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Is Buffalo Discovery Fund (BUFTX) a Strong Mutual Fund Pick Right Now?
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If you're looking for a Mid Cap Growth fund category, then a potential option is Buffalo Discovery Fund (BUFTX - Free Report) . BUFTX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
BUFTX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
BUFTX finds itself in the Buffalo Funds family, based out of Shawnee Mission, KS. Buffalo Discovery Fund debuted in April of 2001. Since then, BUFTX has accumulated assets of about $1.38 billion, according to the most recently available information. The fund's current manager, Clay Brethour, has been in charge of the fund since January of 2004.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 8.78%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.38%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of BUFTX over the past three years is 13.67% compared to the category average of 15.15%. The standard deviation of the fund over the past 5 years is 12.53% compared to the category average of 14.34%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, BUFTX lost 47.94% and outperformed its peer group by 4%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 0.92, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a positive alpha of 0.33. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.32% of its assets in stocks, with an average market capitalization of $18.33 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Services
Other
Turnover is about 77%, so those in charge of the fund make more traders than comparable funds in a given year.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, BUFTX is a no load fund. It has an expense ratio of 1% compared to the category average of 1.20%. From a cost perspective, BUFTX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Buffalo Discovery Fund ( BUFTX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Your research on the Mid Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Buffalo Discovery Fund (BUFTX) a Strong Mutual Fund Pick Right Now?
If you're looking for a Mid Cap Growth fund category, then a potential option is Buffalo Discovery Fund (BUFTX - Free Report) . BUFTX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
BUFTX is part of the Mid Cap Growth section, a segment that boasts a wide array of possible selections. While Mid Cap Growth mutual funds choose companies with a stock market valuation between $2 billion and $10 billion, stocks in these funds are also expected to show broad considerable growth opportunities for investors compared to their peers. To be considered a growth stock, companies must consistently report impressive sales and/or earnings growth.
History of Fund/Manager
BUFTX finds itself in the Buffalo Funds family, based out of Shawnee Mission, KS. Buffalo Discovery Fund debuted in April of 2001. Since then, BUFTX has accumulated assets of about $1.38 billion, according to the most recently available information. The fund's current manager, Clay Brethour, has been in charge of the fund since January of 2004.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 8.78%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 11.38%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of BUFTX over the past three years is 13.67% compared to the category average of 15.15%. The standard deviation of the fund over the past 5 years is 12.53% compared to the category average of 14.34%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, BUFTX lost 47.94% and outperformed its peer group by 4%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 0.92, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a positive alpha of 0.33. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.32% of its assets in stocks, with an average market capitalization of $18.33 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Services
- Other
Turnover is about 77%, so those in charge of the fund make more traders than comparable funds in a given year.Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, BUFTX is a no load fund. It has an expense ratio of 1% compared to the category average of 1.20%. From a cost perspective, BUFTX is actually cheaper than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Buffalo Discovery Fund ( BUFTX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Your research on the Mid Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.