Buffalo Small Cap Fund

Class Inv (BUFSX)
3 / 5 Stars
2 1 2 5 3
Zacks Investment Research
5 (Strong Sell)
Standard & Poor's
3 / 5 Stars
D- (Sell)

#101 in Small Growth

U.S. News evaluated 219 Small Growth Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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The fund has returned 15.64 percent over the past year, 14.94 percent over the past three years, 16.18 percent over the past five years, and 8.78 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date -4.3%
1 Year 15.6%
3 Years (Annualized) 14.9%
5 Years (Annualized) 16.2%
10 Years (Annualized) 8.8%

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Buffalo Small Cap has struggled a bit lately, but its solid long-term record speaks for itself.

As of July 03, 2014, the fund has assets totaling almost $3.65 billion invested in 61 different holdings. Its portfolio consists primarily of shares of small companies.

During the downturn, this fund did a fine job of playing defense. In 2008, for instance, it was able to limit its losses to less than 30 percent. That’s no small feat given that the average fund in Morningstar’s small-growth category lost upward of 41 percent. The fund followed that up with a 37 percent gain in 2009. That’s a middling number compared with some of the high-flying returns that other small-cap funds saw last year, but it’s worth noting that most of the eye-popping returns came from funds that were battered by the recession more so than this fund. Even so, the fund has been in a bit of a rut recently. It finished 2010 at the bottom of its category. Going forward, there are some concerns about the fund’s strong preference for for-profit education companies. “As the beneficiaries of government largess in the form of student loans, they have increasingly come under scrutiny for the results they produce ... as their students rack up debt,” Morningstar analyst John Coumarianos writes in a report on the fund. The fund has returned 15.64 percent over the past year and 14.94 percent over the past three years.

Recent missteps aside, the firm has an outstanding long-term record. As of the end of March, the fund’s 10-year trailing returns landed it in the top 5 percent of Morningstar’s small-growth category. Relative to the broader market, the fund had some of its best years at the turn of the century because smaller companies have outperformed larger ones. The fund has returned 16.18 percent over the past five years and 8.78 percent over the past decade.

Investment Strategy

Management looks for small companies that are attractively priced and have plenty of room to grow. When opportunities are limited, management isn’t averse to building up a sizeable cash stake. Management has a fairly disciplined buy-and-hold mentality and likes to keep a lid on turnover.

Role in Portfolio

Morningstar calls the fund a “supporting player.”


Kent Gasaway and Robert Male have been at the helm since the fund’s 1998 inception. Grant Sarris became a co-manager in 2003. 


Buffalo Small Cap Fund has an expense ratio of 1.00 percent.

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Like all stock funds, this one comes with some risks. Additionally, small-cap stocks can be more volatile than the broader market. 

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