UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-10303 | |||||||
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Buffalo Funds | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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5420 W. 61st Place, |
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(Address of principal executive offices) |
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Clay E. Brethour | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | 913-677-7778 |
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Date of fiscal year end: | March 31, 2019 |
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Date of reporting period: | March 31, 2019 |
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Item 1. Reports to Stockholders.
ANNUAL REPORT
March 31, 2019
Beginning on January 1, 2021, as permitted by regulations adopted by the U.S. Securities and Exchange Commission, paper copies of the Funds' annual and semi-annual shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Funds or from your financial intermediary, such as a broker-dealer or bank if you hold your shares through such an institution. Instead, the reports will be made available on the Funds' website (buffalofunds.com/our-funds/performance/#literature), and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Funds electronically anytime by contacting your financial intermediary or, if you hold your shares directly with the Funds, by calling (800) 492 8332.
You may elect to receive all future reports in paper free of charge. If you invest through a financial intermediary, you can contact your financial intermediary to request that you continue to receive paper copies of your shareholder reports. If you invest directly with the Funds, you can call (800) 492-8332 to let the Funds know you wish to continue receiving paper copies of your shareholder reports. Your election to receive shareholder reports in paper will apply to all funds that you hold through the financial intermediary or directly with the Funds.
MESSAGE TO OUR SHAREHOLDERS
DEAR SHAREHOLDERS,
Equity markets in the U.S. continued their upward trajectory for the 12-month period ending March 31, 2019 as the S&P 500 Index produced a return of 9.50%. Fixed income markets also enjoyed another positive year returning 5.94%, as measured by the ICE BofAML U.S. High Yield Index. However capital markets outside the U.S. gave back ground during the period and the Morningstar Global Markets ex-US Index declined 5.20% on slowing global growth and ongoing structural issues in Europe.
Taking a closer look at the 12-month period, equity markets produced a significant reversal in the 1st quarter of 2019 following one of the worst periods of performance to close out 2018. Year-to-date through March 31, the S&P 500 Index posted a return of 13.65%, its biggest quarterly gain in nearly a decade. Much of the reversal in market sentiment was a result of the change in the Federal Reserve's (the Fed) policies, providing a more growth-friendly backdrop, combined with the anticipation that a U.S. — China trade deal is imminent. Regarding monetary policy, recall that in late 2018, Fed officials were targeting between one and three short-term interest rate increases for this year and a continued reduction in the Central Bank's $4 trillion balance sheet — a wind down of quantitative easing (QE). However, expectations for monetary policy changed in March as the Fed disclosed it is not likely to increase interest rates in 2019 and will stop shrinking its balance sheet by September, extending QE. This pivot in the Fed's policy provided a more growth-friendly tailwind for capital markets. Furthermore, nearly all of the world's central banks are keeping interest rate increases on hold, a signal to investors that low rates will continue significantly longer than most expected just a year ago.
The Fed's change in monetary policy is either going to extend the current 10-year economic expansion period or be a signal that the end of the growth cycle is near. While we do not believe a recession is imminent, the markets are at an inflection point. A recession is defined as two consecutive quarters of economic contraction (negative economic growth) as measured by the Gross Domestic Product (GDP). Since official GDP numbers are typically released two months after the end of a quarter, the economy could be in a recession up to eight months before it's "officially" announced. Financial markets don't wait for official recession announcements and stock market drawdowns occur quickly once signs of an economic recession appear. With that said, we believe an
extension to the current economic expansion is the more likely outcome for the remainder of the year. The sustained robustness of the U.S. economy relative to the rest of the world provides some confidence to believe domestic economic expansion will continue. While the U.S. economy is experiencing some deceleration, growth is simply moderating from above trend to in-line.
In last year's President's Letter, we stated that the resolution of trade disputes was a critical factor in the probability of positive market returns moving forward. Thus far, whenever there are indications of a U.S. and China trade deal agreement, the market responds favorably. We believe trade deal negotiations will come to a close within the next six months, but "ending" the trade war appears to mean something quite different to each side. China would prefer all tariffs be lifted immediately. However, with China's history of backsliding on negotiated deals, the U.S. will likely demand that current tariffs remain, and the lifting of tariffs occur incrementally, as evidence of compliance to the agreement is substantiated. Trade deals are difficult to monitor and enforce, so Washington needs to hold on to at least some leverage to ensure China follows through. While the general market will see the initial advantage of a trade pact, and some sectors like agriculture will have immediate benefits, others may have to wait for fundamental improvements to business through the reduction of current tariffs in the future.
While a U.S. recession is likely to occur at some point, we don't believe it will be in 2019, but we wouldn't be surprised to see a pause or even some giveback in stock prices over the next six months. Regardless of the short-term volatility in the market, at Buffalo Funds, we take a long-term approach to investing. Just like our namesake, the buffalo, we are steady, strong, and proud. We have a record of growth that is a testament to our philosophy of trend-based, deeply-researched investing and commitment to long-term growth. Patience is our mantra, and our great strength. We appreciate your trust in our management teams and our organization. We will continue to work diligently to meet your expectations.
Sincerely,
Clay E. Bethour
President
The Funds' investment objectives, risks, charges and expenses must be considered carefully before investing. The summary and statutory prospectus contains this and other important information about the investment company, and it may be obtained by calling 1-800-49-BUFFALO or visiting www.buffalofunds.com. Read it carefully before investing.
Past performance does not guarantee future results. Mutual fund investing involves risk. Principal loss is possible.
Kornitzer Capital Management, Inc. is the Advisor to the Buffalo Funds which are distributed by Quasar Distributors, LLC.
Nothing contained in this communication constitutes tax, legal or investment advice. Investors must consult their tax advisors or legal counsel for advice and information concerning their particular situation.
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.
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TABLE OF CONTENTS
Portfolio Management Review (unaudited) | 6 | ||||||
Investment Results (unaudited) | 17 | ||||||
Expense Example (unaudited) | 22 | ||||||
Allocation of Portfolio Holdings (unaudited) | 24 | ||||||
Schedules of Investments or Options Written | 26 | ||||||
Buffalo Discovery Fund (BUFTX) | 26 | ||||||
Buffalo Dividend Focus Fund (BUFDX) | 32 | ||||||
Buffalo Emerging Opportunities Fund (BUFOX) | 39 | ||||||
Buffalo Flexible Income Fund (BUFBX) | 45 | ||||||
Buffalo Growth Fund (BUFGX) | 52 | ||||||
Buffalo High Yield Fund (BUFHX) | 57 | ||||||
Buffalo International Fund (BUFIX) | 67 | ||||||
Buffalo Large Cap Fund (BUFEX) | 77 | ||||||
Buffalo Mid Cap Fund (BUFMX) | 82 | ||||||
Buffalo Small Cap Fund (BUFSX) | 87 | ||||||
Statements of Assets and Liabilities | 92 | ||||||
Statements of Operations | 94 | ||||||
Statements of Changes in Net Assets | 96 | ||||||
Financial Highlights | 100 | ||||||
Notes to Financial Statements | 110 | ||||||
Report of Independent Registered Public Accounting Firm | 121 | ||||||
Notice to Shareholders (unaudited) | 122 | ||||||
Privacy Policy (unaudited) | 133 |
PORTFOLIO MANAGEMENT REVIEW (UNAUDITED)
BUFFALO DISCOVERY FUND
The Buffalo Discovery Fund produced a return of 10.34% for the 12-month period ending March 31, 2019, underperforming the Morningstar US Mid Growth Index, which returned 13.39% during the same period. The fund's underperformance versus the benchmark was primarily driven by stock selection within the Health Care and consumer sectors. Partially offsetting these negatives, the fund had a strong stock selection within the Financial and Materials sectors and also benefited from being underweight Energy, a sector that significantly underperformed the overall index.
Among the top contributors to performance for the period included Garmin Ltd., Ingevity Corporation, and Red Hat, Inc. Garmin manufactures and sells GPS (Global Positioning System) devices and technology products for the aviation, automotive, boating, outdoor and fitness markets. The company exceeded sales and earnings forecasts several times throughout the year driven by the market acceptance of advanced technology and richer features across its product lineup. This led to higher average selling prices and upside to investor growth expectations. Ingevity Corporation provides specialty chemicals and high-performance carbon materials and technologies used in a variety of demanding applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks and most notably, automotive components that reduce gasoline vapor emissions. Countries around the globe are adopting new and more stringent vehicle emissions standards which have significantly expanded the company's market opportunity and growth. Meanwhile Red Hat's shares jumped higher when the company announced it agreed to be acquired by IBM for a substantial premium.
Detractors from performance included Nevro Corp., Portola Pharmaceuticals, Inc., and Mylan N.V. Nevro Corp. sells high-frequency spinal cord stimulation devices to treat pain. Its stock price was challenged during the year by patent litigation with a competitor and multiple disappointing forecasts caused by recurring attrition and productivity issues within its sales force. As a result, sales growth and profitability did not materialize as originally expected. Portola Pharmaceuticals, Inc. develops and manufactures hematology drugs. The company's stock price fell after management lowered sales expectations
of its drug, Bevyxxa, which treats thrombosis. The initial uptake, manufacturability, and commercialization of the drug did not materialize as expected, lowering the overall market opportunity for the company. Mylan N.V. shares were controversial during the year due to growing concern about pricing pressure in the generics industry and the overall trend of profit margins for the company. Later in the year, investors were surprised by an unexpectedly large increase in Selling, General and Administrative (SG&A) expenses to support growth in bio-similar and more complex generics, a strategy intended to distance itself from generic industry pricing pressure, but it may take years to bear fruit and highlights a potential lack of investment in prior years.
The fund finished the fiscal year with 86 holdings, an increase of one from the end of the previous fiscal year.
Looking ahead, the market environment appears fertile for active growth stock investing. Interest rates, inflation, and unemployment remain relatively low by historical standards providing a healthy backdrop for consumers and businesses. We don't see a recession on the horizon nor a significant collapse in corporate earnings but valuations are at lofty levels, especially for big secular growers. Earnings growth comparisons also get more difficult as we lap the positive effects of last year's tax reform.
After a possible 1st quarter earnings reset, we suspect the backup in interest rates, a more dovish Federal Reserve stance and a trade deal with China could extend the positive market sentiment. Later in the 2nd half of 2019 market pundits could return their focus to the Fed's interest rate normalization process, which may weigh on market multiples.
Taking all of this together, we believe a volatile, more discerning market could materialize throughout 2019. The volatility may favor judicious growth stock investors, where a steady hand and active management with an eye toward quality, improving profit cycle dynamics and relatively attractive risk-adjusted returns could hold an advantage.
Economic conditions may ebb and flow, but our focus remains steadfast on investing in attractively priced, financially strong, well-managed companies whose innovative strategies should fuel secular growth
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opportunities. We seek those opportunities where thoughtful management teams are in a favorable position to use innovation for market advantage and sustained value creation. Successful innovation may often lead to disruptive share gains in large existing markets, or the creation of large new market opportunities, a strategy which we believe is less dependent on the overall macro environment for growth.
BUFFALO DIVIDEND FOCUS FUND
The Buffalo Dividend Focus Fund posted a return of 7.48% for the 12-month period ending March 31, 2019, underperforming the Morningstar US Large-Mid Cap Index return of 9.43% and the S&P 500 Index return of 9.50%. Sector weightings and security selection hindered the fund's relative performance. Sectors with large weightings in the portfolio like Information Technology, Health Care, and Consumer Discretionary posted positive absolute returns, but lagged the benchmark's sector returns. Meanwhile some of the fund's smaller weighted sectors, Energy, Telecommunication Services, and Industrials, that comprised less than 17% of the fund's assets, produced returns greater than the comparable index sectors.
Specific securities that contributed to performance during the annual reporting period included Microsoft Corporation (MSFT), Visa Inc. (V), and Anthem (ANTM). Shares of Microsoft advanced on growing momentum from its cloud services and enterprise products. Visa's shares advanced on a favorable earnings releases and healthy transaction volumes. Anthem rose on a positive earnings outlook and the launch of a new pharmacy-benefits manager (IngenioRX).
Specific securities that detracted from performance included Activision Blizzard (ATVI), Kraft Heinz (KHC) and CVS Health Corp. (CVS). Activision declined on a weak earnings forecast, a new video game release missed lofty sales expectations, and poor reviews on a new game title. KraftHeinz dropped on a poor earnings release, goodwill impairment charges, and a dividend cut. Shares of CVS fell on weak earnings forecast due to rising costs, poor results from its Omnicare unit, and integration issues with its recent purchase of Aetna.
Although the market generated positive high single digit returns for the 12-month period, the final two quarters (4th quarter 2018 and 1st quarter 2019) generated double-digit markets moves (one negative and one positive). We expect the market to encounter continued volatility in the coming quarters. Concerns include
inflation, potential strengthening of the U.S. dollar, vagaries regarding protectionism efforts from the Administration, evolving geopolitical risks, slowing economic growth, prospects for a recession, rising energy prices and the divided Congress. Valuation metrics while off recent highs are still above historical market averages, leading us to believe the stock market may have a difficult time achieving further multiple expansion. On the other hand, prospective tailwinds for the economy include further job growth, wage increases, lower tax rates, and robust business and consumer confidence, all of which could lead to higher Gross Domestic Product (GDP) growth. The Federal Reserve has also paused interest rate increases and future monetary policy actions are expected to be more data dependent.
Despite the expectation of continued volatility, we remain focused on wide moat, large capitalization competitively advantaged companies trading at reasonable valuations, in our view. If stock market volatility spikes, we will continue to follow our process of finding new investment ideas and to be ready when market declines provide better entry points.
BUFFALO EMERGING OPPORTUNITIES FUND
For the 12-month period ending March 31, 2019, the Buffalo Emerging Opportunities Fund posted a return of 9.39%, ahead of the 8.94% return produced by the Morningstar US Small Growth Index. During the past 12 months, the fund changed its primary benchmark to the Morningstar US Small Growth Index from the Russell 2000 Growth Index, which returned 3.85% during the time period.
The fund posted strong performance in the Information Technology and Financials sectors. Information Technology was the largest sector weighting in the fund and generated a return of over 30% for the period, compared to the index's sector return of about 23%. Financials was also an area of superior stock selection, with the fund's holdings returning about 24% versus the index's' return of negative 5.6%. Partially offsetting this outperformance was the fund's Consumer Discretionary holdings which returned a negative 17.3% compared to the positive 13.8% return by the Index.
While the past 12 months did see the return of downward volatility as small cap growth indices retreated more than 20% for the October through December 2018 period, the subsequent rally to start calendar 2019 erased most of these declines.
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At March 31, 2019, the fund had a weighted average market cap of $1.4 billion compared to the index's weighted average market cap of $3.6 billion. The fund also had an active share of approximately 95%, which means that the portfolio's cumulative holdings only make up 5% of our benchmark's holdings. Additionally, statistics from FactSet indicate that, on average, only 12-14% of a company's outstanding shares within the fund are held by "passive" or index funds. This compares to the average company in our index, which has 25-30% of its outstanding stock held by passive funds. We believe that in periods of extreme volatility skittish investors are likely to pull their money from said passive funds; in turn, these passive funds sell the stock of their underlying holdings to generate cash to meet these redemptions. As a result, we believe our holdings should be less volatile during drawdown periods. The fund did demonstrate this characteristic during the calendar fourth quarter (Oct-Dec 2018) when the index declined 21.4% while the fund declined 19.0%.
During the past 12 months, the fund had two holdings acquired. Stryker acquired Invuity, a medical device company with solutions that help illuminate body cavities for surgery. Additionally, a financial buyer acquired Financial Engines, a provider of financial planning solutions to consumers. We believe that the market is conducive to both strategic and financial buyers looking for acquisition opportunities. In an environment with less robust economic activity and organic growth potential, we expect larger companies with access to low cost capital to look at acquisitions as a way to boost revenue and earnings growth. Additionally, many large private equity funds have been raised for the purpose of acquiring undervalued companies.
The daily headlines that have driven the strong market bounce back in early 2019 continue to provide a supportive overall market back drop as resolution of some of the trade disputes could enable better global growth and the Fed remaining accommodative has been a stock market winner for going on 10 years now. That said, our focus remains finding companies that can sustain growth due to secular growth trends or due to the innovation and disruption they are introducing to an industry, regardless of market headlines.
We operate at the small end of the small capitalization spectrum and can uncover ideas that have seen valuation dislocation that we believe is out of line with the actual results and outlook. As always, we will be playing close attention to the valuations of our holdings and will utilize
market volatility to trim or add to holdings as risk/reward profiles improve or degrade.
The Buffalo Emerging Opportunities Fund is focused on identifying innovation within U.S. companies primarily with North American revenue bases. We continue to look for prudent ways to deploy cash and we remain long-term focused, aiming to be shrewd when the market environment presents opportunity and more cautious when it does not. With an active share of greater than 95%, the fund has continued to offer a distinct offering from the Index and peers.
BUFFALO FLEXIBLE INCOME FUND
For the twelve months ended March 31, 2019, the Buffalo Flexible Income Fund returned 7.73%. During the same period, the S&P 500 returned 9.50%, the Lipper Mixed-Asset Target Allocation Moderate Funds Index returned 3.93% and the ICE BofAML U.S. High Yield Index returned 5.94%.
EQUITY
For the fiscal year ended March 31, 2019, the equity portion of the portfolio returned 9.54% compared to a return of 9.50% for the S&P 500 Index. The Flexible Income Fund's equity component is primarily focused on large cap dividend payers which we believe possess significant competitive advantages. The primary sectors that led to the slight underperformance were Consumer Discretionary and Information Technology. The underperformance within Consumer Discretionary was due to security selection. Lions Gate Entertainment (LGF) was the biggest detractor. During 2018, LGF lowered its projected three-year (2018-2020) EBITDA growth rates from growing double digits to mid-high single digits with fiscal 2019 effectively showing no growth. LGF indicated that it was investing more in original content in the near term resulting in front loaded costs. Additionally, LGF predicted it would have fewer films in 2019 which would also negatively impact revenue and EBITDA. Amazon.com also negatively impacted relative performance but the company does not pay a dividend. The underperformance within the Information Technology sector was due to both sector allocation and security selection. As it relates to sector allocation, the fund was underweighted one of the better performing sectors in the index over the last year. Specific securities that detracted from performance included IBM and Intel. IBM's stock was negatively impacted after it announced it was acquiring Red Hat in October 2018 for $34 billion (30% of IBM's market capitalization) in cash. IBM paid a relatively high multiple
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for the business (10x sales) and its balance sheet leverage will increase to around 4x from 2x and the company planned to suspend its share repurchases for 2020 and 2021 until leverage declined to more management levels. INTC appreciated during the year but less than the sector. The top equity contributors to the fund in fiscal 2019 were Microsoft, Boeing and HollyFrontier while the top detractors to the fund in fiscal 2019 were Lions Gate Entertainment, Schlumberger and Pitney Bowes.
FIXED INCOME
The fixed income portion of the Buffalo Flexible Income Fund generated a loss of 1.09% over the past 12 months which underperformed the ICE BofAML U.S. High Yield Index which generated a return of 5.94%. The energy sector was the largest detractor primarily due to security selection. Approach Resources' bonds declined significantly during the year due to weak financial results leading to tight liquidity and potential fears over tripping a debt covenant. Forum Energy was also a negative contributor due to weak operating results. The company has recently changed management and is focused on generating free cash flow and organic growth versus its past focus of Mergers and Acquisitions (M&A). The top fixed income contributors during the year were Everi Payments, Consolidated Communications and Charter Communications, while the top detractors were Approach Resources, Forum Energy and Medicines Company.
DERIVATIVES
Management also generated income for the fund during the period by writing covered call options. The limited activity in derivative contracts added about 25 basis points of incremental income to fund shareholders during the annual reporting period.
We continue to be diligent in our process of seeking income-producing securities trading at reasonable valuations by our analysis. Given that we believe the U.S. is in the later stages of the current economic cycle, we continue to find ourselves confronted with relatively low spread and yield levels with the non-investment grade fixed income asset class that we prefer over the long haul. This backdrop has resulted in a bond allocation that remains close to the low end of our range in terms of the fund's overall asset mix of stocks, bonds, and cash. Within the fixed income portion of the portfolio, we continue to focus on higher-quality, non-investment grade issuers with defensive business models and manageable credit metrics.
Following the strong market performance during the period, uncertainties that could impact capital markets for the remainder of the year include the Federal Reserve's recent signaling of a less hawkish stance on further rate increases, the recent inversion of the yield curve, increased investor confidence that the trade dispute with China will be resolved and recent weakness in the economies of many European countries. We are also seeing continued strength in the U.S. job market and signs that the U.S. housing market may be improving. As always, we appreciate your confidence in our investment capabilities over the long term.
BUFFALO GROWTH FUND
The Buffalo Growth Fund produced a return of 13.17% for the twelve-month period ending March 31, 2019, slightly trailing the benchmark Morningstar US Growth Index return of 14.02%. Although the fund had strong stock selection within the Information Technology and Material sectors and was underweight the poorest performing sector over the period, the Energy sector, stock selection within the Industrials, Consumer Discretionary, and Health Care sectors weighed on relative performance during the period.
Top contributors during the trailing twelve months included Microsoft (MSFT) and Amazon.com (AMZN). Microsoft continued to successfully transition itself from a software company into a cloud provider that can deliver a wide variety of platform-as-a-service and infrastructure-as-a-service solutions at scale. We believe the company has a long runway of double-digit revenue growth opportunities with margin expansion for several years. Amazon has established itself as the default "go-to" ecommerce website in North America, generating nearly $280 billion of gross merchandise volume (GMV) during 2018. We believe the company's dominance in ecommerce in the U.S. will continue to grow as it continues to build out its distribution and delivery infrastructure, while also growing its online advertising strategy.
The biggest detractors in the period were Evoqua Water Technologies (AQUA) and Nevro Corp. (NVRO). Evoqua Water Technologies is a global leader in helping municipalities and industrial customers protect and improve water and provide cost-effective and reliable treatment systems and services to ensure uninterrupted quality of water, enable regulatory and environmental compliance, and increase efficiency through water reuse. In the December quarter, the company missed its expected financial results by a large margin, on a
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combination of project delays and management's failure to execute. We believe that the core fundamentals providing a tailwind to the company's business will continue long-term, but the management is in a "show-me" period as they try to restore credibility with investors. Nevro Corp. sells high-frequency spinal cord stimulation devices to treat chronic pain. Its stock price was challenged during the year by patent litigation with a competitor and multiple disappointing growth forecasts caused by recurring attrition and productivity issues within its sales force. As a result, sales growth and profitability did not materialize as originally expected.
The market environment appears fertile for active growth stock investing. Interest rates, inflation, and unemployment remain relatively low by historical standards providing a healthy backdrop for consumers and businesses. We don't see a recession on the horizon nor a significant collapse in corporate earnings but valuations are at lofty levels, especially for big secular growers. Earnings growth comparisons also get more difficult as we lap the positive effects of last year's tax reform.
After possible earnings reset in the 1st quarter of 2019 we suspect the backup in interest rates, a more dovish Federal Reserve stance and a trade deal with China could extend the positive market sentiment. Later in the back half of 2019, market pundits could return their focus to the Fed's interest rate normalization process which may weigh on market multiples.
With the significant move up that the market made during the first quarter of 2019, we believe a volatile, more discerning market environment could materialize through 2019. The volatility may favor judicious growth stock investors where a steady hand and active management with an eye toward quality, improving profit cycle dynamics and relatively attractive risk-adjusted returns could hold an advantage.
While economic conditions may ebb and flow, our focus for the Growth Fund is to invest in secular trend stars: attractively-priced, financially-strong, well-managed companies across all market cap segments, which we believe are favorably positioned to harvest the lion's share of big secular growth trends.
BUFFALO HIGH YIELD FUND
The Buffalo High Yield Fund generated a 3.46% return for the fiscal year ending March 31, 2019, underperforming the ICE BofAML U.S. High Yield Index which returned 5.94% during the same period. After producing positive
returns in the first two quarters of the fiscal year, the performance for the High Yield sector tumbled in the third quarter driving cumulative returns into negative territory before reversing course with the strongest quarterly start to a calendar year on record. The market's performance was driven by: (i) continued, albeit modest, economic growth of U.S. GDP; (ii) a healthy labor market with additional jobs added and the unemployment rate near cycle lows; (iii) the Federal Reserve maintaining a gradual pace of increasing interest rates before pivoting in December to a more neutral stance which drove 1st quarter 2019 results; (iv) concerns regarding disruptions in international trade on proposals for tariffs on selected imported products; (vi) evolving geopolitical landscape and risks; and (vii) passage of legislation that cut taxes, boosted spending, and increased the budget deficit. The 10-year Treasury bond returned 5.55% during the fiscal year while the S&P 500 stock index returned 9.50%.
A strong investment inflow into high yield funds during the last quarter of the fiscal year was not enough to offset the negative cash outflows during the first three quarters resulting in roughly $12.5 billion of outflows for the year. This compares to outflows of $25 billion in the previous fiscal year according to data from JP Morgan. The high yield new issuance calendar in the fiscal year was down $122 billion to $181 billion.
During the fiscal year, the 10-year U.S. Treasury bond yield declined by 33 bps from 2.74% to 2.41% while the 2-year Treasury bond ended the period essentially unchanged. The flattening in yield curve drove investment in fixed income with the high yield segment outpacing investment grade bonds. According to data from JP Morgan, the CCC-rated segment returned 3.71%, underperforming the B-rated and BB-rated segments, which returned 6.24% and 6.67%, respectively. The fund took a more defensive position throughout the year as nearly 20% of fund assets were invested in bank loans in anticipation of a weakening economy and expectations of higher interest rates, two events which have yet to fully materialize, leading to relative underperformance.
According to data from JP Morgan, the U.S. high yield market's spread to worst for the period ended March 31, 2019 was 452bps, 42bps wider than the preceding fiscal year but still 160 basis points below its 20-year historical average of 616 basis points.
The fund's cash balance at the end of the fiscal year increased slightly from the previous year's levels by about 1.7% as new security purchases were eclipsed by the holdings in the fund that were called by the issuers or
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sold outright. The fund's composition by asset class as of March 31, 2019 was as follows:
3/31/2018 | 6/30/2018 | 9/30/2018 | 12/31/2018 | 3/31/2019 | |||||||||||||||||||
Straight Corporates | 63.7 | % | 64.9 | % | 67.2 | % | 68.2 | % | 65.4 | % | |||||||||||||
Convertibles | 11.5 | % | 8.9 | % | 8.3 | % | 7.5 | % | 10.1 | % | |||||||||||||
Bank Loans | 18.1 | % | 21.0 | % | 19.7 | % | 20.2 | % | 17.2 | % | |||||||||||||
Preferred Stocks | 0.5 | % | 0.0 | % | 0.0 | % | 0.0 | % | 0.0 | % | |||||||||||||
Convertible Preferreds | 0.5 | % | 0.5 | % | 0.5 | % | 0.6 | % | 0.6 | % | |||||||||||||
Common Stocks | 1.5 | % | 1.3 | % | 1.1 | % | 0.8 | % | 0.7 | % | |||||||||||||
Cash | 4.3 | % | 3.5 | % | 3.1 | % | 2.7 | % | 6.0 | % | |||||||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
The approximate rate and contribution of return from the various asset classes in the fund during the fiscal year is as follows:
Approximate Unweighted Return | Approximate Contribution to Return | ||||||||||
Straight Corporates | 6.1 | % | 4.24 | % | |||||||
Convertible Bonds | 4.4 | % | 0.51 | % | |||||||
Bank Loans | 0.0 | % | 0.00 | % | |||||||
Preferred Stocks | -16.0 | % | -0.05 | % | |||||||
Convertible Preferreds | 12.1 | % | 0.07 | % | |||||||
Common Stocks | -25.4 | % | -0.30 | % | |||||||
Cash | NM | 0.00 | % |
The fund's Straight Corporates, and Convertible Preferreds outperformed the index's total return, while Convertible Bonds, Bank Loans, Preferred Stock, and Common Stocks underperformed the index's total return.
Specific securities that contributed most positively to performance included Live Nation 2.500% convertible bonds, Consolidated Communication 6.500% straight corporate bonds, and Endo International 7.250% straight corporate bonds. The Live Nation convertible notes are highly correlated to the underlying stock price which was up 50% during the period driven by strong earnings and takeout speculation. Consolidated notes generated attractive interest yield while maintaining a steady price level. Endo were purchased at a discount and the company tendered for the outstanding notes at par.
Specific securities that detracted most from performance include Maxar bank debt, Akorn bank debt, and Lions Gate common stock. The Maxar term loan declined on news that one of the company's satellites stopped working, which will curtail expected earnings growth, and announced cost overruns at one of its manufacturing facilities. Akorn suffered in September when Fresenius terminated the merger agreement to acquire Akorn hinting at hidden regulatory issues. The fund liquidated
its Akorn position shortly thereafter. Lions Gate declined throughout the year as the media industry underwent some consolidation and investors' hope that the company would be a target candidate didn't materialize.
The market for high yield securities started out the fiscal year looking to repeat 2017's "steady as she goes" climb towards mid-single digit return before suffering a significant correction in December 2018 only to be followed by a very solid 1st quarter 2019. A growing economy with modest inflation along with the Fed's decision to pause rate hikes created a favorable environment for risky assets; however, market participants are becoming increasingly concerned about potential trade wars with China and physical confrontations with North Korea and Russia/Syria. The U.S. high yield default rate was down 87bps year to date and down 127bps from 2.21% in March 2018 to 0.94%, and still well below the 3.0-3.5% long-term average. The slowdown in new issuance activity reduced the supply of bonds available for purchase, which has helped support bid levels. We continue to be concerned about: the Federal Reserve taking a more aggressive tightening policy stance; inflation growth acceleration; and increasing protectionism efforts from the White House.
We believe that the U.S. is in the later stages of the economic cycle but we still find ourselves confronted with relatively low spread and yield levels. We are managing the fund cautiously yet actively. We ended the year with 122 positions compared to the previous year's level of 146 positions (excluding cash).
We are managing the fund to focus on high-quality issuers with defensive business models and manageable credit metrics. We will continue to deploy the cash in opportunities that we believe offer the most appealing risk/reward tradeoff with a bias toward shorter durations and less levered credits. Additionally, we believe bank loans offer a compelling opportunity as they offer senior positioning in the capital structure and floating interest rates. Finally, we continue to look for opportunities in convertible bonds and preferreds.
BUFFALO INTERNATIONAL FUND
For the twelve months ending March 31, 2019, the Buffalo International Fund produced a return of 0.18%, outperforming the Morningstar Global Markets ex-US Index's return of -4.31%. Like their U.S. brethren, international capital markets were extremely volatile over the past twelve months, dropping as much as 16% before rebounding sharply in the 1st quarter of 2019.
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International markets were buffeted by fears stemming from increasing global trade tension, the potential of a disorderly exit between England and the European Union (Brexit), the rollover of the global automotive cycle and continued economic sluggishness. Additionally, the steady rise in U.S. interest rates resulted in a poor investment climate for international equities during the past 12 months. Fortunately, the U.S Federal Reserve (the Fed), responding to market weakness, if not direct economic signals, provided the help investors craved late in the annual period by reversing to a more accommodative interest rate stance. That was all markets needed, as a wave of relief spread across the globe and equity markets rallied sharply during the final quarter of our annual reporting period. Additionally, prospects for a trade agreement between the U.S. and China appeared to improve, and the concerns of the likelihood of a hard Brexit mostly abated. For the first calendar quarter of 2019, the Morningstar Global Markets ex-US Index posted 10.14% return, well off the lows reached in late December.
The fund's outperformance versus the benchmark during the past 12 months was primarily driven by stock selection as our weightings in Consumer Discretionary, Energy, Technology and the Real Estate sectors detracted from performance. However, our weights in Health Care (over) and Financials (under) helped relative results.
Top contributors in the period included Sartorius Stedim, Kering and Carl Zeiss which benefited from the secular nature of their revenue growth. Unfortunately, despite positive contribution from stock selection overall, there were underperformers which included Fresenius, ASOS Plc, and Henkel. Fresensius, despite a positive resolution to litigation stemming from an acquisition that was terminated, was hit by fears of increased price pressure on their core dialysis markets. ASOS, an internet fashion retailer based in London, had poor performance as investors worried that the company's global logistics expansion would take longer and be far more expensive than originally anticipated. Meanwhile, Henkel's stock had a relatively poor showing as growth in their consumer business was not enough to offset increased concerns that a global economic slowdown could have on their more industrial focused customers.
Despite central bank best efforts, global economic growth has continued to languish. With that said, we see the global growth outlook starting to pick up toward the second half of the year as China shifts their priority to growth with renewed stimulus measures, a reduction in trade tensions, and a more favorable Brexit will help to improve sentiment and economic activity. Of course, as
these political dynamics change, so too may our view of economic prospects. We will continue to monitor the effects on the industries and companies in which we invest and will continue to pay close attention to downside risks, while taking advantage of short-term volatility to invest in those companies that we believe have solid long-term prospects.
While not immune to a global economic slowdown, we believe our approach to investing positions us to identify companies than can grow throughout the economic cycle. Our view is that stocks outside the U.S. have become even less expensive relative to their domestic counter parts, and the heightened level of U.S. trade tension that continues may actually increase the potential for internationally-based companies to increase market share. We hope to use any significant market dislocation caused by slowing economic growth or trade concerns to add to positions in companies whose long-term prospects remain unchanged, in our view.
Economic condition may ebb and flow, but our focus remains steadfast on investing in attractively priced, financially strong, well-managed companies with innovative strategies fueled by secular growth trends. We believe this discipline should lead to superior risk-adjusted returns over the long term.
BUFFALO LARGE CAP FUND
For the fiscal year ending March 31, 2019, the Buffalo Large Cap Fund returned 12.96%, underperforming the Morningstar US Large Growth Index which returned 13.51% during the same period. The fund's underperformance versus the benchmark was primarily driven by stock selection in our Industrial and Health Care holdings. This was offset, in part, by strong stock selection in Technology where our holdings outperformed relative to the index even though the sector weighting was below the index levels.
Top contributors in the fiscal year period were Amazon.com, Microsoft, and Xilinx.
Amazon was the top performing stock in the fiscal year, returning almost 23% in the period. The company has continued to report strong revenue growth in all segments. Its core retail business, web service, and smaller revenue sources like advertising have continued to show significant growth opportunity, with the ability to take share from competitors.
Microsoft returned 29% during the fiscal year and was another strong contributor to the fund's return. The company continued to report strong operating results,
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and its Azure (cloud infrastructure) segment appeared poised for further growth in excess of industry growth.
Xilinx was the third best performing holding in the fund during the fiscal year. The company consistently reported strong quarterly earnings, and its platforms appear positioned for sustained growth in markets such as data center and 5G communications.
Top detractors in the fiscal year period were Schlumberger, Alnylam, and FedEx.
Schlumberger was the biggest detractor from performance during the fiscal year, declining by almost 33%. The company has the largest oil services platform globally. It has suffered from a significant slowdown in pressure pumping in North America and general demand weakness in other key end markets as well.
Alnylam was another stock that detracted from the fund's performance in the fiscal year, declining by almost 22%. The company operates in the biotech industry focused on developing medicines from its RNAi platform. The company's shares have been volatile, reflecting investor concern about the likelihood of approval of key drugs in its pipeline, combined with a high cash burn rate that increases the risk of the investment thesis for investors. We believe the company has positive catalysts that can help to drive its shares higher in the remaining quarters of 2019.
FedEx was another weak performer, declining by 24% in the fiscal year. The company's shipping business has been impacted by slowing global growth and increased costs across its network. At the same time, the company is seeking to generate improvements in its cost structure and would also benefit from improvement in the macro environment. We believe that the longer-term outlook and demand drivers for the company remain strong.
The fund ended the fiscal year with 48 holdings (excluding cash) representing 47 companies. The cash position ended the period at about 5% of fund assets.
Relative to the index, the fund outperformed in the sectors of Technology, Consumer Discretionary, Consumer Staples, Energy, Financials, Health Care, Materials, and Telecom. These sources of outperformance were more than offset, by weakness in Health Care, Industrials, and Real Estate, as well as the fund's fairly modest cash position during the market advance. In the wake of the very strong market performance during the annual reporting period, the fund continues to focus on investing in high-quality growth stocks in all industries with relatively attractive valuations by our analysis, which
we believe should be a key driver of above-index, risk-adjusted returns over the long term.
Uncertainties that could impact large-cap growth stocks in the new fiscal year include: (i) the Federal Reserve's recent signaling of a less hawkish stance on further rate increases; (ii) recent inversion of the yield curve that could portend future economic weakness, although investors appear to be ignoring it for now; (iii) increased investor confidence that the trade dispute with China will be resolved; and (iv) recent weakness in the economies of many European countries where many of our holdings have significant exposure. These uncertainties are offset, in part, by apparent continued strength in the U.S. job market and signs that the U.S. housing market may be improving. At the same time, the benefits that many large-cap companies reached from the tax reforms of 2018 are reaching an anniversary, and valuations of these stocks are trading at elevated valuations. Amidst all of these uncertainties, we continue to be diligent in our process of finding large-cap growth companies that benefit from long-term trends while still trading at manageable valuations. We are seeking to reduce weightings in portfolio holdings that have appreciated above our target price and redeploy capital into companies with better risk-reward tradeoffs. As always, we appreciate your support and confidence in our process.
BUFFALO MID CAP FUND
The Buffalo Mid Cap Fund returned 8.40% for the 12-month period ending March 31, 2019, trailing the Morningstar US Mid Growth Index return of 13.39%. The bulk of the underperformance was driven by poor stock selection in the Consumer Discretionary and Health Care sectors.
Among the top contributors for the fiscal year were Exact Sciences, ServiceNow, and VM Ware. Exact Sciences was a new position added in the 1st quarter of 2018. The company is transforming cancer screening for colorectal cancer from the invasive colonoscopy to its liquid biopsy test, Cologuard. The Cologuard test currently owns a 4% market share with a long-term target of 40% market share. Exact Sciences continued to make progress on its growth plans by adding to its customer base and growing its quarterly test completed throughout the year. In addition, shares received a big boost from a co-marketing agreement with Pfizer, which will dramatically increase its sales presence in 2019 and should result in an acceleration of test adoption.
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Next, ServiceNow shares have benefitted from strong results that have continually exceeded expectations. The company targets the Global 2000, some of the largest enterprises worldwide, and is helping these companies with digital transformation of operations. Its core product of IT operations management has been a spring board into addressing other segments of these companies. The success of these product extensions in customer service and human resources, among other areas, has boosted growth and been a catalyst for shares.
Finally, VMware shares have benefitted from strong results and the clearing of questions surrounding Dell's majority ownership. Early in the year, there was concern that Dell would harm minority shareholders by using its majority ownership to acquire remaining shares at a discount price. Such an outcome never materialized and alternative plans to provide cash to Dell via a dividend removed an overhang for the stock. In addition, VMware shares have benefitted from strong results of a successful hybrid cloud strategy. This development answered concerns about how the company, which is known for server virtualization, would perform in an IT spending environment driven by migration to cloud architectures.
On the other hand, Summit Materials, a building materials company, was the largest detractor from performance in the fiscal year. Their business was slowed by abnormally wet weather which prevented construction activity from taking place in key markets. Additionally, a competitor's decision to go after market share with aggressive pricing prevented Summit from realizing their planned cement price increases and weighed on investor sentiment. We sold the position, realizing losses to offset taxable gains from other holdings, and used the capital to purchase shares of industry peer Martin Marietta Materials instead.
Another drag on performance came from Evoqua Water Technologies, a water treatment company that came to market through an initial public offering (IPO) in late 2017. Their first year as a public company was marred by repeated project delays, integration difficulties, guidance cuts, and a segment realignment. As a result, we lost confidence in the quality of the business and management team and exited the position.
Looking forward, the labor market continues to strengthen, boding well for consumer spending. While industrial activity has decelerated, it is still at a level that supports moderate gross domestic product (GDP) growth. Continued economic growth, subdued inflation, and a rebound in corporate earnings growth have the potential to create a healthy backdrop for equity
investing. However, the recent bounce back in equity valuations and ongoing trade disputes somewhat temper our bullish sentiment. Regardless, we continue to believe that investing in businesses with competitive advantages, strong growth outlooks, and attractive valuations will generate solid risk adjusted returns over longer time horizons.
BUFFALO SMALL CAP FUND
For the fiscal year ending March 31, 2019, the Buffalo Small Cap Fund generated a return of 12.19%, outperforming the Morningstar US Small Growth Index which returned 8.94% during the same period. The fund's outperformance relative to the benchmark was primarily driven by stock selection in our Information Technology and Health Care sectors. This outperformance was partially offset by relative weakness in some holdings in the Materials and Consumer Discretionary sectors. Also impacting relative performance for the year was a negative allocation effect.
Top contributors in the fiscal year were Twilio, Trade Desk, and Paylocity Holdings.
Twilio, a leader in Communications Platform-as-a-Service (CPaaS), was the top contributing stock in the portfolio during the fiscal year, increasing 198% in the period. The company's application programming interface (API's) allow software developers to embed communications capabilities like SMS, voice, video, and email directly in their applications. Twilio continued to benefit from the secular shift of software to cloud-based solutions. Furthermore, the company should benefit from two new product cycles: the general availability of a new contact center product called Flex and an Internet of Things product called Twilio Wireless.
The Trade Desk, a provider of a platform for buyers of advertising, was also a key contributor to the fund's outperformance during the fiscal year, returning approximately 280% for the period. Throughout the year, the company reported very strong growth in its advertising channels, especially in Connected TV and audio, along with significant margin expansion. The company continued to benefit from a share shift in the digital ad category toward real-time programmatic ad buying.
Paylocity Holdings was another top contributing stock in the fund during the fiscal year, increasing 74% for the period. The company has proven to be an extremely consistent provider of outsourced payroll and human capital software to small and medium sized businesses,
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growing revenues between 23% and 28% for the past nine quarters. The stock also got a boost recently as a mid-market competitor, Ultimate Software, received an offer to be taken private.
Top detractors in the fiscal year were Dycom Industries, Nevro, and GreenSky.
Dycom Industries, a leading provider of specialty contracting services to the telecommunications industry and other construction and utility providers, was the largest detractor from performance during the fiscal year. Although emerging wireless technologies (5G) will be a significant tailwind for the company, management has struggled to meet expectations which caused the selloff in the stock.
Nevro, a global medical device company focused on neuromodulation for the treatment of debilitating chronic pain, was another detractor from the fund's performance in the fiscal year. The company suffered from poor sales hiring trends impacting future growth and from intellectual property concerns with a key competitor.
GreenSky, which is a lending platform to match lenders with consumers making purchases in the home improvement and elective health care areas, was a weak performing investment during the fiscal year. The company sold off as its reported loan originations and take rate fell far short of expectation set at the time of the company's May 2018 initial public offering (IPO).
The fund finished the fiscal year with 72 holdings and a cash position of approximately 4% of fund assets.
Market fundamentals remain mostly positive. U.S. investors appear to have resigned themselves to slower economic growth expectations; however, we feel that the economy could accelerate if the Trump administration concludes the trade war with China which seems likely to happen this summer. In Europe, certain regions are showing signs of slowing, however most U.S. companies are not yet claiming that the continent has taken a leg down in economic activity. This is clearly an area to watch. In the U.S., the Fed has moved to a more neutral position regarding monetary policy and is doing a much better job communicating its intentions relative to last year. Growth investing remains in favor compared to value investing as a slower economic activity means investors should continue to place a premium on faster growing companies that require less of an economic tailwind to excel. Furthermore, the market has historically performed well in the third year of the presidential cycle. As always, we remain steadfast to our process of
identifying investment opportunities in smaller, faster growing companies with the potential to benefit from long term trends that are trading at attractive valuations, by our analysis. We appreciate your continued support and confidence in our investment capabilities over the long term.
Sincerely,
John C. Kornitzer
President, KCM
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Bond ratings are grades given to bonds that indicate their credit quality as determined by a private independent rating service such as Standard & Poor's. The firm evaluates a bond issuer's financial strength, or its ability to pay a bond's principal and interest in a timely fashion. Ratings are expressed as letters ranging from 'AAA', which is the highest grade, to 'D', which is the lowest grade. In limited situations when the rating agency has not issued a formal rating, the Advisor will classify the security as nonrated.
Earnings growth is not representative of a fund's future performance.
A basis point is one hundredth of a percentage point (0.01%)
Yield is the income return on an investment.
Yield to worst is the lowest potential yield that can be received on a bond without the issuer actually defaulting.
A Spread is the difference between the bid and the ask price of a security.
Non-investment grade is a bond rating that signifies a low credit quality with a high risk of defaulting.
Duration is a commonly used measure of the potential volatility of the price of a debt security, or the aggregate market value of a portfolio of debt securities, prior to maturity. Securities with a longer duration generally have more volatile prices than securities of comparable quality with a shorter duration.
EBITDA = Earnings before Interest, Tax, Depreciation and Amortization.
Active share is a measure of the percentage of stock holdings in a manager's portfolio that differs from the benchmark index.
Free Cash Flow is revenue less operating expenses including interest expense and maintenance capital spending. It is the discretionary cash that a company has after all expenses and is available for purposes such as dividend payments, investing back into the business, or share repurchases.
Par is the face value of a stock or other security, as distinct from its market value
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INVESTMENT RESULTS (UNAUDITED)
Total Returns as of March 31, 2019
Average Annual | |||||||||||||||||||||||||||
Gross Expense Ratio***** | Three Months | One Year | Five Years | Ten Years | Since Inception | ||||||||||||||||||||||
Buffalo Discovery Fund (inception date 4/16/01) | 1.02 | % | 19.52 | % | 10.34 | % | 10.93 | % | 17.73 | % | 9.36 | % | |||||||||||||||
Morningstar US Mid Growth Index | N/A | 21.03 | % | 13.39 | % | 10.91 | % | 17.23 | % | 8.02 | % | ||||||||||||||||
Russell Mid Cap Growth Index | N/A | 19.62 | % | 11.51 | % | 10.89 | % | 17.60 | % | 8.92 | % | ||||||||||||||||
Lipper Multi-Cap Growth Funds Index | N/A | 16.88 | % | 9.82 | % | 11.06 | % | 16.50 | % | 6.95 | % | ||||||||||||||||
Buffalo Dividend Focus Fund (inception date 12/03/12) | 0.95 | % | 10.90 | % | 7.48 | % | 10.21 | % | N/A | 12.36 | % | ||||||||||||||||
Morningstar US Large-Mid Cap Index | N/A | 13.99 | % | 9.43 | % | 10.63 | % | N/A | 13.96 | % | |||||||||||||||||
S&P 500 Index | N/A | 13.65 | % | 9.50 | % | 10.91 | % | N/A | 14.03 | % | |||||||||||||||||
Lipper Equity Income Funds Index | N/A | 11.50 | % | 6.94 | % | 7.85 | % | N/A | 11.11 | % | |||||||||||||||||
Buffalo Emerging Opportunities Fund (inception date 5/21/04) | 1.50 | % | 16.88 | % | 9.39 | % | 6.59 | % | 19.73 | % | 8.62 | % | |||||||||||||||
Morningstar US Small Growth Index | N/A | 19.43 | % | 8.94 | % | 9.58 | % | 16.99 | % | 9.52 | % | ||||||||||||||||
Russell 2000 Growth Index | N/A | 17.14 | % | 3.85 | % | 8.41 | % | 16.52 | % | 9.33 | % | ||||||||||||||||
Lipper Small-Cap Growth Funds Index | N/A | 18.93 | % | 9.71 | % | 9.33 | % | 16.27 | % | 8.96 | % | ||||||||||||||||
Buffalo Flexible Income Fund (inception date 8/12/94) | 1.01 | % | 11.84 | % | 7.73 | % | 5.38 | % | 10.82 | % | 7.22 | % | |||||||||||||||
60% Morningstar US Large Cap Index/40% ICE BofAML U.S. High Yield Index | N/A | 10.85 | % | 8.52 | % | 8.61 | % | 13.96 | % | 8.85 | % | ||||||||||||||||
Bank of America Merrill Combined Index (60% S&P 500® Index/40% ICE BofAML U.S. High Yield Index) (reflects no deduction for fees, expenses or taxes) | N/A | 11.15 | % | 8.08 | % | 8.43 | % | 14.05 | % | 8.84 | % | ||||||||||||||||
Lipper Mixed-Asset Target Allocation Moderate Funds Index | N/A | 8.41 | % | 3.93 | % | 5.12 | % | 9.44 | % | 6.84 | % | ||||||||||||||||
Buffalo Growth Fund (inception date 5/19/95) | 0.91 | % | 15.30 | % | 13.17 | % | 10.40 | % | 16.15 | % | 10.16 | % | |||||||||||||||
Morningstar US Growth Index* | N/A | 17.67 | % | 14.02 | % | 13.45 | % | 17.55 | % | N/A | |||||||||||||||||
Russell 1000 Growth Index | N/A | 16.10 | % | 12.75 | % | 13.50 | % | 17.52 | % | 9.33 | % | ||||||||||||||||
Lipper Large Cap Growth Funds Index | N/A | 16.21 | % | 12.31 | % | 12.33 | % | 16.26 | % | 8.32 | % | ||||||||||||||||
Buffalo High Yield Fund (inception date 5/19/95) | 1.03 | % | 5.28 | % | 3.46 | % | 3.60 | % | 8.68 | % | 6.93 | % | |||||||||||||||
ICE BofAML U.S. High Yield Index | N/A | 7.40 | % | 5.94 | % | 4.70 | % | 11.24 | % | 7.18 | % | ||||||||||||||||
Lipper High Yield Bond Funds Index | N/A | 7.02 | % | 4.72 | % | 3.87 | % | 10.19 | % | 5.90 | % | ||||||||||||||||
Buffalo International Fund (inception date 9/28/07)** | 1.05 | % | 11.23 | % | 0.18 | % | 5.72 | % | 11.57 | % | 4.18 | % | |||||||||||||||
Morningstar Global Markets ex-US Index | N/A | 10.14 | % | -4.31 | % | 3.17 | % | 9.59 | % | 1.72 | % | ||||||||||||||||
Russell Global (ex USA) Index Net*** | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Lipper International Funds Index | N/A | 10.62 | % | -5.20 | % | 2.67 | % | 9.32 | % | 1.54 | % | ||||||||||||||||
Buffalo Large Cap Fund (inception date 5/19/95) | 0.94 | % | 15.02 | % | 12.96 | % | 12.87 | % | 16.54 | % | 9.69 | % | |||||||||||||||
Morningstar US Large Growth Index**** | N/A | 15.76 | % | 13.51 | % | 14.42 | % | 17.60 | % | N/A | |||||||||||||||||
Russell 1000 Growth Index | N/A | 16.10 | % | 12.75 | % | 13.50 | % | 17.52 | % | 9.33 | % | ||||||||||||||||
Lipper Large Cap Growth Funds Index | N/A | 16.21 | % | 12.31 | % | 12.33 | % | 16.26 | % | 8.32 | % | ||||||||||||||||
Buffalo Mid Cap Fund (inception date 12/17/01) | 1.02 | % | 20.20 | % | 8.40 | % | 6.60 | % | 13.58 | % | 8.03 | % | |||||||||||||||
Morningstar US Mid Growth Index | N/A | 21.03 | % | 13.39 | % | 10.91 | % | 17.23 | % | 8.69 | % | ||||||||||||||||
Russell Mid Cap Growth Index | N/A | 19.62 | % | 11.51 | % | 10.89 | % | 17.60 | % | 9.18 | % | ||||||||||||||||
Lipper Mid-Cap Growth Funds Index | N/A | 18.75 | % | 10.96 | % | 10.07 | % | 16.23 | % | 8.36 | % |
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Average Annual | |||||||||||||||||||||||||||
Gross Expense Ratio***** | Three Months | One Year | Five Years | Ten Years | Since Inception | ||||||||||||||||||||||
Buffalo Small Cap Fund (inception date 4/14/98) | 1.01 | % | 21.83 | % | 12.19 | % | 7.47 | % | 13.95 | % | 11.58 | % | |||||||||||||||
Morningstar US Small Growth Index | N/A | 19.43 | % | 8.94 | % | 9.58 | % | 16.99 | % | 6.18 | % | ||||||||||||||||
Russell 2000 Growth Index | N/A | 17.14 | % | 3.85 | % | 8.41 | % | 16.52 | % | 6.11 | % | ||||||||||||||||
Lipper Small-Cap Growth Funds Index | N/A | 18.93 | % | 9.71 | % | 9.33 | % | 16.27 | % | 7.07 | % |
* The inception date of the Morningstar US Growth Index is July 3, 2002. The annualized return since inception as of March 31, 2019 is 10.06%
** Performance results do not include adjustments made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and may differ from amounts reported in the Financial Highlights.
*** The Russell Global (ex USA) Index was discontinued as of 12/31/2018.
**** The inception date of the Morningstar US Large Growth Index is July 3, 2002. The annualized return since inception as of March 31, 2019 is 9.50%
***** As reported in the Funds' Prospectus dated July 27, 2018. Current period gross expense ratio for each Fund can be found in the Financial Highlights, beginning on page 100.
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 Funds may be lower or higher than the performance quoted. Performance data current as of the most recent month-end may be obtained by calling 1-800-49-BUFFALO or by visiting the website at www.buffalofunds.com.
The Morningstar US Mid Growth Index has replaced the Russell Midcap® Growth Index as the Buffalo Discovery Fund's primary benchmark. The Morningstar US Large-Mid Cap Index has replaced the S&P 500® Index as the Buffalo Dividend Focus Fund's primary benchmark. The Morningstar US Small Growth Index has replaced the Russell 2000® Growth Index as the Buffalo Emerging Opportunities Fund's primary benchmark. The 60% Morningstar US Large Cap Index/40% ICE BofAML US High Yield Index has replaced the Bank of America Merrill Combined Index (60% S&P 500® Index/40% ICE BofAML US High Yield Index) as the Buffalo Flexible Income Fund's primary benchmark. The Morningstar US Growth Index has replaced the Russell 1000® Growth Index as the Buffalo Growth Fund's primary benchmark. The Morningstar Global Markets ex-US Index has replaced the Russell Global (ex-US)® Index as the Buffalo International Fund's primary benchmark. The Morningstar US Large Growth Index has replaced the Russell 1000® Growth Index as the Buffalo Large Cap Fund's primary benchmark. The Morningstar US Mid Growth Index has replaced the Russell Midcap® Growth Index as the Buffalo Mid Cap Fund's primary benchmark. The Morningstar US Small Growth Index has replaced the Russell 2000® Growth Index as the Buffalo Small Cap Fund's primary benchmark. The Advisor believes that each of the new indices is more appropriate given each Fund's holdings.
The Funds' returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of shares. The benchmark returns shown, excluding the Lipper Indices, reflect the reinvestment of dividends and capital gains but do not reflect the deduction of any investment management fees, other expenses or taxes. The performance of the Lipper Indices is presented net of the Funds' fees and expenses; however, applicable sales charges are not taken into consideration. One cannot invest directly in an index.
The Morningstar US Mid Growth Index measures the performance of US mid-cap stocks that are expected to grow at a faster pace than the rest of the market as measured by forward earnings, historical earnings, book value, cash flow and sales. The Lipper Multi-Cap Growth Funds Index is an unmanaged index that reflects the net asset value weighted return of 30 of the largest multi-cap growth funds tracked by Lipper. Its returns include net reinvested dividends. The Morningstar US Large-Mid Cap Index measures the performance of the US equity market targeting the top 90% of stocks by market capitalization. Lipper Equity Income Funds Index tracks funds that seek relatively high current income and growth of income by investing at least 65% of their portfolio in dividend-paying equity securities. These funds' gross or net yield must be at least 125% of the average gross or net yield of the U.S. diversified equity fund universe. The Morningstar US Small Growth Index measures the performance of US small-cap stocks that are expected to grow at a faster pace than the rest of the market as measured by forward earnings, historical earnings, book value, cash flows and sales. The Lipper Small-Cap Growth Funds Index is an unmanaged, equally weighted performance index of the 30 largest qualifying mutual funds (based on net assets) in the Lipper Small-Cap classification. The Morningstar US Large Cap Index measures the performance of the US equity market targeting the
18
(Unaudited)
top 70% of stocks by market capitalization. The ICE BofAML U.S. High Yield Index tracks the performance of below investment grade U.S. dollar-denominated corporate bonds publicly issued in the U.S. domestic market. The Lipper Mixed-Asset Target Allocation Moderate Funds Index is an average of funds that, by portfolio practice, maintain a mix of between 40%-60% equity securities, with the remainder invested in bonds, cash, and cash equivalents. The total return of the Lipper Average does not include the effect of sales charges. The Morningstar US Growth Index measures the performance of US stocks that are expected to grow at a faster pace than the rest of the market as measured by forward earnings, historical earnings, book value, cash flow and sales. The Lipper Large Cap Growth Funds Index is an unmanaged, equally weighted performance index of the 30 largest qualifying mutual funds (based on net assets) in the Lipper Large-Cap classification. The Lipper High Yield Bond Funds Index is a widely recognized index of the 30 largest mutual funds that invest primarily in high yield bonds. The Morningstar Global Market ex-US Index is designed to provide exposure to the top 97% market capitalization in each of two market segments, developed markets, excluding the United States, and emerging markets. The Lipper International Funds Index is an unmanaged, equally weighted performance index of the 30 largest qualifying mutual funds (based on net assets) in the Lipper International classification. The Morningstar US Large Growth Index measures the performance of US large-cap stocks that are expected to grow at a faster pace than the rest of the market as measured by forward earnings, historical earnings, book value, cash flow and sales. The Lipper Mid-Cap Growth Funds Index is an unmanaged, equally weighted performance index of the 30 largest qualifying mutual funds (based on net assets) in the Lipper Mid-Cap classification. The Russell 2000 Growth Index measures the performance of those Russell 2000 Index companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Growth Index measures the performance of those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values. The S&P 500 Index is a capitalization weighted index of 500 large capitalization stocks which is designed to measure broad domestic securities markets. The Russell Mid Cap Growth Index measures the performance of those Russell Midcap companies with higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Growth Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. The Russell 2000 is by far the most common benchmark for mutual funds that identify themselves as "small-cap", while the S&P 500 index is used primarily for large capitalization stocks. The Russell Global (ex USA) Index Net measures the performance of the global equity market based on all investable equity securities, excluding companies assigned to the United States.
Please refer to the prospectus for special risks associated with investing in the Buffalo Funds, including, but not limited to, risks involved with investments in science and technology companies, foreign securities, debt securities, lower- or unrated securities and smaller companies. Fund holdings and sector allocations are subject to change at any time and should not be considered a recommendation to buy or sell any security. Please refer to the Schedule of Investments for a complete list of Fund holdings.
19
INVESTMENT RESULTS (UNAUDITED) Continued
Growth of $10,000 Investment
BUFFALO DISCOVERY FUND
BUFFALO DIVIDEND FOCUS FUND
BUFFALO EMERGING
OPPORTUNITIES FUND
BUFFALO GROWTH FUND
BUFFALO HIGH YIELD FUND
BUFFALO INTERNATIONAL FUND
20
Growth of $10,000 Investment
(Unaudited)
BUFFALO FLEXIBLE INCOME FUND
BUFFALO MID CAP FUND
BUFFALO LARGE CAP FUND
BUFFALO SMALL CAP FUND
21
EXPENSE EXAMPLE (UNAUDITED)
As a shareholder of the Funds, you incur two types of costs: (1) transaction costs (including redemption fees) and (2) ongoing costs, including management fees and other Fund specific expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (October 1, 2018 – March 31, 2019).
ACTUAL EXPENSES
The first line of the tables below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During the Period" to estimate the expenses you paid on your account during the period. Although the Funds charge no sales load or transaction fees, you will be assessed fees for outgoing wire transfers, returned checks and stop payment orders at prevailing rates charged by U.S. Bancorp Fund Services, LLC (doing business as U.S. Bank Global Fund Services), the Funds' transfer agent. If you request that a redemption be made by wire transfer, currently a $15.00 fee is charged by the Funds' transfer agent. To the extent a Fund invests in shares of other investment companies as part of its investment strategy, you will indirectly bear your proportionate share of any fees and expenses charged by
the underlying funds in which the Fund invests in addition to the expenses of the Fund. Actual expenses of the underlying funds are expected to vary among the various underlying funds. These expenses are not included in the examples below. The examples below include management fees, registration fees and other expenses. However, the examples below do not include portfolio trading commissions and related expenses and other extraordinary expenses as determined under U.S. generally accepted accounting principles.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of each table below provides information about hypothetical account values and hypothetical expenses based on the Funds' actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Funds' actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in our Funds and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the tables are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of the tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different Funds. In addition, if these transactional costs were included, your costs would have been higher.
BUFFALO DISCOVERY FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,006.90 | $ | 5.05 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.90 | $ | 5.09 |
* Expenses are equal to the Fund's annualized expense ratio of 1.01%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO DIVIDEND FOCUS FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 967.40 | $ | 4.66 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.19 | $ | 4.78 |
* Expenses are equal to the Fund's annualized expense ratio of 0.95%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
22
(Unaudited)
BUFFALO EMERGING OPPORTUNITIES FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 946.80 | $ | 7.18 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,017.55 | $ | 7.44 |
* Expenses are equal to the Fund's annualized expense ratio of 1.48%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO FLEXIBLE INCOME FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 987.00 | $ | 5.00 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.90 | $ | 5.09 |
* Expenses are equal to the Fund's annualized expense ratio of 1.01%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO GROWTH FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 983.30 | $ | 4.50 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.39 | $ | 4.58 |
* Expenses are equal to the Fund's annualized expense ratio of 0.91%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO HIGH YIELD FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,011.10 | $ | 5.11 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.85 | $ | 5.14 |
* Expenses are equal to the Fund's annualized expense ratio of 1.02%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO INTERNATIONAL FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 964.70 | $ | 5.14 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.70 | $ | 5.29 |
* Expenses are equal to the Fund's annualized expense ratio of 1.05%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO LARGE CAP FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 994.20 | $ | 4.67 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,020.24 | $ | 4.73 |
* Expenses are equal to the Fund's annualized expense ratio of 0.94%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO MID CAP FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 1,001.70 | $ | 5.09 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.85 | $ | 5.14 |
* Expenses are equal to the Fund's annualized expense ratio of 1.02%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
BUFFALO SMALL CAP FUND | Beginning Account Value October 1, 2018 | Ending Account Value March 31, 2019 | Expenses Paid During Period October 1, 2018 - March 31, 2019* | ||||||||||||
Actual | $ | 1,000.00 | $ | 918.60 | $ | 4.83 | |||||||||
Hypothetical (5% return before expenses) | $ | 1,000.00 | $ | 1,019.90 | $ | 5.09 |
* Expenses are equal to the Fund's annualized expense ratio of 1.01%, multiplied by the average account value over the period, multiplied by 182/365 to reflect the one-half year period.
23
ALLOCATION OF PORTFOLIO HOLDINGS
(UNAUDITED)
Percentages represent market value as a percentage of investments as of March 31, 2019
BUFFALO DISCOVERY
FUND
BUFFALO DIVIDEND
FOCUS FUND
BUFFALO EMERGING
OPPORTUNITIES FUND
BUFFALO FLEXIBLE
INCOME FUND
BUFFALO GROWTH
FUND
BUFFALO HIGH YIELD
FUND
24
Percentages represent market value as a percentage of investments as of March 31, 2019
(Unaudited)
BUFFALO
INTERNATIONAL FUND
BUFFALO LARGE CAP
FUND
BUFFALO MID CAP
FUND
BUFFALO SMALL CAP
FUND
25
BUFFALO DISCOVERY FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 94.63 | % | |||||||||
Communication Services | 3.70 | % | |||||||||
Entertainment | 1.39 | % | |||||||||
204,941 | Live Nation Entertainment, Inc.(a) | 13,021,951 | |||||||||
119,542 | Take-Two Interactive Software, Inc.(a) | 11,281,179 | |||||||||
24,303,130 | |||||||||||
Interactive Media & Services | 2.31 | % | |||||||||
15,303 | Alphabet, Inc. — Class A(a) | 18,009,948 | |||||||||
105,758 | IAC/InterActiveCorp(a) | 22,220,813 | |||||||||
40,230,761 | |||||||||||
Total Communication Services (Cost $51,007,430) | 64,533,891 | ||||||||||
Consumer Discretionary | 12.10 | % | |||||||||
Auto Components | 1.14 | % | |||||||||
249,495 | Aptiv PLC(b) | 19,832,358 | |||||||||
Distributors | 1.53 | % | |||||||||
938,258 | LKQ Corp.(a) | 26,627,762 | |||||||||
Diversified Consumer Services | 1.96 | % | |||||||||
379,626 | frontdoor, inc.(a) | 13,066,727 | |||||||||
451,697 | ServiceMaster Global Holdings, Inc.(a) | 21,094,250 | |||||||||
34,160,977 | |||||||||||
Hotels, Restaurants & Leisure | 0.75 | % | |||||||||
60,200 | Vail Resorts, Inc. | 13,081,460 | |||||||||
Household Durables | 1.58 | % | |||||||||
320,455 | Garmin Ltd.(b) | 27,671,289 | |||||||||
Internet & Direct Marketing Retail | 3.33 | % | |||||||||
14,847 | Amazon.com, Inc.(a) | 26,438,795 | |||||||||
126,490 | Etsy, Inc.(a) | 8,502,658 | |||||||||
194,485 | Expedia Group, Inc. | 23,143,715 | |||||||||
58,085,168 | |||||||||||
Textiles, Apparel & Luxury Goods | 1.81 | % | |||||||||
65,810 | Columbia Sportswear Co. | 6,856,086 | |||||||||
283,765 | VF Corp. | 24,662,016 | |||||||||
31,518,102 | |||||||||||
Total Consumer Discretionary (Cost $169,195,425) | 210,977,116 |
The accompanying notes are an integral part of these financial statements.
26
BUFFALO DISCOVERY FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Financials | 5.73 | % | |||||||||
Capital Markets | 5.73 | % | |||||||||
275,285 | Intercontinental Exchange, Inc. | 20,960,200 | |||||||||
161,310 | MSCI, Inc. | 32,074,880 | |||||||||
277,849 | Nasdaq, Inc. | 24,309,009 | |||||||||
107,685 | S&P Global, Inc. | 22,673,077 | |||||||||
Total Financials (Cost $47,953,590) | 100,017,166 | ||||||||||
Health Care | 17.47 | % | |||||||||
Biotechnology | 2.17 | % | |||||||||
163,180 | Exact Sciences Corp.(a) | 14,134,651 | |||||||||
171,973 | Incyte Corp.(a) | 14,791,398 | |||||||||
121,458 | Seattle Genetics, Inc.(a) | 8,895,584 | |||||||||
37,821,633 | |||||||||||
Health Care Equipment & Supplies | 7.27 | % | |||||||||
46,520 | ABIOMED, Inc.(a) | 13,285,647 | |||||||||
103,896 | Align Technology, Inc.(a) | 29,540,750 | |||||||||
124,516 | The Cooper Companies, Inc. | 36,877,904 | |||||||||
134,990 | IDEXX Laboratories, Inc.(a) | 30,183,764 | |||||||||
132,486 | STERIS PLC(b) (c) | 16,962,182 | |||||||||
126,850,247 | |||||||||||
Health Care Providers & Services | 1.19 | % | |||||||||
77,315 | WellCare Health Plans, Inc.(a) | 20,855,721 | |||||||||
Life Sciences Tools & Services | 6.84 | % | |||||||||
273,944 | Agilent Technologies, Inc. | 22,019,619 | |||||||||
146,203 | Bio-Techne Corp. | 29,028,606 | |||||||||
84,880 | Illumina, Inc.(a) | 26,371,367 | |||||||||
85,355 | IQVIA Holdings, Inc.(a) | 12,278,317 | |||||||||
40,864 | Mettler-Toledo International, Inc.(a) | 29,544,672 | |||||||||
119,242,581 | |||||||||||
Total Health Care (Cost $248,485,578) | 304,770,182 | ||||||||||
Industrials | 18.62 | % | |||||||||
Aerospace & Defense | 2.74 | % | |||||||||
104,729 | Harris Corp. | 16,726,269 | |||||||||
157,305 | HEICO Corp. — Class A | 13,223,058 | |||||||||
258,994 | Hexcel Corp. | 17,912,025 | |||||||||
47,861,352 |
The accompanying notes are an integral part of these financial statements.
27
BUFFALO DISCOVERY FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Building Products | 1.22 | % | |||||||||
398,257 | AO Smith Corp. | 21,235,063 | |||||||||
Commercial Services & Supplies | 3.08 | % | |||||||||
398,811 | Copart, Inc.(a) | 24,163,959 | |||||||||
368,055 | Republic Services, Inc. | 29,584,261 | |||||||||
53,748,220 | |||||||||||
Electrical Equipment | 1.18 | % | |||||||||
247,560 | AMETEK, Inc. | 20,540,053 | |||||||||
Industrial Conglomerates | 1.82 | % | |||||||||
92,926 | Roper Industries, Inc. | 31,777,904 | |||||||||
Machinery | 2.61 | % | |||||||||
382,699 | Evoqua Water Technologies Corp.(a) | 4,814,354 | |||||||||
85,568 | IDEX Corp. | 12,984,088 | |||||||||
209,724 | WABCO Holdings, Inc.(a) | 27,647,915 | |||||||||
45,446,357 | |||||||||||
Professional Services | 5.23 | % | |||||||||
47,906 | CoStar Group, Inc.(a) | 22,344,317 | |||||||||
120,695 | Equifax, Inc. | 14,302,357 | |||||||||
469,961 | IHS Markit Ltd.(a) (b) | 25,556,479 | |||||||||
217,723 | Verisk Analytics, Inc. | 28,957,159 | |||||||||
91,160,312 | |||||||||||
Road & Rail | 0.74 | % | |||||||||
111,805 | Kansas City Southern | 12,967,144 | |||||||||
Total Industrials (Cost $236,133,562) | 324,736,405 | ||||||||||
Information Technology | 31.89 | % | |||||||||
Communications Equipment | 2.02 | % | |||||||||
89,712 | Arista Networks Inc.(a) | 28,210,835 | |||||||||
187,797 | Ciena Corp.(a) | 7,012,340 | |||||||||
35,223,175 | |||||||||||
Electronic Equipment, Instruments & Components | 2.01 | % | |||||||||
323,374 | Trimble, Inc.(a) | 13,064,310 | |||||||||
104,589 | Zebra Technologies Corp. — Class A(a) | 21,914,533 | |||||||||
34,978,843 |
The accompanying notes are an integral part of these financial statements.
28
BUFFALO DISCOVERY FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
IT Services | 10.60 | % | |||||||||
205,280 | Akamai Technologies, Inc.(a) | 14,720,629 | |||||||||
146,225 | Broadridge Financial Solutions, Inc. | 15,162,070 | |||||||||
145,906 | EPAM Systems, Inc.(a) | 24,677,082 | |||||||||
231,135 | Fiserv, Inc.(a) | 20,404,598 | |||||||||
99,929 | FleetCor Technologies, Inc.(a) | 24,641,492 | |||||||||
161,540 | GoDaddy, Inc. — Class A(a) | 12,146,193 | |||||||||
57,090 | Shopify, Inc. — Class A(a) (b) | 11,795,936 | |||||||||
129,435 | Square, Inc. — Class A(a) | 9,697,270 | |||||||||
186,960 | Total System Services, Inc. | 17,763,070 | |||||||||
72,878 | WEX Inc.(a) | 13,991,847 | |||||||||
174,983 | Worldpay, Inc.(a) | 19,860,570 | |||||||||
184,860,757 | |||||||||||
Semiconductors & Semiconductor Equipment | 0.38 | % | |||||||||
131,009 | Semtech Corp.(a) | 6,669,668 | |||||||||
Software | 16.88 | % | |||||||||
458,675 | 8x8, Inc.(a) | 9,265,235 | |||||||||
161,405 | Aspen Technology, Inc.(a) | 16,828,085 | |||||||||
91,460 | Autodesk, Inc.(a) | 14,251,297 | |||||||||
2,641,948 | BlackBerry Ltd.(a) (b) | 26,657,255 | |||||||||
162,017 | Guidewire Software, Inc.(a) | 15,741,572 | |||||||||
104,260 | Intuit, Inc. | 27,254,607 | |||||||||
114,414 | Palo Alto Networks, Inc.(a) | 27,788,872 | |||||||||
213,873 | Proofpoint, Inc.(a) | 25,970,598 | |||||||||
170,273 | PTC, Inc.(a) | 15,695,765 | |||||||||
270,100 | RealPage, Inc.(a) | 16,392,369 | |||||||||
132,851 | Red Hat, Inc.(a) | 24,271,878 | |||||||||
105,337 | salesforce.com, Inc.(a) | 16,682,221 | |||||||||
77,277 | ServiceNow, Inc.(a) | 19,048,008 | |||||||||
197,935 | Synopsys, Inc.(a) | 22,792,215 | |||||||||
77,400 | Tyler Technologies, Inc.(a) | 15,820,560 | |||||||||
294,460,537 | |||||||||||
Total Information Technology (Cost $423,522,951) | 556,192,980 |
The accompanying notes are an integral part of these financial statements.
29
BUFFALO DISCOVERY FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Materials | 5.12 | % | |||||||||
Chemicals | 5.12 | % | |||||||||
143,595 | Air Products & Chemicals, Inc. | 27,420,901 | |||||||||
306,180 | FMC Corp. | 23,520,747 | |||||||||
147,839 | Ingevity Corp.(a) | 15,613,277 | |||||||||
176,477 | International Flavors & Fragrances Inc. | 22,728,473 | |||||||||
Total Materials (Cost $58,954,708) | 89,283,398 | ||||||||||
Total Common Stocks (Cost $1,235,253,244) | 1,650,511,138 | ||||||||||
Real Estate Investment Trusts (REITs) | 2.77 | % | |||||||||
Real Estate | 2.77 | % | |||||||||
161,704 | Crown Castle International Corp. | 20,698,112 | |||||||||
60,929 | Equinix Inc. | 27,610,585 | |||||||||
Total Real Estate (Cost $31,284,108) | 48,308,697 | ||||||||||
Total REITs (Cost $31,284,108) | 48,308,697 | ||||||||||
Short Term Investment | 4.34 | % | |||||||||
Investment Company | 4.34 | % | |||||||||
75,716,247 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(d) | 75,716,247 | |||||||||
Total Investment Company | 75,716,247 | ||||||||||
Total Short Term Investment (Cost $75,716,247) | 75,716,247 | ||||||||||
Total Investments (Cost $1,342,253,599) | 101.74 1,774,536,082 | % | |||||||||
Liabilities in Excess of Other Assets | (1.74 (30,274,480) | )% | |||||||||
Total Net Assets | 100.00 1,744,261,602 | % |
The accompanying notes are an integral part of these financial statements.
30
BUFFALO DISCOVERY FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
PLC Public Limited Company
(a) Non Income Producing.
(b) Foreign Issued Security. The total value of these securities amounted to $128,475,499 (7.37% of net assets) at March 31, 2019.
(c) A portion of this security is deemed illiquid. The total value of the illiquid portion of this security amounted to $14,608,991 (0.84% of net assets) at March 31, 2019.
(d) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
31
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 88.55 | % | |||||||||
Communication Services | 11.67 | % | |||||||||
Diversified Telecommunication Services | 2.05 | % | |||||||||
18,130 | AT&T, Inc. | 568,557 | |||||||||
10,625 | Verizon Communications, Inc. | 628,256 | |||||||||
1,196,813 | |||||||||||
Entertainment | 4.78 | % | |||||||||
10,750 | Activision Blizzard, Inc. | 489,448 | |||||||||
64,850 | AMC Entertainment Holdings, Inc. — Class A | 963,022 | |||||||||
12,005 | The Walt Disney Co. | 1,332,915 | |||||||||
2,785,385 | |||||||||||
Interactive Media & Services | 3.33 | % | |||||||||
630 | Alphabet, Inc. — Class A(a) | 741,441 | |||||||||
650 | Alphabet, Inc. — Class C(a) | 762,651 | |||||||||
2,600 | Facebook, Inc. — Class A(a) | 433,394 | |||||||||
1,937,486 | |||||||||||
Media | 1.51 | % | |||||||||
15,200 | Comcast Corp. — Class A | 607,696 | |||||||||
7,466 | Fox Corp. — Class A(a) | 274,077 | |||||||||
881,773 | |||||||||||
Total Communication Services (Cost $5,256,625) | 6,801,457 | ||||||||||
Consumer Discretionary | 5.94 | % | |||||||||
Automobiles | 0.52 | % | |||||||||
8,200 | General Motors Co. | 304,220 | |||||||||
Hotels, Restaurants & Leisure | 2.35 | % | |||||||||
11,625 | Carnival Corp.(b) | 589,620 | |||||||||
6,775 | Cedar Fair, L.P. | 356,501 | |||||||||
5,700 | Starbucks Corp. | 423,738 | |||||||||
1,369,859 | |||||||||||
Internet & Direct Marketing Retail | 1.68 | % | |||||||||
550 | Amazon.com, Inc.(a) | 979,412 | |||||||||
Specialty Retail | 1.39 | % | |||||||||
4,225 | The Home Depot, Inc. | 810,735 | |||||||||
Total Consumer Discretionary (Cost $2,266,342) | 3,464,226 |
The accompanying notes are an integral part of these financial statements.
32
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Consumer Staples | 3.76 | % | |||||||||
Beverages | 1.17 | % | |||||||||
5,550 | PepsiCo, Inc. | 680,152 | |||||||||
Food & Staples Retailing | 0.58 | % | |||||||||
3,450 | Walmart, Inc. | 336,479 | |||||||||
Food Products | 0.47 | % | |||||||||
8,375 | The Kraft Heinz Co. | 273,444 | |||||||||
Household Products | 1.54 | % | |||||||||
4,450 | Colgate-Palmolive Co. | 305,003 | |||||||||
5,725 | The Procter & Gamble Co. | 595,686 | |||||||||
900,689 | |||||||||||
Total Consumer Staples (Cost $1,954,465) | 2,190,764 | ||||||||||
Energy | 8.33 | % | |||||||||
Energy Equipment & Services | 1.02 | % | |||||||||
20,200 | Halliburton Co. | 591,860 | |||||||||
Oil, Gas & Consumable Fuels | 7.31 | % | |||||||||
33,040 | Energy Transfer Equity, L.P. | 507,825 | |||||||||
22,350 | Enterprise Products Partners L.P. | 650,385 | |||||||||
9,600 | Enviva Partners LP | 309,600 | |||||||||
8,450 | Exxon Mobil Corp. | 682,760 | |||||||||
11,575 | Hess Corp. | 697,162 | |||||||||
23,700 | Kinder Morgan, Inc. | 474,237 | |||||||||
9,526 | Marathon Petroleum Corp. | 570,131 | |||||||||
5,950 | Royal Dutch Shell PLC — Class A — ADR(b) | 372,411 | |||||||||
4,264,511 | |||||||||||
Total Energy (Cost $4,488,330) | 4,856,371 |
The accompanying notes are an integral part of these financial statements.
33
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Financials | 15.09 | % | |||||||||
Banks | 7.15 | % | |||||||||
40,000 | Bank of America Corp. | 1,103,600 | |||||||||
23,250 | BB&T Corp. | 1,081,822 | |||||||||
8,550 | Citigroup, Inc. | 531,981 | |||||||||
11,000 | JPMorgan Chase & Co. | 1,113,530 | |||||||||
9,000 | PacWest Bancorp | 338,490 | |||||||||
4,169,423 | |||||||||||
Capital Markets | 3.80 | % | |||||||||
1,100 | BlackRock, Inc. | 470,107 | |||||||||
4,025 | CME Group, Inc. | 662,434 | |||||||||
5,150 | S&P Global, Inc. | 1,084,333 | |||||||||
2,216,874 | |||||||||||
Diversified Financial Services | 2.59 | % | |||||||||
5,400 | Berkshire Hathaway Inc. — Class B(a) | 1,084,806 | |||||||||
27,000 | Compass Diversified Holdings | 423,630 | |||||||||
1,508,436 | |||||||||||
Insurance | 1.55 | % | |||||||||
11,575 | Arthur J. Gallagher & Co. | 904,008 | |||||||||
Total Financials (Cost $5,776,771) | 8,798,741 | ||||||||||
Health Care | 12.73 | % | |||||||||
Biotechnology | 1.45 | % | |||||||||
6,225 | AbbVie, Inc. | 501,673 | |||||||||
1,800 | Amgen Inc. | 341,964 | |||||||||
843,637 | |||||||||||
Health Care Equipment & Supplies | 1.15 | % | |||||||||
7,400 | Medtronic, PLC(b) | 673,992 | |||||||||
Health Care Providers & Services | 5.10 | % | |||||||||
4,275 | Anthem, Inc. | 1,226,839 | |||||||||
13,100 | CVS Health Corp. | 706,483 | |||||||||
4,200 | UnitedHealth Group, Inc. | 1,038,492 | |||||||||
2,971,814 |
The accompanying notes are an integral part of these financial statements.
34
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Pharmaceuticals | 5.03 | % | |||||||||
1,800 | Allergan PLC(b) | 263,538 | |||||||||
3,150 | Eli Lilly & Co. | 408,744 | |||||||||
6,825 | Johnson & Johnson | 954,067 | |||||||||
5,600 | Merck & Co., Inc. | 465,752 | |||||||||
19,800 | Pfizer Inc. | 840,906 | |||||||||
2,933,007 | |||||||||||
Total Health Care (Cost $5,262,398) | 7,422,450 | ||||||||||
Industrials | 8.49 | % | |||||||||
Aerospace & Defense | 2.32 | % | |||||||||
2,125 | The Boeing Co. | 810,518 | |||||||||
4,200 | United Technologies Corp. | 541,338 | |||||||||
1,351,856 | |||||||||||
Air Freight & Logistics | 0.37 | % | |||||||||
1,200 | FedEx Corp. | 217,692 | |||||||||
Airlines | 1.14 | % | |||||||||
12,800 | Delta Air Lines, Inc. | 661,120 | |||||||||
Commercial Services & Supplies | 1.39 | % | |||||||||
7,800 | Waste Management, Inc. | 810,498 | |||||||||
Industrial Conglomerates | 1.46 | % | |||||||||
1,450 | 3M Co. | 301,281 | |||||||||
3,450 | Honeywell International, Inc. | 548,274 | |||||||||
849,555 | |||||||||||
Machinery | 1.16 | % | |||||||||
3,950 | Parker-Hannifin Corp. | 677,899 | |||||||||
Professional Services | 0.65 | % | |||||||||
3,200 | Equifax, Inc. | 379,200 | |||||||||
Total Industrials (Cost $3,411,661) | 4,947,820 | ||||||||||
Information Technology | 16.38 | % | |||||||||
Communications Equipment | 1.64 | % | |||||||||
17,750 | Cisco Systems, Inc. | 958,322 |
The accompanying notes are an integral part of these financial statements.
35
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
IT Services | 3.46 | % | |||||||||
12,925 | Visa Inc. — Class A | 2,018,756 | |||||||||
Semiconductors & Semiconductor Equipment | 2.15 | % | |||||||||
11,750 | Intel Corp. | 630,975 | |||||||||
5,375 | QUALCOMM, Inc. | 306,536 | |||||||||
2,950 | Texas Instruments, Inc. | 312,907 | |||||||||
1,250,418 | |||||||||||
Software | 6.16 | % | |||||||||
21,850 | Microsoft Corp. | 2,576,989 | |||||||||
11,825 | Oracle Corp. | 635,121 | |||||||||
5,900 | SS&C Technologies Holdings, Inc. | 375,771 | |||||||||
3,587,881 | |||||||||||
Technology Hardware, Storage & Peripherals | 2.97 | % | |||||||||
9,120 | Apple Inc. | 1,732,344 | |||||||||
Total Information Technology (Cost $4,265,970) | 9,547,721 | ||||||||||
Materials | 1.65 | % | |||||||||
Chemicals | 1.32 | % | |||||||||
8,475 | DowDuPont Inc. | 451,802 | |||||||||
14,100 | Huntsman Corp. | 317,109 | |||||||||
768,911 | |||||||||||
Metals & Mining | 0.33 | % | |||||||||
3,600 | Compass Minerals International, Inc. | 195,732 | |||||||||
Total Materials (Cost $1,058,430) | 964,643 | ||||||||||
Utilities | 4.51 | % | |||||||||
Electric Utilities | 3.19 | % | |||||||||
15,700 | American Electric Power Co., Inc. | 1,314,875 | |||||||||
8,850 | Edison International | 547,992 | |||||||||
1,862,867 |
The accompanying notes are an integral part of these financial statements.
36
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Multi-Utilities | 1.32 | % | |||||||||
6,100 | Sempra Energy | 767,746 | |||||||||
Total Utilities (Cost $2,222,186) | 2,630,613 | ||||||||||
Total Common Stocks (Cost $35,963,178) | 51,624,806 | ||||||||||
Real Estate Investment Trusts (REITs) | 1.94 | % | |||||||||
Real Estate | 1.94 | % | |||||||||
3,200 | American Tower Corp. | 630,592 | |||||||||
1,100 | Equinix Inc. | 498,476 | |||||||||
Total Real Estate (Cost $832,282) | 1,129,068 | ||||||||||
Total REITs (Cost $832,282) | 1,129,068 | ||||||||||
Convertible Bonds | 6.25 | % | |||||||||
Health Care | 2.67 | % | |||||||||
Pharmaceuticals | 2.67 | % | |||||||||
Horizon Pharma Investment Ltd. | |||||||||||
$ | 750,000 | 2.500%, 03/15/2022(b) | 855,623 | ||||||||
The Medicines Co. | |||||||||||
700,000 | 2.500%, 01/15/2022 | 703,138 | |||||||||
Total Health Care (Cost $1,436,431) | 1,558,761 | ||||||||||
Information Technology | 3.58 | % | |||||||||
Software | 3.58 | % | |||||||||
8x8, Inc. | |||||||||||
1,500,000 | 0.500%, 02/01/2024(c) | 1,539,152 | |||||||||
Guidewire Software, Inc. | |||||||||||
500,000 | 1.250%, 03/15/2025 | 545,494 | |||||||||
Total Information Technology (Cost $1,985,655) | 2,084,646 | ||||||||||
Total Convertible Bonds (Cost $3,422,086) | 3,643,407 |
The accompanying notes are an integral part of these financial statements.
37
BUFFALO DIVIDEND FOCUS FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Short Term Investment | 3.26 | % | |||||||||
Investment Company | 3.26 | % | |||||||||
1,902,889 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(d) | 1,902,889 | |||||||||
Total Investment Company | 1,902,889 | ||||||||||
Total Short Term Investment (Cost $1,902,889) | 1,902,889 | ||||||||||
Total Investments (Cost $42,120,435) | 100.00 58,300,170 | % | |||||||||
Liabilities in Excess of Other Assets | 0.00% (1,560) | ||||||||||
Total Net Assets | 100.00 58,298,610 | % |
ADR American Depositary Receipt
PLC Public Limited Company
(a) Non Income Producing.
(b) Foreign Issued Securities. The total value of these securities amounted to $2,755,184 (4.73% of net assets) at March 31, 2019.
(c) 144A Securities. The total value of this security is $1,539,152 (2.64% of net assets) at March 31, 2019.
(d) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
38
BUFFALO EMERGING OPPORTUNITIES FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 85.03 | % | |||||||||
Communication Services | 5.01 | % | |||||||||
Entertainment | 1.42 | % | |||||||||
42,800 | Liberty Media Corp-Liberty Braves(a) | 1,188,556 | |||||||||
Interactive Media & Services | 1.71 | % | |||||||||
78,900 | EverQuote, Inc. — Class A(a) | 587,016 | |||||||||
197,000 | Trivago N.V. — ADR(a) (b) | 851,040 | |||||||||
1,438,056 | |||||||||||
Media | 1.88 | % | |||||||||
95,400 | Cardlytics, Inc.(a) | 1,577,916 | |||||||||
Total Communication Services (Cost $4,533,922) | 4,204,528 | ||||||||||
Consumer Discretionary | 11.37 | % | |||||||||
Auto Components | 1.44 | % | |||||||||
64,100 | Motorcar Parts of America, Inc.(a) | 1,209,567 | |||||||||
Diversified Consumer Services | 1.22 | % | |||||||||
75,000 | OneSpaWorld Holdings Ltd.(a) (b) | 1,024,500 | |||||||||
Hotels, Restaurants & Leisure | 2.87 | % | |||||||||
67,100 | Del Taco Restaurants, Inc.(a) | 675,026 | |||||||||
227,100 | Playa Hotels & Resorts N.V.(a) (b) | 1,732,773 | |||||||||
2,407,799 | |||||||||||
Household Durables | 1.47 | % | |||||||||
13,000 | LGI Homes, Inc.(a) | 783,120 | |||||||||
12,100 | Universal Electronics, Inc.(a) | 449,515 | |||||||||
1,232,635 | |||||||||||
Internet & Direct Marketing Retail | 1.91 | % | |||||||||
34,500 | Shutterstock, Inc. | 1,608,735 | |||||||||
Leisure Products | 1.05 | % | |||||||||
39,000 | MasterCraft Boat Holdings, Inc.(a) | 880,230 | |||||||||
Specialty Retail | 1.41 | % | |||||||||
66,400 | At Home Group, Inc.(a) | 1,185,904 | |||||||||
Total Consumer Discretionary (Cost $10,202,249) | 9,549,370 |
The accompanying notes are an integral part of these financial statements.
39
BUFFALO EMERGING OPPORTUNITIES
FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Consumer Staples | 2.02 | % | |||||||||
Beverages | 2.02 | % | |||||||||
22,000 | MGP Ingredients, Inc. | 1,697,300 | |||||||||
Total Consumer Staples (Cost $1,179,055) | 1,697,300 | ||||||||||
Financials | 5.90 | % | |||||||||
Capital Markets | 2.36 | % | |||||||||
45,585 | Hamilton Lane Inc. — Class A | 1,986,594 | |||||||||
Diversified Financial Services | 1.48 | % | |||||||||
79,300 | Compass Diversified Holdings | 1,244,217 | |||||||||
Insurance | 2.06 | % | |||||||||
25,200 | Kinsale Capital Group, Inc. | 1,727,964 | |||||||||
Total Financials (Cost $2,598,209) | 4,958,775 | ||||||||||
Health Care | 15.71 | % | |||||||||
Biotechnology | 0.93 | % | |||||||||
17,400 | Deciphera Pharmaceuticals, Inc.(a) | 403,854 | |||||||||
51,500 | Dynavax Technologies Corp.(a) | 376,465 | |||||||||
780,319 | |||||||||||
Health Care Equipment & Supplies | 5.57 | % | |||||||||
15,000 | Establishment Labs Holdings, Inc.(a) | 360,600 | |||||||||
5,700 | Inogen, Inc.(a) | 543,609 | |||||||||
17,000 | Neuronetics, Inc.(a) | 259,250 | |||||||||
26,590 | OrthoPediatrics Corp.(a) | 1,176,076 | |||||||||
80,900 | Oxford Immunotec Global PLC(a) (b) | 1,393,907 | |||||||||
77,100 | RA Medical Systems, Inc.(a) | 262,140 | |||||||||
20,075 | STAAR Surgical Co.(a) | 686,364 | |||||||||
4,681,946 | |||||||||||
Health Care Providers & Services | 2.12 | % | |||||||||
50,500 | Cross Country Healthcare, Inc.(a) | 355,015 | |||||||||
12,900 | LHC Group, Inc.(a) | 1,430,094 | |||||||||
1,785,109 |
The accompanying notes are an integral part of these financial statements.
40
BUFFALO EMERGING OPPORTUNITIES
FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Health Care Technology | 4.53 | % | |||||||||
50,000 | HealthStream, Inc.(a) | 1,403,000 | |||||||||
17,985 | Inspire Medical Systems, Inc.(a) | 1,021,188 | |||||||||
17,100 | Omnicell, Inc.(a) | 1,382,364 | |||||||||
3,806,552 | |||||||||||
Pharmaceuticals | 2.56 | % | |||||||||
89,900 | Optinose, Inc.(a) | 925,970 | |||||||||
51,100 | Urovant Sciences Ltd.(a) (b) | 513,555 | |||||||||
65,651 | Verrica Pharmaceuticals, Inc.(a) | 709,688 | |||||||||
2,149,213 | |||||||||||
Total Health Care (Cost $12,056,637) | 13,203,139 | ||||||||||
Industrials | 19.03 | % | |||||||||
Aerospace & Defense | 2.44 | % | |||||||||
30,440 | Astronics Corp.(a) | 995,997 | |||||||||
67,400 | Kratos Defense & Security Solutions, Inc.(a) | 1,053,462 | |||||||||
2,049,459 | |||||||||||
Air Freight & Logistics | 2.23 | % | |||||||||
81,400 | Air Transport Services Group, Inc.(a) | 1,876,270 | |||||||||
Building Products | 2.27 | % | |||||||||
27,500 | Apogee Enterprises, Inc. | 1,030,975 | |||||||||
19,400 | Patrick Industries, Inc.(a) | 879,208 | |||||||||
1,910,183 | |||||||||||
Commercial Services & Supplies | 0.51 | % | |||||||||
12,500 | Mobile Mini, Inc. | 424,250 | |||||||||
Construction & Engineering | 1.34 | % | |||||||||
19,000 | NV5 Global, Inc.(a) | 1,127,840 | |||||||||
Machinery | 2.62 | % | |||||||||
92,500 | Kornit Digital Ltd.(a) (b) | 2,201,500 | |||||||||
Professional Services | 4.17 | % | |||||||||
11,800 | ICF International, Inc. | 897,744 | |||||||||
21,900 | WageWorks, Inc.(a) | 826,944 | |||||||||
48,100 | Willdan Group, Inc.(a) | 1,783,067 | |||||||||
3,507,755 |
The accompanying notes are an integral part of these financial statements.
41
BUFFALO EMERGING OPPORTUNITIES
FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Trading Companies & Distributors | 3.45 | % | |||||||||
60,200 | Foundation Building Materials, Inc.(a) | 592,368 | |||||||||
19,500 | SiteOne Landscape Supply, Inc.(a) | 1,114,425 | |||||||||
53,710 | Univar Inc.(a) | 1,190,214 | |||||||||
2,897,007 | |||||||||||
Total Industrials (Cost $14,470,186) | 15,994,264 | ||||||||||
Information Technology | 25.24 | % | |||||||||
Electronic Equipment, Instruments & Components | 1.06 | % | |||||||||
40,000 | nLight, Inc.(a) | 891,200 | |||||||||
IT Services | 3.49 | % | |||||||||
53,000 | i3 Verticals, Inc. — Class A(a) | 1,273,060 | |||||||||
31,100 | Virtusa Corp.(a) | 1,662,295 | |||||||||
2,935,355 | |||||||||||
Semiconductors & Semiconductor Equipment | 3.22 | % | |||||||||
67,680 | Everspin Technologies, Inc.(a) | 518,429 | |||||||||
46,000 | Ichor Holdings, Ltd.(a) (b) | 1,038,680 | |||||||||
45,000 | MaxLinear, Inc.(a) | 1,148,850 | |||||||||
2,705,959 | |||||||||||
Software | 17.47 | % | |||||||||
115,000 | 8x8, Inc.(a) | 2,323,000 | |||||||||
131,400 | Amber Road, Inc.(a) | 1,139,238 | |||||||||
18,400 | CyberArk Software Ltd.(a) (b) | 2,190,520 | |||||||||
30,505 | Envestnet, Inc.(a) | 1,994,722 | |||||||||
7,400 | Everbridge, Inc.(a) | 555,074 | |||||||||
17,600 | Five9, Inc.(a) | 929,808 | |||||||||
15,400 | Instructure, Inc.(a) | 725,648 | |||||||||
43,900 | Materialise NV — ADR(a) (b) | 690,986 | |||||||||
50,720 | Mimecast Ltd.(a) (b) | 2,401,592 | |||||||||
13,600 | Varonis Systems, Inc.(a) | 810,968 | |||||||||
42,000 | Yext, Inc.(a) | 918,120 | |||||||||
14,679,676 | |||||||||||
Total Information Technology (Cost $11,103,039) | 21,212,190 |
The accompanying notes are an integral part of these financial statements.
42
BUFFALO EMERGING OPPORTUNITIES
FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Utilities | 0.75 | % | |||||||||
Water Utilities | 0.75 | % | |||||||||
32,500 | AquaVenture Holdings Ltd.(a) (b) | 628,875 | |||||||||
Total Utilities (Cost $585,000) | 628,875 | ||||||||||
Total Common Stocks (Cost $56,728,297) | 71,448,441 | ||||||||||
Real Estate Investment Trust (REIT) | 2.47 | % | |||||||||
Real Estate | 2.47 | % | |||||||||
57,900 | Community Healthcare Trust, Inc. | 2,078,031 | |||||||||
Total Real Estate (Cost $1,295,550) | 2,078,031 | ||||||||||
Total REIT (Cost $1,295,550) | 2,078,031 | ||||||||||
Short Term Investments | 9.94 | % | |||||||||
Investment Company | 9.94 | % | |||||||||
8,354,422 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(c) | 8,354,422 | |||||||||
2,185,924 | The STIT-Treasury Portfolio — 2.30%(c) | 2,185,924 | |||||||||
Total Investment Company | 8,354,422 | ||||||||||
Total Short Term Investments (Cost $10,540,346) | 10,540,346 | ||||||||||
Total Investments (Cost $68,564,193) | 100.04 84,066,818 | % | |||||||||
Liabilities in Excess of Other Assets | (0.04 (34,330) | )% | |||||||||
Total Net Assets | 100.00 84,032,488 | % |
The accompanying notes are an integral part of these financial statements.
43
BUFFALO EMERGING OPPORTUNITIES
FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
ADR American Depositary Receipt
PLC Public Limited Company
(a) Non Income Producing.
(b) Foreign Issued Securities. The total value of these securities amounted to $14,667,928 (17.46% of net assets) at March 31, 2019.
(c) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
44
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 84.09 | % | |||||||||
Communication Services | 6.72 | % | |||||||||
Diversified Telecommunication Services | 4.27 | % | |||||||||
400,000 | AT&T, Inc.(a) | 12,544,000 | |||||||||
240,000 | Verizon Communications, Inc.(a) | 14,191,200 | |||||||||
26,735,200 | |||||||||||
Entertainment | 2.45 | % | |||||||||
498,000 | Lions Gate Entertainment Corp. — Class A(b) | 7,788,720 | |||||||||
498,000 | Lions Gate Entertainment Corp. — Class B(b) | 7,519,800 | |||||||||
15,308,520 | |||||||||||
Total Communication Services (Cost $51,590,182) | 42,043,720 | ||||||||||
Consumer Staples | 16.77 | % | |||||||||
Beverages | 4.54 | % | |||||||||
315,000 | The Coca-Cola Co.(a) | 14,760,900 | |||||||||
50,000 | Keurig Dr Pepper, Inc. | 1,398,500 | |||||||||
100,000 | PepsiCo, Inc. | 12,255,000 | |||||||||
28,414,400 | |||||||||||
Food & Staples Retailing | 3.00 | % | |||||||||
50,000 | Costco Wholesale Corp. | 12,107,000 | |||||||||
100,000 | Sysco Corp. | 6,676,000 | |||||||||
18,783,000 | |||||||||||
Food Products | 2.61 | % | |||||||||
126,500 | B&G Foods, Inc. | 3,089,130 | |||||||||
199,900 | General Mills, Inc. | 10,344,825 | |||||||||
50,000 | Kellogg Co. | 2,869,000 | |||||||||
16,302,955 | |||||||||||
Household Products | 6.62 | % | |||||||||
95,000 | The Clorox Co. | 15,243,700 | |||||||||
25,000 | Colgate-Palmolive Co. | 1,713,500 | |||||||||
71,200 | Kimberly-Clark Corp. | 8,821,680 | |||||||||
150,000 | The Procter & Gamble Co. | 15,607,500 | |||||||||
41,386,380 | |||||||||||
Total Consumer Staples (Cost $58,865,167) | 104,886,735 |
The accompanying notes are an integral part of these financial statements.
45
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Energy | 22.86 | % | |||||||||
Energy Equipment & Services | 2.92 | % | |||||||||
80,000 | Helmerich & Payne, Inc. | 4,444,800 | |||||||||
316,670 | Schlumberger Ltd.(b) | 13,797,312 | |||||||||
18,242,112 | |||||||||||
Oil, Gas & Consumable Fuels | 19.94 | % | |||||||||
235,000 | Apache Corp. | 8,145,100 | |||||||||
365,000 | BP p.l.c. — ADR(a) (b) | 15,957,800 | |||||||||
150,000 | Chevron Corp.(a) | 18,477,000 | |||||||||
220,000 | ConocoPhillips(a) | 14,682,800 | |||||||||
140,000 | Delek Logistics Partners LP | 4,540,200 | |||||||||
175,000 | Exxon Mobil Corp. | 14,140,000 | |||||||||
130,000 | Hess Corp. | 7,829,900 | |||||||||
250,000 | HollyFrontier Corp. | 12,317,500 | |||||||||
430,000 | Kinder Morgan, Inc. | 8,604,300 | |||||||||
89,000 | Marathon Petroleum Corp. | 5,326,650 | |||||||||
22,500 | Phillips 66 | 2,141,325 | |||||||||
200,000 | Royal Dutch Shell PLC — Class A — ADR(b) | 12,518,000 | |||||||||
124,680,575 | |||||||||||
Total Energy (Cost $120,058,741) | 142,922,687 | ||||||||||
Financials | 5.93 | % | |||||||||
Banks | 2.57 | % | |||||||||
321,000 | BB&T Corp.(a) | 14,936,130 | |||||||||
35,000 | Citizens Financial Group, Inc. | 1,137,500 | |||||||||
16,073,630 | |||||||||||
Insurance | 3.36 | % | |||||||||
140,000 | The Allstate Corp. | 13,185,200 | |||||||||
100,000 | Arthur J. Gallagher & Co. | 7,810,000 | |||||||||
20,995,200 | |||||||||||
Total Financials (Cost $21,920,230) | 37,068,830 | ||||||||||
Health Care | 12.44 | % | |||||||||
Biotechnology | 0.26 | % | |||||||||
25,000 | Gilead Sciences, Inc.(a) | 1,625,250 |
The accompanying notes are an integral part of these financial statements.
46
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Health Care Equipment & Supplies | 2.32 | % | |||||||||
80,000 | Abbott Laboratories(a) | 6,395,200 | |||||||||
100,000 | Baxter International, Inc. | 8,131,000 | |||||||||
14,526,200 | |||||||||||
Pharmaceuticals | 9.86 | % | |||||||||
12,500 | Bristol-Myers Squibb Co. | 596,375 | |||||||||
75,000 | Eli Lilly & Co. | 9,732,000 | |||||||||
360,000 | GlaxoSmithKline PLC — ADR(a) (b) | 15,044,400 | |||||||||
130,000 | Johnson & Johnson(a) | 18,172,700 | |||||||||
80,000 | Merck & Co., Inc. | 6,653,600 | |||||||||
270,000 | Pfizer Inc. | 11,466,900 | |||||||||
61,665,975 | |||||||||||
Total Health Care (Cost $42,557,806) | 77,817,425 | ||||||||||
Industrials | 8.09 | % | |||||||||
Aerospace & Defense | 4.27 | % | |||||||||
70,000 | The Boeing Co.(a) | 26,699,400 | |||||||||
Commercial Services & Supplies | 3.03 | % | |||||||||
788,700 | Pitney Bowes Inc. | 5,418,369 | |||||||||
130,000 | Waste Management, Inc. | 13,508,300 | |||||||||
18,926,669 | |||||||||||
Electrical Equipment | 0.75 | % | |||||||||
230,000 | ABB Ltd. — ADR(b) | 4,340,100 | |||||||||
5,400 | Emerson Electric Co. | 369,738 | |||||||||
4,709,838 | |||||||||||
Machinery | 0.04 | % | |||||||||
3,437 | Wabtec Corp. | 253,375 | |||||||||
Total Industrials (Cost $23,982,294) | 50,589,282 | ||||||||||
Information Technology | 9.36 | % | |||||||||
Communications Equipment | 1.73 | % | |||||||||
200,000 | Cisco Systems, Inc. | 10,798,000 | |||||||||
IT Services | 0.06 | % | |||||||||
2,800 | International Business Machines Corp. | 395,080 |
The accompanying notes are an integral part of these financial statements.
47
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Semiconductors & Semiconductor Equipment | 3.42 | % | |||||||||
300,000 | Intel Corp.(a) | 16,110,000 | |||||||||
93,000 | QUALCOMM, Inc. | 5,303,790 | |||||||||
21,413,790 | |||||||||||
Software | 4.15 | % | |||||||||
220,000 | Microsoft Corp.(a) | 25,946,800 | |||||||||
Total Information Technology (Cost $20,739,265) | 58,553,670 | ||||||||||
Materials | 1.92 | % | |||||||||
Chemicals | 1.45 | % | |||||||||
170,000 | DowDuPont Inc. | 9,062,700 | |||||||||
Metals & Mining | 0.47 | % | |||||||||
50,000 | Rio Tinto PLC — ADR(b) | 2,942,500 | |||||||||
Total Materials (Cost $6,941,901) | 12,005,200 | ||||||||||
Total Common Stocks (Cost $346,655,586) | 525,887,549 | ||||||||||
Real Estate Investment Trusts (REITs) | 2.49 | % | |||||||||
Real Estate | 2.49 | % | |||||||||
85,300 | Digital Realty Trust, Inc. | 10,150,700 | |||||||||
205,000 | Weyerhaeuser Co. | 5,399,700 | |||||||||
Total Real Estate (Cost $10,768,219) | 15,550,400 | ||||||||||
Total REITs (Cost $10,768,219) | 15,550,400 | ||||||||||
Convertible Bonds | 1.56 | % | |||||||||
Health Care | 0.32 | % | |||||||||
Pharmaceuticals | 0.32 | % | |||||||||
The Medicines Co. | |||||||||||
$ | 2,000,000 | 2.500%, 01/15/2022 | 2,008,965 | ||||||||
Total Health Care (Cost $2,035,942) | 2,008,965 |
The accompanying notes are an integral part of these financial statements.
48
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Information Technology | 1.24 | % | |||||||||
Software | 1.24 | % | |||||||||
Nuance Communications, Inc. | |||||||||||
7,725,000 | 1.500%, 11/01/2035 | 7,725,000 | |||||||||
Total Information Technology (Cost $7,517,671) | 7,725,000 | ||||||||||
Total Convertible Bonds (Cost $9,553,613) | 9,733,965 | ||||||||||
Corporate Bonds | 2.40 | % | |||||||||
Communication Services | 1.31 | % | |||||||||
Diversified Telecommunication Services | 1.31 | % | |||||||||
CCO Holdings LLC / CCO Holdings Capital Corp. | |||||||||||
3,706,000 | 5.250%, 03/15/2021 | 3,724,549 | |||||||||
Consolidated Communications, Inc. | |||||||||||
5,000,000 | 6.500%, 10/01/2022 | 4,500,000 | |||||||||
Total Communication Services (Cost $8,662,500) | 8,224,549 | ||||||||||
Consumer Discretionary | 0.38 | % | |||||||||
Leisure Products | 0.38 | % | |||||||||
Brunswick Corp. | |||||||||||
2,200,000 | 7.375%, 09/01/2023 | 2,387,939 | |||||||||
Total Consumer Discretionary (Cost $2,122,770) | 2,387,939 | ||||||||||
Energy | 0.29 | % | |||||||||
Oil, Gas & Consumable Fuels | 0.29 | % | |||||||||
Approach Resources, Inc. | |||||||||||
3,000,000 | 7.000%, 06/15/2021 | 1,815,000 | |||||||||
Total Energy (Cost $2,992,592) | 1,815,000 | ||||||||||
Financials | 0.42 | % | |||||||||
Diversified Financial Services | 0.42 | % | |||||||||
Everi Payments, Inc. | |||||||||||
2,500,000 | 7.500%, 12/15/2025(c) | 2,606,250 | |||||||||
Total Financials (Cost $2,500,000) | 2,606,250 | ||||||||||
Total Corporate Bonds (Cost $16,277,862) | 15,033,738 |
The accompanying notes are an integral part of these financial statements.
49
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Short Term Investment | 7.40 | % | |||||||||
Investment Company | 7.40 | % | |||||||||
46,280,475 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(d) | 46,280,475 | |||||||||
Total Investment Company | 46,280,475 | ||||||||||
Total Short Term Investment (Cost $46,280,475) | 46,280,475 | ||||||||||
Total Investments (Cost $429,535,755) | 97.94 612,486,127 | % | |||||||||
Other Assets in Excess of Liabilities | 2.06 12,862,612 | % | |||||||||
Total Net Assets | 100.00 625,348,739 | % |
ADR American Depositary Receipt
PLC Public Limited Company
(a) A portion of these investments are segregated as collateral for open written option contracts.
(b) Foreign Issued Securities. The total value of these securities amounted to $79,908,632 (12.78% of net assets) at March 31, 2019.
(c) 144A Securities. The total value of this security is $2,606,250 (0.42% of net assets) at March 31, 2019.
(d) The rate quoted is the annualized seven-day yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
50
BUFFALO FLEXIBLE INCOME FUND
SCHEDULE OF OPTIONS WRITTEN
MARCH 31, 2019 Continued
Contracts | $ Notional Amount | $ Value | |||||||||||||
Call Options | |||||||||||||||
| Abbott Laboratories | ||||||||||||||
300 | Expiration: May 2019, Exercise Price: $80.00 | 2,398,200 | 67,200 | ||||||||||||
| AT&T, Inc. | ||||||||||||||
875 | Expiration: June 2019, Exercise Price: $34.00 | 2,744,000 | 12,250 | ||||||||||||
| BB&T Corp. | ||||||||||||||
210 | Expiration: April 2019, Exercise Price: $52.50 | 977,130 | 315 | ||||||||||||
| BB&T Corp. | ||||||||||||||
200 | Expiration: June 2019, Exercise Price: $52.50 | 930,600 | 2,900 | ||||||||||||
| BB&T Corp. | ||||||||||||||
400 | Expiration: June 2019, Exercise Price: $55.00 | 1,861,200 | 2,000 | ||||||||||||
| The Boeing Co. | ||||||||||||||
100 | Expiration: April 2019, Exercise Price: $430.00 | 3,814,200 | 40,800 | ||||||||||||
| The Boeing Co. | ||||||||||||||
100 | Expiration: June 2019, Exercise Price: $430.00 | 3,814,200 | 1,900 | ||||||||||||
| The Boeing Co. | ||||||||||||||
100 | Expiration: August 2019, Exercise Price: $430.00 | 3,814,200 | 90,500 | ||||||||||||
| BP p.l.c. | ||||||||||||||
200 | Expiration: July 2019, Exercise Price: $46.00 | 874,400 | 14,000 | ||||||||||||
| Chevron Corp. | ||||||||||||||
500 | Expiration: May 2019, Exercise Price: $130.00 | 6,159,000 | 36,000 | ||||||||||||
| The Coca-Cola Co. | ||||||||||||||
400 | Expiration: May 2019, Exercise Price: $48.00 | 1,874,400 | 20,000 | ||||||||||||
| ConocoPhillips | ||||||||||||||
200 | Expiration: April 2019, Exercise Price: $75.00 | 1,334,800 | 600 | ||||||||||||
| ConocoPhillips | ||||||||||||||
500 | Expiration: May 2019, Exercise Price: $80.00 | 3,337,000 | 1,250 | ||||||||||||
| Gilead Sciences, Inc. | ||||||||||||||
190 | Expiration: May 2019, Exercise Price: $72.50 | 1,235,190 | 6,650 | ||||||||||||
| GlaxoSmithKline PLC | ||||||||||||||
600 | Expiration: May 2019, Exercise Price: $43.00 | 2,507,400 | 27,000 | ||||||||||||
| Intel Corp. | ||||||||||||||
300 | Expiration: June 2019, Exercise Price: $60.00 | 1,611,000 | 14,100 | ||||||||||||
| Johnson & Johnson | ||||||||||||||
150 | Expiration: May 2019, Exercise Price: $150.00 | 2,096,850 | 4,050 | ||||||||||||
| Johnson & Johnson | ||||||||||||||
250 | Expiration: June 2019, Exercise Price: $150.00 | 3,494,750 | 14,250 | ||||||||||||
| Microsoft Corp. | ||||||||||||||
400 | Expiration: June 2019, Exercise Price: $125.00 | 4,717,600 | 72,800 | ||||||||||||
| Verizon Communications, Inc. | ||||||||||||||
400 | Expiration: June 2019, Exercise Price: $62.50 | 2,365,200 | 21,600 | ||||||||||||
Total Written Options (Premiums received $464,390) | 450,165 |
The accompanying notes are an integral part of these financial statements.
51
BUFFALO GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 95.75 | % | |||||||||
Communication Services | 12.23 | % | |||||||||
Diversified Telecommunication Services | 1.51 | % | |||||||||
44,540 | Verizon Communications, Inc. | 2,633,650 | |||||||||
Entertainment | 3.20 | % | |||||||||
19,485 | Electronic Arts, Inc.(a) | 1,980,260 | |||||||||
32,430 | The Walt Disney Co. | 3,600,703 | |||||||||
5,580,963 | |||||||||||
Interactive Media & Services | 7.52 | % | |||||||||
3,507 | Alphabet, Inc. — Class A(a) | 4,127,353 | |||||||||
3,560 | Alphabet, Inc. — Class C(a) | 4,176,984 | |||||||||
28,952 | Facebook, Inc. — Class A(a) | 4,826,009 | |||||||||
13,130,346 | |||||||||||
Total Communication Services (Cost $10,654,741) | 21,344,959 | ||||||||||
Consumer Discretionary | 12.81 | % | |||||||||
Auto Components | 1.09 | % | |||||||||
24,025 | Aptiv PLC(b) | 1,909,747 | |||||||||
Internet & Direct Marketing Retail | 7.34 | % | |||||||||
10,190 | Alibaba Group Holding Ltd. — ADR(a) (b) | 1,859,166 | |||||||||
4,835 | Amazon.com, Inc.(a) | 8,609,926 | |||||||||
1,341 | Booking Holdings, Inc.(a) | 2,339,924 | |||||||||
12,809,016 | |||||||||||
Specialty Retail | 2.39 | % | |||||||||
21,733 | The Home Depot, Inc. | 4,170,345 | |||||||||
Textiles, Apparel & Luxury Goods | 1.99 | % | |||||||||
41,312 | NIKE, Inc. — Class B | 3,478,884 | |||||||||
Total Consumer Discretionary (Cost $10,445,543) | 22,367,992 | ||||||||||
Consumer Staples | 1.27 | % | |||||||||
Beverages | 1.27 | % | |||||||||
40,555 | Monster Beverage Corp.(a) | 2,213,492 | |||||||||
Total Consumer Staples (Cost $2,068,341) | 2,213,492 |
The accompanying notes are an integral part of these financial statements.
52
BUFFALO GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Financials | 5.28 | % | |||||||||
Capital Markets | 5.28 | % | |||||||||
42,695 | The Charles Schwab Corp. | 1,825,638 | |||||||||
15,033 | CME Group, Inc. | 2,474,131 | |||||||||
35,003 | Intercontinental Exchange, Inc. | 2,665,129 | |||||||||
10,702 | S&P Global, Inc. | 2,253,306 | |||||||||
Total Financials (Cost $5,056,544) | 9,218,204 | ||||||||||
Health Care | 20.86 | % | |||||||||
Health Care Equipment & Supplies | 16.15 | % | |||||||||
58,228 | Abbott Laboratories | 4,654,746 | |||||||||
5,420 | ABIOMED, Inc.(a) | 1,547,898 | |||||||||
12,356 | Align Technology, Inc.(a) | 3,513,181 | |||||||||
47,557 | Baxter International, Inc. | 3,866,860 | |||||||||
7,957 | Becton Dickinson and Co. | 1,987,102 | |||||||||
29,175 | Danaher Corp. | 3,851,683 | |||||||||
14,878 | IDEXX Laboratories, Inc.(a) | 3,326,721 | |||||||||
4,715 | Intuitive Surgical, Inc.(a) | 2,690,285 | |||||||||
30,275 | Medtronic, PLC(b) | 2,757,447 | |||||||||
28,195,923 | |||||||||||
Health Care Providers & Services | 1.92 | % | |||||||||
13,566 | UnitedHealth Group, Inc. | 3,354,329 | |||||||||
Life Sciences Tools & Services | 1.68 | % | |||||||||
9,406 | Illumina, Inc.(a) | 2,922,350 | |||||||||
Pharmaceuticals | 1.11 | % | |||||||||
13,587 | Jazz Pharmaceuticals PLC(a) (b) | 1,942,262 | |||||||||
Total Health Care (Cost $23,157,268) | 36,414,864 | ||||||||||
Industrials | 8.01 | % | |||||||||
Aerospace & Defense | 1.02 | % | |||||||||
4,680 | The Boeing Co. | 1,785,045 | |||||||||
Industrial Conglomerates | 1.72 | % | |||||||||
18,916 | Honeywell International, Inc. | 3,006,131 | |||||||||
Machinery | 2.22 | % | |||||||||
95,284 | Evoqua Water Technologies Corp.(a) | 1,198,673 | |||||||||
20,285 | WABCO Holdings, Inc.(a) | 2,674,171 | |||||||||
3,872,844 |
The accompanying notes are an integral part of these financial statements.
53
BUFFALO GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Professional Services | 2.01 | % | |||||||||
52,565 | TransUnion | 3,513,445 | |||||||||
Road & Rail | 1.04 | % | |||||||||
10,822 | Union Pacific Corp. | 1,809,438 | |||||||||
Total Industrials (Cost $12,277,801) | 13,986,903 | ||||||||||
Information Technology | 31.95 | % | |||||||||
Electronic Equipment, Instruments & Components | 1.02 | % | |||||||||
9,750 | Littelfuse, Inc. | 1,779,180 | |||||||||
IT Services | 9.62 | % | |||||||||
17,565 | Broadridge Financial Solutions, Inc. | 1,821,315 | |||||||||
30,050 | Fiserv, Inc.(a) | 2,652,814 | |||||||||
18,310 | MasterCard, Inc. — Class A | 4,311,089 | |||||||||
17,535 | Shopify, Inc. — Class A(a) (b) | 3,623,082 | |||||||||
28,038 | Visa Inc. — Class A | 4,379,255 | |||||||||
16,787,555 | |||||||||||
Semiconductors & Semiconductor Equipment | 2.10 | % | |||||||||
5,040 | Lam Research Corp. | 902,210 | |||||||||
36,741 | QUALCOMM, Inc. | 2,095,339 | |||||||||
13,260 | Semtech Corp.(a) | 675,067 | |||||||||
3,672,616 | |||||||||||
Software | 17.75 | % | |||||||||
6,845 | Adobe, Inc.(a) | 1,824,124 | |||||||||
26,825 | Guidewire Software, Inc.(a) | 2,606,317 | |||||||||
14,889 | Intuit, Inc. | 3,892,133 | |||||||||
104,180 | Microsoft Corp. | 12,286,989 | |||||||||
13,400 | Red Hat, Inc.(a) | 2,448,180 | |||||||||
16,342 | salesforce.com, Inc.(a) | 2,588,083 | |||||||||
11,850 | ServiceNow, Inc.(a) | 2,920,907 | |||||||||
13,360 | VMware, Inc. — Class A | 2,411,614 | |||||||||
30,978,347 | |||||||||||
Technology Hardware, Storage & Peripherals | 1.46 | % | |||||||||
13,442 | Apple Inc. | 2,553,308 | |||||||||
Total Information Technology (Cost $30,320,486) | 55,771,006 |
The accompanying notes are an integral part of these financial statements.
54
BUFFALO GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Materials | 3.34 | % | |||||||||
Chemicals | 3.34 | % | |||||||||
11,000 | Ecolab Inc. | 1,941,940 | |||||||||
22,090 | Linde PLC(b) | 3,886,294 | |||||||||
Total Materials (Cost $4,481,970) | 5,828,234 | ||||||||||
Total Common Stocks (Cost $98,462,694) | 167,145,654 | ||||||||||
Real Estate Investment Trusts (REITs) | 2.87 | % | |||||||||
Real Estate | 2.87 | % | |||||||||
7,395 | American Tower Corp. | 1,457,259 | |||||||||
7,834 | Equinix Inc. | 3,550,055 | |||||||||
Total Real Estate (Cost $2,391,513) | 5,007,314 | ||||||||||
Total REITs (Cost $2,391,513) | 5,007,314 | ||||||||||
Short Term Investment | 1.54 | % | |||||||||
Investment Company | 1.54 | % | |||||||||
2,687,958 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(c) | 2,687,958 | |||||||||
Total Investment Company | 2,687,958 | ||||||||||
Total Short Term Investment (Cost $2,687,958) | 2,687,958 | ||||||||||
Total Investments (Cost $103,542,165) | 100.16 174,840,926 | % | |||||||||
Liabilities in Excess of Other Assets | (0.16 (270,840) | )% | |||||||||
Total Net Assets | 100.00 174,570,086 | % |
The accompanying notes are an integral part of these financial statements.
55
BUFFALO GROWTH FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
ADR American Depositary Receipt
PLC Public Limited Company
(a) Non Income Producing.
(b) Foreign Issued Securities. The total value of these securities amounted to $15,977,998 (9.15% of net assets) at March 31, 2019.
(c) The rate quoted is the annualized seven-day yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
56
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 0.71 | % | |||||||||
Communication Services | 0.39 | % | |||||||||
Entertainment | 0.39 | % | |||||||||
24,485 | Lions Gate Entertainment Corp. — Class A(a) | 382,945 | |||||||||
24,485 | Lions Gate Entertainment Corp. — Class B(a) | 369,724 | |||||||||
Total Communication Services (Cost $499,984) | 752,669 | ||||||||||
Industrials | 0.32 | % | |||||||||
Machinery | 0.32 | % | |||||||||
19,000 | The Greenbrier Companies, Inc. | 612,370 | |||||||||
Total Industrials (Cost $673,855) | 612,370 | ||||||||||
Total Common Stocks (Cost $1,173,839) | 1,365,039 | ||||||||||
Real Estate Investment Trust (REIT) | 0.62 | % | |||||||||
Real Estate | 0.62 | % | |||||||||
1,000 | Crown Castle International Corp. | 1,184,800 | |||||||||
Total Real Estate (Cost $1,011,357) | 1,184,800 | ||||||||||
Total REIT (Cost $1,011,357) | 1,184,800 | ||||||||||
Convertible Bonds | 10.06 | % | |||||||||
Communication Services | 2.33 | % | |||||||||
Entertainment | 1.59 | % | |||||||||
Live Nation Entertainment, Inc. | |||||||||||
$ | 1,500,000 | 2.500%, 05/15/2019 | 2,750,390 | ||||||||
250,000 | 2.500%, 03/15/2023 | 288,901 | |||||||||
3,039,291 | |||||||||||
Interactive Media & Services | 0.74 | % | |||||||||
Twitter, Inc. | |||||||||||
1,500,000 | 1.000%, 09/15/2021 | 1,415,192 | |||||||||
Total Communication Services (Cost $3,167,650) | 4,454,483 |
The accompanying notes are an integral part of these financial statements.
57
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Energy | 0.50 | % | |||||||||
Oil, Gas & Consumable Fuels | 0.50 | % | |||||||||
Whiting Petroleum Corp. | |||||||||||
1,000,000 | 1.250%, 04/01/2020 | 969,162 | |||||||||
Total Energy (Cost $930,470) | 969,162 | ||||||||||
Financials | 0.96 | % | |||||||||
Consumer Finance | 0.96 | % | |||||||||
PRA Group, Inc. | |||||||||||
500,000 | 3.000%, 08/01/2020 | 483,868 | |||||||||
1,500,000 | 3.500%, 06/01/2023 | 1,347,247 | |||||||||
Total Financials (Cost $2,011,042) | 1,831,115 | ||||||||||
Health Care | 1.04 | % | |||||||||
Pharmaceuticals | 1.04 | % | |||||||||
The Medicines Co. | |||||||||||
300,000 | 2.500%, 01/15/2022 | 301,345 | |||||||||
2,000,000 | 2.750%, 07/15/2023 | 1,692,530 | |||||||||
Total Health Care (Cost $2,292,785) | 1,993,875 | ||||||||||
Information Technology | 5.23 | % | |||||||||
Software | 5.23 | % | |||||||||
8x8, Inc. | |||||||||||
3,000,000 | 0.500%, 02/01/2024(b) | 3,078,303 | |||||||||
Envestnet, Inc. | |||||||||||
1,500,000 | 1.750%, 12/15/2019 | 1,677,876 | |||||||||
FireEye, Inc. | |||||||||||
1,000,000 | 0.875%, 06/01/2024(b) | 1,024,583 | |||||||||
Guidewire Software, Inc. | |||||||||||
2,000,000 | 1.250%, 03/15/2025 | 2,181,977 | |||||||||
Nuance Communications, Inc. | |||||||||||
2,060,000 | 1.500%, 11/01/2035 | 2,060,000 | |||||||||
Total Information Technology (Cost $9,495,639) | 10,022,739 | ||||||||||
Total Convertible Bonds (Cost $17,897,586) | 19,271,374 |
The accompanying notes are an integral part of these financial statements.
58
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Corporate Bonds | 64.24 | % | |||||||||
Communication Services | 12.66 | % | |||||||||
Diversified Telecommunication Services | 3.27 | % | |||||||||
CCO Holdings LLC / CCO Holdings Capital Corp. | |||||||||||
2,200,000 | 5.250%, 03/15/2021 | 2,211,011 | |||||||||
Consolidated Communications, Inc. | |||||||||||
4,500,000 | 6.500%, 10/01/2022 | 4,050,000 | |||||||||
6,261,011 | |||||||||||
Entertainment | 3.14 | % | |||||||||
Lions Gate Capital Holdings LLC | |||||||||||
250,000 | 5.875%, 11/01/2024(b) | 258,438 | |||||||||
Live Nation Entertainment, Inc. | |||||||||||
3,100,000 | 5.375%, 06/15/2022(b) | 3,146,500 | |||||||||
1,000,000 | 4.875%, 11/01/2024(b) | 1,008,750 | |||||||||
250,000 | 5.625%, 03/15/2026(b) | 258,750 | |||||||||
Netflix, Inc. | |||||||||||
250,000 | 5.500%, 02/15/2022 | 263,125 | |||||||||
1,000,000 | 5.750%, 03/01/2024 | 1,074,600 | |||||||||
6,010,163 | |||||||||||
Interactive Media & Services | 0.53 | % | |||||||||
Match Group, Inc. | |||||||||||
1,000,000 | 5.000%, 12/15/2027(b) | 1,012,500 | |||||||||
Media | 5.72 | % | |||||||||
AMC Networks, Inc. | |||||||||||
1,500,000 | 5.000%, 04/01/2024 | 1,511,100 | |||||||||
Cinemark USA, Inc. | |||||||||||
1,000,000 | 5.125%, 12/15/2022 | 1,018,750 | |||||||||
The E.W. Scripps Co. | |||||||||||
250,000 | 5.125%, 05/15/2025(b) | 238,750 | |||||||||
Gray Television, Inc. | |||||||||||
2,060,000 | 5.875%, 07/15/2026(b) | 2,101,612 | |||||||||
Nexstar Broadcasting, Inc. | |||||||||||
2,000,000 | 6.125%, 02/15/2022(b) | 2,035,000 | |||||||||
500,000 | 5.625%, 08/01/2024(b) | 508,750 | |||||||||
Sirius XM Radio, Inc. | |||||||||||
1,500,000 | 4.625%, 05/15/2023(b) | 1,524,375 | |||||||||
Townsquare Media, Inc. | |||||||||||
2,100,000 | 6.500%, 04/01/2023(b) | 2,018,625 | |||||||||
10,956,962 | |||||||||||
Total Communication Services (Cost $24,274,731) | 24,240,636 |
The accompanying notes are an integral part of these financial statements.
59
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Consumer Discretionary | 11.91 | % | |||||||||
Auto Components | 0.52 | % | |||||||||
Allison Transmission, Inc. | |||||||||||
1,000,000 | 5.000%, 10/01/2024(b) | 1,001,250 | |||||||||
Commercial Services | 1.61 | % | |||||||||
Compass Group Diversified Holdings LLC | |||||||||||
2,000,000 | 8.000%, 05/01/2026(b) | 2,083,750 | |||||||||
The ServiceMaster Co. LLC | |||||||||||
1,000,000 | 5.125%, 11/15/2024(b) | 1,006,250 | |||||||||
3,090,000 | |||||||||||
Distributors | 1.06 | % | |||||||||
LKQ Corp. | |||||||||||
2,000,000 | 4.750%, 05/15/2023 | 2,022,100 | |||||||||
Diversified Consumer Services | 0.52 | % | |||||||||
Service Corporation International | |||||||||||
1,000,000 | 4.500%, 11/15/2020 | 998,750 | |||||||||
Hotels, Restaurants & Leisure | 2.57 | % | |||||||||
Nathan's Famous, Inc. | |||||||||||
1,500,000 | 6.625%, 11/01/2025(b) | 1,464,375 | |||||||||
Royal Caribbean Cruises Ltd. | |||||||||||
1,615,000 | 7.500%, 10/15/2027(a) | 1,958,302 | |||||||||
Six Flags Entertainment Corp. | |||||||||||
1,500,000 | 5.500%, 04/15/2027(b) | 1,486,950 | |||||||||
4,909,627 | |||||||||||
Leisure Products | 1.70 | % | |||||||||
Brunswick Corp. | |||||||||||
3,000,000 | 7.375%, 09/01/2023 | 3,256,281 | |||||||||
Specialty Retail | 2.09 | % | |||||||||
Penske Automotive Group, Inc. | |||||||||||
2,500,000 | 5.750%, 10/01/2022 | 2,553,125 | |||||||||
Sonic Automotive, Inc. | |||||||||||
1,500,000 | 5.000%, 05/15/2023 | 1,447,500 | |||||||||
4,000,625 | |||||||||||
Textiles, Apparel & Luxury Goods | 1.84 | % | |||||||||
PVH Corp. | |||||||||||
3,120,000 | 7.750%, 11/15/2023 | 3,519,625 | |||||||||
Total Consumer Discretionary (Cost $21,231,461) | 22,798,258 |
The accompanying notes are an integral part of these financial statements.
60
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Consumer Staples | 3.81 | % | |||||||||
Food Products | 3.81 | % | |||||||||
Darling Ingredients, Inc. | |||||||||||
1,100,000 | 5.375%, 01/15/2022 | 1,120,625 | |||||||||
Pilgrim's Pride Corp. | |||||||||||
1,000,000 | 5.750%, 03/15/2025(b) | 1,015,000 | |||||||||
TreeHouse Foods, Inc. | |||||||||||
2,000,000 | 4.875%, 03/15/2022 | 2,031,920 | |||||||||
3,000,000 | 6.000%, 02/15/2024(b) | 3,123,750 | |||||||||
Total Consumer Staples (Cost $7,073,825) | 7,291,295 | ||||||||||
Energy | 6.75 | % | |||||||||
Oil, Gas & Consumable Fuels | 6.75 | % | |||||||||
Andeavor Logistics LP | |||||||||||
3,500,000 | 6.875% (3 Month LIBOR USD + 4.652%), 08/15/2023 | 3,519,547 | |||||||||
Andeavor Logistics LP / Tesoro Logistics Finance Corp. | |||||||||||
1,000,000 | 5.500%, 10/15/2019 | 1,010,123 | |||||||||
Delek Logistics Partners LP / Delek Logistics Finance Corp. | |||||||||||
2,000,000 | 6.750%, 05/15/2025 | 1,990,000 | |||||||||
Holly Energy Partners LP / Holly Energy Finance Corp. | |||||||||||
2,500,000 | 6.000%, 08/01/2024(b) | 2,592,500 | |||||||||
Parsley Energy LLC / Parsley Finance Corp. | |||||||||||
250,000 | 6.250%, 06/01/2024(b) | 259,062 | |||||||||
1,000,000 | 5.375%, 01/15/2025(b) | 1,002,500 | |||||||||
Seven Generations Energy Ltd. | |||||||||||
1,275,000 | 6.750%, 05/01/2023(a) (b) | 1,316,438 | |||||||||
1,000,000 | 5.375%, 09/30/2025(a) (b) | 981,250 | |||||||||
Whiting Petroleum Corp. | |||||||||||
250,000 | 6.625%, 01/15/2026 | 246,250 | |||||||||
Total Energy (Cost $12,829,733) | 12,917,670 | ||||||||||
Financials | 4.67 | % | |||||||||
Capital Markets | 1.60 | % | |||||||||
Donnelley Financial Solutions, Inc. | |||||||||||
1,500,000 | 8.250%, 10/15/2024 | 1,515,000 | |||||||||
MSCI, Inc. | |||||||||||
1,500,000 | 5.250%, 11/15/2024(b) | 1,559,700 | |||||||||
3,074,700 |
The accompanying notes are an integral part of these financial statements.
61
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Diversified Financial Services | 3.07 | % | |||||||||
Cogent Communications Finance, Inc. | |||||||||||
3,000,000 | 5.625%, 04/15/2021(b) | 3,045,000 | |||||||||
Cott Holdings, Inc. | |||||||||||
1,250,000 | 5.500%, 04/01/2025(b) | 1,265,625 | |||||||||
Everi Payments, Inc. | |||||||||||
1,500,000 | 7.500%, 12/15/2025(b) | 1,563,750 | |||||||||
5,874,375 | |||||||||||
Total Financials (Cost $8,715,750) | 8,949,075 | ||||||||||
Health Care | 5.27 | % | |||||||||
Health Care Equipment & Supplies | 0.52 | % | |||||||||
Catalent Pharma Solutions, Inc. | |||||||||||
1,000,000 | 4.875%, 01/15/2026(b) | 995,000 | |||||||||
Health Care Providers & Services | 1.07 | % | |||||||||
Centene Corp. | |||||||||||
1,500,000 | 5.625%, 02/15/2021 | 1,524,375 | |||||||||
500,000 | 6.125%, 02/15/2024 | 524,525 | |||||||||
2,048,900 | |||||||||||
Pharmaceuticals | 3.68 | % | |||||||||
Bausch Health Americas, Inc. | |||||||||||
1,000,000 | 9.250%, 04/01/2026(b) | 1,096,800 | |||||||||
Bausch Health Companies Inc. | |||||||||||
1,500,000 | 5.500%, 11/01/2025(a) (b) | 1,537,500 | |||||||||
500,000 | 9.000%, 12/15/2025(a) (b) | 545,025 | |||||||||
Horizon Pharma USA, Inc. | |||||||||||
2,750,000 | 6.625%, 05/01/2023 | 2,840,504 | |||||||||
Par Pharmaceutical Companies, Inc. | |||||||||||
1,000,000 | 7.500%, 04/01/2027(b) | 1,016,500 | |||||||||
7,036,329 | |||||||||||
Total Health Care (Cost $9,695,380) | 10,080,229 | ||||||||||
Industrials | 13.35 | % | |||||||||
Aerospace & Defense | 2.71 | % | |||||||||
TransDigm, Inc. | |||||||||||
250,000 | 6.000%, 07/15/2022 | 254,688 | |||||||||
500,000 | 6.250%, 03/15/2026(b) | 522,000 | |||||||||
500,000 | 6.375%, 06/15/2026 | 496,800 |
The accompanying notes are an integral part of these financial statements.
62
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Triumph Group, Inc. | |||||||||||
4,000,000 | 4.875%, 04/01/2021 | 3,920,000 | |||||||||
5,193,488 | |||||||||||
Commercial Services & Supplies | 6.70 | % | |||||||||
Cimpress NV | |||||||||||
2,000,000 | 7.000%, 06/15/2026(a) (b) | 1,935,000 | |||||||||
Covanta Holding Corp. | |||||||||||
250,000 | 5.875%, 03/01/2024 | 256,875 | |||||||||
1,500,000 | 5.875%, 07/01/2025 | 1,531,875 | |||||||||
LSC Communications, Inc. | |||||||||||
2,000,000 | 8.750%, 10/15/2023(b) | 2,125,000 | |||||||||
Matthews International Corp. | |||||||||||
1,250,000 | 5.250%, 12/01/2025(b) | 1,203,125 | |||||||||
Mobile Mini, Inc. | |||||||||||
1,000,000 | 5.875%, 07/01/2024 | 1,020,000 | |||||||||
Multi-Color Corp. | |||||||||||
723,000 | 6.125%, 12/01/2022(b) | 746,497 | |||||||||
Quad Graphics, Inc. | |||||||||||
4,000,000 | 7.000%, 05/01/2022 | 4,017,200 | |||||||||
12,835,572 | |||||||||||
Construction & Engineering | 1.87 | % | |||||||||
Great Lakes Dredge & Dock Corp. | |||||||||||
1,500,000 | 8.000%, 05/15/2022 | 1,575,000 | |||||||||
Tutor Perini Corp. | |||||||||||
2,000,000 | 6.875%, 05/01/2025(b) | 1,997,760 | |||||||||
3,572,760 | |||||||||||
Trading Companies & Distributors | 2.07 | % | |||||||||
Fly Leasing Ltd. | |||||||||||
2,000,000 | 6.375%, 10/15/2021(a) | 2,030,000 | |||||||||
2,000,000 | 5.250%, 10/15/2024(a) | 1,930,000 | |||||||||
3,960,000 | |||||||||||
Total Industrials (Cost $25,523,420) | 25,561,820 | ||||||||||
Information Technology | 4.63 | % | |||||||||
Electronic Equipment, Instruments & Components | 1.59 | % | |||||||||
Anixter, Inc. | |||||||||||
500,000 | 5.125%, 10/01/2021 | 517,500 | |||||||||
1,000,000 | 6.000%, 12/01/2025(b) | 1,052,500 |
The accompanying notes are an integral part of these financial statements.
63
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Itron, Inc. | |||||||||||
1,500,000 | 5.000%, 01/15/2026(b) | 1,479,375 | |||||||||
3,049,375 | |||||||||||
IT Services | 1.43 | % | |||||||||
Cardtronics Inc / Cardtronics USA, Inc. | |||||||||||
1,500,000 | 5.500%, 05/01/2025(b) | 1,473,750 | |||||||||
j2 Cloud Services LLC / j2 Global Co-Obligor, Inc. | |||||||||||
1,200,000 | 6.000%, 07/15/2025(b) | 1,251,000 | |||||||||
2,724,750 | |||||||||||
Software | 1.61 | % | |||||||||
Nuance Communications, Inc. | |||||||||||
3,000,000 | 6.000%, 07/01/2024 | 3,086,250 | |||||||||
Total Information Technology (Cost $8,688,861) | 8,860,375 | ||||||||||
Materials | 1.19 | % | |||||||||
Chemicals | 0.54 | % | |||||||||
OCI NV | |||||||||||
1,000,000 | 6.625%, 04/15/2023(a) (b) | 1,042,000 | |||||||||
Metals & Mining | 0.65 | % | |||||||||
Commercial Metals Co. | |||||||||||
1,000,000 | 5.750%, 04/15/2026 | 1,000,000 | |||||||||
250,000 | 5.375%, 07/15/2027 | 241,250 | |||||||||
1,241,250 | |||||||||||
Total Materials (Cost $2,261,250) | 2,283,250 | ||||||||||
Total Corporate Bonds (Cost $120,294,411) | 122,982,608 | ||||||||||
Bank Loans | 17.12 | % | |||||||||
Aerospace & Defense | 3.02 | % | |||||||||
4,937,500 | Maxar Technologies Ltd., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.750%) | 3,859,199 | |||||||||
1,965,125 | TransDigm, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.500%) | 1,918,945 | |||||||||
Building Products | 1.49 | % | |||||||||
2,937,072 | Builders FirstSource, Inc., Senior Secured First Lien Term Loan (3 Month LIBOR USD + 3.000%) | 2,851,413 | |||||||||
Capital Goods | 1.01 | % | |||||||||
1,940,708 | SiteOne Landscape Supply Holding, Llc, Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.750%) | 1,929,190 |
The accompanying notes are an integral part of these financial statements.
64
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Capital Markets | 0.50 | % | |||||||||
956,667 | Blucora, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.000%) | 954,873 | |||||||||
Commercial Services & Supplies | 0.21 | % | |||||||||
406,000 | LSC Communications, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 5.500%) | 404,987 | |||||||||
Diversified Consumer Services | 1.55 | % | |||||||||
725,363 | Laureate Education, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.500%) | 726,183 | |||||||||
2,343,750 | Weight Watchers International, Inc., Senior Secured First Lien Term Loan (3 Month LIBOR USD + 4.750%) | 2,244,879 | |||||||||
Food Products | 0.52 | % | |||||||||
985,000 | Atkins Nutritionals, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.500%)(c) | 987,462 | |||||||||
Health Care Equipment & Supplies | 0.55 | % | |||||||||
1,064,263 | Catalent Pharma Solutions Inc, Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.250%) | 1,061,108 | |||||||||
IT Services | 0.50 | % | |||||||||
987,437 | Internap Corp., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 5.750%) | 957,814 | |||||||||
Machinery | 0.49 | % | |||||||||
950,000 | Welbilt, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.500%) | 938,125 | |||||||||
Media | 1.05 | % | |||||||||
1,068,323 | CBS Radio Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.750%) | 1,041,081 | |||||||||
985,000 | The E.W. Scripps Co., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.000%) | 959,144 | |||||||||
Metals & Mining | 1.47 | % | |||||||||
2,962,500 | US Silica Co., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 4.000%) | 2,808,361 | |||||||||
Oil, Gas & Consumable Fuels | 0.50 | % | |||||||||
992,500 | Keane Group Holdings, LLC, Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.750%) | 958,591 | |||||||||
Pharmaceuticals | 2.43 | % | |||||||||
2,313,897 | Bausch Health Americas, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.000%) | 2,301,715 | |||||||||
475,000 | Bausch Health Americas, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.750%) | 470,141 | |||||||||
1,830,622 | Horizon Pharma USA, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.000%) | 1,833,505 | |||||||||
55,000 | Innoviva, Inc., Senior Secured First Lien Term Loan (3 Month LIBOR USD + 4.500%) | 54,450 | |||||||||
Software | 1.32 | % | |||||||||
Avaya, Inc., Senior Secured First Lien Term Loan (2 Month LIBOR USD + 4.250%) | |||||||||||
989,975 | Avaya, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 4.250%) | 987,396 | |||||||||
324,131 | SS&C Technologies Holdings, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.250%) | 321,946 | |||||||||
233,050 | SS&C Technologies Holdings, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.250%) | 231,479 | |||||||||
994,918 | SS&C Technologies Holdings, Inc., Senior Secured First Lien Term Loan (1 Month LIBOR USD + 2.250%) | 987,820 |
The accompanying notes are an integral part of these financial statements.
65
BUFFALO HIGH YIELD FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Trading Companies & Distributors | 0.51 | % | |||||||||
997,500 | Foundation Building Materials Holding Company LLC, Senior Secured First Lien Term Loan (1 Month LIBOR USD + 3.000%) | 980,667 | |||||||||
Total Bank Loans (Cost $34,370,699) | 32,770,474 | ||||||||||
Short Term Investment | 5.94 | % | |||||||||
Investment Company | 5.94 | % | |||||||||
11,370,875 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(d) | 11,370,875 | |||||||||
Total Investment Company | 11,370,875 | ||||||||||
Total Short Term Investment (Cost $11,370,875) | 11,370,875 | ||||||||||
Total Investments (Cost $186,118,767) | 98.69 188,945,170 | % | |||||||||
Other Assets in Excess of Liabilities | 1.31 2,505,426 | % | |||||||||
Total Net Assets | 100.00 191,450,596 | % |
(a) Foreign Issued Securities. The total value of these securities amounted to $14,028,184 (7.33% if net assets) at March 31, 2019.
(b) 144A Securities. The total value of these securities amounted to $63,000,918 (32.91% of net assets) at March 31, 2019.
(c) Illiquid Security. The total value of these securities amounted to $987,462 (0.52% of net assets) at March 31, 2019.
(d) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
66
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 90.36 | % | |||||||||
Belgium | 1.37 | % | |||||||||
Beverages | 1.37 | % | |||||||||
38,500 | Anheuser-Busch InBev SA/NV | 3,231,865 | |||||||||
17,200 | Anheuser-Busch InBev SA/NV — ADR | 1,444,284 | |||||||||
4,676,149 | |||||||||||
Total Belgium (Cost $4,564,683) | 4,676,149 | ||||||||||
Brazil | 0.33 | % | |||||||||
Beverages | 0.33 | % | |||||||||
262,400 | Ambev SA — ADR | 1,128,320 | |||||||||
Total Brazil (Cost $1,139,667) | 1,128,320 | ||||||||||
Canada | 1.71 | % | |||||||||
Road & Rail | 1.71 | % | |||||||||
65,000 | Canadian National Railway Co. | 5,816,200 | |||||||||
Total Canada (Cost $4,640,241) | 5,816,200 | ||||||||||
Cayman Islands | 1.11 | % | |||||||||
Interactive Media & Services | 1.11 | % | |||||||||
82,000 | Tencent Holdings Ltd. — ADR | 3,770,360 | |||||||||
Total Cayman Islands (Cost $3,335,487) | 3,770,360 | ||||||||||
France | 19.20 | % | |||||||||
Beverages | 1.13 | % | |||||||||
21,500 | Pernod Ricard SA | 3,860,574 | |||||||||
Chemicals | 1.62 | % | |||||||||
43,402 | Air Liquide SA | 5,523,427 | |||||||||
Electrical Equipment | 1.93 | % | |||||||||
84,000 | Schneider Electric SE | 6,593,072 | |||||||||
Food Products | 0.18 | % | |||||||||
11,308 | Vilmorin & Cie S.A. | 598,750 |
The accompanying notes are an integral part of these financial statements.
67
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Hotels, Restaurants & Leisure | 1.39 | % | |||||||||
117,000 | Accor SA | 4,739,604 | |||||||||
Life Sciences Tools & Services | 3.55 | % | |||||||||
11,400 | Eurofins Scientific SE | 4,722,603 | |||||||||
58,341 | Sartorius Stedim Biotech | 7,392,382 | |||||||||
12,114,985 | |||||||||||
Media | 1.82 | % | |||||||||
121,000 | JCDecaux SA | 3,682,539 | |||||||||
47,000 | Publicis Groupe SA | 2,516,484 | |||||||||
6,199,023 | |||||||||||
Professional Services | 1.40 | % | |||||||||
203,000 | Bureau Veritas SA | 4,762,563 | |||||||||
Software | 1.84 | % | |||||||||
42,000 | Dassault Systemes SE | 6,260,074 | |||||||||
Textiles, Apparel & Luxury Goods | 4.34 | % | |||||||||
14,500 | Kering SA | 8,317,274 | |||||||||
17,600 | LVMH Moet Hennessy Louis Vuitton SE | 6,482,704 | |||||||||
14,799,978 | |||||||||||
Total France (Cost $48,794,238) | 65,452,050 | ||||||||||
Germany | 21.91 | % | |||||||||
Chemicals | 1.48 | % | |||||||||
56,000 | Symrise AG | 5,048,312 | |||||||||
Construction Materials | 1.05 | % | |||||||||
49,500 | HeidelbergCement AG | 3,568,066 | |||||||||
Electronic Equipment, Instruments & Components | 1.46 | % | |||||||||
133,711 | Jenoptik AG | 4,992,317 | |||||||||
Entertainment | 0.86 | % | |||||||||
62,000 | CTS Eventim AG & Co. KGaA | 2,939,743 | |||||||||
Health Care Equipment & Supplies | 1.95 | % | |||||||||
79,525 | Carl Zeiss Meditec AG | 6,646,017 | |||||||||
Health Care Providers & Services | 1.79 | % | |||||||||
109,000 | Fresenius SE & Co. KGaA | 6,092,250 | |||||||||
Household Products | 0.81 | % | |||||||||
28,900 | Henkel AG & Co. KGaA | 2,749,932 |
The accompanying notes are an integral part of these financial statements.
68
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Industrial Conglomerates | 1.58 | % | |||||||||
50,200 | Siemens A.G. | 5,398,657 | |||||||||
Insurance | 1.51 | % | |||||||||
21,700 | Muenchener Rueckversicherungs-Gesellschaft AG in Muenchen | 5,142,803 | |||||||||
IT Services | 1.23 | % | |||||||||
33,500 | Wirecard AG | 4,208,382 | |||||||||
Pharmaceuticals | 1.77 | % | |||||||||
9,200 | Bayer AG | 592,408 | |||||||||
12,000 | Bayer AG — ADR | 193,260 | |||||||||
46,000 | Merck KGaA | 5,251,890 | |||||||||
6,037,558 | |||||||||||
Semiconductors & Semiconductor Equipment | 0.44 | % | |||||||||
75,000 | Infineon Technologies AG | 1,488,938 | |||||||||
Software | 2.20 | % | |||||||||
64,800 | SAP SE — ADR | 7,481,808 | |||||||||
Textiles, Apparel & Luxury Goods | 2.38 | % | |||||||||
19,700 | adidas AG | 4,791,483 | |||||||||
5,716 | Puma SE | 3,314,980 | |||||||||
8,106,463 | |||||||||||
Trading Companies & Distributors | 1.40 | % | |||||||||
93,000 | Brenntag AG | 4,781,451 | |||||||||
Total Germany (Cost $53,668,732) | 74,682,697 | ||||||||||
Hong Kong | 2.59 | % | |||||||||
Gas Utilities | 0.68 | % | |||||||||
405,000 | Beijing Enterprises Holdings Ltd. | 2,299,759 | |||||||||
Industrial Conglomerates | 1.43 | % | |||||||||
44,184 | Jardine Matheson Holdings Ltd. | 2,758,391 | |||||||||
56,695 | Jardine Strategic Holdings Ltd. | 2,126,620 | |||||||||
4,885,011 | |||||||||||
Specialty Retail | 0.48 | % | |||||||||
880,750 | L'Occitane International SA | 1,633,050 | |||||||||
Total Hong Kong (Cost $7,999,224) | 8,817,820 |
The accompanying notes are an integral part of these financial statements.
69
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
India | 1.79 | % | |||||||||
Banks | 1.79 | % | |||||||||
532,480 | ICICI Bank Ltd. — ADR | 6,102,221 | |||||||||
Total India (Cost $5,164,582) | 6,102,221 | ||||||||||
Ireland | 3.32 | % | |||||||||
Chemicals | 2.05 | % | |||||||||
39,760 | Linde PLC(a) | 7,000,655 | |||||||||
Construction Materials | 1.07 | % | |||||||||
50,000 | CRH PLC | 1,549,235 | |||||||||
67,300 | CRH PLC — ADR | 2,086,300 | |||||||||
3,635,535 | |||||||||||
Hotels, Restaurants & Leisure | 0.20 | % | |||||||||
102,500 | Dalata Hotel Group PLC | 676,886 | |||||||||
Total Ireland (Cost $9,479,823) | 11,313,076 | ||||||||||
Italy | 1.99 | % | |||||||||
Beverages | 1.99 | % | |||||||||
690,000 | Davide Campari — Milano S.p.A. | 6,779,027 | |||||||||
Total Italy (Cost $2,639,510) | 6,779,027 | ||||||||||
Japan | 4.59 | % | |||||||||
Beverages | 1.14 | % | |||||||||
87,000 | Asahi Group Holdings Ltd. | 3,883,549 | |||||||||
Electronic Equipment, Instruments & Components | 2.32 | % | |||||||||
1,000 | KEYENCE CORP. | 625,195 | |||||||||
75,000 | Murata Manufacturing Co., Ltd. | 3,753,375 | |||||||||
75,000 | Omron Corp. | 3,523,591 | |||||||||
7,902,161 | |||||||||||
Internet & Direct Marketing Retail | 0.34 | % | |||||||||
61,000 | ZOZO, Inc. | 1,153,258 |
The accompanying notes are an integral part of these financial statements.
70
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Machinery | 0.79 | % | |||||||||
14,000 | FANUC Corp. | 2,394,191 | |||||||||
18,000 | FANUC Corp. — ADR(a) | 306,720 | |||||||||
2,700,911 | |||||||||||
Total Japan (Cost $12,755,517) | 15,639,879 | ||||||||||
Netherlands | 7.16 | % | |||||||||
IT Services | 1.71 | % | |||||||||
87,499 | InterXion Holding NV(a) | 5,838,808 | |||||||||
Oil, Gas & Consumable Fuels | 1.03 | % | |||||||||
56,000 | Royal Dutch Shell PLC — Class A — ADR | 3,505,040 | |||||||||
Personal Products | 1.36 | % | |||||||||
79,700 | Unilever N.V. — NY Shares — ADR | 4,645,713 | |||||||||
Semiconductors & Semiconductor Equipment | 1.97 | % | |||||||||
25,741 | ASML Holding NV — NY Shares — ADR | 4,840,595 | |||||||||
55,000 | STMicroelectronics N.V. | 815,782 | |||||||||
70,600 | STMicroelectronics N.V. — NY Shares — ADR | 1,048,410 | |||||||||
6,704,787 | |||||||||||
Trading Companies & Distributors | 1.09 | % | |||||||||
48,500 | IMCD N.V. | 3,700,399 | |||||||||
Total Netherlands (Cost $16,095,021) | 24,394,747 | ||||||||||
Norway | 2.28 | % | |||||||||
Commercial Services & Supplies | 1.95 | % | |||||||||
223,000 | Tomra Systems ASA | 6,647,978 | |||||||||
Diversified Telecommunication Services | 0.33 | % | |||||||||
56,000 | Telenor ASA | 1,121,341 | |||||||||
Total Norway (Cost $3,527,001) | 7,769,319 | ||||||||||
Republic of Korea | 0.46 | % | |||||||||
Technology Hardware, Storage & Peripherals | 0.46 | % | |||||||||
40,000 | Samsung Electronic Co., Ltd. | 1,577,717 | |||||||||
Total Republic of Korea (Cost $894,090) | 1,577,717 |
The accompanying notes are an integral part of these financial statements.
71
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Spain | 2.28 | % | |||||||||
Biotechnology | 1.48 | % | |||||||||
250,300 | Grifols SA — ADR | 5,033,533 | |||||||||
Specialty Retail | 0.80 | % | |||||||||
93,500 | Industria de Diseno Textil, S.A. | 2,749,047 | |||||||||
Total Spain (Cost $7,527,957) | 7,782,580 | ||||||||||
Sweden | 1.59 | % | |||||||||
Electronic Equipment, Instruments & Components | 1.59 | % | |||||||||
104,000 | Hexagon AB — B Shares | 5,435,311 | |||||||||
Total Sweden (Cost $5,514,852) | 5,435,311 | ||||||||||
Switzerland | 5.00 | % | �� | ||||||||
Capital Markets | 0.61 | % | |||||||||
51,037 | Julius Baer Group Ltd. | 2,064,558 | |||||||||
Insurance | 1.55 | % | |||||||||
54,000 | Swiss Re AG | 5,278,242 | |||||||||
Life Sciences Tools & Services | 1.00 | % | |||||||||
11,000 | Lonza Group AG | 3,415,024 | |||||||||
Pharmaceuticals | 1.33 | % | |||||||||
45,400 | Roche Holding AG — ADR | 1,561,306 | |||||||||
10,800 | Roche Holding AG | 2,975,993 | |||||||||
4,537,299 | |||||||||||
Specialty Retail | 0.51 | % | |||||||||
16,700 | Dufry AG | 1,755,989 | |||||||||
Total Switzerland (Cost $16,027,080) | 17,051,112 | ||||||||||
Taiwan, Province of China | 2.03 | % | |||||||||
Semiconductors & Semiconductor Equipment | 2.03 | % | |||||||||
169,281 | Taiwan Semiconductor Manufacturing Co. Ltd. — ADR | 6,933,750 | |||||||||
Total Taiwan, Province of China (Cost $2,497,331) | 6,933,750 |
The accompanying notes are an integral part of these financial statements.
72
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
United Kingdom | 9.65 | % | |||||||||
Beverages | 1.69 | % | |||||||||
35,300 | Diageo plc — ADR | 5,775,433 | |||||||||
Health Care Equipment & Supplies | 1.51 | % | |||||||||
128,100 | Smith & Nephew plc — ADR | 5,138,091 | |||||||||
Hotels, Restaurants & Leisure | 2.18 | % | |||||||||
60,100 | InterContinental Hotels Group PLC | 3,616,988 | |||||||||
57,800 | Whitbread PLC | 3,825,002 | |||||||||
7,441,990 | |||||||||||
Insurance | 2.00 | % | |||||||||
40,000 | Aon PLC | 6,828,000 | |||||||||
Internet & Direct Marketing Retail | 0.54 | % | |||||||||
44,000 | ASOS PLC(a) | 1,837,412 | |||||||||
Pharmaceuticals | 0.52 | % | |||||||||
41,800 | AstraZeneca PLC — ADR | 1,689,974 | |||||||||
1,000 | AstraZeneca PLC | 79,906 | |||||||||
1,769,880 | |||||||||||
Trading Companies & Distributors | 1.21 | % | |||||||||
170,000 | Ashtead Group Plc | 4,109,708 | |||||||||
Total United Kingdom (Cost $27,589,557) | 32,900,514 | ||||||||||
Total Common Stocks (Cost $233,854,593) | 308,022,849 |
The accompanying notes are an integral part of these financial statements.
73
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Short Term Investment | 8.63 | % | |||||||||
Investment Company | 8.63 | % | |||||||||
29,418,197 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(b) | 29,418,197 | |||||||||
Total Investment Company | 29,418,197 | ||||||||||
Total Short Term Investment (Cost $29,418,197) | 29,418,197 | ||||||||||
Total Investments (Cost $263,272,790) | 98.99 337,441,046 | % | |||||||||
Other Assets in Excess of Liabilities | 1.01 3,438,629 | % | |||||||||
Total Net Assets | 100.00 340,879,675 | % |
ADR American Depositary Receipt
PLC Public Limited Company
(a) Non Income Producing.
(b) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The accompanying notes are an integral part of these financial statements.
74
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
As of March 31, 2019, the industry diversification was as follows:
$ Fair Value | Percentage | ||||||||||
Common Stocks | |||||||||||
Banks | 6,102,221 | 1.79 | % | ||||||||
Beverages | 26,103,051 | 7.66 | % | ||||||||
Biotechnology | 5,033,533 | 1.48 | % | ||||||||
Capital Markets | 2,064,559 | 0.61 | % | ||||||||
Chemicals | 17,572,394 | 5.16 | % | ||||||||
Commercial Services & Supplies | 6,647,978 | 1.95 | % | ||||||||
Construction Materials | 7,203,601 | 2.11 | % | ||||||||
Diversified Telecommunication Services | 1,121,341 | 0.33 | % | ||||||||
Electrical Equipment | 6,593,072 | 1.93 | % | ||||||||
Electronic Equipment, Instruments & Components | 18,329,788 | 5.38 | % | ||||||||
Entertainment | 2,939,743 | 0.86 | % | ||||||||
Food Products | 598,750 | 0.18 | % | ||||||||
Gas Utilities | 2,299,759 | 0.67 | % | ||||||||
Health Care Equipment & Supplies | 11,784,108 | 3.46 | % | ||||||||
Health Care Providers & Services | 6,092,250 | 1.79 | % | ||||||||
Hotels, Restaurants & Leisure | 12,858,480 | 3.77 | % | ||||||||
Household Products | 2,749,932 | 0.81 | % | ||||||||
Industrial Conglomerates | 10,283,669 | 3.02 | % | ||||||||
Insurance | 17,249,044 | 5.06 | % | ||||||||
Interactive Media & Services | 3,770,360 | 1.11 | % | ||||||||
Internet & Direct Marketing Retail | 2,990,671 | 0.88 | % | ||||||||
IT Services | 10,047,190 | 2.95 | % | ||||||||
Life Sciences Tools & Services | 15,530,009 | 4.56 | % | ||||||||
Machinery | 2,700,911 | 0.79 | % | ||||||||
Media | 6,199,023 | 1.82 | % | ||||||||
Oil, Gas & Consumable Fuels | 3,505,040 | 1.03 | % | ||||||||
Personal Products | 4,645,713 | 1.36 | % | ||||||||
Pharmaceuticals | 12,344,737 | 3.62 | % | ||||||||
Professional Services | 4,762,563 | 1.40 | % | ||||||||
Road & Rail | 5,816,200 | 1.71 | % | ||||||||
Semiconductors & Semiconductor Equipment | 15,127,475 | 4.44 | % | ||||||||
Software | 13,741,882 | 4.03 | % | ||||||||
Specialty Retail | 6,138,085 | 1.80 | % | ||||||||
Technology Hardware, Storage & Peripherals | 1,577,717 | 0.46 | % | ||||||||
Textiles, Apparel & Luxury Goods | 22,906,441 | 6.72 | % | ||||||||
Trading Companies & Distributors | 12,591,559 | 3.69 | % | ||||||||
Total Common Stocks | 308,022,849 | 90.36 | % |
The accompanying notes are an integral part of these financial statements.
75
BUFFALO INTERNATIONAL FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
$ Fair Value | Percentage | ||||||||||
Short Term Investment | |||||||||||
Investment Company | 29,418,197 | 8.63 | % | ||||||||
Total Short Term Investment | 29,418,197 | 8.63 | % | ||||||||
Total Investments | 337,441,046 | 98.99 | % | ||||||||
Other Assets in Excess of Liabilities | 3,438,629 | 1.01 | % | ||||||||
TOTAL NET ASSETS | 340,879,675 | 100.00 | % |
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
76
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 92.83 | % | |||||||||
Communication Services | 10.82 | % | |||||||||
Entertainment | 2.94 | % | |||||||||
7,100 | Electronic Arts, Inc.(a) | 721,573 | |||||||||
20,600 | Live Nation Entertainment, Inc.(a) | 1,308,924 | |||||||||
2,030,497 | |||||||||||
Interactive Media & Services | 7.88 | % | |||||||||
2,845 | Alphabet, Inc. — Class A(a) | 3,348,252 | |||||||||
1,148 | Alphabet, Inc. — Class C(a) | 1,346,960 | |||||||||
4,450 | Facebook, Inc. — Class A(a) | 741,770 | |||||||||
5,436,982 | |||||||||||
Total Communication Services (Cost $3,851,163) | 7,467,479 | ||||||||||
Consumer Discretionary | 17.37 | % | |||||||||
Hotels, Restaurants & Leisure | 1.15 | % | |||||||||
6,355 | Marriott International, Inc. — Class A | 794,947 | |||||||||
Internet & Direct Marketing Retail | 7.99 | % | |||||||||
2,485 | Amazon.com, Inc.(a) | 4,425,163 | |||||||||
625 | Booking Holdings, Inc.(a) | 1,090,569 | |||||||||
5,515,732 | |||||||||||
Specialty Retail | 6.38 | % | |||||||||
13,970 | Lowe's Companies, Inc. | 1,529,296 | |||||||||
3,700 | O'Reilly Automotive, Inc.(a) | 1,436,710 | |||||||||
27,000 | The TJX Companies, Inc. | 1,436,670 | |||||||||
4,402,676 | |||||||||||
Textiles, Apparel & Luxury Goods | 1.85 | % | |||||||||
6,320 | NIKE, Inc. — Class B | 532,207 | |||||||||
39,250 | Under Armour, Inc. — Class C(a) | 740,648 | |||||||||
1,272,855 | |||||||||||
Total Consumer Discretionary (Cost $5,249,668) | 11,986,210 | ||||||||||
Consumer Staples | 1.26 | % | |||||||||
Personal Products | 1.26 | % | |||||||||
5,250 | The Estee Lauder Companies Inc. — Class A | 869,137 | |||||||||
Total Consumer Staples (Cost $492,128) | 869,137 |
The accompanying notes are an integral part of these financial statements.
77
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Energy | 1.36 | % | |||||||||
Energy Equipment & Services | 1.36 | % | |||||||||
21,579 | Schlumberger Ltd.(b) | 940,197 | |||||||||
Total Energy (Cost $1,286,750) | 940,197 | ||||||||||
Financials | 7.81 | % | |||||||||
Capital Markets | 7.81 | % | |||||||||
11,140 | CME Group, Inc. | 1,833,421 | |||||||||
19,375 | Intercontinental Exchange, Inc. | 1,475,213 | |||||||||
7,100 | S&P Global, Inc. | 1,494,905 | |||||||||
5,800 | T Rowe Price Group, Inc. | 580,696 | |||||||||
Total Financials (Cost $2,537,425) | 5,384,235 | ||||||||||
Health Care | 14.80 | % | |||||||||
Biotechnology | 2.52 | % | |||||||||
6,720 | Alnylam Pharmaceuticals, Inc.(a) | 627,984 | |||||||||
2,000 | Biogen Idec Inc.(a) | 472,760 | |||||||||
18,305 | Portola Pharmaceuticals, Inc.(a) | 635,184 | |||||||||
1,735,928 | |||||||||||
Health Care Equipment & Supplies | 7.14 | % | |||||||||
14,100 | Abbott Laboratories | 1,127,154 | |||||||||
2,565 | The Cooper Companies, Inc. | 759,676 | |||||||||
13,900 | Danaher Corp. | 1,835,078 | |||||||||
13,200 | Medtronic, PLC(b) | 1,202,256 | |||||||||
4,924,164 | |||||||||||
Health Care Providers & Services | 0.94 | % | |||||||||
2,635 | UnitedHealth Group, Inc. | 651,530 | |||||||||
Life Sciences Tools & Services | 1.03 | % | |||||||||
2,300 | Illumina, Inc.(a) | 714,587 | |||||||||
Pharmaceuticals | 3.17 | % | |||||||||
25,000 | Mylan NV(a) (b) | 708,500 | |||||||||
43,000 | Roche Holding AG — ADR(b) | 1,478,770 | |||||||||
2,187,270 | |||||||||||
Total Health Care (Cost $9,106,185) | 10,213,479 |
The accompanying notes are an integral part of these financial statements.
78
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Industrials | 10.45 | % | |||||||||
Air Freight & Logistics | 1.63 | % | |||||||||
6,200 | FedEx Corp. | 1,124,742 | |||||||||
Airlines | 1.33 | % | |||||||||
17,800 | Delta Air Lines, Inc. | 919,370 | |||||||||
Building Products | 1.82 | % | |||||||||
32,000 | Masco Corp. | 1,257,920 | |||||||||
Commercial Services & Supplies | 2.08 | % | |||||||||
13,800 | Waste Management, Inc. | 1,433,958 | |||||||||
Industrial Conglomerates | 1.64 | % | |||||||||
7,100 | Honeywell International, Inc. | 1,128,332 | |||||||||
Road & Rail | 1.95 | % | |||||||||
11,600 | Kansas City Southern | 1,345,368 | |||||||||
Total Industrials (Cost $6,254,444) | 7,209,690 | ||||||||||
Information Technology | 25.84 | % | |||||||||
Electronic Equipment, Instruments & Components | 1.27 | % | |||||||||
21,600 | Trimble, Inc.(a) | 872,640 | |||||||||
IT Services | 5.47 | % | |||||||||
14,100 | PayPal Holdings, Inc.(a) | 1,464,144 | |||||||||
14,800 | Visa Inc. — Class A | 2,311,612 | |||||||||
3,775,756 | |||||||||||
Semiconductors & Semiconductor Equipment | 4.28 | % | |||||||||
22,015 | QUALCOMM, Inc. | 1,255,515 | |||||||||
13,415 | Xilinx, Inc. | 1,700,888 | |||||||||
2,956,403 | |||||||||||
Software | 11.24 | % | |||||||||
3,300 | Intuit, Inc. | 862,653 | |||||||||
43,800 | Microsoft Corp. | 5,165,772 | |||||||||
10,900 | salesforce.com, Inc.(a) | 1,726,233 | |||||||||
7,754,658 | |||||||||||
Technology Hardware, Storage & Peripherals | 3.58 | % | |||||||||
12,995 | Apple Inc. | 2,468,400 | |||||||||
Total Information Technology (Cost $9,809,925) | 17,827,857 |
The accompanying notes are an integral part of these financial statements.
79
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Materials | 3.12 | % | |||||||||
Chemicals | 3.12 | % | |||||||||
5,245 | International Flavors & Fragrances Inc. | 675,504 | |||||||||
8,400 | Linde PLC(b) | 1,477,812 | |||||||||
Total Materials (Cost $2,041,690) | 2,153,316 | ||||||||||
Total Common Stocks (Cost $40,629,378) | 64,051,600 | ||||||||||
Real Estate Investment Trust (REIT) | 2.50 | % | |||||||||
Real Estate | 2.50 | % | |||||||||
3,811 | Equinix Inc. | 1,726,993 | |||||||||
Total Real Estate (Cost $885,242) | 1,726,993 | ||||||||||
Total REIT (Cost $885,242) | 1,726,993 | ||||||||||
Short Term Investment | 4.59 | % | |||||||||
Investment Company | 4.59 | % | |||||||||
3,168,332 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(c) | 3,168,332 | |||||||||
Total Investment Company | 3,168,332 | ||||||||||
Total Short Term Investment (Cost $3,168,332) | 3,168,332 | ||||||||||
Total Investments (Cost $44,682,952) | 99.92 68,946,925 | % | |||||||||
Other Assets in Excess of Liabilities | 0.08 55,337 | % | |||||||||
Total Net Assets | 100.00 69,002,272 | % |
The accompanying notes are an integral part of these financial statements.
80
BUFFALO LARGE CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
ADR American Depositary Receipt
PLC Public Limited Company
(a) Non Income Producing.
(b) Foreign Issued Security. The total value of these securities amounted to $5,807,535 (8.42% of net assets) at March 31, 2019.
(c) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
81
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 96.91 | % | |||||||||
Communication Services | 3.70 | % | |||||||||
Entertainment | 3.70 | % | |||||||||
22,329 | Liberty Media Corp-Liberty Formula One — Class A(a) | 760,079 | |||||||||
21,723 | Liberty Media Corp-Liberty Formula One — Class C(a) | 761,391 | |||||||||
31,437 | Live Nation Entertainment, Inc.(a) | 1,997,507 | |||||||||
15,710 | Take-Two Interactive Software, Inc.(a) | 1,482,553 | |||||||||
Total Communication Services (Cost $4,765,700) | 5,001,530 | ||||||||||
Consumer Discretionary | 9.63 | % | |||||||||
Distributors | 1.93 | % | |||||||||
92,015 | LKQ Corp.(a) | 2,611,386 | |||||||||
Hotels, Restaurants & Leisure | 1.95 | % | |||||||||
47,923 | Norwegian Cruise Line Holdings Ltd.(a) (b) | 2,633,848 | |||||||||
Household Durables | 1.69 | % | |||||||||
54,090 | Sony Corp. — ADR(a) (b) | 2,284,761 | |||||||||
Internet & Direct Marketing Retail | 2.04 | % | |||||||||
23,177 | Expedia Group, Inc. | 2,758,063 | |||||||||
Specialty Retail | 1.28 | % | |||||||||
24,835 | CarMax, Inc.(a) | 1,733,483 | |||||||||
Textiles, Apparel & Luxury Goods | 0.74 | % | |||||||||
53,380 | Under Armour, Inc. — Class C(a) | 1,007,281 | |||||||||
Total Consumer Discretionary (Cost $10,227,932) | 13,028,822 | ||||||||||
Consumer Staples | 0.48 | % | |||||||||
Beverages | 0.48 | % | |||||||||
3,716 | Constellation Brands, Inc. — Class A | 651,526 | |||||||||
Total Consumer Staples (Cost $517,071) | 651,526 | ||||||||||
Financials | 8.74 | % | |||||||||
Capital Markets | 8.74 | % | |||||||||
11,990 | CME Group, Inc. | 1,973,314 | |||||||||
6,185 | MarketAxess Holdings, Inc. | 1,522,005 |
The accompanying notes are an integral part of these financial statements.
82
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
15,546 | Moody's Corp. | 2,815,225 | |||||||||
22,031 | MSCI, Inc. | 4,380,644 | |||||||||
22,670 | Oaktree Capital Group LLC | 1,125,566 | |||||||||
Total Financials (Cost $2,734,961) | 11,816,754 | ||||||||||
Health Care | 16.09 | % | |||||||||
Biotechnology | 3.79 | % | |||||||||
35,515 | Exact Sciences Corp.(a) | 3,076,309 | |||||||||
16,250 | Ligand Pharmaceuticals, Inc.(a) | 2,042,788 | |||||||||
5,119,097 | |||||||||||
Health Care Equipment & Supplies | 2.04 | % | |||||||||
7,890 | Inogen, Inc.(a) | 752,470 | |||||||||
19,360 | ResMed, Inc. | 2,012,859 | |||||||||
2,765,329 | |||||||||||
Health Care Providers & Services | 2.47 | % | |||||||||
26,060 | Centene Corp.(a) | 1,383,786 | |||||||||
7,240 | WellCare Health Plans, Inc.(a) | 1,952,990 | |||||||||
3,336,776 | |||||||||||
Life Sciences Tools & Services | 5.63 | % | |||||||||
4,450 | Bio-Rad Laboratories, Inc. — Class A(a) | 1,360,276 | |||||||||
16,160 | Bio-Techne Corp. | 3,208,568 | |||||||||
4,605 | Illumina, Inc.(a) | 1,430,727 | |||||||||
31,105 | Syneos Health, Inc.(a) | 1,609,995 | |||||||||
7,609,566 | |||||||||||
Pharmaceuticals | 2.16 | % | |||||||||
29,072 | Zoetis, Inc. | 2,926,678 | |||||||||
Total Health Care (Cost $15,218,293) | 21,757,446 | ||||||||||
Industrials | 18.48 | % | |||||||||
Building Products | 0.89 | % | |||||||||
19,601 | Trex Co., Inc.(a) | 1,205,854 | |||||||||
Commercial Services & Supplies | 1.20 | % | |||||||||
26,797 | Copart, Inc.(a) | 1,623,630 | |||||||||
Electrical Equipment | 2.13 | % | |||||||||
34,735 | AMETEK, Inc. | 2,881,963 |
The accompanying notes are an integral part of these financial statements.
83
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Machinery | 1.27 | % | |||||||||
13,062 | WABCO Holdings, Inc.(a) | 1,721,963 | |||||||||
Professional Services | 8.67 | % | |||||||||
7,723 | CoStar Group, Inc.(a) | 3,602,162 | |||||||||
7,682 | Equifax, Inc. | 910,317 | |||||||||
59,559 | IHS Markit Ltd.(a) (b) | 3,238,818 | |||||||||
29,882 | Verisk Analytics, Inc. | 3,974,306 | |||||||||
11,725,603 | |||||||||||
Road & Rail | 1.98 | % | |||||||||
22,978 | Kansas City Southern | 2,664,988 | |||||||||
61 | Lyft, Inc.(a) | 4,776 | |||||||||
2,669,764 | |||||||||||
Trading Companies & Distributors | 2.34 | % | |||||||||
46,415 | HD Supply Holdings, Inc.(a) | 2,012,090 | |||||||||
52,228 | Univar Inc.(a) | 1,157,373 | |||||||||
3,169,463 | |||||||||||
Total Industrials (Cost $16,272,308) | 24,998,240 | ||||||||||
Information Technology | 33.86 | % | |||||||||
Communications Equipment | 3.11 | % | |||||||||
7,820 | Arista Networks Inc.(a) | 2,459,077 | |||||||||
11,186 | F5 Networks, Inc.(a) | 1,755,419 | |||||||||
4,214,496 | |||||||||||
IT Services | 6.87 | % | |||||||||
18,040 | EPAM Systems, Inc.(a) | 3,051,105 | |||||||||
27,130 | GoDaddy, Inc. — Class A(a) | 2,039,905 | |||||||||
9,920 | WEX Inc.(a) | 1,904,541 | |||||||||
20,220 | Worldpay, Inc. — Class A(a) | 2,294,970 | |||||||||
9,290,521 | |||||||||||
Software | 23.88 | % | |||||||||
23,235 | Aspen Technology, Inc.(a) | 2,422,481 | |||||||||
60,310 | Dropbox, Inc. — Class A(a) | 1,314,758 | |||||||||
25,821 | Guidewire Software, Inc.(a) | 2,508,768 | |||||||||
17,230 | Palo Alto Networks, Inc.(a) | 4,184,822 | |||||||||
18,820 | Proofpoint, Inc.(a) | 2,285,313 | |||||||||
49,700 | RealPage, Inc.(a) | 3,016,293 | |||||||||
16,660 | Red Hat, Inc.(a) | 3,043,782 | |||||||||
18,050 | ServiceNow, Inc.(a) | 4,449,145 |
The accompanying notes are an integral part of these financial statements.
84
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
23,592 | SS&C Technologies Holdings, Inc. | 1,502,574 | |||||||||
8,630 | Tyler Technologies, Inc.(a) | 1,763,972 | |||||||||
17,713 | VMware, Inc. — Class A | 3,197,374 | |||||||||
30,735 | Zendesk, Inc.(a) | 2,612,475 | |||||||||
32,301,757 | |||||||||||
Total Information Technology (Cost $27,951,024) | 45,806,774 | ||||||||||
Materials | 4.16 | % | |||||||||
Chemicals | 2.97 | % | |||||||||
10,371 | Air Products & Chemicals, Inc. | 1,980,446 | |||||||||
23,020 | FMC Corp. | 1,768,397 | |||||||||
21,530 | Livent Corp.(a) | 264,388 | |||||||||
4,013,231 | |||||||||||
Construction Materials | 1.19 | % | |||||||||
8,027 | Martin Marietta Materials, Inc. | 1,614,872 | |||||||||
Total Materials (Cost $3,356,445) | 5,628,103 | ||||||||||
Real Estate | 1.77 | % | |||||||||
Real Estate Management & Development | 1.77 | % | |||||||||
48,439 | CBRE Group, Inc. — Class A(a) | 2,395,308 | |||||||||
Total Real Estate (Cost $2,128,859) | 2,395,308 | ||||||||||
Total Common Stocks (Cost $83,172,593) | 131,084,503 | ||||||||||
Real Estate Investment Trust (REIT) | 1.93 | % | |||||||||
Real Estate | 1.93 | % | |||||||||
5,749 | Equinix Inc. | 2,605,217 | |||||||||
Total Real Estate (Cost $959,503) | 2,605,217 | ||||||||||
Total REIT (Cost $959,503) | 2,605,217 |
The accompanying notes are an integral part of these financial statements.
85
BUFFALO MID CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Short Term Investment | 1.43 | % | |||||||||
Investment Company | 1.43 | % | |||||||||
1,938,612 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(c) | 1,938,612 | |||||||||
Total Investment Company | 1,938,612 | ||||||||||
Total Short Term Investment (Cost $1,938,612) | 1,938,612 | ||||||||||
Total Investments (Cost $86,070,708) | 100.27 135,628,332 | % | |||||||||
Liabilities in Excess of Other Assets | (0.27 (366,238) | )% | |||||||||
Total Net Assets | 100.00 135,262,095 | % |
ADR American Depositary Receipt
(a) Non Income Producing.
(b) Foreign Issued Securities. The total value of these securities amounted to $8,157,427 (6.03% of net assets) at March 31, 2019.
(c) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
86
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019
Shares or Face Amount | $ Fair Value* | ||||||||||
Common Stocks | 92.68 | % | |||||||||
Communication Services | 4.14 | % | |||||||||
Diversified Telecommunication Services | 2.11 | % | |||||||||
160,730 | Bandwidth, Inc. — Class A(a) | 10,762,481 | |||||||||
Interactive Media & Services | 2.03 | % | |||||||||
167,320 | CarGurus, Inc.(a) | 6,702,839 | |||||||||
190,650 | Eventbrite, Inc. — Class A(a) | 3,654,760 | |||||||||
10,357,599 | |||||||||||
Total Communication Services (Cost $17,917,138) | 21,120,080 | ||||||||||
Consumer Discretionary | 10.82 | % | |||||||||
Auto Components | 1.35 | % | |||||||||
364,015 | Motorcar Parts of America, Inc.(a) | 6,868,963 | |||||||||
Hotels, Restaurants & Leisure | 4.27 | % | |||||||||
154,455 | Dave & Buster's Entertainment, Inc. | 7,702,671 | |||||||||
360,570 | Penn National Gaming, Inc.(a) | 7,247,457 | |||||||||
264,540 | Red Rock Resorts, Inc. — Class A | 6,838,359 | |||||||||
21,788,487 | |||||||||||
Specialty Retail | 3.16 | % | |||||||||
282,355 | At Home Group, Inc.(a) | 5,042,860 | |||||||||
118,000 | Floor & Decor Holdings, Inc. — Class A(a) | 4,863,960 | |||||||||
317,115 | Guess?, Inc. | 6,215,454 | |||||||||
16,122,274 | |||||||||||
Textiles, Apparel & Luxury Goods | 2.04 | % | |||||||||
188,832 | Steven Madden Ltd. | 6,390,075 | |||||||||
213,670 | Under Armour, Inc. — Class C(a) | 4,031,953 | |||||||||
10,422,028 | |||||||||||
Total Consumer Discretionary (Cost $57,130,116) | 55,201,752 | ||||||||||
Consumer Staples | 1.60 | % | |||||||||
Beverages | 1.60 | % | |||||||||
106,105 | MGP Ingredients, Inc. | 8,186,001 | |||||||||
Total Consumer Staples (Cost $5,480,002) | 8,186,001 |
The accompanying notes are an integral part of these financial statements.
87
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Financials | 4.13 | % | |||||||||
Capital Markets | 1.63 | % | |||||||||
190,315 | Hamilton Lane Inc. — Class A | 8,293,928 | |||||||||
Insurance | 2.50 | % | |||||||||
124,320 | eHealth, Inc.(a) | 7,750,108 | |||||||||
186,895 | Health Insurance Innovations, Inc. — Class A(a) | 5,012,524 | |||||||||
12,762,632 | |||||||||||
Total Financials (Cost $16,662,302) | 21,056,560 | ||||||||||
Health Care | 26.78 | % | |||||||||
Biotechnology | 8.14 | % | |||||||||
209,295 | CareDx, Inc.(a) | 6,596,978 | |||||||||
171,545 | Deciphera Pharmaceuticals, Inc.(a) | 3,981,560 | |||||||||
81,265 | Ligand Pharmaceuticals, Inc.(a) | 10,215,823 | |||||||||
446,525 | Natera, Inc.(a) | 9,207,346 | |||||||||
171,560 | Precision Biosciences, Inc.(a) | 3,079,502 | |||||||||
143,175 | Repligen Corp.(a) | 8,458,779 | |||||||||
41,539,988 | |||||||||||
Health Care Equipment & Supplies | 3.03 | % | |||||||||
58,020 | Inogen, Inc.(a) | 5,533,367 | |||||||||
86,090 | Quidel Corp.(a) | 5,636,312 | |||||||||
126,255 | STAAR Surgical Co.(a) | 4,316,659 | |||||||||
15,486,338 | |||||||||||
Health Care Providers & Services | 1.48 | % | |||||||||
101,893 | HealthEquity, Inc.(a) | 7,538,044 | |||||||||
Health Care Technology | 4.51 | % | |||||||||
200,106 | HMS Holdings Corp.(a) | 5,925,139 | |||||||||
129,240 | Inspire Medical Systems, Inc.(a) | 7,338,247 | |||||||||
70,645 | Medidata Solutions, Inc.(a) | 5,174,040 | |||||||||
56,895 | Omnicell, Inc.(a) | 4,599,392 | |||||||||
23,036,818 | |||||||||||
Life Sciences Tools & Services | 4.44 | % | |||||||||
61,825 | Bio-Techne Corp. | 12,275,354 | |||||||||
93,805 | Cambrex Corp.(a) | 3,644,324 | |||||||||
130,720 | Syneos Health, Inc.(a) | 6,766,067 | |||||||||
22,685,745 |
The accompanying notes are an integral part of these financial statements.
88
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Pharmaceuticals | 5.18 | % | |||||||||
132,890 | Aerie Pharmaceuticals, Inc.(a) | 6,312,275 | |||||||||
236,985 | Catalent, Inc.(a) | 9,619,221 | |||||||||
352,370 | Optinose, Inc.(a) | 3,629,411 | |||||||||
93,264 | Supernus Pharmaceuticals, Inc.(a) | 3,267,971 | |||||||||
331,940 | Verrica Pharmaceuticals, Inc.(a) | 3,588,271 | |||||||||
26,417,149 | |||||||||||
Total Health Care (Cost $101,465,765) | 136,704,082 | ||||||||||
Industrials | 15.48 | % | |||||||||
Air Freight & Logistics | 2.60 | % | |||||||||
369,210 | Air Transport Services Group, Inc.(a) | 8,510,290 | |||||||||
193,565 | Echo Global Logistics, Inc.(a) | 4,796,541 | |||||||||
13,306,831 | |||||||||||
Building Products | 1.32 | % | |||||||||
61,870 | Masonite International Corp.(a) (b) | 3,086,694 | |||||||||
59,160 | Trex Co., Inc.(a) | 3,639,523 | |||||||||
6,726,217 | |||||||||||
Construction & Engineering | 1.63 | % | |||||||||
172,685 | MasTec, Inc.(a) | 8,306,149 | |||||||||
Electrical Equipment | 1.83 | % | |||||||||
274,085 | Bloom Energy Corp. — Class A(a) | 3,541,178 | |||||||||
112,955 | Generac Holdings, Inc.(a) | 5,786,685 | |||||||||
9,327,863 | |||||||||||
Machinery | 3.32 | % | |||||||||
78,140 | John Bean Technologies Corp. | 7,180,285 | |||||||||
410,795 | Kornit Digital Ltd.(a) (b) | 9,776,921 | |||||||||
16,957,206 | |||||||||||
Professional Services | 2.80 | % | |||||||||
121,238 | ICF International, Inc. | 9,223,787 | |||||||||
113,280 | Korn Ferry | 5,072,678 | |||||||||
14,296,465 | |||||||||||
Trading Companies & Distributors | 1.98 | % | |||||||||
77,230 | SiteOne Landscape Supply, Inc.(a) | 4,413,695 | |||||||||
256,975 | Univar Inc.(a) | 5,694,566 | |||||||||
10,108,261 | |||||||||||
Total Industrials (Cost $71,642,537) | 79,028,992 |
The accompanying notes are an integral part of these financial statements.
89
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Information Technology | 28.72 | % | |||||||||
Communications Equipment | 3.42 | % | |||||||||
122,885 | Acacia Communications, Inc.(a) | 7,047,455 | |||||||||
184,160 | Lumentum Holdings, Inc.(a) | 10,412,406 | |||||||||
17,459,861 | |||||||||||
IT Services | 1.80 | % | |||||||||
138,046 | InterXion Holding NV(a) (b) | 9,211,810 | |||||||||
Semiconductors & Semiconductor Equipment | 6.00 | % | |||||||||
154,090 | Inphi Corp.(a) | 6,739,897 | |||||||||
77,445 | Monolithic Power Systems, Inc. | 10,493,023 | |||||||||
92,190 | Semtech Corp.(a) | 4,693,393 | |||||||||
56,810 | Universal Display Corp. | 8,683,408 | |||||||||
30,609,721 | |||||||||||
Software | 17.50 | % | |||||||||
451,970 | 8x8, Inc.(a) | 9,129,794 | |||||||||
66,165 | Avalara, Inc.(a) | 3,691,345 | |||||||||
46,465 | Coupa Software Inc.(a) | 4,227,386 | |||||||||
64,370 | CyberArk Software Ltd.(a) (b) | 7,663,249 | |||||||||
210,255 | ForeScout Technologies, Inc.(a) | 8,811,787 | |||||||||
235,746 | Mimecast Ltd.(a) (b) | 11,162,573 | |||||||||
165,610 | Paylocity Holding Corp.(a) | 14,770,756 | |||||||||
227,360 | Pluralsight, Inc. — Class A(a) | 7,216,406 | |||||||||
241,705 | PROS Holdings, Inc.(a) | 10,209,619 | |||||||||
37,170 | The Trade Desk, Inc. — Class A(a) | 7,357,801 | |||||||||
85,060 | Varonis Systems, Inc.(a) | 5,072,128 | |||||||||
89,312,844 | |||||||||||
Total Information Technology (Cost $83,643,682) | 146,594,236 | ||||||||||
Materials | 1.01 | % | |||||||||
Construction Materials | 1.01 | % | |||||||||
323,223 | Summit Materials, Inc. — Class A(a) | 5,129,549 | |||||||||
Total Materials (Cost $6,385,609) | 5,129,549 | ||||||||||
Total Common Stocks (Cost $360,327,151) | 473,021,252 |
The accompanying notes are an integral part of these financial statements.
90
BUFFALO SMALL CAP FUND
SCHEDULE OF INVESTMENTS
MARCH 31, 2019 Continued
Shares or Face Amount | $ Fair Value* | ||||||||||
Real Estate Investment Trusts (REITs) | 3.15 | % | |||||||||
Real Estate | 3.15 | % | |||||||||
409,470 | CoreCivic, Inc. | 7,964,191 | |||||||||
154,650 | CyrusOne, Inc. | 8,109,846 | |||||||||
Total Real Estate (Cost $15,695,082) | 16,074,037 | ||||||||||
Total REITs (Cost $15,695,082) | 16,074,037 | ||||||||||
Short Term Investment | 4.88 | % | |||||||||
Investment Company | 4.88 | % | |||||||||
24,918,730 | Fidelity Investments Money Market Funds — Government Portfolio — Class I — 2.31%(c) | 24,918,730 | |||||||||
Total Investment Company | 24,918,730 | ||||||||||
Total Short Term Investment (Cost $24,918,730) | 24,918,730 | ||||||||||
Total Investments (Cost $400,940,963) | 100.71 514,014,019 | % | |||||||||
Liabilities in Excess of Other Assets | (0.71 (3,604,106) | )% | |||||||||
Total Net Assets | 100.00 510,409,913 | % |
(a) Non Income Producing.
(b) Foreign Issued Securities. The total value of these securities amounted to $40,901,247 (8.01% of net assets) at March 31, 2019.
(c) The rate quoted is the annualized seven-day effective yield as of March 31, 2019.
* See Note 1A of the accompanying Notes to Financial Statements regarding valuation of securities.
The Global Industry Classification Standard (GICS) was developed by and/or is the exclusive property of MSCI, Inc. and Standard & Poor's Financial Services LLC ("S&P"). GICS is a service mark of MSCI and S&P and has been licensed for use by U.S. Bancorp Fund Services, LLC.
The accompanying notes are an integral part of these financial statements.
91
STATEMENTS OF ASSETS AND
LIABILITIES
MARCH 31, 2019
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | Buffalo Flexible Income Fund | Buffalo Growth Fund | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Investments in securities, at cost: | $ | 1,342,253,599 | $ | 42,120,435 | $ | 68,564,193 | $ | 429,535,755 | $ | 103,542,165 | |||||||||||||
Investments in securities, at value: | 1,774,536,082 | 58,300,170 | 84,066,818 | 612,486,127 | 174,840,926 | ||||||||||||||||||
Cash denominated in foreign currency, at value:(1) | — | — | — | — | — | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investments sold | 9,736,857 | — | — | 12,707,949 | 6,879 | ||||||||||||||||||
Fund shares sold | 1,185,894 | 237,144 | 47,818 | 126,269 | 29,222 | ||||||||||||||||||
Dividends | 711,846 | 30,058 | 15,022 | 1,022,694 | 79,952 | ||||||||||||||||||
Interest | 192,330 | 8,488 | 12,745 | 450,544 | 7,198 | ||||||||||||||||||
Other assets | 58,929 | 12,062 | 16,781 | 17,964 | 18,192 | ||||||||||||||||||
Total assets | 1,786,421,938 | 58,587,922 | 84,159,184 | 626,811,547 | 174,982,369 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investments purchased | 38,971,530 | 199,556 | — | 49,220 | 5,688 | ||||||||||||||||||
Written options, at value(2) (Note 7) | — | — | — | 450,165 | — | ||||||||||||||||||
Fund shares purchased | 1,725,578 | 43,156 | 14,744 | 349,624 | 254,876 | ||||||||||||||||||
Management fees (Note 3) | 1,462,024 | 44,076 | 103,751 | 528,996 | 133,982 | ||||||||||||||||||
Custodian fees (Note 3) | — | — | — | — | — | ||||||||||||||||||
Other payables | — | — | — | — | — | ||||||||||||||||||
Accrued expenses | 1,204 | 2,524 | 8,201 | 84,803 | 17,737 | ||||||||||||||||||
Total liabilities | 42,160,336 | 289,312 | 126,696 | 1,462,808 | 412,283 | ||||||||||||||||||
NET ASSETS | $ | 1,744,261,602 | $ | 58,298,610 | $ | 84,032,488 | $ | 625,348,739 | $ | 174,570,086 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Paid-in capital | $ | 1,295,676,134 | $ | 42,553,632 | $ | 69,238,814 | $ | 441,388,030 | $ | 97,700,564 | |||||||||||||
Total distributable earnings | 448,585,468 | 15,744,978 | 14,793,674 | 183,960,709 | 76,869,522 | ||||||||||||||||||
NET ASSETS APPLICABLE TO OUTSTANDING SHARES | $ | 1,744,261,602 | $ | 58,298,610 | $ | 84,032,488 | $ | 625,348,739 | $ | 174,570,086 | |||||||||||||
Capital shares, $1.00 par value: | |||||||||||||||||||||||
Authorized | Unlimited | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||||||||
Outstanding | 68,960,174 | 3,502,155 | 5,491,176 | 40,948,725 | 6,954,737 | ||||||||||||||||||
NET ASSET VALUE PER SHARE | $ | 25.29 | $ | 16.65 | $ | 15.30 | $ | 15.27 | $ | 25.10 | |||||||||||||
(1) Cash denominated in foreign currency, at cost | — | — | — | — | — | ||||||||||||||||||
(2) Written options, premiums received | — | — | — | 464,390 | — |
The accompanying notes are an integral part of these financial statements.
92
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | Buffalo Mid Cap Fund | Buffalo Small Cap Fund | |||||||||||||||||||
ASSETS: | |||||||||||||||||||||||
Investments in securities, at cost: | $ | 186,118,767 | $ | 263,272,790 | $ | 44,682,952 | $ | 86,070,708 | $ | 400,940,963 | |||||||||||||
Investments in securities, at value: | 188,945,170 | 337,441,046 | 68,946,925 | 135,628,332 | 514,014,019 | ||||||||||||||||||
Cash denominated in foreign currency, at value:(1) | — | 2,786,260 | — | — | — | ||||||||||||||||||
Receivables: | |||||||||||||||||||||||
Investments sold | 1,218,276 | — | — | — | — | ||||||||||||||||||
Fund shares sold | 423,321 | 2,260,788 | 57,211 | 43,633 | 333,436 | ||||||||||||||||||
Dividends | 111 | 1,214,545 | 42,419 | 29,510 | 395,191 | ||||||||||||||||||
Interest | 2,706,862 | 62,589 | 4,570 | 2,578 | 45,353 | ||||||||||||||||||
Other assets | 45,115 | 21,991 | 15,369 | 14,203 | 25,731 | ||||||||||||||||||
Total assets | 193,338,855 | 343,787,219 | 69,066,494 | 135,718,256 | 514,813,730 | ||||||||||||||||||
LIABILITIES: | |||||||||||||||||||||||
Payables: | |||||||||||||||||||||||
Investments purchased | 1,098,750 | 1,315,700 | — | 4,392 | 3,805,647 | ||||||||||||||||||
Written options, at value(2) (Note 7) | — | — | — | — | — | ||||||||||||||||||
Fund shares purchased | 618,585 | 34,976 | 11,722 | 324,480 | 156,218 | ||||||||||||||||||
Management fees (Note 3) | 161,910 | 282,193 | 51,709 | 114,251 | 435,779 | ||||||||||||||||||
Custodian fees (Note 3) | — | 11,547 | — | — | — | ||||||||||||||||||
Other payables | 6,440 | 1,242,201 | — | — | — | ||||||||||||||||||
Accrued expenses | 2,574 | 20,927 | 791 | 13,038 | 6,173 | ||||||||||||||||||
Total liabilities | 1,888,259 | 2,907,544 | 64,222 | 456,161 | 4,403,817 | ||||||||||||||||||
NET ASSETS | $ | 191,450,596 | $ | 340,879,675 | $ | 69,002,272 | $ | 135,262,095 | $ | 510,409,913 | |||||||||||||
NET ASSETS CONSIST OF: | |||||||||||||||||||||||
Paid-in capital | $ | 189,087,332 | $ | 267,709,069 | $ | 43,565,414 | $ | 81,958,088 | $ | 376,135,497 | |||||||||||||
Total distributable earnings | 2,363,264 | 73,170,606 | 25,436,858 | 53,304,007 | 134,274,416 | ||||||||||||||||||
NET ASSETS APPLICABLE TO OUTSTANDING SHARES | $ | 191,450,596 | $ | 340,879,675 | $ | 69,002,272 | $ | 135,262,095 | $ | 510,409,913 | |||||||||||||
Capital shares, $1.00 par value: | |||||||||||||||||||||||
Authorized | Unlimited | Unlimited | Unlimited | Unlimited | Unlimited | ||||||||||||||||||
Outstanding | 17,633,921 | 23,097,593 | 2,224,903 | 9,314,934 | 39,601,358 | ||||||||||||||||||
NET ASSET VALUE PER SHARE | $ | 10.86 | $ | 14.76 | $ | 31.01 | $ | 14.52 | $ | 12.89 | |||||||||||||
(1) Cash denominated in foreign currency, at cost | — | 2,786,395 | — | — | — | ||||||||||||||||||
(2) Written options, premiums received | — | — | — | — | — |
93
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2019
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | Buffalo Flexible Income Fund | Buffalo Growth Fund | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Interest | $ | 2,400,305 | $ | 77,361 | $ | 139,103 | $ | 2,748,579 | $ | 116,417 | |||||||||||||
Dividends | 12,771,446 | 1,326,465 | 276,767 | 21,248,873 | 1,983,621 | ||||||||||||||||||
Foreign tax withheld on dividends | (78,687 | ) | (2,708 | ) | — | (188,821 | ) | — | |||||||||||||||
Total investment income | 15,093,064 | 1,401,118 | 415,870 | 23,808,631 | 2,100,038 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Management fees (Note 3) | 19,099,016 | 527,474 | 1,264,328 | 6,685,590 | 1,739,982 | ||||||||||||||||||
Registration fees | 82,838 | 24,847 | 20,300 | 25,218 | 22,092 | ||||||||||||||||||
Custody fees (Note 3) | — | — | — | — | — | ||||||||||||||||||
Other expenses | 34,669 | 1,330 | 1,809 | 12,633 | 3,778 | ||||||||||||||||||
Total expenses | 19,216,523 | 553,651 | 1,286,437 | 6,723,441 | 1,765,852 | ||||||||||||||||||
Net investment income (loss) | (4,123,459 | ) | 847,467 | (870,467 | ) | 17,085,190 | 334,186 | ||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain from: | |||||||||||||||||||||||
Investment transactions | 109,271,672 | 1,214,980 | 10,221,223 | 9,829,252 | 25,981,469 | ||||||||||||||||||
Options written (Note 7) | — | — | — | 1,369,324 | — | ||||||||||||||||||
Net unrealized appreciation/depreciation during the year on: | |||||||||||||||||||||||
Investments | 56,258,991 | 2,058,259 | (1,859,026 | ) | 21,145,348 | (3,409,082 | ) | ||||||||||||||||
Options written (Note 7) | — | — | — | 15,727 | — | ||||||||||||||||||
Net realized and unrealized gain (loss) | 165,530,663 | 3,273,239 | 8,362,197 | 32,359,651 | 22,572,387 | ||||||||||||||||||
Net increase in net assets resulting from operations | $ | 161,407,204 | $ | 4,120,706 | $ | 7,491,630 | $ | 49,444,841 | $ | 22,906,573 |
The accompanying notes are an integral part of these financial statements.
94
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | Buffalo Mid Cap Fund | Buffalo Small Cap Fund | |||||||||||||||||||
INVESTMENT INCOME: | |||||||||||||||||||||||
Interest | $ | 11,713,741 | $ | 505,419 | $ | 43,090 | $ | 38,752 | $ | 303,518 | |||||||||||||
Dividends | 104,722 | 5,207,827 | 775,318 | 1,027,797 | 1,780,522 | ||||||||||||||||||
Foreign tax withheld on dividends | (1,322 | ) | (786,692 | ) | (9,668 | ) | (2,983 | ) | — | ||||||||||||||
Total investment income | 11,817,141 | 4,926,554 | 808,740 | 1,063,566 | 2,084,040 | ||||||||||||||||||
EXPENSES: | |||||||||||||||||||||||
Management fees (Note 3) | 2,078,929 | 2,927,982 | 604,782 | 1,425,022 | 5,368,300 | ||||||||||||||||||
Registration fees | 23,863 | 33,445 | 20,908 | 25,228 | 27,151 | ||||||||||||||||||
Custody fees (Note 3) | — | 79,658 | — | — | — | ||||||||||||||||||
Other expenses | 11,200 | 5,441 | 1,698 | 2,837 | 9,825 | ||||||||||||||||||
Total expenses | 2,113,992 | 3,046,526 | 627,388 | 1,453,087 | 5,405,276 | ||||||||||||||||||
Net investment income (loss) | 9,703,149 | 1,880,028 | 181,352 | (389,521 | ) | (3,321,236 | ) | ||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS): | |||||||||||||||||||||||
Net realized gain from: | |||||||||||||||||||||||
Investment transactions | 248,000 | 3,934,373 | 2,467,683 | 10,703,705 | 82,752,622 | ||||||||||||||||||
Options written (Note 7) | — | — | — | — | — | ||||||||||||||||||
Net unrealized appreciation/depreciation during the year on: | |||||||||||||||||||||||
Investments | (3,139,572 | ) | (3,163,588 | ) | 5,730,182 | 574,142 | (16,807,095 | ) | |||||||||||||||
Options written (Note 7) | — | — | — | — | — | ||||||||||||||||||
Net realized and unrealized gain (loss) | (2,891,572 | ) | 770,785 | 8,197,865 | 11,277,847 | 65,945,527 | |||||||||||||||||
Net increase in net assets resulting from operations | $ | 6,811,577 | $ | 2,650,813 | $ | 8,379,217 | $ | 10,888,326 | $ | 62,624,291 |
95
STATEMENTS OF CHANGES IN
NET ASSETS
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | |||||||||||||||||||||||||
Year Ended March 31, 2019 | Year Ended March 31, 2018 | Year Ended March 31, 2019 | Year Ended March 31, 2018 | Year Ended March 31, 2019 | Year Ended March 31, 2018 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | (4,123,459 | ) | $ | (3,092,840 | ) | $ | 847,467 | $ | 728,715 | $ | (870,567 | ) | $ | (991,080 | ) | |||||||||||
Net realized gain on investment transactions | 109,271,672 | 82,717,910 | 1,214,980 | 791,680 | 10,221,223 | 16,176,709 | |||||||||||||||||||||
Net unrealized appreciation/depreciation during the year on investments and translation of assets and liabilities in foreign currencies | 56,258,991 | 150,955,830 | 2,058,259 | 3,708,149 | (1,859,026 | ) | 2,477,927 | ||||||||||||||||||||
Net increase in net assets resulting from operations | 161,407,204 | �� | 230,580,900 | 4,120,706 | 5,228,544 | 7,491,630 | 17,663,556 | ||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | |||||||||||||||||||||||||||
Total distributions(a) | (110,113,837 | ) | (74,201,821 | ) | (2,716,751 | ) | (1,316,597 | ) | (9,489,887 | ) | (15,190,026 | ) | |||||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||||||||
Shares sold | 415,923,525 | 716,276,288 | 9,078,114 | 16,020,835 | 6,067,632 | 7,737,359 | |||||||||||||||||||||
Reinvested dividends and distributions | 106,874,653 | 71,881,517 | 2,654,601 | 1,290,308 | 9,179,140 | 14,672,957 | |||||||||||||||||||||
Shares issued | 522,798,178 | 788,157,805 | 11,732,715 | 17,311,143 | 15,246,772 | 22,410,316 | |||||||||||||||||||||
Redemptions | (726,779,933 | ) | (301,825,167 | ) | (14,201,824 | ) | (21,654,044 | ) | (17,184,615 | ) | (22,251,679 | ) | |||||||||||||||
Net increase (decrease) from capital share transactions | (203,981,755 | ) | 486,332,638 | (2,469,109 | ) | (4,342,901 | ) | (1,937,843 | ) | 158,637 | |||||||||||||||||
Total increase (decrease) in net assets | (152,688,388 | ) | 642,711,717 | (1,065,154 | ) | (430,954 | ) | (3,936,100 | ) | 2,632,167 | |||||||||||||||||
NET ASSETS(b): | |||||||||||||||||||||||||||
Beginning of period | 1,896,949,990 | 1,254,238,273 | 59,363,764 | 59,794,718 | 87,968,588 | 85,336,421 | |||||||||||||||||||||
End of period | $ | 1,744,261,602 | $ | 1,896,949,990 | $ | 58,298,610 | $ | 59,363,764 | $ | 84,032,488 | $ | 87,968,588 | |||||||||||||||
Fund share transactions: | |||||||||||||||||||||||||||
Shares sold | 16,719,992 | 29,561,547 | 544,728 | 1,009,434 | 378,496 | 463,225 | |||||||||||||||||||||
Reinvested dividends and distributions | 5,027,030 | 2,953,226 | 169,194 | 78,647 | 706,631 | 935,776 | |||||||||||||||||||||
Shares issued | 21,747,022 | 32,514,773 | 713,922 | 1,088,081 | 1,085,127 | 1,399,001 | |||||||||||||||||||||
Shares repurchased | (30,153,058 | ) | (12,524,337 | ) | (857,868 | ) | (1,346,183 | ) | (1,082,528 | ) | (1,318,382 | ) | |||||||||||||||
Net increase (decrease) in fund shares | (8,406,036 | ) | 19,990,436 | (143,946 | ) | (258,102 | ) | 2,599 | 80,619 |
The following information was previously reported in the March 31, 2018 financial statements. The distribution information for the period ended March 31, 2019 presented on the Statement of Changes is presented for comparative purposes to the March 31, 2018 financial statements, which conform to the SEC Final Rule on Disclosure Update and Simplification which was effective November 5, 2018 (see Note 1I).
(a) For the year ended March 31, 2018, dividends and distributions to shareholders totaled the following for each Fund, respectively:
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | |||||||||||||
From Net Investment Income | $ | — | $ | (741,876 | ) | $ | — | ||||||||
From Net Realized Gain from Investment Transactions | $ | (74,201,821 | ) | $ | (574,721 | ) | $ | (15,190,026 | ) |
Buffalo Flexible Income Fund | Buffalo Growth Fund | ||||||||||
From Net Investment Income | $ | (17,897,643 | ) | $ | (2,896,083 | ) | |||||
From Net Realized Gain from Investment Transactions | $ | (23,400,423 | ) | $ | (35,204,302 | ) |
(b) As of March 31, 2018, undistributed (distribution in excess of) net investment income (loss) totaled the following for each Fund, respectively:
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | |||||||||||||
Undistributed (distribution in excess of) net investment income (loss) | $ | — | $ | 33,501 | $ | — |
Buffalo Flexible Income Fund | Buffalo Growth Fund | ||||||||||
Undistributed (distribution in excess of) net investment income (loss) | $ | (287,003 | ) | $ | (35,199 | ) |
The accompanying notes are an integral part of these financial statements.
96
Buffalo Flexible Income Fund | Buffalo Growth Fund | ||||||||||||||||||
Year Ended March 31, 2019 | Year Ended March 31, 2018 | Year Ended March 31, 2019 | Year Ended March 31, 2018 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income (loss) | $ | 17,085,190 | $ | 17,052,376 | $ | 334,186 | $ | 2,353,997 | |||||||||||
Net realized gain on investment transactions | 11,198,576 | 32,647,949 | 25,981,469 | 77,526,161 | |||||||||||||||
Net unrealized appreciation/depreciation during the year on investments and translation of assets and liabilities in foreign currencies | 21,161,075 | 4,949,457 | (3,409,082 | ) | (39,540,427 | ) | |||||||||||||
Net increase in net assets resulting from operations | 49,444,841 | 54,649,782 | 22,906,573 | 40,339,731 | |||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | |||||||||||||||||||
Total distributions(a) | (35,878,816 | ) | (41,298,066 | ) | (44,229,643 | ) | (38,100,385 | ) | |||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||
Shares sold | 24,699,685 | 45,642,534 | 11,315,580 | 15,871,765 | |||||||||||||||
Reinvested dividends and distributions | 34,755,445 | 40,017,720 | 43,555,073 | 37,275,472 | |||||||||||||||
Shares issued | 59,455,130 | 85,660,254 | 54,870,653 | 53,147,237 | |||||||||||||||
Redemptions | (145,756,801 | ) | (198,380,348 | ) | (63,228,598 | ) | (178,079,701 | ) | |||||||||||
Net increase (decrease) from capital share transactions | (86,301,671 | ) | (112,720,094 | ) | (8,357,945 | ) | (124,932,464 | ) | |||||||||||
Total increase (decrease) in net assets | (72,735,646 | ) | (99,368,378 | ) | (29,681,015 | ) | (122,693,118 | ) | |||||||||||
NET ASSETS(b): | |||||||||||||||||||
Beginning of period | 698,084,385 | 797,452,763 | 204,251,101 | 326,944,219 | |||||||||||||||
End of period | $ | 625,348,739 | $ | 698,084,385 | $ | 174,570,086 | $ | 204,251,101 | |||||||||||
Fund share transactions: | |||||||||||||||||||
Shares sold | 1,606,175 | 2,996,751 | 402,669 | 500,709 | |||||||||||||||
Reinvested dividends and distributions | 2,380,628 | 2,628,131 | 1,992,455 | 1,269,168 | |||||||||||||||
Shares issued | 3,986,803 | 5,624,882 | 2,395,124 | 1,769,877 | |||||||||||||||
Shares repurchased | (9,590,693 | ) | (13,159,169 | ) | (2,287,622 | ) | (5,525,810 | ) | |||||||||||
Net increase (decrease) in fund shares | (5,603,890 | ) | (7,534,287 | ) | 107,502 | (3,755,933 | ) |
97
STATEMENTS OF CHANGES IN
NET ASSETS
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | |||||||||||||||||||||||||
Year Ended March 31, 2019 | Year Ended March 31, 2018 | Year Ended March 31, 2019 | Year Ended March 31, 2018 | Year Ended March 31, 2019 | Year Ended March 31, 2018 | ||||||||||||||||||||||
OPERATIONS: | |||||||||||||||||||||||||||
Net investment income (loss) | $ | 9,703,149 | $ | 9,735,597 | $ | 1,880,028 | $ | 1,038,974 | $ | 181,352 | $ | 221,630 | |||||||||||||||
Net realized gain on investment transactions | 248,000 | 842,299 | 3,934,373 | 641,932 | 2,467,683 | 4,099,923 | |||||||||||||||||||||
Net unrealized appreciation/depreciation during the year on investments and translation of assets and liabilities in foreign currencies | (3,139,572 | ) | (3,025,094 | ) | (3,163,588 | ) | 36,292,927 | 5,730,182 | 5,425,497 | ||||||||||||||||||
Net increase in net assets resulting from operations | 6,811,577 | 7,552,802 | 2,650,813 | 37,973,833 | 8,379,217 | 9,747,050 | |||||||||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | |||||||||||||||||||||||||||
Total distributions(a) | (10,394,594 | ) | (11,215,031 | ) | (6,555,569 | ) | (914,680 | ) | (3,420,115 | ) | (3,671,701 | ) | |||||||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||||||||||
Shares sold | 36,291,699 | 48,065,535 | 107,233,312 | 78,887,134 | 6,477,705 | 17,122,313 | |||||||||||||||||||||
Reinvested dividends and distributions | 9,744,720 | 10,628,551 | 6,071,856 | 850,120 | 3,284,029 | 3,622,675 | |||||||||||||||||||||
Shares issued | 46,036,419 | 58,694,086 | 113,305,168 | 79,737,254 | 9,761,734 | 20,744,988 | |||||||||||||||||||||
Redemptions | (82,297,800 | ) | (59,743,044 | ) | (46,385,811 | ) | (42,207,639 | ) | (14,742,594 | ) | (15,676,911 | ) | |||||||||||||||
Net increase (decrease) from capital share transactions | (36,261,381 | ) | (1,048,958 | ) | 66,919,357 | 37,529,615 | (4,980,860 | ) | 5,068,077 | ||||||||||||||||||
Total increase (decrease) in net assets | (39,844,398 | ) | (4,711,187 | ) | 63,014,601 | 74,588,768 | (21,758 | ) | 11,143,426 | ||||||||||||||||||
NET ASSETS(b): | |||||||||||||||||||||||||||
Beginning of period | 231,294,994 | 236,006,181 | 277,865,074 | 203,276,306 | 69,024,030 | 57,880,604 | |||||||||||||||||||||
End of period | $ | 191,450,596 | $ | 231,294,994 | $ | 340,879,675 | $ | 277,865,074 | $ | 69,002,272 | $ | 69,024,030 | |||||||||||||||
Fund share transactions: | |||||||||||||||||||||||||||
Shares sold | 3,354,334 | 4,276,421 | 7,417,295 | 5,407,820 | 215,365 | 605,095 | |||||||||||||||||||||
Reinvested dividends and distributions | 898,676 | 948,602 | 456,874 | 57,324 | 120,382 | 124,022 | |||||||||||||||||||||
Shares issued | 4,253,010 | 5,225,023 | 7,874,169 | 5,465,144 | 335,747 | 729,117 | |||||||||||||||||||||
Shares repurchased | (7,576,892 | ) | (5,322,142 | ) | (3,174,368 | ) | (2,953,023 | ) | (484,776 | ) | (537,136 | ) | |||||||||||||||
Net increase (decrease) in fund shares | (3,323,882 | ) | (97,119 | ) | 4,699,801 | 2,512,121 | (149,029 | ) | 191,981 |
The following information was previously reported in the March 31, 2018 financial statements. The distribution information for the period ended March 31, 2019 presented on the Statement of Changes is presented for comparative purposes to the March 31, 2018 financial statements, which conform to the SEC Final Rule on Disclosure Update and Simplification which was effective November 5, 2018 (see Note 1I).
(a) For the year ended March 31, 2018, dividends and distributions to shareholders totaled the following for each Fund, respectively:
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | |||||||||||||
From Net Investment Income | $ | (10,035,998 | ) | $ | (746,241 | ) | $ | (96,713 | ) | ||||||
From Net Realized Gain from Investment Transactions | $ | (1,179,033 | ) | $ | (168,439 | ) | $ | (3,574,988 | ) |
Buffalo Mid Cap Fund | Buffalo Small Cap Fund | ||||||||||
From Net Investment Income | $ | — | $ | — | |||||||
From Net Realized Gain from Investment Transactions | $ | (37,044,289 | ) | $ | (134,493,446 | ) |
(b) As of March 31, 2018, undistributed (distribution in excess of) net investment income (loss) totaled the following for each Fund, respectively:
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | |||||||||||||
Undistributed (distribution in excess of) net investment income (loss) | $ | 264,893 | $ | 285,779 | $ | 221,630 |
Buffalo Mid Cap Fund | Buffalo Small Cap Fund | ||||||||||
Undistributed (distribution in excess of) net investment income (loss) | $ | (148,720 | ) | $ | — |
The accompanying notes are an integral part of these financial statements.
98
Buffalo Mid Cap Fund | Buffalo Small Cap Fund | ||||||||||||||||||
Year Ended March 31, 2019 | Year Ended March 31, 2018 | Year Ended March 31, 2019 | Year Ended March 31, 2018 | ||||||||||||||||
OPERATIONS: | |||||||||||||||||||
Net investment income (loss) | $ | (389,521 | ) | $ | (364,899 | ) | $ | (3,321,236 | ) | $ | (3,559,621 | ) | |||||||
Net realized gain on investment transactions | 10,703,705 | 48,583,841 | 82,752,622 | 138,305,873 | |||||||||||||||
Net unrealized appreciation/depreciation during the year on investments and translation of assets and liabilities in foreign currencies | 574,142 | (20,149,333 | ) | (16,807,095 | ) | (43,337,579 | ) | ||||||||||||
Net increase in net assets resulting from operations | 10,888,326 | 28,069,609 | 62,624,291 | 91,408,673 | |||||||||||||||
DISTRIBUTIONS TO SHAREHOLDERS: | |||||||||||||||||||
Total distributions(a) | (5,175,731 | ) | (37,044,289 | ) | (103,368,251 | ) | (134,493,446 | ) | |||||||||||
CAPITAL SHARE TRANSACTIONS: | |||||||||||||||||||
Shares sold | 4,820,981 | 28,026,993 | 52,782,283 | 64,116,331 | |||||||||||||||
Reinvested dividends and distributions | 5,138,307 | 36,688,053 | 101,824,965 | 132,040,755 | |||||||||||||||
Shares issued | 9,959,288 | 64,715,046 | 154,607,248 | 196,157,086 | |||||||||||||||
Redemptions | (35,996,580 | ) | (295,566,267 | ) | (139,273,015 | ) | (180,254,520 | ) | |||||||||||
Net increase (decrease) from capital share transactions | (26,037,292 | ) | (230,851,221 | ) | 15,334,233 | 15,902,566 | |||||||||||||
Total increase (decrease) in net assets | (20,324,697 | ) | (239,825,901 | ) | (25,409,727 | ) | (27,182,207 | ) | |||||||||||
NET ASSETS(b): | |||||||||||||||||||
Beginning of period | 155,586,792 | 395,412,693 | 535,819,640 | 563,001,847 | |||||||||||||||
End of period | $ | 135,262,095 | $ | 155,586,792 | $ | 510,409,913 | $ | 535,819,640 | |||||||||||
Fund share transactions: | |||||||||||||||||||
Shares sold | 347,891 | 1,771,900 | 3,464,564 | 3,673,470 | |||||||||||||||
Reinvested dividends and distributions | 422,558 | 2,691,714 | 9,480,910 | 9,000,733 | |||||||||||||||
Shares issued | 770,449 | 4,463,614 | 12,945,474 | 12,674,203 | |||||||||||||||
Shares repurchased | (2,573,659 | ) | (18,565,346 | ) | (9,077,196 | ) | (10,826,595 | ) | |||||||||||
Net increase (decrease) in fund shares | (1,803,210 | ) | (14,101,732 | ) | 3,868,278 | 1,847,608 |
99
FINANCIAL HIGHLIGHTS
BUFFALO DISCOVERY FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 24.52 | $ | 21.86 | $ | 19.30 | $ | 21.50 | $ | 20.53 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment loss | (0.06 | ) | (0.04 | ) | (0.02 | ) | (0.03 | ) | (0.05 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 2.31 | 3.82 | 3.10 | (0.69 | ) | 3.08 | |||||||||||||||||
Total from investment operations | 2.25 | 3.78 | 3.08 | (0.72 | ) | 3.03 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net realized gain from investment transactions | (1.48 | ) | (1.12 | ) | (0.52 | ) | (1.48 | ) | (2.06 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 25.29 | $ | 24.52 | $ | 21.86 | $ | 19.30 | $ | 21.50 | |||||||||||||
Total return | 10.34 | % | 17.35 | % | 16.13 | % | (3.33 | %) | 15.56 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 1,744,262 | $ | 1,896,950 | $ | 1,254,238 | $ | 1,010,583 | $ | 774,187 | |||||||||||||
Ratio of expenses to average net assets | 1.01 | % | 1.01 | % | 1.01 | % | 1.01 | % | 1.01 | % | |||||||||||||
Ratio of net investment loss to average net assets | (0.21 | %) | (0.20 | %) | (0.11 | %) | (0.18 | %) | (0.28 | %) | |||||||||||||
Portfolio turnover rate | 77 | % | 42 | % | 51 | % | 59 | % | 52 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
100
FINANCIAL HIGHLIGHTS
BUFFALO DIVIDEND FOCUS FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 16.28 | $ | 15.32 | $ | 13.20 | $ | 13.76 | $ | 12.25 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income | 0.25 | 0.19 | 0.18 | 0.16 | 0.13 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.91 | 1.11 | 2.22 | (0.30 | ) | 2.16 | |||||||||||||||||
Total from investment operations | 1.16 | 1.30 | 2.40 | (0.14 | ) | 2.29 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | (0.25 | ) | (0.19 | ) | (0.18 | ) | (0.17 | ) | (0.13 | ) | |||||||||||||
Net realized gain from investment transactions | (0.54 | ) | (0.15 | ) | (0.10 | ) | (0.26 | ) | (0.65 | ) | |||||||||||||
Total distributions | (0.79 | ) | (0.34 | ) | (0.28 | ) | (0.43 | ) | (0.78 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | 0.01 | — | (1) | ||||||||||||||||
Net asset value, end of period | $ | 16.65 | $ | 16.28 | $ | 15.32 | $ | 13.20 | $ | 13.76 | |||||||||||||
Total return | 7.48 | % | 8.51 | % | 18.35 | % | (0.88 | %) | 18.86 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 58,299 | $ | 59,364 | $ | 59,795 | $ | 38,222 | $ | 41,116 | |||||||||||||
Ratio of expenses to average net assets | 0.94 | % | 0.94 | % | 0.95 | % | 0.97 | % | 0.94 | % | |||||||||||||
Ratio of net investment income to average net assets | 1.45 | % | 1.16 | % | 1.34 | % | 1.21 | % | 1.04 | % | |||||||||||||
Portfolio turnover rate | 20 | % | 21 | % | 26 | % | 65 | % | 62 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
101
FINANCIAL HIGHLIGHTS
BUFFALO EMERGING OPPORTUNITIES FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 16.03 | $ | 15.78 | $ | 13.89 | $ | 17.85 | $ | 19.31 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment loss | (0.15 | ) | (0.18 | ) | (0.13 | ) | (0.28 | ) | (0.31 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.32 | 3.55 | 3.25 | (2.45 | ) | 0.06 | |||||||||||||||||
Total from investment operations | 1.17 | 3.37 | 3.12 | (2.73 | ) | (0.25 | ) | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net realized gain from investment transactions | (1.90 | ) | (3.12 | ) | (1.23 | ) | (1.23 | ) | (1.25 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | 0.04 | ||||||||||||||||
Net asset value, end of period | $ | 15.30 | $ | 16.03 | $ | 15.78 | $ | 13.89 | $ | 17.85 | |||||||||||||
Total return | 9.39 | % | 21.84 | % | 22.99 | % | (15.47 | %) | (0.71 | %) | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 84,032 | $ | 87,969 | $ | 85,336 | $ | 114,270 | $ | 238,828 | |||||||||||||
Ratio of expenses to average net assets | 1.48 | % | 1.48 | % | 1.48 | % | 1.47 | % | 1.47 | % | |||||||||||||
Ratio of net investment loss to average net assets | (0.94 | %) | (1.10 | %) | (0.62 | %) | (1.19 | %) | (1.29 | %) | |||||||||||||
Portfolio turnover rate | 40 | % | 48 | % | 95 | % | 70 | % | 19 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
102
FINANCIAL HIGHLIGHTS
BUFFALO FLEXIBLE INCOME FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 15.00 | $ | 14.74 | $ | 13.70 | $ | 14.53 | $ | 14.41 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income | 0.39 | 0.34 | 0.35 | 0.38 | 0.30 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 0.71 | 0.77 | 1.14 | (0.70 | ) | 0.18 | |||||||||||||||||
Total from investment operations | 1.10 | 1.11 | 1.49 | (0.32 | ) | 0.48 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | (0.39 | ) | (0.36 | ) | (0.38 | ) | (0.41 | ) | (0.30 | ) | |||||||||||||
Net realized gain from investment transactions | (0.44 | ) | (0.49 | ) | (0.07 | ) | (0.10 | ) | (0.06 | ) | |||||||||||||
Total distributions | (0.83 | ) | (0.85 | ) | (0.45 | ) | (0.51 | ) | (0.36 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 15.27 | $ | 15.00 | $ | 14.74 | $ | 13.70 | $ | 14.53 | |||||||||||||
Total return | 7.73 | % | 7.57 | % | 11.02 | % | (2.24 | %) | 3.33 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 625,349 | $ | 698,084 | $ | 797,453 | $ | 899,246 | $ | 1,350,945 | |||||||||||||
Ratio of expenses to average net assets | 1.01 | % | 1.01 | % | 1.01 | % | 1.01 | % | 1.01 | % | |||||||||||||
Ratio of net investment income to average net assets | 2.57 | % | 2.27 | % | 2.45 | % | 2.72 | % | 2.05 | % | |||||||||||||
Portfolio turnover rate | 6 | % | 2 | % | 1 | % | 5 | % | 42 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
103
FINANCIAL HIGHLIGHTS
BUFFALO GROWTH FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 29.83 | $ | 30.83 | $ | 28.86 | $ | 34.60 | $ | 35.45 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income | 0.05 | 0.39 | 0.23 | 0.18 | 0.19 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 2.76 | 4.58 | 3.36 | (0.61 | ) | 3.63 | |||||||||||||||||
Total from investment operations | 2.81 | 4.97 | 3.59 | (0.43 | ) | 3.82 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | (0.01 | ) | (0.45 | ) | (0.22 | ) | (0.19 | ) | (0.18 | ) | |||||||||||||
Net realized gain from investment transactions | (7.53 | ) | (5.52 | ) | (1.40 | ) | (5.12 | ) | (4.49 | ) | |||||||||||||
Total distributions | (7.54 | ) | (5.97 | ) | (1.62 | ) | (5.31 | ) | (4.67 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 25.10 | $ | 29.83 | $ | 30.83 | $ | 28.86 | $ | 34.60 | |||||||||||||
Total return | 13.17 | % | 16.42 | % | 12.88 | % | (0.96 | %) | 11.32 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 174,570 | $ | 204,251 | $ | 326,944 | $ | 395,511 | $ | 463,167 | |||||||||||||
Ratio of expenses to average net assets | 0.91 | % | 0.91 | % | 0.91 | % | 0.91 | % | 0.91 | % | |||||||||||||
Ratio of net investment income to average net assets | 0.17 | % | 0.90 | % | 0.70 | % | 0.52 | % | 0.48 | % | |||||||||||||
Portfolio turnover rate | 16 | % | 32 | % | 18 | % | 42 | % | 30 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
104
FINANCIAL HIGHLIGHTS
BUFFALO HIGH YIELD FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 11.04 | $ | 11.21 | $ | 11.04 | $ | 11.71 | $ | 11.84 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income | 0.51 | 0.50 | 0.48 | 0.44 | 0.44 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.15 | ) | (0.15 | ) | 0.42 | (0.48 | ) | (0.03 | ) | ||||||||||||||
Total from investment operations | 0.36 | 0.35 | 0.90 | (0.04 | ) | 0.41 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | (0.51 | ) | (0.47 | ) | (0.47 | ) | (0.46 | ) | (0.42 | ) | |||||||||||||
Net realized gain from investment transactions | (0.03 | ) | (0.05 | ) | (0.26 | ) | (0.17 | ) | (0.12 | ) | |||||||||||||
Total distributions | (0.54 | ) | (0.52 | ) | (0.73 | ) | (0.63 | ) | (0.54 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 10.86 | $ | 11.04 | $ | 11.21 | $ | 11.04 | $ | 11.71 | |||||||||||||
Total return | 3.46 | % | 3.20 | % | 8.37 | % | (0.41 | %) | 3.58 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 191,451 | $ | 231,295 | $ | 236,006 | $ | 282,385 | $ | 255,987 | |||||||||||||
Ratio of expenses to average net assets | 1.02 | % | 1.02 | % | 1.02 | % | 1.01 | % | 1.02 | % | |||||||||||||
Ratio of net investment income to average net assets | 4.68 | % | 4.06 | % | 4.27 | % | 3.79 | % | 3.71 | % | |||||||||||||
Portfolio turnover rate | 22 | % | 41 | % | 40 | % | 44 | % | 25 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
105
FINANCIAL HIGHLIGHTS
BUFFALO INTERNATIONAL FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 15.10 | $ | 12.80 | $ | 11.40 | $ | 11.93 | $ | 11.73 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income | 0.09 | 0.06 | 0.13 | 0.06 | 0.09 | ||||||||||||||||||
Net realized and unrealized gains (losses) | (0.11 | ) | 2.29 | 1.39 | (0.54 | ) | 0.18 | ||||||||||||||||
Total from investment operations | (0.02 | ) | 2.35 | 1.52 | (0.48 | ) | 0.27 | ||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | (0.08 | ) | (0.04 | ) | (0.12 | ) | (0.05 | ) | (0.07 | ) | |||||||||||||
Net realized gain from investment transactions | (0.24 | ) | (0.01 | ) | — | — | — | ||||||||||||||||
Total distributions | (0.32 | ) | (0.05 | ) | (0.12 | ) | (0.05 | ) | (0.07 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 14.76 | $ | 15.10 | $ | 12.80 | $ | 11.40 | $ | 11.93 | |||||||||||||
Total return | 0.11 | % | 18.40 | % | 13.46 | % | (4.02 | %) | 2.32 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 340,880 | $ | 277,865 | $ | 203,276 | $ | 234,446 | $ | 256,608 | |||||||||||||
Ratio of expenses to average net assets | 1.04 | % | 1.03 | % | 1.04 | % | 1.04 | % | 1.05 | % | |||||||||||||
Ratio of net investment income to average net assets | 0.64 | % | 0.42 | % | 1.02 | % | 0.52 | % | 0.77 | % | |||||||||||||
Portfolio turnover rate | 16 | % | 13 | % | 4 | % | 7 | % | 21 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
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FINANCIAL HIGHLIGHTS
BUFFALO LARGE CAP FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 29.08 | $ | 26.53 | $ | 23.09 | $ | 25.09 | $ | 23.34 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment income | 0.09 | 0.09 | 0.08 | 0.09 | 0.05 | ||||||||||||||||||
Net realized and unrealized gains (losses) | 3.46 | 4.01 | 4.18 | (0.47 | ) | 4.51 | |||||||||||||||||
Total from investment operations | 3.55 | 4.10 | 4.26 | (0.38 | ) | 4.56 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | (0.11 | ) | (0.04 | ) | (0.13 | ) | (0.04 | ) | (0.05 | ) | |||||||||||||
Net realized gain from investment transactions | (1.51 | ) | (1.51 | ) | (0.69 | ) | (1.58 | ) | (2.76 | ) | |||||||||||||
Total distributions | (1.62 | ) | (1.55 | ) | (0.82 | ) | (1.62 | ) | (2.81 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 31.01 | $ | 29.08 | $ | 26.53 | $ | 23.09 | $ | 25.09 | |||||||||||||
Total return | 12.96 | % | 15.41 | % | 18.67 | % | (1.56 | %) | 20.29 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 69,002 | $ | 69,024 | $ | 57,881 | $ | 47,794 | $ | 44,013 | |||||||||||||
Ratio of expenses to average net assets | 0.93 | % | 0.93 | % | 0.95 | % | 0.94 | % | 0.96 | % | |||||||||||||
Ratio of net investment income to average net assets | 0.27 | % | 0.33 | % | 0.34 | % | 0.41 | % | 0.23 | % | |||||||||||||
Portfolio turnover rate | 10 | % | 40 | % | 41 | % | 62 | % | 30 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
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FINANCIAL HIGHLIGHTS
BUFFALO MID CAP FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 13.99 | $ | 15.68 | $ | 15.04 | $ | 18.68 | $ | 19.27 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment loss | (0.04 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | (0.04 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.11 | 1.77 | 1.85 | (1.62 | ) | 1.87 | |||||||||||||||||
Total from investment operations | 1.07 | 1.74 | 1.84 | (1.64 | ) | 1.83 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net investment income | — | — | — | — | (1) | — | (1) | ||||||||||||||||
Net realized gain from investment transactions | (0.54 | ) | (3.43 | ) | (1.20 | ) | (2.00 | ) | (2.42 | ) | |||||||||||||
Total distributions | (0.54 | ) | (3.43 | ) | (1.20 | ) | (2.00 | ) | (2.42 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 14.52 | $ | 13.99 | $ | 15.68 | $ | 15.04 | $ | 18.68 | |||||||||||||
Total return | 8.40 | % | 11.69 | % | 12.94 | % | (8.83 | %) | 10.43 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 135,262 | $ | 155,587 | $ | 395,413 | $ | 458,635 | $ | 566,302 | |||||||||||||
Ratio of expenses to average net assets | 1.02 | % | 1.01 | % | 1.01 | % | 1.01 | % | 1.01 | % | |||||||||||||
Ratio of net investment loss to average net assets | (0.27 | %) | (0.13 | %) | (0.09 | %) | (0.10 | %) | (0.18 | %) | |||||||||||||
Portfolio turnover rate | 36 | % | 51 | % | 51 | % | 46 | % | 12 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
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FINANCIAL HIGHLIGHTS
BUFFALO SMALL CAP FUND
The following tables are intended to help you understand the Fund's financial performance. The information reflects financial results for the Fund held for the periods shown. Total returns assume reinvestment of all dividends and distributions. Total returns do not reflect payment of sales charges, if any, and are not annualized for periods of less than one year.
Years Ended March 31, | |||||||||||||||||||||||
Condensed data for a share of capital stock outstanding throughout the period. | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||||||
Net asset value, beginning of period | $ | 15.00 | $ | 16.61 | $ | 16.64 | $ | 32.83 | $ | 36.02 | |||||||||||||
Income from investment operations: | |||||||||||||||||||||||
Net investment loss | (0.08 | ) | (0.09 | ) | (0.13 | ) | (0.20 | ) | (0.24 | ) | |||||||||||||
Net realized and unrealized gains (losses) | 1.25 | 2.92 | 3.19 | (3.60 | ) | 0.31 | |||||||||||||||||
Total from investment operations | 1.17 | 2.83 | 3.06 | (3.80 | ) | 0.07 | |||||||||||||||||
Less distributions from: | |||||||||||||||||||||||
Net realized gain from investment transactions | (3.28 | ) | (4.44 | ) | (3.09 | ) | (12.39 | ) | (3.26 | ) | |||||||||||||
Paid-in capital from redemption fees(2) | — | — | — | (1) | — | (1) | — | (1) | |||||||||||||||
Net asset value, end of period | $ | 12.89 | $ | 15.00 | $ | 16.61 | $ | 16.64 | $ | 32.83 | |||||||||||||
Total return | 12.19 | % | 17.65 | % | 24.51 | % | (13.28 | %) | 0.56 | % | |||||||||||||
Ratios/Supplemental Data | |||||||||||||||||||||||
Net assets, end of period (in thousands) | $ | 510,410 | $ | 535,820 | $ | 563,002 | $ | 961,411 | $ | 3,005,980 | |||||||||||||
Ratio of expenses to average net assets | 1.01 | % | 1.01 | % | 1.01 | % | 1.01 | % | 1.00 | % | |||||||||||||
Ratio of net investment loss to average net assets | (0.55 | %) | (0.64 | %) | (0.52 | %) | (0.61 | %) | (0.63 | %) | |||||||||||||
Portfolio turnover rate | 57 | % | 49 | % | 45 | % | 41 | % | 17 | % |
(1) Less than $0.01 per share.
(2) Effective December 1, 2016, the Board of Trustees approved the elimination of redemption fees on shares of the Funds.
The accompanying notes are an integral part of these financial statements.
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NOTES TO FINANCIAL STATEMENTS
March 31, 2019
1. SIGNIFICANT ACCOUNTING POLICIES:
The Buffalo Funds (comprised of the Buffalo Discovery Fund, Buffalo Dividend Focus Fund, Buffalo Emerging Opportunities Fund, Buffalo Flexible Income Fund, Buffalo Growth Fund, Buffalo High Yield Fund, Buffalo International Fund, Buffalo Large Cap Fund, Buffalo Mid Cap Fund, and Buffalo Small Cap Fund) (the "Funds") are registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified open-end management investment company. The shares of the Buffalo Funds are issued in multiple series, with each series, in effect, representing a separate fund.
The investment objective of the Buffalo Discovery Fund, Buffalo Emerging Opportunities Fund, Buffalo Growth Fund, Buffalo International Fund, Buffalo Large Cap Fund, Buffalo Mid Cap Fund and Buffalo Small Cap Fund is long-term growth of capital. The investment objective of the Buffalo Flexible Income Fund is high current income, with long-term growth of capital as a secondary objective. The investment objectives of the Buffalo Dividend Focus Fund and Buffalo High Yield Fund are current income, with long-term growth of capital as a secondary objective.
Each Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") Topic 946 "Financial Services — Investment Companies."
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements.
A. INVESTMENT VALUATION — Equity securities and debt securities traded on a national securities exchange or national market, except those traded using the National Association of Securities Dealers' Automated Quotation System ("NASDAQ"), are valued at the latest sales price thereof, or if no sale was reported on that date, the mean between the most recent quoted bid and ask price is used. All equity securities that are traded using NASDAQ are valued using the NASDAQ Official Closing Price ("NOCP"), which may not necessarily represent the last sales price. If there has been no sale on such exchange or on NASDAQ on such day, the security is valued at the mean between the most recent quoted bid and ask price.
When market quotations are not readily available, any security or other asset is valued at its fair value as determined in good faith under procedures approved by the Board of Trustees (the "Board"). If events occur that will affect the value of a Fund's portfolio securities before the net asset value ("NAV") has been calculated (a "significant event"), the security will generally be priced using a fair value procedure. The Board has adopted specific procedures for valuing portfolio securities and delegated the responsibility of fair value determinations to the Valuation Committee. Some of the factors that may be considered by the Valuation Committee in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restriction on disposition; trading in similar securities of the same issuer or comparable companies; information from broker-dealers; and an evaluation of the forces that influence the market in which the securities are purchased or sold. As of March 31, 2019, none of the Funds held fair valued securities. In addition, with respect to the valuation of securities principally traded on foreign markets, the Buffalo International Fund uses a fair value pricing service approved by the Funds' Board which employs quantitative models to adjust for "stale" prices caused by the movement of other markets and other factors occurring after the close of the foreign markets, but before the close of the New York Stock Exchange ("NYSE"). As of March 31, 2019, the Buffalo International Fund held 59 fair valued securities, with a market value of $223,459,837 or 65.55% of total net assets.
Debt securities with remaining maturities of 60 days or less are normally valued at the last reported sale price. If there is no trade on the particular day, then the security will be priced at the mean between the most recent bid and ask prices.
Restricted securities include securities that have not been registered under the Securities Act of 1933, as amended, and securities that are subject to restrictions on resale. The Funds may invest in restricted securities that are
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consistent with the Funds' investment objectives and investment strategies. In some cases, the issuer of restricted securities has agreed to register such securities for resale, at the issuer's expense either upon demand by the Funds or in connection with another registered offering of the securities. Investments in restricted securities are valued utilizing the Funds' corporate bond valuation policies.
In accordance with FASB ASC 820, Fair Value Measurements ("ASC 820"), fair value is defined as the price that a Fund would receive to sell an investment or pay to transfer a liability in an orderly transaction with an independent buyer in the principal market, or in the absence of a principal market, the most advantageous market for the investment or liability. ASC 820 establishes a three-tier hierarchy to distinguish between (1) inputs that reflect the assumptions market participants would use in pricing an asset or liability developed based on market data obtained from sources independent of the reporting entity (observable inputs) and (2) inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances (unobservable inputs) and to establish classification of fair value measurements for disclosure purposes. Various inputs are used in determining the value of the Funds' investments. The inputs are summarized in the three broad levels listed below:
Level 1 — Valuations based on quoted prices for investments in active markets that a Fund has the ability to access at the measurement date. Valuation adjustments are not applied to Level 1 investments.
Level 2 — Valuations based on other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risks, etc.).
Level 3 — Valuations based on significant unobservable inputs (including a Fund's own assumptions and judgment in determining the fair value of investments).
Inputs that are used in determining fair value of an investment may include price information, credit data, volatility statistics, and other factors. These inputs can be either observable or unobservable. The availability of observable inputs can vary between investments, and is affected by various factors such as the type of investment, and the volume and level of activity for that investment or similar investments in the market place. The inputs will be considered by Kornitzer Capital Management, Inc. ("Advisor" or "KCM"), along with any other relevant factors in the calculation of an investment's fair value. The Funds use prices and inputs that are current as of the measurement date, which may include periods of market dislocations. During these periods, the availability of prices and inputs may be reduced for many investments. This condition could cause an investment to be reclassified between the various levels within the hierarchy.
Non-U.S. equity securities actively traded in foreign markets may be reflected in Level 2 despite the availability of closing prices, because the Funds evaluate and determine whether those closing prices reflect fair value at the close of the NYSE or require adjustment, as described above and in Note 8 — Foreign Investment Risk.
Investments falling into the Level 3 category are primarily supported by quoted prices from brokers and dealers participating in the market for those investments. However, these may be classified as Level 3 investments due to lack of market transparency and corroboration to support these quoted prices. Additionally, valuation models may be used as the pricing source for any remaining investments classified as Level 3. These models rely on one or more significant unobservable inputs and/or significant assumptions made by the Valuation Committee. Inputs used in valuations may include, but are not limited to, financial statement analysis, capital account balances, discount rates and estimated cash flows, and comparable company data.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following table provides the fair value measurement of applicable Fund assets and liabilities by level within the fair value hierarchy as of March 31, 2019. These assets are measured on a recurring basis.
BUFFALO DISCOVERY FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,650,511,138 | $ | — | $ | — | $ | 1,650,511,138 | |||||||||||
REITS | 48,308,697 | — | — | 48,308,697 | |||||||||||||||
Short Term Investment | 75,716,247 | — | — | 75,716,247 | |||||||||||||||
Total* | $ | 1,774,536,082 | $ | — | $ | — | $ | 1,774,536,082 |
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BUFFALO DIVIDEND FOCUS FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 51,624,806 | $ | — | $ | — | $ | 51,624,806 | |||||||||||
REITS | 1,129,068 | — | — | 1,129,068 | |||||||||||||||
Convertible Bonds | — | 3,643,407 | — | 3,643,407 | |||||||||||||||
Short Term Investment | 1,902,889 | — | — | 1,902,889 | |||||||||||||||
Total* | $ | 54,656,763 | $ | 3,643,407 | $ | — | $ | 58,300,170 |
BUFFALO EMERGING OPPORTUNIES FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 71,448,441 | $ | — | $ | — | $ | 71,448,441 | |||||||||||
REIT | 2,078,031 | — | — | 2,078,031 | |||||||||||||||
Short Term Investments | 10,540,346 | — | — | 10,540,346 | |||||||||||||||
Total* | $ | 84,066,818 | $ | — | $ | — | $ | 84,066,818 |
BUFFALO FLEXIBLE INCOME FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 525,887,549 | $ | — | $ | — | $ | 525,887,549 | |||||||||||
REITS | 15,550,400 | — | — | 15,550,400 | |||||||||||||||
Convertible Bonds | — | 9,733,965 | — | 9,733,965 | |||||||||||||||
Corporate Bonds | — | 15,033,738 | — | 15,033,738 | |||||||||||||||
Short Term Investment | 46,280,475 | — | — | 46,280,475 | |||||||||||||||
Total* | $ | 587,718,424 | $ | 24,767,703 | $ | — | $ | 612,486,127 | |||||||||||
Written Options | $ | 443,700 | $ | 6,465 | $ | — | $ | 450,165 |
BUFFALO GROWTH FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 167,145,654 | $ | — | $ | — | $ | 167,145,654 | |||||||||||
REITS | 5,007,314 | — | — | 5,007,314 | |||||||||||||||
Short Term Investment | 2,687,958 | — | — | 2,687,958 | |||||||||||||||
Total* | $ | 174,840,926 | $ | — | $ | — | $ | 174,840,926 |
BUFFALO HIGH YIELD FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 1,365,039 | $ | — | $ | — | $ | 1,365,039 | |||||||||||
REIT | 1,184,800 | — | — | 1,184,800 | |||||||||||||||
Convertible Bonds | — | 19,271,374 | — | 19,271,374 | |||||||||||||||
Corporate Bonds | — | 122,982,608 | — | 122,982,608 | |||||||||||||||
Bank Loans | — | 32,770,474 | — | 32,770,474 | |||||||||||||||
Short Term Investment | 11,370,875 | — | — | 11,370,875 | |||||||||||||||
Total* | $ | 13,920,714 | $ | 175,024,456 | $ | — | $ | 188,945,170 |
BUFFALO INTERNATIONAL FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 84,563,012 | $ | 223,459,837 | $ | — | $ | 308,022,849 | |||||||||||
Short Term Investment | 29,418,197 | — | — | 29,418,197 | |||||||||||||||
Total* | $ | 113,981,209 | $ | 223,459,837 | $ | — | $ | 337,441,046 |
BUFFALO LARGE CAP FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 64,051,600 | $ | — | $ | — | $ | 64,051,600 | |||||||||||
REIT | 1,726,993 | — | — | 1,726,993 | |||||||||||||||
Short Term Investment | 3,168,332 | — | — | 3,168,332 | |||||||||||||||
Total* | $ | 68,946,925 | $ | — | $ | — | $ | 68,946,925 |
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BUFFALO MID CAP FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 131,084,503 | $ | — | $ | — | $ | 131,084,503 | |||||||||||
REIT | 2,605,217 | — | — | 2,605,217 | |||||||||||||||
Short Term Investment | 1,938,612 | — | — | 1,938,612 | |||||||||||||||
Total* | $ | 135,628,332 | $ | — | $ | — | $ | 135,628,332 |
BUFFALO SMALL CAP FUND
Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||
Common Stocks | $ | 473,021,252 | $ | — | $ | — | $ | 473,021,252 | |||||||||||
REITS | 16,074,037 | — | 16,074,037 | ||||||||||||||||
Short Term Investment | 24,918,730 | — | — | 24,918,730 | |||||||||||||||
Total* | $ | 514,014,019 | $ | — | $ | — | $ | 514,014,019 |
* Additional information regarding the industry and/or geographical classification of these investments is disclosed in the schedule of investments.
The following is a reconciliation of the Buffalo High Yield Fund Level 3 assets for which significant unobservable inputs were used to determine fair value for the period ended March 31, 2019:
Fair Value Measurement Using Significant Unobservable Inputs (Level 3) | Investments in Securities Period Ended March 31, 2019 | ||||||
Fair Value as of 3/31/2018 | $ | 260,625 | |||||
Total unrealized losses included in earnings | (2,187 | ) | |||||
Transfer out of Level 3 | (258,438 | ) | |||||
Fair Value as of 3/31/2019 | $ | — | |||||
The amount of total gains or losses for the period included in net increase (decrease) in net asset applicable to outstanding shares attributed to the change in unrealized gains or losses relating to assets still held at the reporting date | (2,187 | ) |
The Level 3 amount from March 31, 2018 consisted of one corporate bond security that was fair valued in good faith, using significant unobservable inputs, by the Valuation Committee. The transfer out of Level 3 of this security was due to the security being priced by the pricing vendor when it resumed trading.
B. FEDERAL INCOME TAXES — Each Fund complies with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and makes the requisite distributions of income and capital gains to its shareholders sufficient to relieve it from all or substantially all federal income and excise taxes. Therefore, no federal income tax provision has been provided.
At March 31, 2019, the Funds did not have any tax positions that did not meet the "more likely-than-not" threshold of being sustained by the applicable tax authority. The Funds recognize interest and penalties, if any, related to unrecognized tax benefits as other expense in the Statement of Operations. During the year, the Funds did not incur any interest or penalties.
The Funds have analyzed all open tax years, as defined by the statute of limitations, for all major jurisdictions. Open tax years are those that are open for exam by taxing authorities. Open tax years include the tax years ended March 31, 2016 through March 31, 2019. The Funds have no examinations in progress.
C. INVESTMENT TRANSACTIONS AND INVESTMENT INCOME — Investment transactions are accounted for on the date the securities are purchased or sold (trade date). Dividend income is recorded on the ex-dividend date except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income is recognized on the accrual basis. Realized gains and losses from investment transactions are reported on the identified cost basis. All discounts/premiums are accreted/amortized for financial reporting purposes and are included in interest income.
D. DISTRIBUTIONS TO SHAREHOLDERS — Distributions to shareholders are recorded on the ex-dividend date. Distributions are determined in accordance with income tax regulations, which may differ from U.S. generally
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accepted accounting principles ("GAAP"). These differences are primarily due to differing treatments for premium amortization on debt securities, deferral of late year and wash sale losses, and partnership investment income.
E. USE OF ESTIMATES — The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from such estimates.
F. FOREIGN CURRENCY TRANSLATION — Values of investments denominated in foreign currencies are converted into U.S. dollars using a spot market rate of exchange on the day of valuation. Purchases and sales of investments and dividend and interest income are translated to U.S. dollars using a spot market rate of exchange prevailing on the respective dates of such transactions. The portion of security gains or losses resulting from changes in foreign exchange rates is included with net realized and unrealized gain or loss from investments, as appropriate, for both financial reporting and tax purposes.
G. PURCHASED AND WRITTEN OPTION CONTRACTS — Certain of the Funds may purchase and write call or put options on securities and indices and enter into related closing transactions. As a holder of a call option, a Fund has the right, but not the obligation, to purchase a security at the exercise price during the exercise period. As the writer of a call option, a Fund has the obligation to sell the security at the exercise price during the exercise period. The Fund's maximum payout in the case of written call option contracts cannot be determined. As a holder of a put option, a Fund has the right, but not the obligation, to sell a security at the exercise price during the exercise period. As the writer of a put option, a Fund has the obligation to buy the underlying security at the exercise price during the exercise period. The Funds did not hold any written put options as of March 31, 2019.
The premium that a Fund pays when purchasing an option or receives when writing an option will reflect, among other things, the market price of the security, the relationship of the exercise price to the market price of the security, the relationship of the exercise price to the volatility of the security, the length of the option period and supply and demand factors. The premium is the market value of an option at the time of purchase.
A purchaser (holder) of a put option pays a non-refundable premium to the seller (writer) of a put option to obtain the right to sell a specified amount of a security at a fixed price (the exercise price) during a specified period (exercise period). Conversely, the seller (writer) of a put option, upon payment by the holder of the premium, has the obligation to buy the security from the holder of the put option at the exercise price during the exercise period.
Exchange traded options are valued at the composite price, using the National Best Bid and Offer quotes ("NBBO"). NBBO consists of the highest bid prices and lowest ask prices across any of the exchanges on which an option is quoted, thus providing a view across the entire U.S. options marketplace. Specifically, composite pricing looks at the last trades on the exchanges where the options are traded. If there are no trades for the option on a given business day, composite option pricing calculates the mean of the highest bid price and lowest ask price across the exchanges where the option is traded. Non exchange traded options also will be valued at the mean between the last bid and ask quotations. For options where market quotations are not readily available, a fair value shall be determined as set forth in the Funds' fair valuation guidelines.
The Funds may use options with the objective to generate income as a non-principal investment strategy. Currently, the Buffalo Flexible Income Fund makes use of the options strategy to a greater extent than the other Funds because high income generation is a primary investment objective of the Buffalo Flexible Income Fund. The primary strategy used by Buffalo Flexible Income Fund to achieve income generation through the use of options is to write covered calls with the strike price above the cost basis and the value the portfolio managers believe will be achieved before the expiration of the option and also at a value that the portfolio managers are willing to sell if the option is exercised. The collected premiums generate income for the Fund, and if the option is exercised, a gain will also be achieved. A risk of using derivatives is that the counterparty to a derivative may fail to comply with their obligation to the Funds. See Note 7 for written option activity.
H. INDEMNIFICATIONS — Under the Funds' organizational documents, officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnification to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred, and may not occur. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
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I. RECENT ACCOUNTING PRONOUNCEMENTS — In August 2018, the U.S. Securities and Exchange Commission approved amendments to eliminate, update or modify certain disclosure requirements required of registered investment companies. In part, these amendments amend Regulation S-X and require presentation of distributable earnings on the Statement of Assets and Liabilities in total rather than disclosing the three components of distributable earnings (undistributed net investment income, undistributed realized gain and net unrealized appreciation (depreciation) on investments). An additional amendment to Regulation S-X amends the requirement to state separately on the Statement of Changes in Net Assets distributions to shareholders from net investment income, net realized gain and other sources and instead disclose distributions to shareholders in total, except for return of capital, which should be disclosed separately. These updates have been incorporated in the Funds' financial statements and have no impact on each of the Fund's net assets or results of operations.
In August 2018, FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. The changes affect all companies that are required to include fair value measurement disclosures. In general, the amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13 and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date. These updates have been incorporated in the Funds' financial statements and have no impact on each of the Fund's net assets or results of operations. The Funds adopted the removed and modified disclosures in the Funds' financial statements and have elected to delay the adoption of additional disclosures until their effective date.
2. FEDERAL TAX MATTERS:
The tax character of distributions paid during the year ended March 31, 2019 and the year ended March 31, 2018 were as follows:
Year Ended March 31, 2019 | Year Ended March 31, 2018 | ||||||||||||||||||
Ordinary Income | Long-Term Capital Gains | Ordinary Income | Long-Term Capital Gains | ||||||||||||||||
Buffalo Discovery Fund | $ | 12,334,576 | $ | 97,779,261 | $ | 36,141,376 | $ | 38,060,445 | |||||||||||
Buffalo Dividend Focus Fund | 959,250 | 1,757,501 | 1,316,597 | — | |||||||||||||||
Buffalo Emerging Opportunities Fund | 2,389,211 | 7,100,676 | 7,657,329 | 7,532,697 | |||||||||||||||
Buffalo Flexible Income Fund | 17,960,609 | 17,918,207 | 17,863,622 | 23,434,444 | |||||||||||||||
Buffalo Growth Fund | 273,363 | 43,956,280 | 3,028,666 | 35,071,719 | |||||||||||||||
Buffalo High Yield Fund | 9,788,238 | 606,356 | 10,466,122 | 748,909 | |||||||||||||||
Buffalo International Fund | 1,570,569 | 4,985,000 | 746,268 | 168,412 | |||||||||||||||
Buffalo Large Cap Fund | 722,703 | 2,697,412 | 1,516,935 | 2,154,766 | |||||||||||||||
Buffalo Mid Cap Fund | — | 5,175,731 | 8,773,432 | 28,270,857 | |||||||||||||||
Buffalo Small Cap Fund | 2,587,277 | 100,780,974 | 12,080,010 | 122,413,436 |
For tax purposes, distributions from short-term capital gain distributions are included in ordinary distributions.
Additionally, GAAP requires that certain components of net assets relating to permanent differences be reclassified between financial and tax reporting. These reclassifications have no effect on net assets or net asset value per share. For the year ended March 31, 2019, the following table shows the reclassifications made:
Distributable Earnings | Paid In Capital | ||||||||||
Buffalo Discovery Fund | $ | (19,368,178 | ) | $ | 19,368,178 | ||||||
Buffalo Dividend Focus Fund | (77,159 | ) | 77,159 | ||||||||
Buffalo Emerging Opportunities Fund | (290,560 | ) | 290,560 | ||||||||
Buffalo Flexible Income Fund | (2,506,778 | ) | 2,506,778 | ||||||||
Buffalo Growth Fund | (6,901,967 | ) | 6,901,967 |
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Distributable Earnings | Paid In Capital | ||||||||||
Buffalo High Yield Fund | $ | (108,027 | ) | $ | 108,027 | ||||||
Buffalo International Fund | (470,235 | ) | 470,235 | ||||||||
Buffalo Large Cap Fund | (527,830 | ) | 527,830 | ||||||||
Buffalo Mid Cap Fund | (508,897 | ) | 508,897 | ||||||||
Buffalo Small Cap Fund | (18,410,946 | ) | 18,410,946 |
The permanent differences primarily relate to net operating losses and utilization of earnings and profit distributions to shareholders on redemption of shares.
As of March 31, 2019, the components of accumulated earnings (losses) for income tax purposes were as follows:
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | Buffalo Flexible Income Fund | Buffalo Growth Fund | |||||||||||||||||||
Tax cost of Investments(a) | $ | 1,347,122,293 | $ | 42,285,426 | $ | 68,896,547 | $ | 429,452,867 | $ | 103,548,075 | |||||||||||||
Unrealized Appreciation | 450,383,701 | 17,617,645 | 22,674,219 | 213,354,734 | 75,093,411 | ||||||||||||||||||
Unrealized Depreciation | (22,969,912 | ) | (1,602,901 | ) | (7,503,948 | ) | (30,771,639 | ) | (3,800,560 | ) | |||||||||||||
Net unrealized appreciation | 427,413,789 | 16,014,744 | 15,170,271 | 182,583,095 | 71,292,851 | ||||||||||||||||||
Undistributed Ordinary Income | — | 58,078 | — | 287,327 | 252,448 | ||||||||||||||||||
Undistributed Long Term Capital Gain | 22,359,333 | — | — | 1,104,919 | 5,380,245 | ||||||||||||||||||
Distributable earnings | 22,359,333 | 58,078 | — | 1,392,246 | 5,632,693 | ||||||||||||||||||
Other accumulated gain/(loss) | (1,187,654 | ) | (327,844 | ) | (376,597 | ) | (14,632 | ) | (56,022 | ) | |||||||||||||
Total accumulated gain/(loss) | 448,585,468 | 15,744,978 | 14,793,674 | 183,960,709 | 76,869,522 | ||||||||||||||||||
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | Buffalo Mid Cap Fund | Buffalo Small Cap Fund | |||||||||||||||||||
Tax cost of Investments(a) | $ | 186,179,408 | $ | 263,344,979 | $ | 44,711,738 | $ | 86,344,886 | $ | 401,483,132 | |||||||||||||
Unrealized Appreciation | 5,845,498 | 84,911,988 | 25,698,230 | 51,511,454 | 141,359,171 | ||||||||||||||||||
Unrealized Depreciation | (3,079,736 | ) | (10,815,921 | ) | (1,463,043 | ) | (2,228,008 | ) | (28,828,284 | ) | |||||||||||||
Net unrealized appreciation | 2,765,762 | 74,096,067 | 24,235,187 | 49,283,446 | 112,530,887 | ||||||||||||||||||
Undistributed Ordinary Income | 327,308 | 176,778 | 657,900 | — | — | ||||||||||||||||||
Undistributed Long Term Capital Gain | — | — | 543,771 | 4,208,605 | 24,339,176 | ||||||||||||||||||
Distributable earnings | 327,308 | 176,778 | 1,201,671 | 4,208,605 | 24,339,176 | ||||||||||||||||||
Other accumulated gain/(loss) | (729,806 | ) | (1,102,239 | ) | — | (188,044 | ) | (2,595,647 | ) | ||||||||||||||
Total accumulated gain/(loss) | 2,363,264 | 73,170,606 | 25,436,858 | 53,304,007 | 134,274,416 |
The differences between book-basis and tax-basis unrealized appreciation are attributable primarily to the tax deferral of losses on wash sales, premium amortization, and publicly traded partnership investments.
Other accumulated gain/(loss) is generally comprised of qualified late year losses, mark to market on unsettled dividends, and/or straddle loss deferrals.
(a) Represents cost for federal income tax purposes and may differ from the cost for financial reporting purposes.
As of March 31, 2019, the Buffalo Funds had no capital loss carryovers available to offset future taxable gains.
In order to meet certain excise tax distribution requirements, the Funds are required to measure and distribute annually net capital gains realized during a twelve month period ending October 31 and net investment income earned during a twelve month period ending December 31. In connection with this, the Funds are permitted for tax purposes to defer into their next fiscal year qualified late year losses. Qualified late year capital losses are any net capital losses incurred between November 1 and the end of their fiscal year, March 31, 2019. Qualified late year ordinary losses are generally losses incurred between January 1 and the end of their fiscal year, March 31, 2019.
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At March 31, 2019, the following Funds deferred, on a tax basis, qualified late year losses, consisting of ordinary and capital losses, as follows:
Qualified Late Year Ordinary Losses | Qualified Late Year Capital Losses | ||||||||||
Buffalo Discovery Fund | $ | 1,187,654 | $ | — | |||||||
Buffalo Dividend Focus Fund | — | 327,844 | |||||||||
Buffalo Emerging Opportunities Fund | 224,225 | 152,372 | |||||||||
Buffalo Growth Fund | — | 56,022 | |||||||||
Buffalo High Yield Fund | — | 729,806 | |||||||||
Buffalo International Fund | — | 1,156,223 | |||||||||
Buffalo Mid Cap Fund | 188,044 | — | |||||||||
Buffalo Small Cap Fund | 717,457 | 1,878,190 |
For the year ended March 31, 2019, the Buffalo International Fund earned foreign source income and paid foreign taxes which they intend to pass through to their shareholders pursuant to Section 853 of the Internal Revenue Code as follows:
BUFFALO INTERNATIONAL FUND
Country | Gross Dividend | Taxes Withheld | |||||||||
Belgium | $ | 73,129 | $ | 10,487 | |||||||
Bermuda | 94,389 | — | |||||||||
Brazil | 34,658 | 3,404 | |||||||||
Canada | 72,707 | 10,906 | |||||||||
Cayman Islands | 2,952 | — | |||||||||
Finland | 49,105 | 7,366 | |||||||||
France | 728,779 | 305,949 | |||||||||
Germany | 1,472,576 | 209,607 | |||||||||
Hong Kong | 68,602 | 4,556 | |||||||||
India | 17,420 | — | |||||||||
Ireland | 168,476 | — | |||||||||
Italy | 40,597 | 6,090 | |||||||||
Japan | 262,836 | 26,284 | |||||||||
Mexico | 13,176 | 1,318 | |||||||||
Netherlands | 348,316 | 52,247 | |||||||||
Norway | 142,677 | 27,407 | |||||||||
South Korea | 47,579 | 7,851 | |||||||||
Spain | 154,439 | 22,116 | |||||||||
Sweden | 6,337 | 951 | |||||||||
Switzerland | 578,226 | 45,748 | |||||||||
Taiwan | 211,454 | 44,405 | |||||||||
United Kingdom | 576,367 | — | |||||||||
United States | 57,236 | — | |||||||||
$ | 5,222,033 | $ | 786,692 |
3. RELATED PARTY TRANSACTIONS:
Management fees are paid to KCM at the rate of 1.00% per annum of the average daily net asset values of the Funds, except for the Buffalo Emerging Opportunities Fund, Buffalo Dividend Focus Fund, Buffalo Growth Fund and Buffalo Large Cap Fund which have a management fee rate of 1.45%, 0.90%, 0.90% and 0.90%, respectively. The management fees are for services which include the costs of all management, supervisory and administrative services required in the normal operation of the Funds. This includes investment management and supervision; fees of the custodian (except for the additional cost of maintaining custody of assets in foreign jurisdictions, when compared to domestic custody costs), independent registered public accounting firm and legal counsel; fees and expenses of officers, trustees and other personnel; rent; shareholder services; and other items incidental to corporate administration. Pursuant to a Master Services Agreement with U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global
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Fund Services ("GFS"), KCM pays GFS a fee of 30/100 of 1% (0.30%) of each Funds' average daily net assets out of the fees KCM receives from the Funds, except for the Buffalo Dividend Focus Fund, Buffalo Growth Fund and the Buffalo Large Cap Fund, where GFS receives 25/100 of 1% (0.25%). GFS provides or obtains various operational services required by the Funds, pays various Fund expenses and acts as paying agent to compensate other Fund service providers. Some of the other Fund service providers are affiliates of GFS.
With respect to the Buffalo Small Cap Fund only, the annual management fee rate of one percent (1.00%) of the Buffalo Small Cap Fund's average daily net assets is a base fee paid to KCM that is subject to reduced fees paid on assets in excess of certain levels (breakpoints). The fee paid by KCM to GFS is also subject to breakpoints on assets in excess of certain levels. The breakpoint schedules for the management fees paid by the Buffalo Small Cap Fund to KCM and the fees paid by KCM to GFS are set forth in the following table:
BUFFALO SMALL CAP FUND FEE BREAKPOINTS
(As a % Of Average Daily Net Assets) | |||||||||||
Asset Level | Management Fee | GFS Fee | |||||||||
Assets up to $6 billion | 1.00 | % | 0.300 | % | |||||||
Assets over $6 billion up to $7 billion | 0.95 | % | 0.275 | % | |||||||
Assets over $7 billion up to $8 billion | 0.90 | % | 0.250 | % | |||||||
Assets over $8 billion up to $9 billion | 0.85 | % | 0.225 | % | |||||||
Assets over $9 billion | 0.80 | % | 0.200 | % |
The management fees do not include the cost of acquiring and disposing of portfolio securities, taxes, if any, imposed directly on the Funds and their shares, insurance, certain trustee expenses and the cost of qualifying the Funds' shares for sale in any jurisdiction. Certain officers of the Funds are also officers and/or directors of KCM.
The Buffalo International Fund incurred $79,658 in custody fees during the period ended March 31, 2019, and owed $11,547 for custody fees as of March 31, 2019.
4. AGGREGATE COMPENSATION TO TRUSTEES:
The Funds do not directly compensate any of their trustees. GFS pays trustee fees to non-interested Board members from its share of the management fee that it receives from KCM. The aggregate compensation paid to the Funds' non-interested trustees for their service on the Funds' Board for the period ended March 31, 2019 was $183,000. Interested trustees who are affiliated with KCM do not receive any compensation from the Funds, but are compensated directly by KCM in connection with their employment with KCM.
5. INVESTMENT TRANSACTIONS:
The aggregate purchases and sales of securities, excluding short-term investments and U.S. government securities, for the Funds for the year ended March 31, 2019, were as follows:
Buffalo Discovery Fund | Buffalo Dividend Focus Fund | Buffalo Emerging Opportunities Fund | Buffalo Flexible Income Fund | Buffalo Growth Fund | |||||||||||||||||||
Purchases | $ | 1,379,540,988 | $ | 11,207,344 | $ | 31,627,998 | $ | 41,076,366 | $ | 28,880,551 | |||||||||||||
Proceeds from Sales | $ | 1,636,367,513 | $ | 11,932,589 | $ | 44,614,012 | $ | 190,985,396 | $ | 81,522,432 | |||||||||||||
Buffalo High Yield Fund | Buffalo International Fund | Buffalo Large Cap Fund | Buffalo Mid Cap Fund | Buffalo Small Cap Fund | |||||||||||||||||||
Purchases | $ | 44,263,124 | $ | 96,485,448 | $ | 6,756,602 | $ | 50,891,801 | $ | 295,590,451 | |||||||||||||
Proceeds from Sales | $ | 82,607,714 | $ | 42,706,736 | $ | 14,920,076 | $ | 81,137,548 | $ | 399,137,232 |
There were no purchases or sales of long-term U.S. government securities for any Funds during the period ended March 31, 2019.
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6. TRANSACTIONS WITH AFFILIATES:
Investments representing 5% or more of the outstanding voting securities of a portfolio company result in that company being considered an affiliated company, as defined in the 1940 Act. There were no affiliated companies held in any of the Funds during the period ended March 31, 2019.
7. OPTIONS WRITTEN:
FASB ASC 815, Derivatives and Hedging (ASC 815) is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures to enable investors to better understand how and why the Funds use derivative instruments, how these derivative instruments are accounted for and their effects on the Funds' financial position and results of operations. The Buffalo Flexible Income Fund is the only Fund that has maintained any positions in derivative instruments or engaged in hedging activities during the year ended March 31, 2019. For the year ended March 31, 2019, the quarterly average gross notional amount of derivatives held by the Fund was $28,335,644, representing holdings in written options. The Fund utilizes these written options as a substitute for a comparable market position in the respective underlying security of the written options.
As of March 31, 2019, the Buffalo Flexible Income Fund was invested in written option contracts.
The following is a summary of the location of derivative investments on the Fund's Statement of Assets and Liabilities as of March 31, 2019:
Derivative Investment Type | Value | ||||||
Liability Derivatives | |||||||
Buffalo Flexible Income Fund | |||||||
Written Options — equity contracts | $ | 450,165 |
The following is a summary of the effect of derivative investments on Realized Gain (loss) and Change in Unrealized Appreciation/Depreciation on Options in the Funds as of March 31, 2019:
Derivative Investment Type | Realized Gain (Loss) on Options | ||||||
Liability Derivatives | |||||||
Buffalo Flexible Income Fund | |||||||
Written Options — equity contracts | $ | 1,369,324 | |||||
Derivative Investment Type | Change in Unrealized Appreciation/Depreciation on Options | ||||||
Liability Derivatives | |||||||
Buffalo Flexible Income Fund | |||||||
Written Options — equity contracts | $ | 15,727 |
The following tables present derivative assets and liabilities net of amounts available for offset under Master Netting Agreements (MNA) and net of related collateral received or pledged, if any, as of March 31, 2019:
GROSS AMOUNTS NOT OFFSET IN THE STATEMENT OF ASSETS AND LIABILITIES AND SUBJECT TO MNAs
Gross | Gross Amounts Offset In The | Net Amounts Presented In | Gross Amounts Not Offset In The Statement Of Financial Position | ||||||||||||||||||||||||
Liabilities: | Amounts Of Recognized Liabilities | Statement Of Financial Position | The Statement Of Financial Position | Financial Instruments | Collateral Pledged/ Received | Net Amount | |||||||||||||||||||||
Description | |||||||||||||||||||||||||||
Written Options | $ | 450,165 | $ | — | $ | 450,165 | $ | 450,165 | $ | 450,165 | $ | — | |||||||||||||||
$ | 450,165 | $ | — | $ | 450,165 | $ | 450,165 | $ | 450,165 | $ | — |
8. FOREIGN INVESTMENT RISK:
When the Buffalo International Fund buys or sells securities on a foreign stock exchange, the transaction is undertaken in the local currency rather than in U.S. dollars. In purchasing or selling local currency to execute transactions on foreign exchanges, the Buffalo International Fund will be exposed to the risk that the value of the foreign currency will increase or decrease, which may impact the value of the portfolio holdings. China has, and may continue to adopt, internal economic policies that affect its currency valuations in a manner that may be disadvantageous for U.S. investors or U.S. companies seeking to do business in China. In addition, a country may
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impose formal or informal currency exchange controls (or "capital controls"). These types of controls may restrict or prohibit the Buffalo International Fund's ability to repatriate both investment capital and income, which could undermine the value of the portfolio holdings and potentially place the Buffalo International Fund's assets at risk of total loss.
Investing in securities of foreign corporations and governments involves additional risks relating to: political, social, religious and economic developments abroad; market instability; fluctuations in foreign exchange rates; different regulatory requirements, market practices, accounting standards and practices; and less publicly available information about foreign issuers. Additionally, these investments may be less liquid, carry higher brokerage commissions and other fees, and procedures and regulations governing transactions and custody in foreign markets also may involve delays in payment, delivery or recovery of money or investments. Investments in common stocks of U.S. companies with international operations, and the purchase of sponsored or unsponsored ADRs (American Depositary Receipt) carry similar risks. In addition to risks associated with investing in foreign securities, there are special risks associated with investments in China and Hong Kong, including exposure to currency fluctuations, less liquidity, expropriation, confiscatory taxation, nationalization, exchange control regulations, differing legal standards and rapid fluctuations in inflation and interest rates. The Chinese government could, at any time, alter or discontinue economic reform programs implemented since 1978.
9. LINE OF CREDIT:
U.S. Bank, N.A. has made available to the Funds an unsecured line of credit pursuant to a Loan Agreement for the Funds which matures, unless renewed, on July 30, 2020. The line of credit is intended to provide short-term financing, if necessary, subject to certain restrictions, in connection with shareholder redemptions. The Funds may borrow up to the lesser of $50,000,000 or certain percentage amounts based on the net assets of the Funds.
The interest rate paid by the Funds on outstanding borrowings is equal to the Prime Rate. During the year ended March 31, 2019, the Funds did not borrow from the line of credit.
10. SUBSEQUENT EVENTS:
Management has evaluated the events and transactions that have occurred after March 31, 2019 and through the date the financial statements were issued and determined that there were no significant subsequent events that would require adjustment of the financial statements or additional disclosures.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and the Board of Trustees of Buffalo Funds
Opinion on the Financial Statements
We have audited the accompanying statements of assets and liabilities of the Buffalo Funds (the Trust) (comprising the Buffalo Discovery Fund, Buffalo Dividend Focus Fund, Buffalo Emerging Opportunities Fund, Buffalo Flexible Income Fund, Buffalo Growth Fund, Buffalo High Yield Fund, Buffalo International Fund, Buffalo Large Cap Fund, Buffalo Mid Cap Fund, and Buffalo Small Cap Fund (collectively referred to as the "Funds")), including the schedules of investments, as of March 31, 2019, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of each of the Funds comprising the Buffalo Funds at March 31, 2019, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on each of the Funds' financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Trust in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Trust is not required to have, nor were we engaged to perform, an audit of the Trust's internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Trust's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of March 31, 2019, by correspondence with the custodian, brokers, and agent banks or by other appropriate auditing procedures where replies from brokers and agent banks were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of the Buffalo Funds since 1994.
Kansas City, Missouri
May 23, 2019
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NOTICE TO SHAREHOLDERS (UNAUDITED)
MARCH 31, 2019
TAX INFORMATION
For the fiscal year ended March 31, 2019, certain dividends paid by the Funds may be subject to a maximum tax rate of 23.8%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The percentage of dividends declared from ordinary income designated as qualified dividend income was as follows (unaudited):
Buffalo Discovery Fund | 46.05 | % | |||||
Buffalo Dividend Focus Fund | 100.00 | % | |||||
Buffalo Emerging Opportunities Fund | 8.09 | % | |||||
Buffalo Flexible Income Fund | 100.00 | % | |||||
Buffalo Growth Fund | 100.00 | % | |||||
Buffalo High Yield Fund | 1.14 | % | |||||
Buffalo International Fund | 100.00 | % | |||||
Buffalo Large Cap Fund | 85.39 | % | |||||
Buffalo Mid Cap Fund | 0.00 | % | |||||
Buffalo Small Cap Fund | 58.03 | % |
For corporate shareholders, the percent of ordinary income distributions qualifying for the corporate dividends received deduction for the fiscal year ended March 31, 2019 was as follows (unaudited):
Buffalo Discovery Fund | 21.09 | % | |||||
Buffalo Dividend Focus Fund | 100.00 | % | |||||
Buffalo Emerging Opportunities Fund | 8.09 | % | |||||
Buffalo Flexible Income Fund | 82.86 | % | |||||
Buffalo Growth Fund | 100.00 | % | |||||
Buffalo High Yield Fund | 1.14 | % | |||||
Buffalo International Fund | 1.35 | % | |||||
Buffalo Large Cap Fund | 83.44 | % | |||||
Buffalo Mid Cap Fund | 0.00 | % | |||||
Buffalo Small Cap Fund | 58.03 | % |
FOREIGN SHAREHOLDERS: The percentage of ordinary income distributions that are designated as interest-related dividends under Internal Revenue Code Section 871(k)(1)(C) for the year ended March 31, 2019 was as follows (unaudited):
Buffalo Discovery Fund | 0.00 | % | |||||
Buffalo Dividend Focus Fund | 4.79 | % | |||||
Buffalo Emerging Opportunities Fund | 0.00 | % | |||||
Buffalo Flexible Income Fund | 11.01 | % | |||||
Buffalo Growth Fund | 5.08 | % | |||||
Buffalo High Yield Fund | 98.46 | % | |||||
Buffalo International Fund | 8.93 | % | |||||
Buffalo Large Cap Fund | 0.15 | % | |||||
Buffalo Mid Cap Fund | 0.00 | % | |||||
Buffalo Small Cap Fund | 0.00 | % |
FOREIGN SHAREHOLDERS: The percentage of taxable ordinary income distributions that are designated as short-term capital gain distributions under Internal Revenue Section 871(k)(2)(C) for the year ended March 31, 2019 was as follows (unaudited).
Buffalo Discovery Fund | 100.00 | % | |||||
Buffalo Dividend Focus Fund | 7.87 | % | |||||
Buffalo Emerging Opportunities Fund | 100.00 | % | |||||
Buffalo Flexible Income Fund | 6.39 | % | |||||
Buffalo Growth Fund | 82.98 | % | |||||
Buffalo High Yield Fund | 0.00 | % | |||||
Buffalo International Fund | 0.00 | % | |||||
Buffalo Large Cap Fund | 67.60 | % | |||||
Buffalo Mid Cap Fund | 0.00 | % | |||||
Buffalo Small Cap Fund | 100.00 | % |
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(Unaudited)
With respect to the taxable year ended March 31, 2019, the Funds hereby designate as capital gain dividends the amounts listed below, or, if subsequently determined to be different, the net capital gains of such year:
Funds | From Long-Term Capital Gains, Subject to the 15% Rate Gains Category: | From Long-Term Capital Gains, Using Proceeds from Shareholder Redemptions: | |||||||||
Buffalo Discovery Fund | $ | 97,779,261 | $ | 22,303,983 | |||||||
Buffalo Dividend Focus Fund | 1,757,501 | 67,961 | |||||||||
Buffalo Emerging Opportunities Fund | 7,100,676 | 290,560 | |||||||||
Buffalo Flexible Income Fund | 17,918,207 | 2,506,778 | |||||||||
Buffalo Growth Fund | 43,956,280 | 6,901,967 | |||||||||
Buffalo High Yield Fund | 606,356 | 107,961 | |||||||||
Buffalo International Fund | 4,985,000 | 306,631 | |||||||||
Buffalo Large Cap Fund | 2,697,412 | 527,830 | |||||||||
Buffalo Mid Cap Fund | 5,175,731 | 764,351 | |||||||||
Buffalo Small Cap Fund | 100,780,974 | 18,410,946 |
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(Unaudited)
Trustees and Officers of the Funds
The management and affairs for the Funds are supervised by the Board of Trustees ("Trustees") under the laws of the State of Delaware. The Trustees and executive officers of the Funds and their principal occupations for the last five years are set forth below. Each may have held other positions with the named companies during that period. The Funds' Statement of Additional Information includes additional information about the Trustees and is available without charge, upon request, by calling the Funds toll-free at 1-800-49-BUFFALO.
Name, Age and Address | Position(s) Held with Funds | Term of Office and Length of Time Served | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee During the Past Five Years | ||||||||||||||||||
INTERESTED TRUSTEES(1) | |||||||||||||||||||||||
Clay E. Brethour 5420 West 61st Place Shawnee Mission, KS 66205 Year of Birth: 1969 | Trustee President and Treasurer | Indefinite term and served since August 2013. One year term and served since September 2014. | Portfolio Manager, Kornitzer Capital Management, Inc. (management company) 2000-present. | 10 | None | ||||||||||||||||||
INDEPENDENT TRUSTEES | |||||||||||||||||||||||
Philip J. Kennedy 5420 West 61st Place Shawnee Mission, KS 66205 Year of Birth: 1945 | Trustee | Indefinite term and served since May 1995. | Business Consultant and C.P.A. | 10 | None | ||||||||||||||||||
Rachel F. Lupardus 5420 West 61st Place Shawnee Mission, KS 66205 Year of Birth: 1972 | Trustee | Indefinite term and served since October 2015. | Chief Operating Officer/Chief Financial Officer, Trozzolo Communications Group (marketing communications agency), 2015-present; Chief Financial Officer, Customer Engagement, KBM Group LLC (marketing services company) 2014-2015. | 10 | None | ||||||||||||||||||
Jeffrey D. Yowell 5420 West 61st Place Shawnee Mission, KS 66205 Year of Birth: 1967 | Chairman Trustee | One year term and served since December 2017. Indefinite term and served since October 2015. | President and Owner, Getter Farms, LLC (agriculture and farm-related operations), 2007-present. | 10 | None | ||||||||||||||||||
OFFICERS | |||||||||||||||||||||||
Fred Coats 5420 West 61st Place Shawnee Mission, KS 66205 Year of Birth: 1965 | Chief Compliance Officer | Indefinite term and served since May 2015. | Chief Compliance Officer, Kornitzer Capital Management, Inc. (management company) May 2015-present; Private Practice Attorney May 1993-present. | N/A | None | ||||||||||||||||||
Rachel Spearo 615 East Michigan Street Milwaukee, WI 53202 Year of Birth: 1979 | Secretary | One year term and served since November 2017. | Vice President, U.S. Bank Global Fund Services, LLC 2004-present. | N/A | N/A |
1 Mr. Brethour is deemed to be an interested person of the Funds as that term is defined in the 1940 Act, by virtue of the fact that he is a board member and an employee of the Advisor.
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A NOTE ON FORWARD-LOOKING STATEMENTS
Except for historical information contained in this annual report for the Funds, the matters discussed in this report may constitute forward-looking statements made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These include any advisor and/or portfolio manager predictions, assessments, analyses or outlooks for individual securities, industries, market sectors and/or markets. These statements involve risks and uncertainties. In addition to the general risks described for the Funds in the current Prospectus, other factors bearing on these reports include the accuracy of the advisor's or portfolio managers' forecasts and predictions, and the appropriateness of the investment programs designed by the advisor or portfolio manager to implement their strategies efficiently and effectively. Any one or more of these factors, as well as other risks affecting the securities markets and investment instruments generally, could cause the actual results of the Funds to differ materially as compared to benchmarks associated with the Funds.
ADDITIONAL INFORMATION
The Buffalo Funds have adopted proxy voting policies and procedures that delegate to Kornitzer Capital Management, Inc., the Funds' investment advisor, the authority to vote proxies. A description of the Buffalo Funds' proxy voting policies and procedures is available without charge, upon request, by calling the Funds toll free at 1-800-49-BUFFALO. A description of these policies and procedures is also included in the Funds' Statement of Additional Information, which is available on the SEC's website at http://www.sec.gov.
The actual voting records relating to portfolio securities during the most recent twelve month period ended June 30 (as filed with the SEC on Form N-PX) are available without charge, upon request, by calling the Funds toll free at 1-800-49-BUFFALO or by accessing the SEC's website at http://www.sec.gov.
The Funds file their complete schedule of portfolio holdings with the SEC four times each fiscal year at quarter-ends. The Trust files the Schedule of Portfolio Holdings with the SEC on Form N-CSR (second and fourth quarters) and as an exhibit to its reports on Form N-PORT (first and third quarters). Shareholders may view the Funds' Forms N-CSR and N-PORT on the SEC's website at http://www.sec.gov.
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APPROVAL OF INVESTMENT
ADVISORY CONTRACTS
The Board of Trustees (the "Trustees") of Buffalo Funds, a Delaware statutory trust, on behalf of its series, Buffalo Flexible Income Fund, Buffalo High Yield Fund, Buffalo Large Cap Fund, Buffalo Small Cap Fund, Buffalo Growth Fund, Buffalo Discovery Fund, Buffalo Mid Cap Fund, Buffalo Emerging Opportunities Fund, Buffalo International Fund and Buffalo Dividend Focus Fund (all such funds referred to collectively as the "Funds") met in person on November 15, 2018, to consider the renewal of the Amended and Restated Management Agreements (the "Agreements") between the Trust, on behalf of the Funds, and Kornitzer Capital Management, Inc., the Funds' investment adviser (the "Adviser" or "KCM"). In advance of the meeting, the Trustees requested and received materials to assist them in considering the renewal of the Agreements. The materials provided contained information with respect to the factors enumerated below, including the Agreements, a memorandum prepared by the Trustees' independent legal counsel discussing in detail the Trustees' fiduciary obligations and the factors they should assess in considering the approval of the Agreements, detailed comparative information relating to the advisory fees, overall expenses and performance of the Funds, due diligence materials relating to the Adviser (including the Adviser's Form ADV, information regarding key personnel, information relating to the Adviser's and the Funds' compliance programs, including risk management, and the Code of Ethics), information that the Adviser regularly provides to the Trustees in connection with reports on its activities and the activities of the Funds at the Trustees' periodic Board meetings, and other pertinent information. In addition, the Independent Trustees, as defined below, met with their independent counsel on November 7, 2018 and immediately prior to the Board meeting held on November 15, 2018, to review and discuss the information provided to them and their duties and responsibilities in connection with the renewal of the Agreements. Based on their evaluation of information provided by the Adviser, in conjunction with the Funds' other service providers, the Trustees, by a unanimous vote (including a separate vote of the Trustees who are not "interested persons," as that term is defined in the Investment Company Act of 1940, as amended (the "Independent Trustees")), approved the renewal of the Agreements for an additional term of one year ending November 30, 2019.
DISCUSSION OF FACTORS CONSIDERED
In considering the renewal of the Agreements between the Trust, on behalf of the Funds, and the Adviser, the
Trustees reviewed and analyzed various factors that they determined were relevant, including the factors enumerated below.
1. Nature, Extent and Quality of Services Provided to the Funds
The Trustees considered the nature, extent and quality of services provided by KCM to the Funds and the amount of time devoted to the Funds' affairs by KCM's staff. The Trustees considered KCM's specific responsibilities in all aspects of day-to-day management of the Funds, including the investment strategies implemented by KCM, as well as the qualifications, experience and responsibilities of the Funds' portfolio managers and other key personnel at KCM involved in the day-to-day activities of the Funds. In executive session and the separate meeting of the Independent Trustees on November 7, 2018, the Independent Trustees reviewed information provided by KCM in response to the Board's 15(c) Request for Information, including the structure of KCM's compliance program and KCM's continuing commitment to the growth of the Funds' assets. The Trustees noted during the course of the prior year they had met with representatives of KCM in person to discuss the Funds' performance and outlook, along with the marketing and compliance efforts made by KCM throughout the year. The Trustees also noted any services that extended beyond portfolio management, and they considered the trading capability of KCM, and the lack of both significant shareholder complaints and financial statement issues. The Trustees discussed KCM's handling of compliance matters, including the quarterly and annual reports of the Trust's chief compliance officer to the Trustees on the effectiveness of KCM's compliance program. The Trustees concluded that KCM had sufficient quality and depth of personnel, resources, investment methods and compliance policies and procedures essential to performing its duties under the Management Agreements and that the nature, overall quality and extent of the management services provided to the Funds, as well as KCM's compliance program, were satisfactory.
2. Investment Performance of the Funds and the Adviser
In assessing the quality of the portfolio management services delivered by KCM, the Trustees compared the short-term and longer-term performance of each Fund on both an absolute basis and in comparison to a benchmark index and in comparison to a peer group as constructed using data from Morningstar, Inc. (each a "Morningstar Peer Group").
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Buffalo Discovery Fund. The Trustees noted the Buffalo Discovery Fund's performance for the three-year, five-year and ten-year periods ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end mid cap growth funds, falling within the first quartile of the Morningstar Peer Group for the five-year and ten-year periods, and the second quartile of the Morningstar Peer Group for the three-year period. The Trustees also noted the Buffalo Discovery Fund's performance for the year-to-date and one-year periods was below the median for the Morningstar Peer Group, falling into the third quartile for both periods. The Trustees further noted for the one-year, and three-year periods ended September 30, 2018 the Buffalo Discovery Fund underperformed the Morningstar US Mid Growth Total Return Index, the Russell Midcap Growth Index and the Lipper Multi Cap Growth Funds Index. The Trustees also noted for the five-year, ten-year and since inception periods ended September 30, 2018, the Buffalo Discovery Fund outperformed the Morningstar US Mid Growth Total Return Index, the Russell Midcap Growth Index and the Lipper Multi Cap Growth Funds Index for all periods, with the exception that the Fund had underperformed the Lipper Multi Cap Growth Funds Index for the five-year period. The Trustees also compared the performance of the Buffalo Discovery Fund to that of other accounts managed by KCM using investment strategies substantially similar to that of the Fund and noted for all periods the performance of the Fund was comparable to that of the other accounts.
Buffalo Dividend Focus Fund. The Trustees noted the Buffalo Dividend Focus Fund's performance for the five-year period ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end large blend category funds, falling within the first quartile. The Trustees further noted the Buffalo Dividend Focus Fund's performance for the year-to-date, one-year and three-year periods ended June 30, 2018 was below the median for the Morningstar Peer Group, falling into the third quartile for each period. The Trustees further noted for the one-year, three-year, five-year and since inception periods ended September 30, 2018, the Buffalo Dividend Focus Fund outperformed the Lipper Equity Income Funds Index but had underperformed the Morningstar US Large-Mid TR Index and the S&P 500 Index for the one-year, three-year, five-year and since inception periods ended September 30, 2018.
Buffalo Emerging Opportunities Fund. The Trustees noted the Buffalo Emerging Opportunities Fund's performance for the year-to-date and ten-year periods ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end small growth funds, falling into
the second quartile for the year-to-date period and at the top of the first quartile for the ten-year period. The Trustees further noted the Buffalo Emerging Opportunities Fund's performance for the three-year period ended June 30, 2018 was only slightly below the median for the Morningstar Peer Group, falling in the third quartile of the Morningstar Peer Group. The Trustees further noted for the three-year and ten-year periods ended September 30, 2018, the Buffalo Emerging Opportunities Fund outperformed the Lipper Small Cap Growth Funds Index, the Russell 2000 Growth Total Return Index and the Morningstar US Small Growth Index but had underperformed the same indexes for the one-year, five-year and since inception periods ended September 30, 2018.
Buffalo Flexible Income Fund. The Trustees noted the Buffalo Flexible Income Fund's performance for the one-year period ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end allocation 70-85% equity funds, falling within the first quartile of the Morningstar Peer Group. The Trustees further noted the Buffalo Flexible Income Fund's performance was below the Morningstar Peer Group median for the year-to-date, three-year, five-year and ten-year periods ended June 30, 2018, falling within the third quartile for the year-to-date, one-year and five-year periods, and falling within the fourth quartile for the ten-year period. The Trustees further noted for the one-year, three-year, five-year, ten-year, fifteen-year and since inception periods ended September 30, 2018, the Buffalo Flexible Income Fund outperformed the Lipper Mixed-Asset Target Allocation Moderate Funds Index but had underperformed a blended index of 60% S&P 500 Index and 40% ICE BofAML U.S. High Yield Index, for all periods ended September 30, 2018.
Buffalo Growth Fund. The Trustees noted the Buffalo Growth Fund's performance for the three-year and five-year periods ended June 30, 2018 was below the median for the Morningstar Peer Group of U.S. open-end large growth funds, falling within the third quartile of the Morningstar Peer Group for both periods. The Trustees further noted for the year-to-date, one-year and ten-year periods ended June 30, 2018, the Buffalo Growth Fund's performance was above that of the Morningstar Peer Group median, falling within the second quartile of the Morningstar Peer Group for the one-year period, and within the first quartile for the year-to-date and ten-year periods. The Trustees further noted: for the one-year, three-year, five-year, and ten-year periods ended September 30, 2018 the Buffalo Growth Fund had underperformed the Morningstar US Growth Index, but
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had outperformed the same index for the fifteen year period ended September 30, 2018; for the three-year, five-year and ten-year periods ended September 30, 2018, the Buffalo Growth Fund had underperformed the Lipper Large Cap Growth Funds Index, but had outperformed the same index for the one-year, fifteen year and since inception periods ended September 30, 2018; and for the since inception period ended September 30, 2018 the Buffalo Growth Fund had outperformed the Russell 1000 Growth Index, but had underperformed the same index for the one-year, three-year, five-year, ten-year and fifteen year periods. The Trustees also compared the performance of the Buffalo Growth Fund to that of other accounts managed by KCM using investment strategies substantially similar to that of the Fund and noted for all periods the performance of the Fund was comparable to that of the other accounts.
Buffalo High Yield Fund. The Trustees noted the Buffalo High Yield Fund's performance for the year-to-date period ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end high yield bond funds, falling within the second quartile of the Morningstar Peer Group, and was generally in line with the Morningstar Peer Group for the 10-year period ended June 30, 2018, falling within the third quartile. The Trustees further noted the Buffalo High Yield Fund's performance for the one-year, three-year and five-year periods ended June 30, 2018 was below the median for the Morningstar Peer Group, falling within the third quartile of the Morningstar Peer Group for the one-year and five-year periods, and within the fourth quartile for the three-year period. The Trustees further noted for the since inception period ended September 30, 2018, the Buffalo High Yield Fund outperformed the Lipper High Yield Bond Funds Index, but had underperformed the Index for all other periods, and had also underperformed the ICE BofA Merrill Lynch High Yield Index and the ICE BofA Merrill Lynch High Yield Master Index for all periods ended September 30, 2018. However, the Trustees noted that the Adviser explained that the credit quality of the securities held in the Buffalo High Yield Fund tends to be higher than more traditional high yield funds.
Buffalo International Fund. The Trustees noted the Buffalo International Fund's performance for the year-to-date, one-year, three-year, five-year and ten-year periods June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end foreign large growth funds, noting the Fund's performance was at the top of the first quartile for the three-year period, within the first quartile for the year-to-date, five-year and ten-year periods, and within the second quartile for the one-year period. The
Trustees further noted for the one-year, three-year, five-year, ten-year and since-inception periods ended September 30, 2018, the Buffalo International Fund outperformed the Russell Global ex US Index, the Lipper International Funds Index and the Morningstar Global Markets ex-US Index. The Trustees also compared the performance of the Buffalo International Fund to that of other accounts managed by KCM using investment strategies substantially similar to that of the Fund and noted for all periods the performance of the Fund was comparable to that of the other accounts.
Buffalo Large Cap Fund. The Trustees noted the Buffalo Large Cap Fund's performance for the three-year, five-year and ten-year periods ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end large growth funds, noting the Fund's performance fell within the first quartile for the ten-year period, and within the second quartile for the three-year and five-year periods. The Trustees further noted the Buffalo Large Cap Fund's performance for the year-to-date and one-year periods ended June 30, 2018 was below the Morningstar Peer Group median, falling within the third quartile for the year-to-date period and within the fourth quartile for the one-year period. The Trustees further noted for the five-year, ten-year and since-inception periods ended September 30, 2018, the Buffalo Large Cap Fund outperformed the Lipper Large Cap Growth Funds Index, and that the Buffalo Large Cap Fund had also outperformed the Russell 1000 Growth Index for the since inception period ended September 30, 2018. The Trustees noted the Buffalo Large Cap Fund had underperformed the Lipper Large Cap Growth Funds Index and Russell 1000 Growth Index for the one-year, three-year and fifteen-year periods ended September 30, 2018, and had also underperformed the Russell 1000 Growth Total Return Index for the five-year and ten-year periods ended September 30, 2018. The Trustees also compared the performance of the Buffalo Large Cap Fund to that of other accounts managed by KCM using investment strategies substantially similar to that of the Fund and noted for all periods the performance of the Fund was comparable to that of the other accounts.
Buffalo Mid Cap Fund. The Trustees noted the Buffalo Mid Cap Fund's performance for the year-to-date period ended June 30, 2018 was above the median for the Morningstar Peer Group of U.S. open-end mid-cap growth funds, falling within the second quartile, and for the one-year, three-year, five-year and ten-year periods ended June 30, 2018 was below the median, falling within the fourth quartile for all periods, except the ten-year period where the Buffalo Mid Cap Fund fell in the third quartile. The Trustees also
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noted the Buffalo Mid Cap Fund underperformed the Lipper Mid Cap Growth Funds Index, the Morningstar US Mid Growth Index and the Russell Midcap Growth Index for all periods ended September 30, 2018. The Trustees also compared the performance of the Buffalo Mid Cap Fund to that of other accounts managed by KCM using investment strategies substantially similar to that of the Fund and noted for all periods the performance of the Fund was comparable to that of the other accounts. The Trustees noted they continued to review the Buffalo Mid Cap Fund's performance each quarter.
Buffalo Small Cap Fund. The Trustees noted the Buffalo Small Cap Fund's performance for the year-to-date, one-year, three-year and ten-year periods ended June 30, 2018 was above the median of the Morningstar Peer Group of U.S. open-end small growth funds, falling within the first quartile of the Morningstar Peer Group for the year-to-date and three-year periods, and within the second quartile for the one-year and ten-year periods. The Trustees further noted the Buffalo Small Cap Fund's performance for the five-year period ended June 30, 2018 was below the median for the Morningstar Peer Group, falling within the fourth quartile. The Trustees further noted for the one-year, three-year, fifteen-year and since inception periods ended September 30, 2018, the Buffalo Small Cap Fund outperformed the Russell 2000 Growth Index, the Lipper Small Cap Growth Funds Index, and the Morningstar US Small Growth Index.
The Trustees also compared the performance of the Buffalo Small Cap Fund to that of other accounts managed by KCM using investment strategies substantially similar to that of the Fund and noted for all periods the performance of the Fund was comparable to that of the other accounts.
After considering all of the information including specific responses regarding Fund performance, including KCM's efforts to improve performance of underperforming Funds, the Trustees concluded that the performance obtained by KCM for the Funds was satisfactory under current market conditions and in light of each Fund's investment objective, strategies and policies. Although past performance is not a guarantee or indication of future results, the Trustees determined that the Funds and their shareholders were likely to benefit from KCM's continued management.
3. Costs of Services Provided, and Profits Realized by KCM
The Trustees considered the cost of services and the structure of KCM's fees, including a review of the expense
analyses and other pertinent material with respect to the Funds. The Trustees reviewed related statistical information, including the comparative expenses, expense components and peer group selections. The Trustees considered the cost structure of each Fund relative to its Morningstar Peer Group.
The Trustees also considered the overall profitability of the Funds to KCM and examined the level of profits that could be expected to accrue to KCM from the fees payable under the Management Agreements, as well as the Funds' brokerage commissions and use of soft dollars by KCM. The Trustees also considered the profitability of each Fund before and after any distribution costs borne by KCM. These considerations were based on materials requested by the Trustees specifically for the meeting, as well as the presentations made by KCM over the course of the year.
In reviewing the Morningstar 15(c) materials, the Board noted the Buffalo Funds operate under a unitary fee structure whereby many of the Funds' ordinary operating expenses are paid by KCM out of its advisory fee rather than paid directly by the Funds. The Board noted the difficulty of comparing the Buffalo Funds' to non-unitary fee funds and observed that the advisory fee comparison in the Board materials which used the management fee excluding the fees paid by KCM to U.S. Bancorp Fund Services, LLC under a master servicing agreement, and referred to below as the net management fee, was the most appropriate. The Board also noted the net expense ratio used in the Morningstar comparative data excludes any 12b-1 fees imposed by other funds.
Buffalo Discovery Fund. The Trustees noted the Buffalo Discovery Fund's net management fee of 0.70% fell within the second quartile and was above the Morningstar Peer Group average of 0.69% and below the Morningstar Peer Group median of 0.71%. The Trustees further noted the net expense ratio of 1.01% for the Buffalo Discovery Fund fell in the third quartile, above the Morningstar Peer Group average of 0.89%, which fell in the upper second quartile. Based on a profitability analysis prepared by KCM, the Trustees concluded that KCM's profit from sponsoring the Discovery Fund had not been, and currently was not, excessive and that KCM maintained adequate profit levels to support its services to the Fund.
Buffalo Dividend Focus Fund. The Trustees noted the Buffalo Dividend Focus Fund's net management fee of 0.65% was slightly above the Morningstar Peer Group median and average of 0.64%. The Trustees further noted the net expense ratio of 0.94% for the Buffalo Dividend Focus Fund fell into the third quartile, above the Morningstar Peer Group average of 0.88%, which fell into
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the second quartile. Based on a profitability analysis prepared by KCM, the Trustees concluded that KCM's profit before distribution costs, was not excessive and that KCM maintained adequate profit levels to support its services to the Fund.
Buffalo Emerging Opportunities Fund. The Trustees noted the Buffalo Emerging Opportunities Fund's net management fee of 1.15% was the highest in its Morningstar Peer Group, above the Peer Group average of 0.82% and median of 0.83%. The Trustees further noted the net expense ratio of 1.48% for the Buffalo Emerging Opportunities Fund fell within the fourth quartile, above the Morningstar Peer Group average and median of 1.01%, which fell between the second and third quartiles. The Trustees noted that based on information provided by KCM, the Emerging Opportunities Fund would more closely align with a micro-cap category, but Morningstar does not have such a category and is therefore included in the small growth category. Based on a profitability analysis prepared by KCM, the Trustees concluded that while KCM was not realizing profits in connection with its management of the Emerging Opportunities Fund, KCM maintained adequate profit levels to support its services to the Fund from the revenues of its overall investment advisory business.
Buffalo Flexible Income Fund. The Trustees noted the Buffalo Flexible Income Fund's net management fee of 0.70% fell within the third quartile and was above the Morningstar Peer Group average of 0.64% and median of 0.60%. The Trustees further noted the net expense ratio of 1.01% for the Buffalo Flexible Income Fund fell within the third quartile, above the Morningstar Peer Group average of 0.83%, which also fell within the third quartile. Based on a profitability analysis prepared by KCM, the Trustees concluded that while KCM was realizing profits before distribution costs in connection with its management of the Flexible Income Fund, the Fund was not profitable to KCM after such costs, but KCM maintained adequate profit levels to support its services to the Fund from the revenues of its overall investment advisory business.
Buffalo Growth Fund. The Trustees noted the Buffalo Growth Fund's net management fee of 0.65% fell within the second quartile, below the Morningstar Peer Group average of 0.68% and median of 0.70%. The Trustees further noted the net expense ratio of 0.91% for the Buffalo Growth Fund fell within the third quartile, above the Morningstar Peer Group average of 0.86%, which fell into the second quartile and the median of 0.88% which fell between the second and third quartiles. Based on a
profitability analysis prepared by KCM, the Trustees concluded that while KCM was realizing profits before distribution costs in connection with its management of the Buffalo Growth Fund, the Fund was not profitable to KCM after such costs, but KCM maintained adequate profit levels to support its services to the Fund from the revenue of its overall investment advisory business.
Buffalo High Yield Fund. The Trustees noted the Buffalo High Yield Fund's net management fee of 0.70% fell within the third quartile, above the Morningstar Peer Group average of 0.63% and median of 0.65%. The Trustees further noted the net expense ratio of 1.02% for the Buffalo High Yield Fund fell within the fourth quartile, above the Morningstar Peer Group average of 0.85%, which fell within the third quartile. Based on a profitability analysis prepared by KCM, the Trustees concluded that KCM's profit from sponsoring the High Yield Fund had not been, and currently was not, excessive and that KCM maintained adequate profit levels to support its services to the Fund.
Buffalo International Fund. The Trustees noted the Buffalo International Fund's net management fee of 0.70% fell in the first quartile, below the Morningstar Peer Group average and median of 0.82%. The Trustees further noted the net expense ratio of 1.04% for the Buffalo International Fund fell within the third quartile, above the Morningstar Peer Group average of 0.96%, which fell within the second quartile and slightly above the Morningstar Peer Group median of 1.00% which fell between the second and third quartiles. Based on a profitability analysis prepared by KCM, the Trustees concluded that while KCM was not realizing profits in connection with its management of the International Fund, KCM maintained adequate profit levels to support its services to the Fund from the revenues of its overall investment advisory business.
Buffalo Large Cap Fund. The Trustees noted the Buffalo Large Cap Fund's net management fee of 0.65% fell into the second quartile, below the Morningstar Peer Group average and median of 0.70%. The Trustees further noted the net expense ratio of 0.93% for the Buffalo Large Cap Fund fell within the second quartile, below the Morningstar Peer Group average and median of 0.96%, which fell between the second and third quartiles. Based on a profitability analysis prepared by KCM, the Trustees concluded that while KCM was not realizing profits in connection with its management of the Large Cap Fund, KCM maintained adequate profit levels to support its services to the Fund from the revenues of its overall investment advisory business.
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Buffalo Mid Cap Fund. The Trustees noted the Buffalo Mid Cap Fund's net management fee of 0.70% fell within the first quartile, below the Morningstar Peer Group average of 0.77% and median of 0.75%. The Trustees further noted the net expense ratio of 1.02% for the Buffalo Mid Cap Fund fell in the third quartile, above the Morningstar Peer Group average of 0.99%, which fell within the second quartile and slightly above the Morningstar Peer Group median of 1.005%, which fell between the second and third quartiles. Based on a profitability analysis prepared by KCM, the Trustees concluded that KCM's profit from sponsoring the Mid Cap Fund had not been, and currently was not, excessive and that KCM maintained adequate profit levels to support its services to the Fund.
Buffalo Small Cap Fund. The Trustees noted the Buffalo Small Cap Fund's net management fee of 0.70% fell within the first quartile and was below the Morningstar Peer Group average and median of 0.80%. The Trustees further noted the net expense ratio of 1.01% for the Buffalo Small Cap Fund fell between the second and third quartiles and was equivalent to the Morningstar Peer Group median and below the Morningstar Peer Group average of 1.05%, which fell within the third quartile. The Trustees further noted the annual management fee is subject to reduced fees paid on assets in excess of certain levels. Based on a profitability analysis prepared by KCM, the Trustees concluded that KCM's profit from sponsoring the Small Cap Fund had not been, and currently was not, excessive and that KCM maintained adequate profit levels to support its services to the Fund.
The Trustees concluded that each Fund's expenses and the management fees paid to KCM were fair and reasonable in light of the comparative performance, expense and management fee information. The Trustees further concluded that KCM's profit from sponsoring the Funds had not been, and currently was not, excessive and that KCM maintained adequate profit levels to support the services to the Funds.
4. Extent of Economies of Scale as the Funds Grow
The Trustees compared each Fund's expenses relative to its peer group and discussed realized and potential economies of scale. In considering the economies of scale for each Fund, the Board considered that the Buffalo Funds operate under a unitary fee structure whereby many of the Funds' ordinary operating expenses are paid by KCM out of its advisory fee rather than being paid directly by the Funds.
Buffalo Discovery Fund. The Trustees reviewed the structure of the Buffalo Discovery Fund's management
fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Discovery Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo Dividend Focus Fund. The Trustees reviewed the structure of the Buffalo Dividend Focus Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Dividend Focus Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo Emerging Opportunities Fund. The Trustees reviewed the structure of the Buffalo Emerging Opportunities Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Emerging Opportunities Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo Flexible Income Fund. The Trustees reviewed the structure of the Buffalo Flexible Income Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Flexible Income Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
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Buffalo Growth Fund. The Trustees reviewed the structure of the Buffalo Growth Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Growth Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo High Yield Fund. The Trustees reviewed the structure of the Buffalo High Yield Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo High Yield Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo International Fund. The Trustees reviewed the structure of the Buffalo International Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo International Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo Large Cap Fund. The Trustees reviewed the structure of the Buffalo Large Cap Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Large Cap Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo Mid Cap Fund. The Trustees reviewed the structure of the Buffalo Mid Cap Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees noted the Buffalo Mid Cap Fund's management fee structure did not contain any breakpoint reductions as the Fund's assets grow in size, but that the feasibility of incorporating breakpoints would continue to be reviewed on a regular basis.
Buffalo Small Cap Fund. The Trustees reviewed the structure of the Buffalo Small Cap Fund's management fee and total expense ratio and considered whether the Fund was large enough to generate economies of scale for shareholders or whether economies of scale would be expected to be realized as Fund assets grow (and if so, how those economies of scale were being or would be shared with shareholders). The Trustees further noted the Buffalo Small Cap Fund's management fee structure contained breakpoint reductions as the Fund's assets grow in size. The Trustees concluded that the current fee structure for each Fund was reasonable and reflected a sharing of economies of scale between KCM and each Fund at each Fund's current asset levels.
5. Benefits Derived from the Relationship with the Funds
The Trustees considered the direct and indirect benefits that could be received by KCM from its association with the Funds. The Trustees examined the brokerage and commissions of KCM with respect to the Funds. The Trustees concluded that the benefits KCM may receive, such as greater name recognition, growth in separate account management services, greater exposure to press coverage, or increased ability to obtain research or brokerage services, appear to be reasonable, and may benefit the Funds through growth in assets.
CONCLUSIONS
The Trustees considered all of the foregoing factors. In considering the Agreements, the Trustees did not identify any one factor as all-important, but rather considered these factors collectively in light of the Funds' surrounding circumstances and concluded that the Funds and their shareholders would benefit from the Adviser's continued management. Based on this review, the Trustees, including a majority of the Independent Trustees, approved the renewal of the Agreements with the Funds as being in the best interests of the Funds and their shareholders.
132
PRIVACY POLICY (UNAUDITED)
This Privacy Policy has been adopted by the Buffalo Funds. The Funds are each an open-end diversified management investment company registered under the Investment Company Act of 1940 (the "1940 Act").
This Privacy Policy has also been adopted by KCM, an investment advisor registered with the Securities and Exchange Commission that serves as the investment advisor and manager of the Funds.
The Funds and the Adviser are collectively referred to as the "Companies," "we," "our" or "us."
As a part of providing you services and products we collect non-public personally identifiable information ("Personal Information") about you. Some of this is information you provide and some is obtained from other sources. In some circumstances, a necessary part of providing products and services to you requires that we disclose Personal Information about you to third parties.
We want you to understand how we handle your Personal Information. Please read the Privacy Policy carefully. It has information about our policies for the collection, use, disclosure, and protection of your Personal Information. If you have any questions, you can obtain additional information from the following:
Buffalo Funds
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, Wisconsin 53201-0701
www.buffalofunds.com
1-800-492-8332
Please be aware that we periodically update or revise the Privacy Policy. As methods of doing business change, we reflect any applicable changes in our Privacy Policy. If you are our customer, we will send you an update as and when it occurs.
SALE/DISCLOSURE OF YOUR PERSONAL INFORMATION
We promise that we will not sell your Personal Information to any person.
Also, we will not disclose your Personal Information to any third person aside from the disclosures described below. These disclosures generally relate to marketing or maintaining products or services provided to you.
WHAT INFORMATION DO WE COLLECT?
Personal, Financial and Product Information
To be able to offer, provide and maintain these products and services, the Companies collect a variety of Personal Information about you. The Personal Information we collect will vary depending upon the product or service you select.
The following is a general list of the Personal Information. Not all of the Personal Information will be collected every time you do business with us.
Personal Information
• Name
• Address
• Birthdate
• Phone number
• Social Security Number
• E-mail address
• Product-Related Personal Information
• Product Activity History (things you have done with your mutual funds such as deposits, transfers, redemptions, etc.)
GENERAL PRIVACY PROCESSES
How do we collect Personal Information?
We use a variety of methods to collect Personal Information. We collect Personal Information directly from you with paper forms (for example, new account and other administrative forms), over the phone or through facsimile transmissions. We also collect Personal Information from our web site and through other electronic means. We collect some Personal Information through joint marketing programs where we offer a product or service through another financial institution. In some of these instances, you may be considered a customer of both entities.
Who has access to this Personal Information?
Generally, only the Companies' staff and certain companies working on the Companies' behalf have access to this Personal Information.
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(Unaudited)
Those Working on Our Behalf
Depending on the product or service you select, there may be a number of third parties that will have access to your Personal Information since they are working on our behalf. This access is necessary because these third parties perform a task or provide administrative services for the product you seek or have purchased from us. If we do not share the Personal Information, we cannot provide you the product or service you requested. In certain cases, affiliates are the entities performing such services on our behalf.
When we share Personal Information with non-affiliated companies working on our behalf, we protect your Personal Information by requiring such companies to adopt our privacy policy or have a policy providing protection similar to ours.
Required Disclosures
Certain Personal Information may also be disclosed to third parties without your consent if disclosure is necessary to comply with: 1) legal processes; 2) to protect the rights, property, or personal safety of the Funds, their shareholders or the public; 3) as part of inspections or examinations conducted by our regulatory agencies; and 4) in other situations required by law.
Joint Marketing
In certain circumstances, the Companies may jointly market a product or service with another financial institution. In these circumstances, we have arranged to offer our products through these entities and their representatives or through electronic systems (for example, the Internet).
The Companies may make other disclosures authorized by law.
Requested Disclosures
We will disclose your Personal Information if you request it to those persons that you designate. Examples of this are to: members of your family; registered investment advisors, attorneys and CPAs who you have retained to advise you in a transaction; and persons whom you have designated to represent you in dealings with us.
What do we do with the Personal Information?
The Companies make use of the Personal Information to provide you with the financial products and services that we offer.
At the point that you cease being a customer, we will maintain your Personal Information and handle it just the same as our current customers.
The Companies restrict access to the Personal Information to those who need to know it for ordinary business purposes. We also maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your Personal Information.
What are your options regarding corrections of Personal Information?
Generally, upon your written request, we will make available Personal Information for your review. Please note, Personal Information collected that relates to a disputed claim or legal proceeding will not be made available. If you notify us that the Personal Information is incorrect, we will review it and if we agree, correct our records. If we do not agree, you may submit a short comment, which we will include in future third party disclosures, if any occur, of Personal Information.
134
1-800-49-BUFFALO
(1-800-492-8332)
Buffalo Funds
c/o U.S. Bancorp Fund Services, LLC
P.O. Box 701
Milwaukee, WI 53201-0701
www.buffalofunds.com
Buffalofundannual
Item 2. Code of Ethics.
The Registrant has adopted a code of ethics that applies to the Registrant’s principal executive officer and principal financial officer. The Registrant has not made any amendments to its code of ethics during the period covered by this report. The Registrant has not granted any waivers from any provisions of the code of ethics during the period covered by this report. A copy of the Registrant’s Code of Ethics is incorporated by reference to the Registrant’s Form N-CSR filed on June 3, 2011.
Item 3. Audit Committee Financial Expert.
The Registrant’s Board of Trustees has determined that there is at least one audit committee financial expert serving on its audit committee. The name of the audit committee financial experts are Philip J. Kennedy and Rachel F. Lupardus. Both Mr. Kennedy and Ms. Lupardus are “independent” as defined in Item 3(a)(2) of Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(1) (a) — (d) Aggregate fees billed to the Registrant for each of the last two fiscal years for professional services rendered by the Registrant’s Independent Registered Public Accounting Firm were as follows:
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| FYE 3/31/2019 |
| FYE 3/31/2018 |
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Audit Fees |
| $ | 214,400 |
| $ | 192,960 |
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Audit-Related Fees |
| $ | 7,300 |
| $ | 6,570 |
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Tax Fees |
| $ | 35,080 |
| $ | 31,572 |
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All Other Fees |
| $ | 0 |
| $ | 0 |
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Audit fees include amounts related to the audit of the Registrant’s annual financial statements and services normally provided by the Independent Registered Public Accounting Firm in connection with statutory and regulatory filings, including registration statements. Audit-related fees refer to the reading and commenting on the Registrant’s semi-annual reports. Tax fees include amounts related to tax compliance, tax planning, and tax advice, including specifically tax return review and excise tax distribution review services. There were no fees billed for services rendered to the Registrant’s investment adviser or any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the Registrant that were required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(e) (1) The Registrant’s audit committee charter requires pre-approval in advance of (i) audit and non-audit services performed by the Registrant’s Independent Registered Public Accounting Firm for the Registrant; and (ii) audit and non-audit services relating directly to the operations and financial reporting of the Registrant performed by the Registrant’s principal accounting officer for the Registrant’s investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the Registrant.
(2) None of the services described in (b) — (d) above were approved by the audit committee specifically pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) The aggregate non-audit fees were for audit-related and tax services rendered to the Registrant. As disclosed above, the amount of fees billed for such services were $42,380 and $38,142 for the 2019 and 2018 fiscal years, respectively.
(h) The aggregate fees billed for non-audit services rendered to the Registrant’s investment advisor related to surprise security count procedures were $12,500 and $12,500 for the 2019 and 2018 fiscal years respectively. These fees were not required to be pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
Item 5. Audit Committee of Listed Registrants.
Not applicable because the Registrant is not a listed issuer.
Item 6. Investments.
Schedule of Investments is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable because the Registrant is an open-end investment company.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable because the Registrant is an open-end investment company.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable because the Registrant is an open-end investment company.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees.
Item 11. Controls and Procedures.
(a) The Registrant’s Principal Executive Officer and Principal Financial Officer has reviewed and evaluated the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as of a date within 90 days of the filing of this report, as required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. Based on his review, the Principal Executive Office and Principal Financial Officer has concluded that the disclosure controls and procedures are effective in ensuring that information required to be disclosed in this report is appropriately recorded, processed, summarized and reported and made known to him by others within the Registrant and by the Registrant’s service provider.
(b) There were no changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s second fiscal quarter of the period covered by this report that have materially affected, are is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.
Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable because the Registrant is an open-end investment company.
Item 13. Exhibits.
(a) (1) Code of Ethics. Incorporated by reference to the Registrant’s Form N-CSR filed on June 3, 2011.
(2) Certifications pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002 are filed herewith.
(3) Not applicable because the Registrant is an open-end investment company.
(1) There was no change in the registrant’s independent public accountant for the period covered by this report.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Buffalo Funds |
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By | /s/ Clay E. Brethour |
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| Clay E. Brethour, |
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| President and Treasurer |
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Date | 5/29/2019 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Buffalo Funds |
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By | /s/ Clay E. Brethour |
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| Clay E. Brethour, |
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| President and Treasurer |
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Date | 5/29/2019 |
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