Investor Login Advisors Contact Us FAQs Search SMALL CAP FUND QUICK FACTS Investor Institutional Ticker: BUFSX BUISX Inception Date: 4/14/1998 7/1/2019 Expense Ratio: 1.01% 0.86% Total Net Assets: $1.20 Billion (9/30/21) Morningstar Category: Small Cap Growth Benchmark Index: Morningstar U.S. Small Growth Related Material: Fund Fact Sheet Q3 2021 PM Commentary Q3 2021 Summary Prospectus 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 LISTEN TO THE PORTFOLIO MANAGERS DISCUSS THEIR INVESTMENT PHILOSOPHY Audio Player 00:00 Use Up/Down Arrow keys to increase or decrease volume. MORNINGSTAR RATING Overall Morningstar Rating™ of BUFSX based on risk-adjusted returns among 574 Small Growth funds as of 10/31/21. INVESTMENT STYLE FUND OBJECTIVE & INVESTMENT PHILOSOPHY 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 common stocks, preferred stocks, convertible preferred stocks, warrants and rights of small capitalization (“small-cap”) companies. The Small Cap Fund defines small-cap companies as those that, at the time of purchase, have market capitalizations within the range of the Morningstar U.S. Small Growth Index. As of June 30, 2021 the range of market capitalizations of the Morningstar U.S. Small Growth Index was $543 million to $20.4 billion. The Fund managers seek to identify companies for the 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. RECENT RECOGNITION Kiplinger Top-Performing Mutual Fund (3 Years, 20 Years) – November 18, 2021 Kiplinger Top-Performing Mutual Fund (20 Years) – October 20, 2021 Kiplinger Top-Performing Mutual Fund (20 Years) – September 21, 2021 Kiplinger Top-Performing Mutual Fund (20 Years) – August 18, 2021 Kiplinger Top-Performing Mutual Fund (3 Years, 5 Years, 10 Years, 20 Years) – July 28, 2021 Kiplinger Top-Performing Mutual Fund (3 Years, 5 Years, 20 Years) – June 17, 2021 Kiplinger Top-Performing Mutual Fund (3 Years, 20 Years) – May 13, 2021 Kiplinger Top-Performing Mutual Fund (3 Years, 20 Years) – April 22, 2021 Kiplinger Top-Performing Mutual Fund (1 Year, 20 Years) – March 23, 2021 Investor’s Business Daily 2021 Best Mutual Funds Award Winner – March 22, 2021 Kiplinger Top-Performing Mutual Fund (1 Year, 20 Years) – February 23, 2021 Kiplinger Top-Performing Mutual Fund (1 Year, 20 Years) – January 19, 2021 FinancialPlanning.com Best Performing Small Cap Funds – December 1, 2020 FEATURED ARTICLES & REPORTS PERFORMANCE (%) MONTH - END QUARTER - END CALENDAR YEAR As of 10/31/21 3 MO YTD 1 YR 3 YR 5 YR 10 YR 15 YR 20 YR Since Inception BUFFALO SMALL CAP FUND - Investor 2.20 13.92 47.18 32.74 27.64 17.95 12.35 12.91 13.98 BUFFALO SMALL CAP FUND - Institutional 2.28 14.08 47.37 32.94 27.83 18.12 12.52 13.08 14.15 Morningstar U.S. Small Growth Index 4.60 6.14 32.25 20.50 19.65 15.12 11.06 10.41 7.69 Lipper Small Cap Growth Fund Index 4.06 14.63 40.69 22.84 21.30 15.70 10.98 10.32 8.77 Morningstar Small Growth Category 3.84 15.33 45.00 22.75 20.79 15.47 11.21 11.06 8.97 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 9/30/21) Upside Capture 146.09 Downside Capture 98.97 Alpha 9.44 Beta 1.10 Sharpe Ratio 0.85 HYPOTHETICAL GROWTH OF $10,000 Buffalo Small Cap Fund - Investor Class Morningstar U.S. Small Growth Index 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 $0 $50,000 $100,000 $150,000 $200,000 $250,000 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 PORTFOLIO CHARACTERISTICS (As of 9/30/21) # of Holdings 85 Median Market Cap $2.42 B Weighted Average Market Cap $3.20 B 3-Yr Annualized Turnover Ratio 56.35% % of Holdings with Free Cash Flow 61.45% Active Share 91.27% TOP 10 HOLDINGS Name of Holding Ticker Sector % of Net Assets Everi Holdings EVRI Consumer Discretionary 2.09% Cambium Networks Corp CMBM Technology 1.97% Natera NTRA Health Care 1.89% ICF Intl ICFI Industrials 1.87% Castle Biosciences CSTL Health Care 1.85% Phreesia PHR Health Care 1.80% Bandwidth BAND Technology 1.78% CareDx CDNA Health Care 1.74% Adtran ADTN Technology 1.72% Halozyme Therapeutics HALO Health Care 1.65% TOP 10 HOLDINGS TOTAL 18.36% As of 6/30/21. 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. View Full Holdings SECTOR WEIGHTING 21.0 0.8 0.0 8.7 20.1 16.7 26.2 1.8 0.0 1.9 0.0 2.9 Buffalo Small Cap Fund Morningstar U.S. Small Growth Index Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Real Estate Telecommunications Utilities Cash 0% 5% 10% 15% 20% 25% 30% 35% 40% As of 9/30/21. 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 Micro Cap (<$1.5B): 26.6% Small Cap ($1.5B - $4.5B): 44.6% Mid Cap ($4.5B - $30B): 28.8% As of 9/30/21. Market Cap percentages may not equal 100% due to rounding. MANAGEMENT Jamie Cuellar, CFA Portfolio Manager 29 Years of Experience View full bio Bob Male, CFA Portfolio Manager 35 Years of Experience View full bio COMMENTARY Q3 2021 Commentary CAPITAL MARKET OVERVIEW PERFORMANCE COMMENTARY (As of 9/30/21) — Many small cap growth companies continued to struggle during the quarter as a result of declining gross domestic product (GDP) estimates due to supply chain disruptions and the COVID-19 spike from the highly transmissible Delta variant. Investors gravitated to the relative safety of larger companies, and market capitalization was a meaningful driver of relative performance during the period. The Russell 2000 Index of smaller companies declined -4.36% in the quarter, underperforming the Russell Midcap Index and the larger cap Russell 1000 Index, which produced returns of -0.93% and 0.21%, respectively. Growth companies outperformed Value in the mid and large cap indices during the quarter, but Growth underperformed Value in the smaller cap Russell 2000 Index by 267 basis points. Small cap value has meaningfully outperformed small cap growth year to date. Weakness was seen in all but one sector of the Morningstar U.S. Small Growth Index, as only Energy produced positive returns. Healthcare and Telecom Services were the weakest performing sectors within the index, while Technology and Industrials declined the least. The Buffalo Small Cap Fund (BUFSX) produced a return of -5.96% for the quarter, underperforming the Morningstar U.S. Small Cap Growth Index return of -4.50%. Healthcare drove most of the underperformance, followed by weakness in Industrials and Telecom Services while Consumer Discretionary, Technology, and Financials outperformed. Historically, stock selection drives the Fund’s relative performance, but attribution analysis this quarter shows that our allocation effect and selection effect detracted by an almost equal amount. The negative allocation effect came from a portfolio overweight to Consumer Discretionary and Telecom Services, two weaker performing benchmark sectors along with a portfolio underweight to Technology and Energy, two better performing benchmark sectors. TOP CONTRIBUTORS Rush Street Interactive (RSI) was a significant contributor for the quarter. An online sports betting and interactive casino company, Rush Street shares struggled during the spring and early summer due to weakness in companies that came public through a SPAC, or special purpose acquisition company. Seasonal weakness in online sports betting companies ahead of the pivotal NFL season also weighed on the company’s shares. The stock recovered this quarter, as investors grew increasingly excited about online sports betting as the NFL season kicked off. Additionally, the company maintained solid market share in their key iCasino markets, and investors cheered the potential for further consolidation within the group, as a couple of deals were announced with some speculation that RSI could be an acquisition candidate. TOP DETRACTORS Bandwidth (BAND) was the largest detractor during the period. Industry consolidation and vertical integration within the Communications Platform as a Service (CPaaS) group drove fears that Bandwidth has a competitive disadvantage, which led to share price declines. Continued tough competition throughout the remainder of 2021, especially in areas where Bandwidth benefited from additional political traffic in 2021, contributed to the selloff. We believe the latter is a short-term phenomenon that will anniversary this upcoming quarter, and Wall Street is failing to give credit for Bandwidth’s own acquisition activity, namely the acquisition of Voxbone, which accelerates Bandwidth’s entry into Europe. Hydroform (HYFM) was another detractor from performance during the quarter. A distributor of controlled environment agricultural products such as nutrients, consumables and lighting largely used by the fast-growing cannabis industry, Hydroform’s stock was weak due to a slowdown in the California market, following an inventory correction from an earlier harvest. We believe this will prove to be a short-term event, and the long-term opportunity for Hydroform, namely more markets approving cannabis usage along with the potential for highly accretive acquisitions by the company, remains intact. OUTLOOK 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. LITERATURE Buffalo Small Cap Fund Documents Last Updated Fact Sheet 9/30/21 Quarterly Commentary 9/30/21 Full Fund Holdings 9/30/21 Summary Prospectus 7/29/21 Prospectus 7/29/21 Statement of Additional Information 7/29/21 Annual Report 3/31/21 Semi-Annual Report 9/30/20 Tax Guide - 2020 1/10/21 General Account Forms Investor Class Institutional Class Both 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 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 574 for the 3-year, 4 stars among 504 for the 5-year, and 4 stars among 380 Small Growth funds for the 10-year period ending 10/31/21, based on risk-adjusted returns. 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. OUR FUNDS Discovery Fund Dividend Focus Fund Early Stage Growth Fund Flexible Income Fund Growth Fund High Yield Fund International Fund Large Cap Fund Mid Cap Fund Small Cap Fund INVEST WITH US Open an Account Directly Work with a Financial Advisor Platform Availability RESOURCES Account Forms Advisors Coverdell Accounts CUSIP IDs FAQs Investor Login IRA Accounts Literature Prospectus Tax Information ABOUT US Who We Are Investment Strategy Our Team Our History LinkedIn Prospectus Privacy Policy Definitions © 2021 Buffalo Funds. All rights reserved. Before you invest in the Buffalo Funds, please refer to the summary or statutory prospectus for important information about the investment company, including investment objectives, risks, charges and expenses. You may also obtain a hard copy of the prospectus by calling (800) 49-BUFFALO. The prospectus should be read carefully before you invest or send money. Mutual fund investing involves risk; Principal loss is possible. The Buffalo Dividend Focus, Flexible Income, Early Stage Growth, Small Cap, Mid Cap, Discovery, Growth, and International Funds invest in smaller companies, which involve additional risks such as limited liquidity and greater volatility. The Dividend Focus, High Yield, Early Stage Growth, Small Cap, Mid Cap, Discovery, Growth, Large Cap and International Fund may invest in foreign securities which will involve political, economic and currency risks, greater volatility and differences in accounting methods. The International Fund may invest in emerging markets, which are generally more volatile and can have relatively unstable governments, social and legal systems that do not protect shareholders, economies based on only a few industries and securities markets that are substantially smaller, less liquid, more volatile and may have a lower level of government oversight than securities markets in more developed countries. The Flexible Income and High Yield Funds may invest in lower-rated and non-rated securities presents a greater risk of loss to principal and interest than higher-rated securities. Investments in debt securities typically decrease in value when interest rates rise. This risk is usually greater for longer-term debt securities. The Flexible Income Fund may invest in MLPs which are subject to certain risks inherent in the structure of MLPs, including complex tax structure risks, limited ability for election or removal of management, limited voting rights, potential dependence on parent companies or sponsors for revenues to satisfy obligations, and potential conflicts of interest between partners, members and affiliates. Investors should be aware of risks involved with investing REITs and real estate securities, such as declines in the value of real estate and increased susceptibility to adverse economic or regulatory developments. 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