ending 12/31/20.

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. ©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.