Investor Login Advisors Contact Us FAQs Search DISCOVERY FUND QUICK FACTS Investor Institutional Ticker: BUFTX BUITX Inception Date: 4/16/2001 7/1/2019 Expense Ratio: 1.01% 0.86% Total Net Assets: $1.78 Billion (9/30/21) Morningstar Category: Mid Cap Growth Benchmark Index: Morningstar U.S. Mid Growth Related Material: Fund Fact Sheet Q3 2021 PM Commentary Q3 2021 Summary Prospectus FUND OBJECTIVE & INVESTMENT PHILOSOPHY The investment objective of the Buffalo Discovery Fund is long-term growth of capital. The Fund managers seek to identify companies expected to benefit from innovation and 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 engaged in innovative strategies are those who, in the Fund managers’ opinion, are engaged in the pursuit and practical application of knowledge to discover, develop, and commercialize products, services, or intellectual property. Companies are screened using in-depth, in-house research to identify those which the Fund managers believe have favorable attributes, including attractive valuation, strong management, conservative debt, free cash flow, scalable business models, and competitive advantages. MORNINGSTAR RATINGS Overall Morningstar Rating™ of BUFTX based on risk-adjusted returns among 550 Midcap Growth funds as of 10/31/21. Morningstar Sustainability Rating™ of BUFTX out of 1,538 U.S. Equity Mid Cap funds as of 9/30/21, based on 97% of AUM Carbon Metric Rating of BUFTX as of 6/30/21 in the Mid Cap Growth category, based on 79% of AUM; long positions only Historical Sustainability Score Rank of BUFTX 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 DISCOVERY FUND - Investor 3.32 14.10 38.91 23.62 19.24 16.47 12.80 11.82 10.91 BUFFALO DISCOVERY FUND - Institutional 3.37 14.22 39.15 23.81 19.42 16.65 12.97 11.99 11.07 Morningstar U.S. Mid Growth Index 6.83 19.39 41.98 30.23 24.60 17.43 12.81 11.84 10.54 Morningstar Mid-Cap Growth Category 4.52 16.95 41.84 25.22 21.26 15.74 11.60 10.94 9.64 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 BUFTX vs Morningstar U.S. Mid Growth Index (As of 9/30/21) Upside Capture 72.00 Downside Capture 88.18 Alpha -1.72 Beta 0.87 Sharpe Ratio 0.80 HYPOTHETICAL GROWTH OF $10,000 Buffalo Discovery Fund - Investor Class Morningstar U.S. Mid Growth Index 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 $0 $20,000 $40,000 $60,000 $80,000 $100,000 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 82 Median Market Cap $21.33 B Weighted Average Market Cap $24.07 B 3-Yr Annualized Turnover Ratio 88.97% % of Holdings with Free Cash Flow 77.11% Active Share 78.75% TOP 10 HOLDINGS Holding Ticker Sector % of Net Assets Generac Holdings GNRC Industrials 2.48% IHS Markit INFO Industrials 2.22% MSCI MSCI Financials 1.96% Darden Restaurants DRI Consumer Discretionary 1.90% Natera NTRA Health Care 1.81% Bandwidth BAND Technology 1.78% Expedia EXPE Consumer Discretionary 1.78% EPAM Systems EPAM Technology 1.72% AMETEK AME Industrials 1.69% Avantor AVTR Materials 1.69% TOP 10 HOLDINGS TOTAL 19.03% 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 16.4 0.5 0.0 4.8 18.4 18.0 32.4 3.5 1.5 2.0 0.0 2.6 13.1 1.0 0.0 4.4 21.6 18.5 38.1 1.0 1.6 0.0 0.8 0.0 Buffalo Discovery Fund Morningstar U.S. Mid 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 Small Cap ($1.5B - $4.5B): … Mid Cap ($4.5B - $30B): 60.… Large Cap (>$30B): 31.3% As of 9/30/21. Market Cap percentages may not equal 100% due to rounding. MANAGEMENT Dave Carlsen, CFA Portfolio Manager 29 Years of Experience View full bio Jamie Cuellar, CFA Portfolio Manager 29 Years of Experience View full bio Ken Laudan Portfolio Manager 28 Years of Experience View full bio Click here to read about the recent portfolio manager changes for the Buffalo Discovery Fund. COMMENTARY Q3 2021 Commentary CAPITAL MARKET OVERVIEW PERFORMANCE COMMENTARY (As of 9/30/21) — The Buffalo Discovery Fund (BUFTX) returned -0.62% during the quarter versus the Morningstar U.S. Mid Growth Index’s return of 0.20%. The Fund’s modest underperformance was driven by stock selection in the Information Technology and Telecommunications Services. Our relative underweight to the benchmark index’s highest valuation software constituents continued to act as a headwind. Outside of Technology and Telecom, strong stock selection in Consumer, Industrials, and Health Care acted as positive contributors relative to the index. The Fund continues to invest in disruptive and innovative growth companies with relatively attractive valuations, a strategy we believe should be a key driver of above-index risk-adjusted returns over the long term. TOP CONTRIBUTORS Icon Plc (ICON) was a top contributor during the quarter. The company is a leading clinical research organization (CRO) whose services help pharma, biotech, and medical device companies develop and commercialize products. In our view, the company is well positioned to benefit from the secular outsourcing trend in the health care industry. During the quarter, investors warmed to the prospect of higher-than-expected revenue and cost synergies following the recently completed acquisition of competitor PRA Health Services. This merger provides global scale and services breadth, as pharma and biotech customers continue to pursue more outsourcing arrangements and move from trial-by-trial engagements to longer-term strategic customer relationships. Palo Alto Networks, Inc. (PANW), a leading network security solutions provider, was another strong contributor in the quarter. Investors cheered better-than-expected billing guidance for fiscal year 2022, driven by a robust spending environment and strong adoption of next generation products. Security spending remains strong following numerous high profile cyber-attacks in recent years, while at the same time the work from home trend has expanded the threat landscape beyond the corporation. TOP DETRACTORS Bandwidth (BAND) was the largest detractor from performance results during the quarter. The stock was weak for a couple of reasons, namely consolidation and vertical integration within the Communications Platform as a Service (CPaaS) group that brought fears of Bandwidth having a competitive disadvantage. The company also continued tough comparisons throughout the rest of 2021, especially in the 4th quarter where Bandwidth benefited from additional political traffic in 2021. We believe the latter is a short term phenomenon that will anniversary in 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. Universal Display (OLED) was also a meaningful detractor from performance for the quarter. The stock languished due to concerns over supply chain disruption and logistics issues evident in most consumer electronics, especially in televisions and handsets, which constitute the bulk of Universal Display’s end markets. We believe OLED TVs continue to gain market share in the premium segment, and additional OLED TV capacity and potential new products could provide a positive backdrop for OLED shares, when supply chains improve post COVID lockdowns in its key manufacturing areas. 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. Investing in both actively and passively managed mutual funds involves risk and principal loss is possible. Earnings growth is not representative of the fund’s future performance. DISCOVERY FUND NEWS 7 BUFFALO FUNDS NAMED TO IBD BEST MUTUAL FUNDS 2021 LIST Mar 22, 2021 Seven Buffalo Funds were named to Investor’s Business Daily Best Mutual Funds 2021 list, including the Best U.S. Diversified, Growth, Large Cap, Mid Cap, Small Cap, International, and U.S. Taxable Bond Fund categories. RIDING TRENDS IN POWER SECURITY, ORTHOPEDIC PRODUCTS, AND WIRELESS TOWERS Mar 11, 2021 Dave Carlsen, Buffalo Discovery Fund co-portfolio manager, was recently interviewed by The Wall Street Transcript where he discusses growth drivers for companies in several sectors, including power grid security, orthopedic products, and wireless towers. “MONEY LIFE MARKET CALL” WITH BUFFALO DISCOVERY FUND PM KEN LAUDAN Dec 7, 2020 Ken Laudan, Buffalo Discovery Fund co-portfolio manager, recently appeared on the Money Life with Chuck Jaffe podcast, discussing his investment viewpoints and portfolio strategy. MORNINGSTAR UPGRADES BUFFALO DISCOVERY FUND (BUFTX) ANALYST RATING TO BRONZE May 1, 2018 BUFTX earns Bronze Morningstar Analyst RatingTM due to the management team’s ability to adapt to the changing focus of the Fund over the past 14 years. LITERATURE Buffalo Discovery 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 MORNINGSTAR RATING™ The Buffalo Discovery Fund (BUFTX) received 3 stars among 550 for the 3-year, 3 stars among 495 for the 5-year, and 4 stars among 384 Mid-Cap Growth funds for the 10-year period ending 10/31/21. Other share classes may have different performance characteristics. MORNINGSTAR SUSTAINABILITY RATING™ MORNINGSTAR LOW CARBON DESIGNATION™ 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. The Buffalo Funds are offered only to United States residents, and information on this site is intended only for such persons. Nothing on this website should be considered a solicitation to buy or an offer to sell shares of any Buffalo Fund in any jurisdiction where the offer or solicitation would be unlawful under the securities laws of such jurisdiction. Kornitzer Capital Management is the advisor to the Buffalo Funds, which are distributed by Quasar Distributors, LLC.