BUFFALO BALANCED FUND INC, 497J, 1996-08-02

BUFFALO BALANCED FUND INC
497J, 1996-08-02

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Prospectus

Buffalo Balanced Fund, Inc.
Buffalo Equity Fund, Inc.
Buffalo High Yield Fund, Inc.
Buffalo USA Global Fund, Inc.

July 31, 1996

Managed and Distributed By:
Jones & Babson, Inc.
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Toll-Free:
1-800-49-BUFFALO
(1-800-492-8332)

Investment Counsel:
Kornitzer Capital Management, Inc.
Shawnee Mission, Kansas

Investment Objectives

Buffalo Balanced Fund seeks both long-term capital growth
and high current income. Long-term capital growth is
intended to be achieved primarily by the Fund's investment
in common stocks and secondarily by the Fund's investment in
convertible bonds and convertible preferred stocks. High
current income is intended to be achieved by the Fund's
investment in corporate bonds, government bonds, convertible
bonds, preferred stocks and convertible preferred stocks.

This Fund will invest up to 75% of its assets in lower rated
bonds, commonly known as "junk bonds," that entail greater
risks including default risks, than those found in higher
rated securities. Investors should carefully consider these
risks before investing.

Buffalo Equity Fund seeks long-term capital appreciation.
Long-term capital appreciation is intended to be achieved
primarily by the Fund's investment in common stocks.
Realization of dividend income is a secondary consideration
to the extent that it supplements the return on the Fund's
investments and investment in the dividend-producing
securities is consistent with achieving the Fund's objective
of long-term capital appreciation.

Buffalo High Yield Fund primarily seeks a high level of
current income and secondarily, capital growth. The Fund
invests primarily in a diversified portfolio of high-
yielding fixed income securities. The Fund will invest in
debt securities and preferred stock. The Fund may invest in
any fixed income securities, whether nonconvertible or
convertible without restriction.

This Fund will invest in a significant portion, up to 100%
of its assets, in lower rated bonds, commonly known as "junk
bonds," that entail greater risks including default risks,
than those found in higher rated securities. The Fund's
fixed income investments may consist totally of securities
rated below investment grade. Investors should carefully
consider these risks before investing. See "Investment
Objectives and Portfolio Management Policies," page 14;
"Risk Factors," page 19; "Investment Restrictions," page 21
and "Fixed Income Securities Described and Ratings," page
32. Secondarily, the Fund may invest up to 10% of the value
of its total assets in common stocks and other equity
securities.

Buffalo USA Global Fund seeks capital growth. Capital growth
is intended to be achieved primarily by the Fund's
investment in common stocks of companies based in the United
States that receive greater than 40% of their revenues or
pre-tax income from international operations, measured as of
the preceding four completed quarters of business or the
companies' most recently completed fiscal year. At least 65%
of the value of the Fund's total assets must be invested in
at least three different countries. This diversification is
achieved through the international operations of United
States-based companies as described above. The Fund will
invest in common stocks considered by the manager to have
above average potential for appreciation; income is a
secondary consideration. The Fund will invest primarily in
common stocks listed on the New York Stock Exchange.

Purchase Information

Minimum Investment (each Fund selected)

Initial Purchase $ 2,500
Initial IRA and Uniform Transfers (Gifts)
to Minors Purchases $ 250
Subsequent Purchase:
By Mail $ 100
By Telephone or Wire $ 1,000
All Automatic Purchases $ 100

Shares are purchased and redeemed at net asset value. There
are no sales, redemption or Rule 12b-1 distribution charges.
If you need further information, please call the Fund at the
telephone number indicated.

Additional Information

This prospectus should be read and retained for future
reference. It contains the information that you should know
before you invest. A "Statement of Additional Information"
of the same date as this prospectus has been filed with the
Securities and Exchange Commission and is incorporated by
reference. Investors desiring additional information about
the Funds may obtain a copy without charge by writing or
calling the Fund.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

Table of Contents
Page

Highlights 4
Fund Expenses 7
Financial Highlights 10
Investment Objectives and Portfolio Management Policies 14
Restricted Securities 19
Repurchase Agreements 19
Asset-Backed Securities 19
Risk Factors 19
Investment Restrictions 21
Performance Measures 21
How to Purchase Shares 22
Initial Investments 23
Investments Subsequent to Initial Investment 24
Telephone Investment Service 24
Automatic Monthly Investment Plan 24
How to Redeem Shares 25
Systematic Redemption Plan 26
How to Exchange Shares Between Buffalo and Babson Funds 27
How Share Price is Determined 28
Officers and Directors 28
Management and Investment Counsel 28
General Information and History 30
Dividends, Distributions and Their Taxation 31
Description of Securities Ratings 32
Shareholder Services 33
Shareholder Inquiries 34

Highlights For more
information on
this subject
see page ...

The Funds

The Buffalo Funds are a group of four open-end diversified
investment companies sponsored by Jones & Babson, Inc., for
which Kornitzer Capital Management, Inc. serves as
investment counsel. ....................................... 2

Buffalo Balanced Fund, Inc. was incorporated in Maryland on
January 25, 1994. ......................................... 30

Buffalo Equity Fund, Inc., Buffalo High Yield Fund, Inc. and
Buffalo USA Global Fund, Inc. were incorporated in Maryland
on November 23, 1994. ..................................... 30

Buffalo Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc. and Buffalo USA Global Fund,
Inc. each offer one class of non-assessable common shares
with equal voting rights. ................................. 30

Buffalo Balanced Fund, Inc. seeks both long-term capital
growth and high current income. The Fund will invest in a
diversified array of common stocks, preferred stocks,
convertible bonds, convertible preferred stocks, corporate
bonds and government bonds. ............................... 14

Buffalo Equity Fund, Inc. seeks long-term capital
appreciation by investment in a broad array of common
stocks, in terms of companies and industries. ............. 15

Buffalo High Yield Fund, Inc. primarily seeks a high level
of current income and secondarily, capital growth. The Fund
invests primarily in debt securities and may invest in
preferred stock. .......................................... 16

Buffalo USA Global Fund, Inc. seeks capital growth by
investing in common stocks of companies based in the United
States that receive greater than 40% of their revenues or
pre-tax income from international operations. ............. 18

How to Invest

Fund shares can only be purchased directly from the Funds
through their manager and principal underwriter, Jones &
Babson, Inc. Because no sales charges are added to the price
of the shares, the full amount of any purchase is invested
for the benefit of the shareholder. The minimum initial
purchase is $2,500. Subsequent purchases must be at least
$100, except wire purchases which must be in the amount of
$1,000 or more. ........................................... 22

Telephone Investment - You may make investments of $1,000
or more by telephone if you have authorized such investments
in your application, or, subsequently, on a special
authorization form provided upon request. ................. 24

Automatic Monthly Investment - You may elect to make
monthly investments in a constant dollar amount from your
checking account ($100 minimum). The Fund will draft your
checking account on the same day each month in the amount
you authorize in your application, or, subsequently, on a
special authorization form provided upon request. ......... 24

Highlights For more
information on
this subject
see page ...
Redemption

Shares of the Funds are redeemable at net asset value next
effective after receipt by the Fund of a shareholder's
request in good order. No redemption charge is made. ...... 25

Exchange Privilege with Other Buffalo or Babson Funds

Shareholders may transfer their investments without charge
to any other Buffalo or Babson Fund sponsored by Jones &
Babson, Inc. This exchange involves the liquidation of
shares from one Fund and a purchase of shares in the Fund to
which the investment is being transferred. This is a
transaction which may or may not be taxable depending on the
shareholder's tax status. .................................. 27

Automatic Exchange - You may exchange shares from your
account ($100 minimum) in any of the Buffalo or Babson Funds
to an identically registered account in any other Fund in
the Buffalo or Babson Group according to your instructions.
Monthly exchanges will be continued until all shares have
been exchanged or until you terminate the Automatic Exchange
authorization. A special authorization form will be provided
upon request.

Management of the Funds

The Funds are managed by Jones & Babson, Inc. which employs
Kornitzer Capital Management, Inc. to assist in the
investment advisory function. ............................. 28

The Management Fee Covers the Investment Advisory Fee and
All Other Normal Operating Costs

Jones & Babson, Inc., as manager, agrees to supply to the
Funds all normal services necessary for their functions as
open-end diversified investment companies, exclusive of
taxes and other charges of governments and their agencies
(including the cost of qualifying the Fund's shares for sale
in any jurisdiction), certain fees, dues, interest,
brokerage commissions and extraordinary costs, if any. For
this it charges the Funds a fee based on an annual rate of
one percent (1%) of average daily net assets from which
Jones & Babson, Inc. pays Kornitzer Capital Management, Inc.
an investment counsel fee of 50/100 of 1% (.50%) of average
daily net assets.

Although these fees are higher than the fees of most other
advisers whose charges cover only investment advisory
services with all remaining operational expenses absorbed
directly by the Fund, Jones & Babson's charges compare
favorably with other advisers when all expenses to Fund
shareholders are taken into account. ...................... 28

Highlights For more
information on
this subject
see page ...
Dividend Policies

Buffalo Balanced Fund, Inc. and Buffalo High Yield Fund,
Inc. will pay substantially all of their net investment
income quarterly, usually in March, June, September and
December. It is contemplated that distributions from capital
gains, if any, will be declared annually on or before
December 31 for Buffalo Balanced Fund, Inc. Distributions
from capital gains, if any, will be declared semiannually,
usually in June and December for Buffalo High Yield Fund,
Inc. ...................................................... 31

Buffalo Equity Fund, Inc. and Buffalo USA Global Fund, Inc.
will pay dividends from net investment income and capital
gains semiannually, usually in June and December. ......... 31

Taxes

The Funds will distribute substantially all of their net
income each year in order to be exempt from federal income
tax. Dividend and capital gains distributions will be
taxable to each shareholder whether taken in cash or
reinvested in additional shares in accordance with the
shareholder's tax status. ................................. 31

Risk Factors

For a discussion of risk factors applicable to repurchase
agreements. ............................................... 19

For a discussion of risk factors applicable to covered call
options. .................................................. 19

For a discussion of risk factors applicable to ADRs. ...... 20

For a discussion of risk factors applicable to common
stocks. ................................................... 20

For a discussion of risk factors applicable to high yield
high risk debt securities. ................................ 20

For a discussion of risk factors applicable to global
operations. ............................................... 21

Fund Expenses

The following information is provided in order to assist you
in understanding the various costs and expenses that a
shareholder of a Buffalo Fund will bear directly or indirectly.

Buffalo Balanced Fund, Inc.

The expenses set forth below are based on the fiscal year
ended March 31, 1996.

Shareholder Transaction Expenses

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees 1.00%
12b-l fees None
Other expenses .11%
Total Fund operating expenses 1.11%

You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:

1 Year 3 Year 5 Year 10 Year
$11 $35 $61 $135

Buffalo Equity Fund, Inc.

The expenses set forth below are based on the period from
May 19, 1995 (inception) to March 31, 1996.

Shareholder Transaction Expenses

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees 1.00%
12b-l fees None
Other expenses .06%
Total Fund operating expenses 1.06%

You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:

1 Year 3 Year 5 Year 10 Year
$11 $34 $58 $129

Buffalo High Yield Fund, Inc.

The expenses set forth below are based on the period from
May 19, 1995 (inception) to March 31, 1996.

Shareholder Transaction Expenses

Maximum sales load imposed on purchases None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees 1.00%
12b-l fees None
Other expenses .03%
Total Fund operating expenses 1.03%

You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:

1 Year 3 Year 5 Year 10 Year
$11 $33 $57 $126

Buffalo USA Global Fund, Inc.

The expenses set forth below are based on the period from
May 19, 1995 (inception) to March 31, 1996.

Shareholder Transaction Expenses

Maximum sales load imposed on purchase None
Maximum sales load imposed on reinvested dividends None
Deferred sales load None
Redemption fee None
Exchange fee None

Annual Fund Operation Expenses
(as a percentage of average net assets)

Management fees 1.00%
12b-l fees None
Other expenses .06%
Total Fund operating expenses 1.06%

You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:

1 Year 3 Year 5 Year 10 Year
$11 $34 $58 $129

The above information is provided in order to assist you in
understanding the various costs and expenses that a
shareholder of the Fund will bear directly or indirectly.
The above examples should not be considered a representation
of past or future expenses. Actual expenses may be greater
or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation
of past or future annual return. The actual return may be
greater or less than the assumed amount.

The purpose of the foregoing fee tables is to assist the
investor in understanding the various costs and expenses
that an investor in a Fund will bear directly or indirectly.
The various costs and expenses are explained in more detail
in this prospectus. Management fees are discussed in greater
detail under "Management and Investment Counsel."

Financial Highlights

Buffalo Balanced Fund, Inc.

The following financial highlights for the fiscal periods
ended March 31, 1996 and 1995, have been derived from
audited financial statements of Buffalo Balanced Fund, Inc.
and should be read in conjunction with the financial
statements of the Fund and the report of Ernst & Young LLP,
independent public auditors, appearing in the March 31, 1996
Annual Report to Shareholders which is incorporated by
reference in this prospectus.

<TABLE>
<CAPTION>
August 12, 1994
(Inception Date)
1996 to March 31, 1995*
</CAPTION>
<S> <C> <C>

Net asset value, beginning of period $ 10.06 $ 10.07

Income from investment operations:

Net investment income .65 .32

Net gains or (losses) on securities (both
realized and unrealized) 1.07 (.03)

Total from investment operations 1.72 .29

Less distributions:

Dividends from net investment income (.68) (.30)

Distributions from capital gains (.40) -

Total distributions (1.08) (.30)

Net asset value, end of period $ 10.70 $ 10.06

Total return 17.87% 2.91%

Ratios/Supplemental Data

Net assets, end of year (in millions) $ 50 $ 38

Ratio of expenses to average net assets 1.11% 1.06%

Ratio of net investment income to average
net assets 6.27% 8.89%

Portfolio turnover rate 61% 33%

<FN>

<F1> * The Fund was capitalized on June 6, 1994 with
$100,000, representing 10,000 shares at a net asset value of
$10.00 per share.
Initial public offering was made on August 12, 1994,
at which time net asset value was $10.07 per share.

Ratios for this initial period of operations are
annualized.

Total return is not annualized.
</FN>
</TABLE>

Buffalo Equity Fund, Inc.

The following financial highlights for the period from May
19, 1995 (inception) to March 31, 1996, have been derived
from audited financial statements of Buffalo Equity Fund,
Inc. and should be read in conjunction with the financial
statements of the Fund and the report of Ernst & Young LLP,
independent public auditors, appearing in the March 31, 1996
Annual Report to Shareholders which is incorporated by
reference in this prospectus.
May 19, 1995
(Inception Date)
to March 31, 1996*

Net asset value, beginning of period $ 10.14

Income from investment operations:

Net investment income .21

Net gains or (losses) on securities (both
realized and unrealized) 2.72

Total from investment operations 2.93

Less distributions:

Dividends from net investment income (.20)

Distributions from capital gains (.51)

Total distributions (.71)

Net asset value, end of period $ 12.36

Total return 29.11%

Ratios/Supplemental Data

Net assets, end of year (in millions) $ 6

Ratio of expenses to average net assets 1.06%

Ratio of net investment income to average
net assets 2.55%

Portfolio turnover rate 63%

* Ratios for this initial period of operations are
annualized.

Total return is not annualized.

Buffalo High Yield Fund, Inc.

The following financial highlights for the period from May
19, 1995 (inception) to March 31, 1996, have been derived
from audited financial statements of Buffalo High Yield
Fund, Inc. and should be read in conjunction with the
financial statements of the Fund and the report of Ernst &
Young LLP, independent public auditors, appearing in the
March 31, 1996 Annual Report to Shareholders which is
incorporated by reference in this prospectus.

May 19, 1995
(Inception Date)
to March 31, 1996*

Net asset value, beginning of period $ 10.14

Income from investment operations:

Net investment income .53

Net gains or (losses) on securities (both
realized and unrealized) 1.14

Total from investment operations 1.67

Less distributions:

Dividends from net investment income (.53)

Distributions from capital gains (.13)

Total distributions (.66)

Net asset value, end of period $ 11.15

Total return 16.67%

Ratios/Supplemental Data

Net assets, end of year (in millions) $ 7

Ratio of expenses to average net assets 1.03%

Ratio of net investment income to average
net assets 7.40%

Portfolio turnover rate 25%

* Ratios for this initial period of operations are
annualized.

Total return is not annualized.

Buffalo USA Global Fund, Inc.

The following financial highlights for the period from May
19, 1995 (inception) to March 31, 1996, have been derived
from audited financial statements of Buffalo USA Global
Fund, Inc. and should be read in conjunction with the
financial statements of the Fund and the report of Ernst &
Young LLP, independent public auditors, appearing in the
March 31, 1996 Annual Report to Shareholders which is
incorporated by reference in this prospectus.

May 19, 1995
(Inception Date)
to March 31, 1996*

Net asset value, beginning of period $ 10.14

Income from investment operations:

Net investment income .15

Net gains or (losses) on securities (both
realized and unrealized) 1.61

Total from investment operations 1.76

Less distributions:

Dividends from net investment income (.15)

Distributions from capital gains (.39)

Total distributions (.54)

Net asset value, end of period $ 11.36

Total return 17.49%

Ratios/Supplemental Data

Net assets, end of year (in millions) $ 5

Ratio of expenses to average net assets 1.06%

Ratio of net investment income to average
net assets 1.94%

Portfolio turnover rate 123%

* Ratios for this initial period of operations are
annualized.

Total return is not annualized.

Investment Objectives and Portfolio
Management Policies

Each Fund's objectives and policies as described in this
section will not be changed without approval of a majority
of the Fund's outstanding shares.

Buffalo Balanced Fund

Buffalo Balanced Fund seeks both long-term capital growth
and high current income. Long-term capital growth is
intended to be achieved primarily by the Fund's investment
in common stocks and secondarily by the Fund's investment in
convertible bonds and convertible preferred stocks. High
current income is intended to be achieved by the Fund's
investment in corporate bonds, government bonds, mortgage-
backed securities, convertible bonds, preferred stocks and
convertible preferred stocks.

Buffalo Balanced Fund will normally invest in a broad array
of securities, diversified not only in terms of companies
and industries, but also in terms of types of securities.
The types of securities include common stocks, preferred
stocks, convertible bonds, convertible preferred stocks,
corporate bonds and government bonds. It is expected that
the majority of common stocks purchased by the Fund will be
large capitalization companies with most, if not all, listed
on the New York Stock Exchange. Large capitalization stocks
are considered to be those with capitalization in excess of
$1 billion.

It is not the manager's intention to make wide use of NASDAQ
traded, smaller capitalization common stocks. Smaller
capitalization stocks are considered to be those with
capitalization of less than $1 billion. The Fund may invest
up to 75% of its assets in corporate bonds, convertible
bonds, preferred stocks and convertible preferred stocks.
The manager expects that from time-to-time these securities
may be rated below investment grade (BBB) by the major
rating agencies. The manager believes this policy is
justified given the manager's view that these securities
from time-to-time offer superior value and the manager's
experience and substantial in-house credit research
capabilities with higher yielding securities.

Securities rated Baa or higher by Moody's or BBB by Standard
& Poor's or higher are classified as investment grade
securities. Although securities rated Baa by Moody's and BBB
by Standard & Poor's have speculative characteristics, they
are considered to be investment grade. Such securities carry
a lower degree of risk than lower rated securities. (See
"Risk Factors Applicable to High Yielding High Risk Debt
Securities.")

Securities rated below Baa by Moody's or BBB by Standard &
Poor's are commonly known as junk bonds and are considered
to be high risk. Yields on such bonds will fluctuate over
time, and achievement of the Fund's investment objective may
be more dependent on the Fund's own credit analysis than is
the case for higher rated bonds. (See "Risk Factors
Applicable to High Yielding High Risk Debt Securities.")

The Fund may also invest in high-yielding, high-risk
corporate debt securities (so-called "junk bonds"). Up to
20% of the Fund's assets may be invested in debt securities
which are rated less than B or unrated.

The Fund will not invest in securities that, at the time of
initial investment, are rated less than B by Moody's or
Standard & Poor's. Securities that are subsequently
downgraded in quality below B may continue to be held by the
Fund, and will be sold only if the Fund's adviser believes
it would be advantageous to do so. In addition, the credit
quality of unrated securities purchased by the Fund must be,
in the opinion of the Fund's adviser, at least equivalent to
a B rating by Moody's or Standard & Poor's.

Securities rated less than Baa by Moody's or BBB by Standard
& Poor's are classified as non-investment grade securities.
Such securities carry a high degree of risk and are
considered speculative by the major credit rating agencies.
(See "Risk Factors Applicable to High Yielding Debt
Securities.")

The Fund is authorized to write (i.e. sell) covered call
options on the securities in which it may invest and to
enter into closing purchase transactions with respect to
certain of such options. A covered call option is an option
where the Fund in return for a premium gives another party a
right to buy specified securities owned by the Fund at a
specified future date and price set at the time of the
contract. (See "Risk Factors Applicable to Covered Call
Options.")

Covered call options serve as a partial hedge against the
price of the underlying security declining.

Investments in money market securities shall include
government securities, commercial paper, bank certificates
of deposit and repurchase agreements collateralized by
government securities. Investment in commercial paper is
restricted to companies in the top two rating categories by
Moody's and Standard & Poor's.

The Fund may also invest in issues of the United States
treasury or a United States government agency subject to
repurchase agreements. The use of repurchase agreements by
the Fund involves certain risks. For a discussion of these
risks, see "Risk Factors Applicable to Repurchase
Agreements."

There is no assurance that the Fund's objective of long-term
growth of capital and high current income can be achieved.
Portfolio turnover will be no more than is necessary to meet
the Fund's objective. Under normal circumstances, it is
anticipated that portfolio turnover for common stocks in the
Fund's portfolio will not exceed 100% on an annual basis,
and that portfolio turnover for other securities will not
exceed 100% on an annual basis. Buffalo Balanced Fund's
annualized turnover for the period from August 12, 1994
(inception) to March 31, 1995, was 33% and for the year
ended March 31, 1996, it was 61%. Commissions paid during
the fiscal year ended March 31, 1996, amounted to $30,108.

Buffalo Equity Fund

Buffalo Equity Fund seeks long-term capital appreciation.
Long-term capital appreciation is intended to be achieved
primarily by the Fund's investment in common stocks.
Realization of dividend income is a secondary consideration
to the extent that it supplements the return on the Funds
investments and investment in the dividend-producing
securities is consistent with achieving the Fund's objective
of long-term capital appreciation.

Buffalo Equity Fund will normally invest in a broad array of
common stocks, in terms of companies and industries. It is
expected that the majority of common stocks purchased in the
Fund will be large capitalization companies with most, if
not all, listed on the New York Stock Exchange. Large
capitalization stocks are considered to be those with
capitalization in excess of $1 billion.

The Fund may purchase foreign securities through dollar-
denominated American Depository Receipts (ADRs), which do
not involve the same direct currency and liquidity risks as
securities denominated in foreign currency and which are
issued by domestic banks and publicly traded in the United
States. The Fund does not intend to invest directly in
foreign securities or foreign currencies.

The Fund will invest at least 65% of its assets in common
stocks under normal circumstances. When, in the manager's
judgment, market conditions warrant substantial temporary
defensive investments in high-quality money market
securities, the Fund may do so.

Covered call options serve as a partial hedge against the
price of the underlying security declining.

There is no assurance that the Fund's objective of long-term
capital appreciation can be achieved. Portfolio turnover
will be no more than is necessary to meet the Fund's
objective. Under normal circumstances, it is anticipated
that portfolio turnover will not exceed 100% on an annual
basis. Buffalo Equity Fund's annualized turnover for the
period from May 19, 1995 (inception) to March 31, 1996, was
63%. Commissions paid during the same period amounted to
$7,661.

Buffalo High Yield Fund

Buffalo High Yield Fund primarily seeks a high level of
current income and secondarily, capital growth. The Fund
invests primarily in a diversified portfolio of high-
yielding fixed income securities. High current income is
intended to be achieved by the Fund's investment in any
fixed income securities, without restriction, such as
corporate bonds, government bonds, convertible bonds,
preferred stocks and convertible preferred stocks. The Fund
may not invest in foreign government bonds. Capital growth
is intended to be achieved by the appreciation of fixed
income and equity investments held in the Fund.

The Fund may invest up to 100% of its assets in any fixed
income securities, including without limitation, corporate
bonds, convertible bonds, preferred stocks and convertible
preferred stocks. These securities may be rated below
investment grade (BB/Ba and B/B) by the major rating
agencies or, if unrated, are in the opinion of the manager
of similar quality. The manager believes this policy is
justified given the manager's view that these securities
from time-to-time offer superior value and given the
manager's experience and substantial in-house credit
research capabilities with higher yielding securities.

Securities rated Baa or higher by Moody's or BBB by Standard
& Poor's or higher are classified as investment grade
securities. Although securities rated Baa by Moody's and BBB
by Standard & Poor's have speculative characteristics, they
are considered to be "medium" investment grade. Such
securities carry a lower degree of risk than lower rated
securities.

Securities rated Baa and below by Moody's or BBB and below
by Standard & Poor's are commonly known as "junk bonds" and
are considered to be high risk. Yields on such bonds will
fluctuate over time, and achievement of the Fund's
investment objective may be more dependent on the Fund's own
credit analysis than is the case for higher rated bonds.
(See "Risk Factors Applicable to High Yielding High Risk
Debt Securities.")

Up to 20% of the Fund's assets may be invested in debt
securities which are rated less than B at the time of
purchase or if unrated are in the opinion of the manager of
similar quality. Securities rated B or higher at the time of
purchase, which are subsequently downgraded, will not be
subject to this limitation.

The lowest rating that may be held in the Fund is D, or that
of defaulted securities. (See "Risk Factors Applicable to
High Yielding High Risk Debt Securities.") The Fund will not
purchase obligations that are in default, but may hold in
the portfolio securities which go into default subsequently
to acquisition by the Fund.

The proportion of the Fund invested in each type of security
is expected to change over time in accordance with the
investment manager's interpretation of economic conditions
and underlying security values. However, it is expected that
a minimum of 65% of the Fund's total assets will always be
invested in fixed income securities and that a maximum of
10% of its total assets will be invested in equity
securities. The Fund's flexible investment policy allows it
to invest in securities with varying maturities; however, it
is anticipated that the average maturity of securities
acquired by the Fund will not exceed 15 years. The average
maturity of the Fund will be generally ten years or less.
The manager may look at a number of factors in selecting
securities for the Fund's portfolio. These include the past,
current and estimated future: (1) financial strength of the
issuer; (2) cash flow; (3) management; (4) borrowing
requirements; and (5) responsiveness to changes in interest
rates and business conditions. Sometimes the manager may
believe that a full or partial temporary defensive position
is desirable, due to present or anticipated market or
economic conditions. To achieve a defensive posture, the
manager may take any one or more of the following steps with
respect to assets in the Fund's portfolio: (1) shortening
the average maturity of the Fund's debt portfolio; (2)
holding cash or cash equivalents; and (3) emphasizing high-
grade debt securities. Taking a defensive posture as
described above may involve a reduction in the yield on the
Fund's portfolio.

Under normal circumstances, the Fund may invest up to 20% of
its assets in securities rated AAA/Aaa, AA/Aa and A/A, or
unrated securities of comparable quality; 90% of its assets
in securities rated BBB/Baa, BB/Ba and B/B, or unrated
securities of comparable quality; and 20% of its assets in
securities rated CCC/Caa; CC/Ca; and D/D, or unrated
securities of comparable quality.

The following table shows the percentage of the Fund's
assets invested in securities assigned to the various rating
categories by Moody's and Standard & Poor's and in unrated
securities determined by the Investment Counsel of the Fund
to be of comparable quality.

Unrated securities of
Rated securities, comparable quality
as a percentage of as a percentage of
Rating Fund's assets Fund's assets

BBB/Baa 5.3
BB/Ba 4.4
B/B 71.1 9.0
CCC/Caa 10.2

Covered call options serve as a partial hedge against the
price of the underlying security declining.

The Fund may also invest in issues of the United States
treasury or a United States government agency subject to
repurchase agreements. The use of repurchase agreements by
the Fund involves certain risks, see "Risk Factors
Applicable to Repurchase Agreements."

There is no assurance that the Fund's objective of a high
level of current income and secondarily capital growth can
be achieved. Portfolio turnover will be no more than is
necessary to meet the Fund's objective. Under normal
circumstances, it is anticipated that portfolio turnover
will not exceed 100% on an annual basis. Buffalo High Yield
Fund's annualized turnover for the period from May 19, 1995
(inception) to March 31, 1996, was 25%. Commissions paid
during the same period amounted to $650.

Buffalo USA Global Fund

Buffalo USA Global Fund seeks capital growth. Capital growth
is intended to be achieved primarily by the Fund's
investment in common stocks of companies based in the United
States that receive greater than 40% of their revenues or
pre-tax income from international operations, measured as of
the preceding four completed quarters of business or the
respective company's most recently completed fiscal year. At
least 65% of the value of the Fund's total assets must be
invested in at least three different countries. This
diversification is achieved through the international
operations of United States - based companies as described
above. The Fund will invest in common stocks considered by
the manager to have above average potential for
appreciation; income is a secondary consideration. Under
normal circumstances, the Fund will invest in a majority of
its assets in common stocks listed on the New York Stock
Exchange.

The Fund's manager believes that the investment policies of
the Fund reduce or eliminate several risks associated with
direct investment in foreign securities. Trading costs are
usually higher in foreign countries because commission rates
are generally fixed rather than negotiated, as in the United
States. Liquidity risk is generally lowered because trading
volumes are typically higher on United States exchanges.
Many foreign stock exchanges require extended clearance and
settlement periods, which can impair a manager from
implementing specific investment policies. Finally, there is
generally less enforcement of security laws and supervision
of developing country stock exchanges.

When, in the manager's judgment, market conditions warrant
substantial temporary defensive investments in high quality
money market securities, the Fund may do so.

The Fund is authorized to write (i.e. sell) covered call
options on the securities in which it may invest and to
enter into closing purchased transactions with respect to
certain of such options. A covered call option is an option
where the Fund in return for a premium gives another party a
right to buy specified securities owned by the Fund at a
specified future date and price set at the time of the
contract. (See "Risk Factors Applicable to Covered Call
Options.")

Covered call options serve as a partial hedge against the
price of the underlying security declining.

There is no assurance that the Fund's objective of capital
growth can be achieved. Portfolio turnover will be no more
than is necessary to meet the Fund's objective. Under normal
circumstances, it is anticipated that portfolio turnover for
the Fund will not exceed 100% on an annual basis. Buffalo
USA Global Fund's annualized turnover for the period from
May 19, 1995 (inception) to March 31, 1996, was 123%.
Commissions paid during the same period amounted to $8,644.

Restricted Securities

Each Fund may purchase restricted securities that are not
registered for sale to the general public but which are
eligible for resale to qualified institutional investors
under Rule 144A of the Securities Act of 1933. Under the
supervision of the Fund's Board of Directors, the Investment
Counsel determines the liquidity of such investments by
considering all relevant factors. Provided that a dealer or
institutional trading market in such securities exists,
these restricted securities are not treated as illiquid
securities for purposes of a Fund's investment limitations.
Certain restrictions applicable to each Fund limit their
investment in securities that are illiquid by virtue of the
absence of a readily available market or because of legal or
contractual restrictions on resale to no more than 10% of
each Fund's net assets. The prices realized from the sales
of these securities could be less than those originally paid
by the Fund or less than what may be considered the fair
value of such securities.

Repurchase Agreements

A repurchase agreement involves the sale of securities to
the Fund with the concurrent agreement by the seller to
repurchase the securities at the Fund's cost plus interest
at an agreed rate upon demand or within a specified time,
thereby determining the yield during the purchaser's period
of ownership. The result is a fixed rate of return insulated
from market fluctuations during such period. Under the
Investment Company Act of 1940, repurchase agreements are
considered loans by a Fund.

The Funds will enter into such repurchase agreements only
with United States banks having assets in excess of $1
billion which are members of the Federal Deposit Insurance
Corporation, and with certain securities dealers who meet
the qualifications set from time to time by the Board of
Directors. The term to maturity of a repurchase agreement
normally will be no longer than a few days. Repurchase
agreements maturing in more than seven days and other
illiquid securities will not exceed 10% of the total assets
of any Fund.

Asset-Backed Securities

The Buffalo High Yield Fund may invest in asset-backed
securities. Asset-backed securities are collateralized by
short maturity loans such as automobile receivables, credit
card receivables, other types of receivables or assets.
Credit support for asset-backed securities may be based on
the underlying assets and/or provided through credit
enhancements by a third party. Credit enhancement techniques
include letters of credit, insurance bonds, limited
guarantees (which are generally provided by the issuer),
senior-subordinated structures and over-collateralization.

Risk Factors

Risk Factors Applicable to
Repurchase Agreements

The Funds may enter into repurchase agreements. The use of
repurchase agreements involves certain risks. For example,
if the seller of the agreement defaults on its obligation to
repurchase the underlying securities at a time when the
value of these securities has declined, a Fund may incur a
loss upon disposition of them. If the seller of the
agreement becomes insolvent and subject to liquidation or
reorganization under the Bankruptcy Code or other laws,
disposition of the underlying securities may be delayed
pending court proceedings. Finally, it is possible that a
Fund may not be able to perfect its interest in the
underlying securities. While the Fund management
acknowledges these risks, it is expected that they can be
controlled through stringent security selection criteria and
careful monitoring procedures.

Risk Factors Applicable to
Covered Call Options

Each of the Buffalo Funds may engage in covered call option
transactions as described herein. Up to 25% of a Fund's
total assets may be subject to covered call options. By
writing covered call options, the Fund gives up the
opportunity, while the option is in effect, to profit from
any price increase in the underlying security above the
option exercise price. In addition, a Fund's ability to sell
the underlying security will be limited while the option is
in effect unless the Fund effects a closing purchase
transaction. A closing purchase transaction cancels out a
Fund's position as the writer of an option by means of an
offsetting purchase of an identical option prior to the
expiration of the option it has written.

Upon the termination of a Fund's obligation under a covered
call option other than through exercise of the option, the
Fund will realize a short-term capital gain or loss. Any
gain realized by a Fund from the exercise of an option will
be short- or long-term depending on the period for which the
stock was held. The writing of covered call options creates
a straddle that is potentially subject to the straddle
rules, which may override some of the foregoing rules and
result in a deferral of some losses for tax purposes.

Risk Factors Applicable to ADRs

Up to 25% of Buffalo Equity Fund's total assets may be
invested in ADRs. ADRs (sponsored or unsponsored) are
receipts typically issued by a U.S. bank or trust company
evidencing ownership of the underlying foreign securities.
Most ADRs are traded on a U.S. stock exchange. Issuers of
unsponsored ADRs are not contractually obligated to disclose
material information in the U.S. and, therefore, there may
not be a correlation between such information and the market
value of the unsponsored ADR.

Risk Factors Applicable to Common Stocks

Buffalo Equity Fund, Buffalo Balanced Fund and Buffalo USA
Global Fund invest in common stocks. Buffalo High Yield Fund
may invest up to 10% of it assets in common stocks. The
Funds are subject to market risk and fund risk. Market risk
is the possibility that stock prices in general will decline
over short or even extended periods of time. Stock markets
tend to be cyclical, with periods when stock prices
generally rise and periods when stock prices generally
decline. Fund risk is the possibility that a Fund's
performance during a specific period may not meet or exceed
that of the stock market as a whole.

Risk Factors Applicable to High Yielding
High Risk Debt Securities

Buffalo Balanced Fund and Buffalo High Yield Fund invest in
high-yielding, high-risk debt securities. Lower rated bonds
involve a higher degree of credit risk, the risk that the
issuer will not make interest or principal payments when
due. In the event of an unanticipated default, a Fund would
experience a reduction in its income, and could expect a
decline in the market value of the securities so affected.
More careful analysis of the financial condition of each
issuer of lower grade securities is therefore necessary.
During an economic downturn or substantial period of rising
interest rates, highly leveraged issuers may experience
financial stress which would adversely affect their ability
to service their principal and interest payment obligations,
to meet projected business goals and to obtain additional
financing.

The market prices of lower grade securities are generally
less sensitive to interest rate changes than higher rated
investments, but more sensitive to adverse economic or
political changes or, in the case of corporate issuers,
individual corporate developments. Periods of economic or
political uncertainty and change can be expected to result
in volatility of prices of these securities. Since the last
major economic recession, there has been a substantial
increase in the use of high-yield debt securities to fund
highly leveraged corporate acquisitions and restructurings,
so past experience with high-yield securities in a prolonged
economic downturn may not provide an accurate indication of
future performance during such periods. Lower rated
securities also may have less liquid markets than higher
rated securities, and their liquidity as well as their value
may be adversely affected by adverse economic conditions.
Adverse publicity and investor perceptions, as well as new
or proposed laws, may also have a negative impact on the
market for high-yield/high-risk bonds.

Credit quality of high-yield/high-risk securities (so-called
"junk bonds") can change suddenly and unexpectedly and even
recently issued credit ratings may not fully reflect the
actual risks posed by a particular high-yield/high-risk
security. For these reasons, it is the Funds' policy not to
rely primarily on ratings issued by established credit
rating agencies, but to utilize such ratings in conjunction
with the investment adviser's own independent and ongoing
review of credit quality. As a mutual fund investing in
fixed income securities, each of the Funds is subject
primarily to interest rate, income and credit risk. Interest
rate risk is the potential for a decline in bond prices due
to rising interest rates. In general, bond prices vary
inversely with interest rates. When interest rates rise,
bond prices generally fall. Conversely, when interest rates
fall, bond prices generally rise. The change in price
depends in several factors, including the bond's maturity
date. In general, bonds with longer maturities are more
sensitive to interest rates than bonds with shorter
maturities.

The Funds are also subject to income risk which is the
potential for a decline in the respective Fund's income due
to falling market interest rates.

In addition to interest rate and income risks, each Fund is
subject to credit risk. Credit risk, also known as default
risk, is the possibility that a bond issuer will fail to
make timely payments of interest or principal to a Fund. The
credit risk of a Fund depends on the quality of its
investments. Reflecting their higher risks, lower-quality
bonds generally offer higher yields (all other factors being
equal). Ratings of debt securities are defined under the
caption "Fixed Income Securities Described and Ratings."

Risk Factors Applicable to Global Operations

The risks to which the U.S. companies in which Buffalo USA
Global Fund plans to invest are exposed and, consequently,
the concurrent risks experienced by the Fund as a result of
investing in such companies include: the risk of
fluctuations in the value of foreign currencies; adverse
political and economic developments; and the possibility of
expropriation, nationalization or confiscatory taxation or
limitations on the removal of funds or other assets. The
performance of foreign currencies relative to the U.S.
dollar and the relative strength of the U.S. dollar may be
important factors in the performance of the Fund.

Investment Restrictions

In addition to the policies set forth under the caption
"Investment Objectives and Portfolio Management Policies,"
the Funds are subject to certain other restrictions which
may not be changed without approval of the lesser of: (1)
at least 67% of the voting securities present at a meeting
if the holders of more than 50% of the outstanding
securities of the Fund are present or represented by proxy,
or (2) more than 50% of the outstanding voting securities of
the Fund. Among these restrictions, the more important ones
are that the Fund will not purchase the securities of any
issuer if more than 5% of the Fund's total assets would be
invested in the securities of such issuer, or the Fund would
hold more than 10% of any class of securities of such
issuer; the Fund will not make any loan (the purchase of a
security subject to a repurchase agreement or the purchase
of a portion of an issue of publicly distributed debt
securities is not considered the making of a loan); and the
Fund will not borrow or pledge its credit under normal
circumstances, except up to 10% of its total assets
(computed at the lower of fair market value or cost)
temporarily for emergency or extraordinary purposes, and not
for the purpose of leveraging its investments; and provided
further that any borrowings shall have asset coverage of at
least 3 to 1. The Fund will not buy securities while
borrowings are outstanding. The full text of these
restrictions are set forth in the "Statement of Additional
Information."

Performance Measures

From time to time, each of the Funds may advertise its
performance in various ways, as summarized below. Further
discussion of these matters also appears in the "Statement
of Additional Information." A discussion of Buffalo Balanced
Fund, Buffalo Equity Fund, Buffalo High Yield Fund and
Buffalo USA Global Fund performance is included in the
Fund's Annual Report to Shareholders which is available from
the Fund upon request at no charge.

Yield

The Buffalo Balanced Fund and the Buffalo High Yield Fund
may advertise a yield figure derived by dividing the Fund's
net investment income per share during a 30-day base period
by the per share price on the last day of the base period.

Total Return

The Funds may advertise "average annual total return" over
various periods of time. Such total return figures show the
average percentage change in value of an investment in the
respective Fund from the beginning date of the measuring
period to the end of the measuring period. These figures
reflect changes in the price of the Fund's shares and assume
that any income dividends and/or capital gains distributions
made by the respective Fund during the period were
reinvested in shares of the Fund. Figures will be given for
recent one-, five- and ten-year periods (if applicable), and
may be given for other periods as well (such as from
commencement of the Fund's operations, or on a year-by-year
basis). When considering "average" total return figures for
periods longer than one year, it is important to note that a
Fund's annual total return for any one year in the period
might have been greater or less than the average for the
entire period.

Performance Comparisons

In advertisements or in reports to shareholders, each of the
Funds may compare its performance to that of other mutual
funds with similar investment objectives and to stock or
other relevant indices. For example, the Buffalo Funds may
compare their performance to rankings prepared by Lipper
Analytical Services, Inc. (Lipper), a widely recognized
independent service which monitors the performance of mutual
funds. Buffalo Balanced Fund, Buffalo Equity Fund, Buffalo
High Yield Fund, and Buffalo USA Global Fund may compare
their performance to the Standard & Poor's 500 Stock Index
(S&P 500), an index of unmanaged groups of common stocks,
the Dow Jones Industrial Average, a recognized unmanaged
index of common stocks of 30 industrial companies listed on
the NYSE, or the Consumer Price Index. Buffalo High Yield
Fund may compare its performance to the Shearson/ Lehman
Government/ Corporate Index, an unmanaged index of
government and corporate bonds, or the Consumer Price Index.
Performance information, rankings, ratings, published
editorial comments and listings as reported in national
financial publications such as Kiplinger's Personal Finance
Magazine, Business Week, Morningstar Mutual Funds,
Investor's Business Daily, Institutional Investor, The Wall
Street Journal, Mutual Fund Forecaster, No-Load Investor,
Money, Forbes, Fortune and Barron's may also be used in
comparing performance of the Funds. Performance comparisons
should not be considered as representative of the future
performance of any Fund. Further information regarding the
performance of the Buffalo Funds is contained in the
"Statement of Additional Information."

Performance rankings, recommendations, published editorial
comments and listings reported in Money, Barron's,
Kiplinger's Personal Finance Magazine, Financial World,
Forbes, U.S. News & World Report, Business Week, The Wall
Street Journal, Investors Business Daily, USA Today, Fortune
and Stanger's, may also be cited (if any of the Funds is
listed in any such publication) or used for comparison, as
well as performance listings and rankings from Morningstar
Mutual Funds, Personal Finance, Income and Safety, The
Mutual Fund Letter, No-Load Fund Investor, United Mutual
Fund Selector, No-Load Fund Analyst, No-Load Fund X, Louis
Rukeyeser's Wall Street newsletter, Donoghue's Money Letter,
CDA Investment Technologies, Inc., Wiesenberger Investment
Company Service and Donoghue's Mutual Fund Almanac.

How to Purchase Shares

You must specify the Fund in which you desire to in-
vest on your application form. Failure to do so will result
in the application and your check or bank wire being
returned to you.

Shares are purchased at net asset value (no sales charge)
from the Fund through its agent, Jones & Babson, Inc., 2440
Pershing Road, Suite G-15, Kansas City, MO 64108. For
information call toll free 1-800-49-BUFFALO
(1-800-492-8322). If an investor wishes to engage the
services of any other broker to purchase (or redeem) shares
of the Fund, a fee may be charged by such broker. The Fund
will not be responsible for the consequences of delays
including delays in the banking or Federal Reserve wire
systems.

You do not pay a sales commission when you buy shares of the
Funds. Shares are purchased at the Fund's net asset value
(price) per share next effective after a purchase order and
payment have been received by the Fund. In the case of
certain institutions which have made satisfactory payment
arrangements with a Fund, orders may be processed at the net
asset value per share next effective after a purchase order
has been received by the Fund.

The Funds reserve the right in their sole discretion to
withdraw all or any part of the offerings made by this
prospectus or to reject purchase orders when, in the
judgment of management, such withdrawal or rejection is in
the best interest of a Fund and its shareholders. The Funds
also reserve the right at any time to waive or increase the
minimum requirements applicable to initial or subsequent
investments with respect to any person or class of persons,
which include shareholders of the Funds' special investment
programs. The Funds reserve the right to refuse to accept
orders for Fund shares unless accompanied by payment, except
when a responsible person has indemnified the Fund against
losses resulting from the failure of investors to make
payment. In the event that a Fund sustains a loss as the
result of failure by a purchaser to make payment, the Funds'
underwriter, Jones & Babson, Inc. will cover the loss.

Initial Investments

Initial investments - By mail. You may open an account and
make an investment by completing and signing the application
which accompanies this prospectus. Make your check ($2,500
minimum unless your purchase is pursuant to an IRA or the
Uniform Transfers (Gifts) to Minors Act in which case the
minimum initial purchase is $250) payable to UMB Bank, n.a.
Mail your application and check to:

The Buffalo Fund Group
2440 Pershing Road, Suite G-15
Kansas City, Missouri 64108

Initial investments - By wire. You may purchase shares of a
Fund by wiring funds ($2,500 minimum) through the Federal
Reserve Bank to the custodian, UMB Bank, n.a. Prior to
sending your money, you must call the Fund toll free 1-800-
49-BUFFALO (1-800-492-8322) and provide it with the identity
of the registered account owner, the registered address, the
Social Security or Taxpayer Identification Number of the
registered owner, the amount being wired, the name and
telephone number of the wiring bank and the person to be
contacted in connection with the order. You will then be
provided a Fund account number, after which you should
instruct your bank to wire the specified amount, along with
the account number and the account registration to:

UMB Bank, n.a.
Kansas City, Missouri, ABA #101000695
For:
Buffalo Balanced Fund, Inc./AC= 987059-5095
Buffalo Equity Fund, Inc./AC= 987071-5880
Buffalo High Yield Fund, Inc./AC= 987071-5899
Buffalo USA Global Fund, Inc./AC= 987071-5902
(As appropriate)

For Account No. (insert assigned Fund account number and
name in which account is registered.)

A completed application must be sent to the Fund as soon as
possible so the necessary remaining information can be
recorded in your account. Payment of redemption proceeds
will be delayed until the completed application is received
by the Fund.

Investments Subsequent
to Initial Investment

You may add to your Fund account at any time in amounts of
$100 or more if purchases are made by mail, or $1,000 or
more if purchases are made by wire or telephone. Automatic
monthly investments must be in amounts of $100 or more.

Checks should be mailed to the Fund at its address, and make
them payable to UMB Bank, n.a. Always identify your account
number or include the detachable reminder stub which
accompanies each confirmation.

Wire share purchases should include your account
registration, your account number and the Buffalo Fund in
which you are purchasing shares. It also is advisable to
notify the Fund by telephone that you have sent a wire
purchase order to the bank.

Telephone Investment Service

To use the Telephone Investment Service, you must first
establish your Fund account and authorize telephone orders
in the application form, or, subsequently, on a special
authorization form provided upon request. If you elect the
Telephone Investment Service, you may purchase Fund shares
by telephone and authorize the Fund to draft your checking
account for the cost of the shares so purchased. You will
receive the next available price after the Fund has received
your telephone call. Availability and continuance of this
privilege is subject to acceptance and approval by the Fund
and all participating banks. During periods of increased
market activity, you may have difficulty reaching the Fund
by telephone, in which case you should contact the Fund by
mail or telegraph. The Fund will not be responsible for the
consequences of delays including delays in the banking or
Federal Reserve wire systems.

The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, and if
such procedures are not followed, the Fund may be liable for
losses due to unauthorized or fraudulent instructions. Such
procedures may include, but are not limited to, requiring
personal identification prior to acting upon instructions
received by telephone, providing written confirmations of
such transactions, and/or tape recording of telephone
instructions.

The Fund reserves the right to initiate a charge for this
service and to terminate or modify any or all of the
privileges in connection with this service at any time upon
15 days written notice to shareholders, and to terminate or
modify the privileges without prior notice in any
circumstances where such termination or modification is in
the best interest of the Fund and its investors.

Automatic Monthly Investment Plan

You may elect to make monthly investments in a constant
dollar amount from your checking account ($100 minimum). The
Fund will draft your checking account on the same day each
month in the amount you authorize in your application, or,
subsequently, on a special authorization form provided upon
request. Availability and continuance of this privilege is
subject to acceptance and approval by the Fund and all
participating banks. If the date selected falls on a day
upon which the Fund shares are not priced, investment will
be made on the first date thereafter upon which Fund shares
are priced. The Fund will not be responsible for the
consequences of delays including delays in the banking or
Federal Reserve wire systems.

The Funds reserve the right to initiate a charge for this
service and to terminate or modify any or all of the
privileges in connection with this service at any time upon
15 days written notice to shareholders, and to terminate or
modify the privileges without prior notice in any
circumstances where such termination or modification is in
the best interest of the Fund and its investors.

How to Redeem Shares

The Funds will redeem shares at the price (net asset value
per share) next computed after receipt of a redemption
request in "good order." (See "How Share Price is
Determined.")

A written request for redemption, together with an endorsed
share certificate where a certificate has been issued, must
be received by the Fund in order to constitute a valid
tender for redemption. For authorization of redemptions by a
corporation, it will also be necessary to have an
appropriate certified copy of resolutions on file with the
Fund before a redemption request will be considered in "good
order." In the case of certain institutions which have made
satisfactory redemption arrangements with a Fund, redemption
orders may be processed by facsimile or telephone
transmission at net asset value per share next effective
after receipt by the Fund. If an investor wishes to engage
the services of any other broker to redeem (or purchase)
shares of any Fund, a fee may be charged by such broker.

To be in "good order" the request must include the
following:

(1) A written redemption request or stock assignment
(stock power) containing the genuine signature of each
registered owner exactly as the shares are registered, with
clear identification of the account by registered name(s)
and account number and the number of shares or the dollar
amount to be redeemed;

(2) any outstanding stock certificates representing
shares to be redeemed;

(3) signature guarantees as required (see Signature Guarantees); and

(4) any additional documentation which the Fund may
deem necessary to insure a genuine redemption.

Where additional documentation is normally required to
support redemptions as in the case of corporations,
fiduciaries, and others who hold shares in a representative
or nominee capacity such as certified copies of corporate
resolutions, or certificates of incumbency, or such other
documentation as may be required under the Uniform
Commercial Code or other applicable laws or regulations, it
is the responsibility of the shareholder to maintain such
documentation on file and in a current status. A failure to
do so will delay the redemption. If you have questions
concerning redemption requirements, please write or
telephone the Fund well ahead of an anticipated redemption
in order to avoid any possible delay.

Requests which are subject to special conditions or which
specify an effective date other than as provided herein
cannot be accepted. All redemption requests must be
transmitted to the Fund at 2440 Pershing Road, Suite G-15,
Kansas City, Missouri 64108. Each of the Funds will redeem
shares at the price (net asset value per share) next
computed after receipt of a redemption request in "good
order." (See "How Share Price is Determined.")

The Funds will endeavor to transmit redemption proceeds to
the proper party, as instructed, as soon as practicable
after a redemption request has been received in "good order"
and accepted, but in no event later than the third business
day thereafter. Transmissions are made by mail unless an
expedited method has been authorized and specified in the
redemption request. The Funds will not be responsible for
the consequences of delays including delays in the banking
or Federal Reserve wire systems.

Redemptions will not become effective until all documents in
the form required have been received. In the case of
redemption requests made within 15 days of the date of
purchase, the Fund will delay transmission of proceeds until
such time as it is certain that unconditional payment in
federal funds has been collected for the purchase of shares
being redeemed or 15 days from the date of purchase. You can
avoid the possibility of delay by paying for all of your
purchases with a transfer of federal funds.

Signature Guarantees are required in connection with all
redemptions by mail, or changes in share registration,
except as hereinafter provided. These requirements may be
waived by a Fund in certain instances where it appears
reasonable to do so and will not unduly affect the interests
of other shareholders. Signature(s) must be guaranteed by an
"eligible Guarantor institution" as defined in Rule 17Ad-15
under the Securities Exchange Act of 1934. Eligible
guarantor institutions include: (1) national or state banks,
savings associations, savings and loan associations, trust
companies, savings banks, industrial loan companies and
credit unions; (2) national securities exchanges, registered
securities associations and clearing agencies; or (3)
securities broker/dealers which are members of a national
securities exchange or clearing agency or which have a
minimum net capital of $100,000. A notarized signature will
not be sufficient for the request to be in proper form.

Signature guarantees will be waived for mail redemptions of
$10,000 or less, but they will be required if the checks are
to be payable to someone other than the registered owner(s),
or are to be mailed to an address different from the
registered address of the shareholder(s), or where there
appears to be a pattern of redemptions designed to
circumvent the signature guarantee requirement, or where a
Fund has other reason to believe that this requirement would
be in the best interests of the Fund and its shareholders.

The right of redemption may be suspended or the date of
payment postponed beyond the normal three-day period when
the New York Stock Exchange is closed or under emergency
circumstances as determined by the Securities and Exchange
Commission. Further, each of the Funds reserves the right to
redeem its shares in kind under certain circumstances. If
shares are redeemed in kind, the shareholder may incur
brokerage costs when converting into cash. Redemptions in-
kind must be in the form of readily marketable securities.
Additional details are set forth in the "Statement of
Additional Information."

Due to the high cost of maintaining smaller accounts, the
Board of Directors has authorized each of the Funds to close
shareholder accounts where their value falls below the
current minimum initial investment requirement at the time
of initial purchase as a result of redemptions and not as
the result of market action, and remains below this level
for 60 days after each such shareholder account is mailed a
notice of: (1) the Fund's intention to close the account,
(2) the minimum account size requirement, and (3) the date
on which the account will be closed if the minimum size
requirement is not met. Since the minimum investment amount
and the minimum account size are the same, any redemption
from an account containing only the minimum investment
amount may result in redemption of that account.

Systematic Redemption Plan

If you own shares in an open account valued at $10,000 or
more, and desire to make regular monthly or quarterly
withdrawals without the necessity and inconvenience of
executing a separate redemption request to initiate each
withdrawal, you may enter into a Systematic Withdrawal Plan
by completing forms obtainable from the Fund. For this
service, the manager may charge you a fee not to exceed
$1.50 for each withdrawal. Currently the manager assumes the
additional expenses arising out of this type of plan, but it
reserves the right to initiate such a charge at any time in
the future when it deems it necessary. If such a charge is
imposed, participants will be provided 30 days notice.

Subject to a $50 minimum, you may withdraw each period a
specified dollar amount. Shares also may be redeemed at a
rate calculated to exhaust the account at the end of a
specified period of time.

Dividends and capital gains distributions must be reinvested
in additional shares. Under all withdrawal programs,
liquidation of shares in excess of dividends and
distributions reinvested will diminish and may exhaust your
account, particularly during a period of declining share
values.

You may revoke or change your plan or redeem all of your
remaining shares at any time. Withdrawal payments will be
continued until the shares are exhausted or until the Fund
or you terminate the plan by written notice to the other.

How to Exchange Shares
Between Buffalo and Babson Funds

Shareholders may exchange their Fund shares, which have been
held in open account for 30 days or more, and for which good
payment has been received, for identically registered shares
of any Fund in the Buffalo or Babson Fund Group which is
legally registered for sale in the state of residence of the
investor, except Babson Enterprise Fund, Inc., provided that
the minimum amount exchanged has a value of $1,000 or more
and meets the minimum investment requirement of the Fund
into which it is exchanged.

Effective at the close of business on January 31, 1992, the
Directors of the Babson Enterprise Fund, Inc. took action
to limit the offering of that Fund's shares. Babson
Enterprise Fund, Inc. will not accept any new accounts,
including IRAs and other retirement plans, until further
notice, nor will Babson Enterprise Fund accept transfers
from shareholders of other Babson Funds, who were not
shareholders of record of Babson Enterprise Fund at the
close of business on January 31, 1992.

To authorize the Telephone/Telegraph Exchange Privilege, all
registered owners must sign the appropriate section on the
original application, or the Fund must receive a special
authorization form, provided upon request. During periods of
increased market activity, you may have difficulty reaching
the Fund by telephone, in which case you should contact the
Fund by mail or telegraph. The Fund reserves the right to
initiate a charge for this service and to terminate or
modify any or all of the privileges in connection with this
service at any time and without prior notice under any
circumstances, where continuance of these privileges would
be detrimental to the Fund or its shareholders, such as an
emergency, or where the volume of such activity threatens
the ability of the Fund to conduct business, or under any
other circumstances, upon 60 days written notice to
shareholders. The Fund will not be responsible for the
consequences of delays including delays in the banking or
Federal Reserve wire systems.

The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine, and if
such procedures are not followed, the Fund may be liable for
losses due to unauthorized or fraudulent instructions. Such
procedures may include, but are not limited to requiring
personal identification prior to acting upon instructions
received by telephone, providing written confirmations of
such transactions, and/or tape recording of telephone
instructions.

Exchanges by mail may be accomplished by a written request
properly signed by all registered owners identifying the
account, the number of shares or dollar amount to be
redeemed for exchange, and the Buffalo Fund into which the
account is being transferred.

If you wish to exchange part or all of your shares in the
Fund for shares of a Fund in the Buffalo or Babson Fund
Group, you should review the prospectus of the Fund to be
purchased, which can be obtained from Jones & Babson, Inc.
Any such exchange will be based on the respective net asset
values of the shares involved. Any exchange between Funds
involves the sale of an asset. Unless the shareholder
account is tax-deferred, this is a taxable event.

How Share Price is Determined

In order to determine the price at which new shares will be
sold and at which issued shares presented for redemption
will be liquidated, the net asset value per share of each
Fund is computed once daily, Monday through Friday, at the
specific time during the day that the Board of Directors
sets at least annually, except on days on which changes in
the value of portfolio securities will not materially affect
the net asset value, or days during which no security is
tendered for redemption and no order to purchase or sell
such security is received by a Fund, or customary holidays.
For a list of the holidays during which the Funds are not
open for business, see "How Share Price is Determined" in
the "Statement of Additional Information."

The price at which new shares of a Fund will be sold and at
which issued shares presented for redemption will be
liquidated is computed once daily at 4:00 P.M. (Eastern
Time), except on those days when the Fund is not open for
business.

The per share calculation is made by subtracting from each
of the Fund's total assets any liabilities and then dividing
into this amount the total outstanding shares as of the date
of the calculation. Each security listed on an exchange is
valued at its last sale price on that exchange on the date
as of which assets are valued. Where the security is listed
on more than one exchange, each of the Funds will use the
price of that exchange which it generally considers to be
the principal Exchange on which the security is traded.
Lacking sales, the security is valued at the mean between
the current closing bid and asked prices. An unlisted
security for which over-the-counter market quotations are
readily available is valued at the mean between the last
current bid and asked prices. When market quotations are not
readily available, any security or other asset is valued at
its fair value as determined in good faith by the Board of
Directors.

Officers and Directors

The officers of the Funds manage its day-to-day operations.
The Funds' manager and officers are subject to the
supervision and control of the respective Boards of
Directors. A list of the officers and directors of the Funds
and a brief statement of their present positions and
principal occupations during the past five years is set
forth in the "Statement of Additional Information."

Management and Investment Counsel

Jones & Babson, Inc. was founded in 1960. It organized the
Funds in 1994, and acts as their manager and principal
underwriter. Pursuant to the current Management Agreement
for each of the Buffalo Funds, Jones & Babson, Inc. provides
or pays the cost 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, independent auditors and
legal counsel; remuneration of officers, directors and other
personnel; rent; shareholder services, including the
maintenance of the shareholder accounting system and
transfer agency; and such other items as are incidental to
corporate administration.

Not considered normal operating expenses, and therefore
payable by the Funds, are taxes, interest, governmental
charges and fees, including registration of a Fund and its
shares with the Securities and Exchange Commission and the
Securities Departments of the various States, brokerage
costs, dues, and all extraordinary costs and expenses
including but not limited to legal and accounting fees
incurred in anticipation of or arising out of litigation or
administrative proceedings to which a Fund, its officers or
directors may be subject or a party thereto.

As a part of the Management Agreement, Jones & Babson, Inc.
employs at its own expense Kornitzer Capital Management,
Inc. as its investment counsel to assist in the investment
advisory function for the Funds. Kornitzer Capital
Management, Inc. is an independent investment counseling
firm founded in 1989. It serves a broad variety of
individual, corporate and other institutional clients by
maintaining an extensive research and analytical staff. It
has an experienced investment analysis and research staff
which eliminates the need for Jones & Babson, Inc. and the
Fund to maintain an extensive duplicate staff, with the
consequent increase in the cost of investment advisory
service. The cost of the services of Kornitzer Capital
Management, Inc. is included in the fee of Jones & Babson,
Inc. The Management Agreement limits the liability of the
manager and its investment counsel, as well as their
officers, directors and personnel, to acts or omissions
involving willful malfeasance, bad faith, gross negligence,
or reckless disregard of their duties. The organizational
arrangements of the investment counsel require that all
investment decisions be made by committee, and no person is
primarily responsible for making recommendations to that
committee.

As compensation for all the foregoing services, the Funds
pay Jones & Babson, Inc. a fee at the annual rate of one
percent (1%) of average daily net assets from which Jones &
Babson, Inc. pays Kornitzer Capital Management, Inc. a fee
of 50/100 of 1% (.50%) of average daily net assets. The fees
are computed daily and paid semimonthly. The total expenses
of Buffalo Balanced Fund for the fiscal year ended March 31,
1996, amounted to 1.11% of the Fund. Investment counsel fees
of $120,132 were paid to Kornitzer Capital Management. The
total expenses of Buffalo Equity Fund for the period from
May 19, 1995 (inception) to March 31, 1996, amounted to
1.06%. Investment counsel fees of $14,866 were paid to
Kornitzer Capital Management. The total expenses of Buffalo
High Yield Fund for the period from May 19, 1995 (inception)
to March 31, 1996, amounted to 1.03%. Investment counsel
fees of $18,630 were paid to Kornitzer Capital Management.
The total expenses of Buffalo USA Global Fund for the period
from May 19, 1995 (inception) to March 31, 1996, amounted to
1.06%. Investment counsel fees of $12,999 were paid to
Kornitzer Capital Management.

The annual fee charged by Jones & Babson, Inc. is higher
than the fees of most other investment advisers whose
charges cover only investment advisory services with all
remaining operational expenses absorbed directly by the
Fund, however, it is anticipated that the total expenses of
the Fund will compare favorably with those of other mutual
funds whose advisers' fees cover only investment advisory
services with all remaining operational expenses absorbed by
the Funds.

Certain officers and directors of the Fund are also officers
or directors or both of other Buffalo Funds, Jones & Babson,
Inc. or Kornitzer Capital Management, Inc.

Jones & Babson, Inc. is a wholly-owned subsidiary of
Business Men's Assurance Company of America, which is
considered to be a controlling person under the Investment
Company Act of 1940. Assicurazioni Generali S.p.A., an
insurance organization founded in 1831 based in Trieste,
Italy, is considered to be a controlling person and is the
ultimate parent of Business Men's Assurance Company of
America. Mediobanca is a 5% owner of Generali.

Kornitzer Capital Management, Inc. is a closely held
corporation and has limitations in the ownership of its
stock designed to maintain control in those who are active
in management. Owners of 5% or more of Kornitzer Capital
Management, Inc. are John C. Kornitzer, Kent W. Gasaway,
Willard R. Lynch, Thomas W. Laming and Susan Stack.

The current Management Agreements between the Funds and
Jones & Babson, Inc., which include the Investment Counsel
Agreements between Jones & Babson, Inc. and Kornitzer
Capital Management, Inc. will continue in effect until
October 31, 1996. The Agreements will continue automatically
for successive annual periods ending each October 31 so long
as such continuance is specifically approved at least
annually by the Board of Directors of the respective Fund or
by the vote of a majority of the outstanding voting
securities of the respective Fund, and, provided also that
such continuance is approved by the vote of a majority of
the directors who are not parties to the Agreements or
interested persons of any such party at a meeting held in
person and called specifically for the purpose of evaluating
and voting on such approval. Both Agreements provide that
either party may terminate by giving the other 60 days
written notice. The Agreements terminate automatically if
assigned by either party.

General Information and History

Buffalo Balanced Fund was incorporated in Maryland on
January 25, 1994. Buffalo Equity Fund, Buffalo High Yield
Fund and Buffalo USA Global Fund were incorporated in
Maryland on November 23, 1994. Each of the Buffalo Funds has
a present authorized capitalization of 10,000,000 shares of
$1 par value common stock. All shares are of the same class
with like rights and privileges. Each full and fractional
share, when issued and outstanding, has: (1) equal voting
rights with respect to matters which affect the Fund; and
(2) equal dividend, distribution and redemption rights to
the assets of the Fund. Shares when issued are fully paid
and non-assessable. The Funds may create other series of
stock but will not issue any senior securities. Shareholders
do not have pre-emptive or conversion rights.

Non-cumulative voting - These shares have non-cumulative
voting rights, which means that the holders of more than 50%
of the shares voting for the election of directors can elect
100% of the directors, if they choose to do so, and in such
event, the holders of the remaining less than 50% of the
shares voting will not be able to elect any directors.

The Maryland Statutes permit registered investment
companies, such as the Funds, to operate without an annual
meeting of shareholders under specified circumstances if an
annual meeting is not required by the Investment Company Act
of 1940. There are procedures whereby the shareholders may
remove directors. These procedures are described in the
"Statement of Additional Information" under the caption
"Officers and Directors." The Funds have adopted the
appropriate provisions in its By-Laws and may not, at its
discretion, hold annual meetings of shareholders for the
following purposes unless required to do so: (1) election
of directors; (2) approval of any investment advisory
agreement; (3) ratification of the selection of independent
auditors; and (4) approval of a distribution plan. As a
result, the Funds do not intend to hold annual meetings.

The Funds may use the name "Buffalo" in its name so long as
Kornitzer Capital Management, Inc. is continued as its
investment counsel. Complete details with respect to the use
of the name are set out in the Management Agreements between
the Funds and Jones & Babson, Inc.

This prospectus omits certain of the information contained
in the registration statement filed with the Securities and
Exchange Commission, Washington, D.C. These items may be
inspected at the offices of the Commission or obtained from
the Commission upon payment of the fee prescribed.

In the opinion of the staff of the Securities and Exchange
Commission, the use of this combined Prospectus may possibly
subject all Funds to a certain amount of liability for any
losses arising out of any statement or omission in this
Prospectus regarding a particular Fund. In the opinion of
the Funds' management, however, the risk of such liability
is not materially increased by the use of a combined
Prospectus.

Dividends, Distributions
and Their Taxation

Buffalo Balanced Fund and Buffalo High Yield Fund pay
dividends from net investment income quarterly, usually in
March, June, September and December. Distribution from
capital gains realized on the sale of securities, if any,
will be declared by Buffalo Balanced Fund annually on or
before December 31 and by Buffalo High Yield Fund
semiannually, usually in June and December. The Buffalo
Equity Fund and Buffalo USA Global Fund pay dividends from
net investment income and capital gains semiannually,
usually in June and December. Dividend and capital gains
distributions will be reinvested automatically in additional
shares at the net asset value per share next computed and
effective at the close of business on the day after the
record date, unless the shareholder has elected on the
original application, or by written instructions filed with
the Fund, to have them paid in cash.

The Funds intend to qualify for taxation as a "regulated
investment company" under the Internal Revenue Code so that
the Fund will not be subject to federal income tax to the
extent that it distributes its income to its shareholders.
Dividends, either in cash or reinvested in shares, paid by a
Fund from net investment income will be taxable to
shareholders as ordinary income, and will generally qualify
in part for the 70% dividends-received deduction for
corporations. The portion of the dividends so qualified
depends on the aggregate taxable qualifying dividend income
received by a Fund from domestic (U.S.) sources. The Funds
will send to shareholders a statement each year advising the
amount of the dividend income which qualifies for such
treatment.

Whether paid in cash or additional shares of a Fund, and
regardless of the length of time Fund shares have been owned
by the shareholder, distributions from long-term capital
gains are taxable to shareholders as such, but are not
eligible for the dividends-received deduction for
corporations. Shareholders are notified annually by the
Funds as to federal tax status of dividends and
distributions paid by the Fund. Such dividends and
distributions may also be subject to state and local taxes.

Exchange and redemption of Fund shares are taxable events
for federal income tax purposes. Shareholders may also be
subject to state and municipal taxes on such exchanges and
redemptions. You should consult your tax adviser with
respect to the tax status of distributions from the Fund in
your state and locality.

The Funds intend to declare and pay dividends and capital
gains distributions so as to avoid imposition of the federal
excise tax. To do so, each Fund expects to distribute during
each calendar year an amount equal to: (1) 98% of its
calendar year ordinary income; (2) 98% of its capital gains
net income (the excess of short- and long-term capital gain
over short- and long-term capital loss) for the one-year
period ending each October 31; and (3) 100% of any
undistributed ordinary or capital gain net income from the
prior calendar year. Dividends declared in October, November
or December and made payable to shareholders of record in
such a month are deemed to have been paid by the Fund and
received by shareholders on December 31 of such year, so
long as the dividends are actually paid before February 1 of
the following year.

To comply with IRS regulations, the Funds are required by
federal law to withhold 31% of reportable payments (which
may include dividends, capital gains distributions, and
redemptions) paid to shareholders who have not complied with
IRS regulations. In order to avoid this withholding
requirement, shareholders must certify on their Application,
or on a separate form supplied by the Fund, that their
Social Security or Taxpayer Identification Number provided
is correct and that they are not currently subject to backup
withholding, or that they are exempt from backup
withholding.

The federal income tax status of all distributions will be
reported to shareholders each January as a part of the
annual statement of shareholder transactions. Shareholders
not subject to tax on their income will not be required to
pay tax on amounts distributed to them.

THE TAX DISCUSSION SET FORTH ABOVE IS INCLUDED HEREIN FOR
GENERAL INFORMATION ONLY. PROSPECTIVE INVESTORS SHOULD
CONSULT THEIR OWN TAX ADVISERS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF AN INVESTMENT IN THE FUNDS.

Description of Securities Ratings

Fixed Income Securities Described and Ratings

Description of Bond Ratings:

Standard & Poor's Corporation (S&P)

AAA - Highest Grade. These securities possess the ultimate
degree of protection as to principal and interest.
Marketwise, they move with interest rates, and hence provide
the maximum safety on all counts.

AA - High Grade. Generally, these bonds differ from AAA
issues only in a small degree. Here too, prices move with
the long-term money market.

A - Upper-medium Grade. They have considerable investment
strength, but are not entirely free from adverse effects of
changes in economic and trade conditions. Interest and
principal are regarded as safe. They predominately reflect
money rates in their market behavior but, to some extent,
also economic conditions.

BBB - Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they
normally exhibit protection parameters, adverse economic
conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.

BB, B, CCC, CC - Bonds rated BB, B, CCC and CC are
regarded, on balance, as predominantly speculative with
respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations.
BB indicates the lowest degree of speculation and CC the
highest degree of speculation. While such bonds will likely
have some quality and protective characteristics, these are
outweighed by large uncertainties or major risk exposures to
adverse conditions.

Moody's Investors Service, Inc. (Moody's)

Aaa - Best Quality. These securities carry the smallest
degree of investment risk and are generally referred to as
"gilt-edge." Interest payments are protected by a large, or
by an exceptionally stable margin, and principal is secure.
While the various protective elements are likely to change,
such changes as can be visualized are most unlikely to
impair the fundamentally strong position of such issues.

Aa - High Quality by All Standards. They are rated lower
than the best bonds because margins of protection may not be
as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude, or there may be other
elements present which make the long-term risks appear
somewhat greater.

A - Upper-medium Grade. Factors giving security to
principal and interest are considered adequate, but elements
may be present which suggest a susceptibility to impairment
sometime in the future.

Baa - Bonds which are rated Baa are considered as medium
grade obligations, i. e., they are neither highly protected
nor poorly secured. Interest payments and principal security
appear adequate for the present, but certain protective
elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have
speculative characteristics as well.

Ba - Bonds which are rated Ba are judged to have
predominantly speculative elements; their future cannot be
considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not
well safeguarded during both good and bad times over the
future. Uncertainty of position characterizes bonds in this
class.

B - Bonds which are rated B generally lack characteristics
of the desirable investment. Assurance of interest and
principal payments or maintenance of other terms of the
contract over any long period of time may be small.

Caa - Bonds which are rated Caa are of poor standing. Such
issues may be in default or there may be present elements of
danger with respect to principal or interest.

Ca - Bonds which are rated Ca represent obligations which
are speculative in a high degree. Such issues are often in
default or have other marked shortcomings.

Shareholder Services

The Funds and their manager offer shareholders a broad
variety of services described throughout this Prospectus. In
addition, the following services are available:

Automatic Reinvestment - Dividends and capital gains
distributions may be reinvested automatically, or
shareholders may elect to have dividends paid in cash and
capital gains reinvested, or to have both paid in cash.

Telephone Investments - You may make investments of $1,000
or more by telephone if you have authorized such investments
in your application, or, subsequently, on a special
authorization form provided upon request. See "Telephone
Investment Service."

Automatic Exchange - You may exchange shares from your
account ($100 minimum) in any of the Buffalo Funds to an
identically registered account in any other fund in the
Buffalo or Babson Group according to your instructions.
Monthly exchanges will be continued until all shares have
been exchanged or until you terminate the Automatic Exchange
authorization. A special authorization form will be provided
upon request.

Transfer of Ownership - A shareholder may transfer shares
to another shareholder account. The requirements which apply
to redemptions apply to transfers. A transfer to a new
account must meet initial investment requirements.

Systematic Redemption Plan - Shareholders who own shares in
open account valued at $10,000 or more may arrange to make
regular withdrawals without the necessity of executing a
separate redemption request to initiate each withdrawal.

Sub-Accounting - Keogh and corporate tax qualified
retirement plans, as well as certain other investors who
must maintain separate participant accounting records, may
meet these needs through services provided by the Fund's
manager, Jones & Babson, Inc. Investment minimums may be met
by accumulating the separate accounts of the group. Although
there is currently no charge for sub-accounting, the Fund
and its manager reserve the right to make reasonable charges
for this service.

Prototype Retirement Plans - Jones & Babson, Inc. offers a
defined contribution prototype plan - The Universal
Retirement Plan - which is suitable for all who are self-
employed, including sole proprietors, partnerships, and
corporations. The Universal Prototype includes both money
purchase pension and profit-sharing plan options.

Individual Retirement Accounts - Also available is an
Individual Retirement Account (IRA). The IRA uses the IRS
model form of plan and provides an excellent way to
accumulate a retirement fund which will earn tax-deferred
dollars until withdrawn. An IRA may also be used to defer
taxes on certain distributions from employer-sponsored
retirement plans. You may contribute up to $2,000 of
compensation each year ($2,250 if a spousal IRA is
established), some or all of which may be deductible.
Consult your tax adviser concerning the amount of the tax
deduction, if any.

Simplified Employee Pensions (SEPs) - The Jones & Babson
IRA may be used with IRS Form 5305 - SEP to establish a SEP-
IRA, to which the self-employed individual may contribute up
to 15% of net earned income or $30,000, whichever is less. A
SEP-IRA offers the employer the ability to make the same
level of deductible contributions as a Profit-Sharing Plan
with greater ease of administration, but less flexibility in
plan coverage of employees.

Shareholder Inquiries

Telephone inquiries may be made toll free to the Fund, 1-
800-49-BUFFALO (1-800-492-8332).

Shareholders may address written inquiries to the Funds at:

The Buffalo Group of Funds
2440 Pershing Road, Suite G-15
Kansas City, MO 64108

INVESTMENT COUNSEL
KORNITZER CAPITAL MANAGEMENT, INC.
Shawnee Mission, Kansas

INDEPENDENT AUDITORS
ERNST & YOUNG LLP
Kansas City, Missouri

LEGAL COUNSEL
STRADLEY, RONON, STEVENS & YOUNG
Philadelphia, Pennsylvania

JOHN G. DYER
Kansas City, Missouri

CUSTODIAN
UMB BANK, n.a.
Kansas City, Missouri

TRANSFER AGENT
JONES & BABSON, INC.
Kansas City, Missouri

PART B

BUFFALO BALANCED FUND, INC.
BUFFALO EQUITY FUND, INC.
BUFFALO HIGH YIELD FUND, INC.
BUFFALO USA GLOBAL FUND, INC.

STATEMENT OF ADDITIONAL INFORMATION

July 31, 1996

This Statement is not a Prospectus but should be read in conjunction
with the Funds' current Prospectus dated July 31, 1996. To obtain
the Prospectus please call the Fund toll-free
1-800-49-BUFFALO (1-800-492-8332).

TABLE OF CONTENTS
Page
INVESTMENT OBJECTIVES AND POLICIES 2
PORTFOLIO TRANSACTIONS 2
INVESTMENT RESTRICTIONS 3
Buffalo Balanced Fund 3
Buffalo Equity Fund 4
Buffalo High Yield Fund 5
Buffalo USA Global Fund 6
PERFORMANCE MEASURES 7
TOTAL RETURN 7
HOW THE FUNDS' SHARES ARE DISTRIBUTED 8
HOW SHARE PURCHASES ARE HANDLED 8
REDEMPTION OF SHARES 9
SIGNATURE GUARANTEES 9
MANAGEMENT AND INVESTMENT COUNSEL 9
HOW SHARE PRICE IS DETERMINED 10
OFFICERS AND DIRECTORS 11
CUSTODIAN 13
INDEPENDENT AUDITORS 13
OTHER JONES & BABSON FUNDS 14
DESCRIPTION OF COMMERCIAL PAPER RATINGS 14
FINANCIAL STATEMENTS 15

<PAGE>

INVESTMENT OBJECTIVES
AND POLICIES

The following policies supplement the Fund's
investment objective and policies set forth in the
Prospectus.

PORTFOLIO TRANSACTIONS

Decisions to buy and sell securities for the
Funds are made by Jones & Babson, Inc.
pursuant to recommendations by Kornitzer
Capital Management, Inc. Officers of the Funds
and Jones & Babson, Inc. are generally
responsible for implementing or supervising
these decisions, including allocation of portfolio
brokerage and principal business as well as the
negotiation of commissions and/or the price of
the securities. In instances where securities are
purchased on a commission basis, the Funds will
seek competitive and reasonable commission
rates based on circumstances of the trade
involved and to the extent that they do not
detract from the quality of the execution.

The Funds, in purchasing and selling portfolio
securities, will seek the best available
combination of execution and overall price
(which shall include the cost of the transaction)
consistent with the circumstances which exist at
the time. The Funds do not intend to solicit
competitive bids on each transaction.

The Funds believe it is in their best interest
and that of their shareholders to have a stable
and continuous relationship with a diverse group
of financially strong and technically qualified
broker-dealers who will provide quality
executions at competitive rates. Broker-dealers
meeting these qualifications also will be selected
for their demonstrated loyalty to the respective
Fund, when acting on its behalf, as well as for
any research or other services provided to the
respective Fund. Substantially all of the portfolio
transactions are through brokerage firms which
are members of the New York Stock Exchange
because usually the most active market in the
size of the Funds' transactions and for the types
of securities predominant in the Funds'
respective portfolios is to be found there. When
buying securities in the over-the-counter market,
the Funds will select a broker who maintains a
primary market for the security unless it appears
that a better combination of price and execution
may be obtained elsewhere. The Funds
normally will not pay a higher commission rate
to broker-dealers providing benefits or services
to it than it would pay to broker-dealers who do
not provide it such benefits or services.
However, the Funds reserve the right to do so
within the principles set out in Section 28(e) of
the Securities Exchange Act of 1934 when it
appears that this would be in the best interests of
the shareholders.

No commitment is made to any broker or
dealer with regard to placing of orders for the
purchase or sale of Fund portfolio securities, and
no specific formula is used in placing such
business. Allocation is reviewed regularly by
both the Boards of Directors of the Funds and
Jones & Babson, Inc.

Since the Funds do not market their shares
through intermediary brokers or dealers, it is not
the Funds' practice to allocate brokerage or
principal business on the basis of sales of their
shares which may be made through such firms.
However, they may place portfolio orders with
qualified broker-dealers who recommend the
Funds to other clients, or who act as agent in the
purchase of the Funds' shares for their clients.

Research services furnished by broker-dealers
may be useful to the Funds' manager and its
investment counsel in serving other clients, as
well as the respective Funds. Conversely, the
Funds may benefit from research services
obtained by the manager or its investment
counsel from the placement of portfolio
brokerage of other clients.

When it appears to be in the best interest of
their shareholders, the Funds may join with
other clients of the manager and its investment
counsel in acquiring or disposing of a portfolio
holding. Securities acquired or proceeds
obtained will be equitably distributed among the
Funds and other clients participating in the
transaction. In some instances, this investment

2
<PAGE>

procedure may affect the price paid or received
by a Fund or the size of the position obtained by
a Fund.

INVESTMENT RESTRICTIONS

In addition to the investment objective and
portfolio management policies set forth in the
Prospectus under the caption "Investment
Objective and Portfolio Management Policies,"
the following restrictions also may not be
changed without approval of the "holders of a
majority of the outstanding shares" of the Fund.

The Buffalo Balanced Fund will not: (1)
purchase the securities of any one issuer, except
the United States government, if immediately
after and as a result of such purchase (a) the
value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value
of the Fund's total assets, or (b) the Fund owns
more than 10% of the outstanding voting
securities, or any other class of securities, of
such issuer; (2) engage in the purchase or sale of
real estate, commodities or futures contracts; (3)
underwrite the securities of other issuers; (4)
make loans to any of its officers, directors, or
employees, or to its manager, or general
distributor, or officers or directors thereof; (5)
make any loan (the purchase of a security
subject to a repurchase agreement or the
purchase of a portion of an issue of publicly
distributed debt securities is not considered the
making of a loan); (6) invest in companies for
the purpose of exercising control of
management; (7) purchase securities on margin,
or sell securities short, except that the Fund may
write covered call options; (8) purchase shares
of other investment companies except in the
open market at ordinary broker's commission or
pursuant to a plan of merger or consolidation;
(9) invest in the aggregate more than 5% of the
value of its gross assets in the securities of
issuers (other than federal, state, territorial, or
local governments, or corporations, or
authorities established thereby), which,
including predecessors, have not had at least
three years' continuous operations; (10) except
for transactions in its shares or other securities
through brokerage practices which are
considered normal and generally accepted under
circumstances existing at the time, enter into
dealings with its officers or directors, its
manager or underwriter, or their officers or
directors, or any organization in which such
persons have a financial interest; (11) purchase
or retain securities of any company in which any
Fund officers or directors, or Fund manager, its
partner, officer, or director beneficially owns
more than 1/2 of 1% of said company's
securities, if all such persons owning more than
1/2 of 1% of such company's securities, own in
the aggregate more than 5% of the outstanding
securities of such company; (12) borrow or
pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at
the lower of fair market value or cost)
temporarily for emergency or extraordinary
purposes, and not for the purpose of leveraging
its investments, and provided further that any
borrowing in excess of 5% of the total assets of
the Fund shall have asset coverage of at least 3
to 1; (13) make itself or its assets liable for the
indebtedness of others; (14) invest in securities
which are assessable or involve unlimited
liability; or (15) purchase any securities which
would cause 25% or more of the Fund's total
assets at the time of such purchase to be invested
in any one industry.

In addition to the fundamental investment
restrictions set out above, in order to comply
with the law or regulations of various States, the
Fund will not engage in the following practices:
(1) invest in securities of foreign issuers which
are not listed on a recognized domestic or
foreign securities exchange (the Fund does not
intend to invest directly in foreign securities;
this policy is not fundamental); (2) invest in
puts, calls, straddles, spreads, and any
combination thereof if by reason thereof the
value of its aggregate investment in such classes
of securities will exceed 5% of its total assets,
except that the Fund may write covered call
options in excess of this limitation; (3) invest in
oil, gas and other mineral leases or arbitrage
transactions; (4) purchase or sell real estate
(including limited partnership interests, but
excluding readily marketable interests in real
estate investment trusts or readily marketable
securities of companies which invest in real
estate); or (5) purchase securities, including
144(a) securities, which are not readily
marketable or of issuers which the company is
restricted from selling to the public without
registration under the securities Act of 1933, if

3
<PAGE>

by reason thereof more than 10% of its total
assets would be so invested.

Certain states also require that the Fund's
investments in warrants, valued at the lower of
cost or market, may not exceed 5% of the value
of the Fund's net assets. Included within that
amount, but not to exceed 2% of the value of the
Fund's net assets may be warrants which are not
listed on the New York or American Stock
Exchange. Warrants acquired by the Fund in
units or attached to securities may be deemed to
be without value for purposes of this limitation.
In addition, the Fund has undertaken to the state
of California to comply with the expense
limitations set forth in Rule 260.140.84(a) of
Title 10 of the California Administrative Code.

The Buffalo Equity Fund will not: (1)
purchase the securities of any one issuer, except
the United States government, if immediately
after and as a result of such purchase (a) the
value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value
of the Fund's total assets, or (b) the Fund owns
more than 10% of the outstanding voting
securities, or any other class of securities, of
such issuer; (2) engage in the purchase or sale of
real estate, commodities or futures contracts; (3)
underwrite the securities of other issuers; (4)
make loans to any of its officers, directors, or
employees, or to its manager, or general
distributor, or officers or directors thereof; (5)
make any loan (the purchase of a security
subject to a repurchase agreement or the
purchase of a portion of an issue of publicly
distributed debt securities is not considered the
making of a loan); (6) invest in companies for
the purpose of exercising control of
management; (7) purchase securities on margin,
or sell securities short, except that the Fund may
write covered call options; (8) purchase shares
of other investment companies except in the
open market at ordinary broker's commission or
pursuant to a plan of merger or consolidation;
(9) invest in the aggregate more than 5% of the
value of its gross assets in the securities of
issuers (other than federal, state, territorial, or
local governments, or corporations, or
authorities established thereby), which,
including predecessors, have not had at least
three years' continuous operations; (10) except
for transactions in its shares or other securities
through brokerage practices which are
considered normal and generally accepted under
circumstances existing at the time, enter into
dealings with its officers or directors, its
manager or underwriter, or their officers or
directors, or any organization in which such
persons have a financial interest; (11) purchase
or retain securities of any company in which any
Fund officers or directors, or Fund manager, its
partner, officer, or director beneficially owns
more than 1/2 of 1% of said company's
securities, if all such persons owning more than
1/2 of 1% of such company's securities, own in
the aggregate more than 5% of the outstanding
securities of such company; (12) borrow or
pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at
the lower of fair market value or cost)
temporarily for emergency or extraordinary
purposes, and not for the purpose of leveraging
its investments, and provided further that any
borrowing in excess of 5% of the total assets of
the Fund shall have asset coverage of at least 3
to 1; (13) make itself or its assets liable for the
indebtedness of others; (14) invest in securities
which are assessable or involve unlimited
liability; or (15) purchase any securities which
would cause 25% or more of the Fund's total
assets at the time of such purchase to be invested
in any one industry.

In addition to the fundamental investment
restrictions set out above, in order to comply
with the law or regulations of various States, the
Fund will not engage in the following practices:
(1) invest in securities of foreign issuers which
are not listed on a recognized domestic or
foreign securities exchange (the Fund does not
intend to invest directly in foreign securities or
foreign currencies but, may purchase foreign
securities through dollar-denominated American
Depository Receipts); (2) invest in puts, calls,
straddles, spreads, and any combination thereof
if by reason thereof the value of its aggregate
investment in such classes of securities will
exceed 5% of its total assets, except that the
Fund may write covered call options in excess of
this limitation; (3) invest in oil, gas and other
mineral leases or arbitrage transactions; (4)
purchase or sell real estate (including limited
partnership interests, but excluding readily
marketable interests in real estate investment
trusts or readily marketable securities of
companies which invest in real estate); or (5)
purchase securities, including 144(a) securities,

4
<PAGE>

which are not readily marketable or of issuers
which the company is restricted from selling to
the public without registration under the
securities Act of 1933, if by reason thereof nore
than 10% of its total assets would be so invested.
The Fund intends to limit calls to writing calls
issued by the Options Clearing Corporation.

The Buffalo High Yield Fund will not: (1)
purchase the securities of any one issuer, except
the United States government, if immediately
after and as a result of such purchase (a) the
value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value
of the Fund's total assets, or (b) the Fund owns
more than 10% of the outstanding voting
securities, or any other class of securities, of
such issuer; (2) engage in the purchase or sale of
real estate, commodities or futures contracts; (3)
underwrite the securities of other issuers; (4)
make loans to any of its officers, directors, or
employees, or to its manager, or general
distributor, or officers or directors thereof; (5)
make any loan (the purchase of a security
subject to a repurchase agreement or the
purchase of a portion of an issue of publicly
distributed debt securities is not considered the
making of a loan); (6) invest in companies for
the purpose of exercising control of
management; (7) purchase securities on margin,
or sell securities short, except that the Fund may
write covered call options; (8) purchase shares
of other investment companies except in the
open market at ordinary broker's commission or
pursuant to a plan of merger or consolidation;
(9) invest in the aggregate more than 5% of the
value of its gross assets in the securities of
issuers (other than federal, state, territorial, or
local governments, or corporations, or
authorities established thereby), which,
including predecessors, have not had at least
three years' continuous operations; (10) except
for transactions in its shares or other securities
through brokerage practices which are
considered normal and generally accepted under
circumstances existing at the time, enter into
dealings with its officers or directors, its
manager or underwriter, or their officers or
directors, or any organization in which such
persons have a financial interest; (11) purchase
or retain securities of any company in which any
Fund officers or directors, or Fund manager, its
partner, officer, or director beneficially owns
more than 1/2 of 1% of said company's
securities, if all such persons owning more than
1/2 of 1% of such company's securities, own in
the aggregate more than 5% of the outstanding
securities of such company; (12) borrow or
pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at
the lower of fair market value or cost)
temporarily for emergency or extraordinary
purposes, and not for the purpose of leveraging
its investments, and provided further that any
borrowing in excess of 5% of the total assets of
the Fund shall have asset coverage of at least 3
to 1; (13) make itself or its assets liable for the
indebtedness of others; (14) invest in securities
which are assessable or involve unlimited
liability; or (15) purchase any securities which
would cause 25% or more of the Fund's total
assets at the time of such purchase to be invested
in any one industry.

5
<PAGE>

estate investment trusts or readily marketable
securities of companies which invest in real
estate); or (5) purchase securities, including
144(a) securities which are not readily
marketable or, of issuers which the company is
restricted from selling to the public without
registration under the securities Act of 1933, if
by reason thereof more than 10% of its total
assets would be so invested.

The Buffalo USA Global Fund will not: (1)
purchase the securities of any one issuer, except
the United States government, if immediately
after and as a result of such purchase (a) the
value of the holdings of the Fund in the
securities of such issuer exceeds 5% of the value
of the Fund's total assets, or (b) the Fund owns
more than 10% of the outstanding voting
securities, or any other class of securities, of
such issuer; (2) engage in the purchase or sale of
real estate, commodities or futures contracts; (3)
underwrite the securities of other issuers; (4)
make loans to any of its officers, directors, or
employees, or to its manager, or general
distributor, or officers or directors thereof; (5)
make any loan (the purchase of a security
subject to a repurchase agreement or the
purchase of a portion of an issue of publicly
distributed debt securities is not considered the
making of a loan); (6) invest in companies for
the purpose of exercising control of
management; (7) purchase securities on margin,
or sell securities short, except that the Fund may
write covered call options; (8) purchase shares
of other investment companies except in the
open market at ordinary broker's commission or
pursuant to a plan of merger or consolidation;
(9) invest in the aggregate more than 5% of the
value of its gross assets in the securities of
issuers (other than federal, state, territorial, or
local governments, or corporations, or
authorities established thereby), which,
including predecessors, have not had at least
three years' continuous operations; (10) except
for transactions in its shares or other securities
through brokerage practices which are
considered normal and generally accepted under
circumstances existing at the time, enter into
dealings with its officers or directors, its
manager or underwriter, or their officers or
directors, or any organization in which such
persons have a financial interest; (11) purchase
or retain securities of any company in which any
Fund officers or directors, or Fund manager, its
partner, officer, or director beneficially owns
more than 1/2 of 1% of said company's
securities, if all such persons owning more than
1/2 of 1% of such company's securities, own in
the aggregate more than 5% of the outstanding
securities of such company; (12) borrow or
pledge its credit under normal circumstances,
except up to 10% of its gross assets (computed at
the lower of fair market value or cost)
temporarily for emergency or extraordinary
purposes, and not for the purpose of leveraging
its investments, and provided further that any
borrowing in excess of 5% of the total assets of
the Fund shall have asset coverage of at least 3
to 1; (13) make itself or its assets liable for the
indebtedness of others; (14) invest in securities
which are assessable or involve unlimited
liability; or (15) purchase any securities which
would cause 25% or more of the Fund's total
assets at the time of such purchase to be invested
in any one industry.

6
<PAGE>

partnership interests, but excluding readily
marketable interests in real estate investment
trusts or readily marketable securities of
companies which invest in real estate); or (5)
purchase securities, including 144(a) securities,
which are not readily marketable or of issuers
which the company is restricted from selling to
the public without registration under the
securities Act of 1933, if by reason thereof more
than 10% of its total assets would be so invested.
The Fund intends to limit calls to writing calls
issued by the Options Clearing Corporation.

PERFORMANCE MEASURERS

From time to time, the Buffalo Balanced Fund
or the Buffalo High Yield Fund may quote its
yield in advertisements, shareholder reports or
other communications to shareholders. Yield is
calculated according to the following SEC
standardized formula.

Current yield reflects the income per share
earned by a Fund's investments.

Current yield is determined by dividing the
net investment income per share earned during a
30-day base period by the maximum offering
price per share on the last day of the period and
annualizing the result. Expenses accrued for the
period include any fees charged to all
shareholders during the base period.

The SEC standardized yield formula is as
follows:

Yield = 2[(a-b+1)-1]
cd

Where: a = dividends and interest
earned during the period
b = expenses accrued for the
period (net of
reimbursements)
c = the average daily number
of shares outstanding
during the period that
were entitled to receive
income distributions
d = the maximum offering
price per share on the last
day of the period.

TOTAL RETURN

Each of the Buffalo Fund's "average annual
total return" figures will be computed according
to a formula prescribed by the Securities and
Exchange Commission. The formula can be
expressed as follows:

P(1+T)n = ERV

Where: P = a hypothetical initial
payment of $1000
T = average annual total
return
n = number of years
ERV = Ending Redeemable
Value of a
hypothetical $1000
payment made at the
beginning of the 1, 5
or 10 year (or other)
periods at the end of
the 1, 5, or 10 year
(or other) periods (or
fractional portions
thereof).

The tables below show the average total return
for each of the Funds for the specified periods:

BALANCED EQUITY
FUND FUND -
For the one year
4/1/95-3/31/96 20.68% n/a

From commencement
of operations to 3/31/96* 12.53% 29.11%
_____________________________________

7
<PAGE>

* Buffalo Balanced Fund commenced
operation on August 12, 1994, and Buffalo
Equity Fund commenced operation on
May 19, 1995.

HIGH YIELD GLOBAL-
FUND FUND
For the one year
4/1/95-3/31/96 n/a n/a

From commencement
of operations to 3/31/96* 18.45% 27.01%
_____________________________________

* Buffalo High Yield Fund commenced
operation on May 19, 1995, and Buffalo
USA Global Fund commenced operation on
May 19, 1995.

HOW THE FUNDS' SHARES
ARE DISTRIBUTED

Jones & Babson, Inc., as agent of the Funds,
agrees to supply its best efforts as sole
distributor of the Funds' shares and, at its own
expense, pay all sales and distribution expenses
in connection with their offering other than
registration fees and other government charges.

Jones & Babson, Inc. does not receive any fee
or other compensation under the distribution
agreements with the Buffalo Funds, which
continues in effect until October 31, 1996, and
which will continue automatically for successive
annual periods ending each October 31, if
continued at least annually by the Funds' Boards
of Directors, including a majority of those
Directors who are not parties to such
Agreements or interested persons of any such
party. It terminates automatically if assigned by
either party or upon 60 days written notice by
either party to the other.

Jones & Babson, Inc. also acts as sole
distributor of the shares of David L. Babson
Growth Fund, Inc., D. L. Babson Bond Trust,
D. L. Babson Money Market Fund, Inc., D. L.
Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund
II, Inc., Babson Value Fund, Inc., Shadow Stock
Fund, Inc., Babson-Stewart Ivory International
Fund, Inc., Scout Stock Fund, Inc., Scout Bond
Fund, Inc., Scout Money Market Fund, Inc.,
Scout Tax-Free Money Market Fund, Inc., Scout
Regional Fund, Inc., Scout WorldWide Fund,
Inc. and Scout Balanced Fund, Inc.

HOW SHARE PURCHASES
ARE HANDLED

Each order accepted will be fully invested in
whole and fractional shares, unless the purchase
of a certain number of whole shares is specified,
at the net asset value per share next effective
after an order is accepted by the Fund.

Each investment is confirmed by a year-to-
date statement which provides the details of the
immediate transaction, plus all prior
transactions in your account during the current
year. This includes the dollar amount invested,
the number of shares purchased or redeemed,
the price per share, and the aggregate shares
owned. A transcript of all activity in your
account during the previous year will be
furnished each January. By retaining each
annual summary and the last year-to-date
statement, you have a complete detailed history
of your account which provides necessary tax
information. A duplicate copy of a past annual
statement is available from Jones & Babson, Inc.
at its cost, subject to a minimum charge of $5
per account, per year requested.

Normally, the shares which you purchase are
held by the Fund in open account, thereby
relieving you of the responsibility of providing
for the safekeeping of a negotiable share
certificate. Should you have a special need for a
certificate, one will be issued on request for all
or a portion of the whole shares in your account.
There is no charge for the first certificate issued.
A charge of $3.50 will be made for any
replacement certificates issued. In order to
protect the interests of the other shareholders,
share certificates will be sent to those
shareholders who request them only after the
Fund has determined that unconditional
payment for the shares represented by the
certificate has been received by its custodian,
UMB Bank, n.a.

If an order to purchase shares must be
canceled due to non-payment, the purchaser will
be responsible for any loss incurred by the Fund
arising out of such cancellation. To recover any
such loss, the Fund reserves the right to redeem

8
<PAGE>

shares owned by any purchaser whose order is
canceled, and such purchaser may be prohibited
or restricted in the manner of placing further
orders.

Each Fund reserves the right in its sole
discretion to withdraw all or any part of the
offering made by the prospectus or to reject
purchase orders when, in the judgment of
management, such withdrawal or rejection is in
the best interest of the Fund and its
shareholders. Each Fund also reserves the right
at any time to waive or increase the minimum
requirements applicable to initial or subsequent
investments with respect to any person or class
of persons, which include shareholders of the
Fund's special investment programs.

REDEMPTION OF SHARES

The right of redemption may be suspended, or
the date of payment postponed beyond the
normal three-day period by the Funds' Boards of
Directors under the following conditions
authorized by the Investment Company Act of
1940: (1) for any period (a) during which the
New York Stock Exchange is closed, other than
customary weekend and holiday closing, or (b)
during which trading on the New York Stock
Exchange is restricted; (2) for any period during
which an emergency exists as a result of which
(a) disposal by the Fund of securities owned by it
is not reasonably practicable, or (b) it is not
reasonably practicable for the Fund to determine
the fair value of its net assets; or (3) for such
other periods as the Securities and Exchange
Commission may by order permit for the
protection of the Fund's shareholders.

The Funds have elected to be governed by
Rule 18f-1 under the Investment Company Act
of 1940 pursuant to which the Funds are
obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the Fund's net
asset value during any 90-day period for any one
shareholder. Should redemptions by any
shareholder exceed such limitation, a Fund may
redeem the excess in kind. If shares are
redeemed in kind, the redeeming shareholder
may incur brokerage costs in converting the
assets to cash. The method of valuing securities
used to make redemptions in kind will be the
same as the method of valuing portfolio
securities described under "How Share Price is
Determined" in the Prospectus, and such
valuation will be made as of the same time the
redemption price is determined.

SIGNATURE GUARANTEES

Signature guarantees normally reduce the
possibility of forgery and are required in
connection with each redemption method to
protect shareholders from loss. Signature
guarantees are required in connection with all
redemptions by mail or changes in share
registration, except as provided in the
Prospectus.

Signature guarantees must appear together
with the signature(s) of the registered owner(s),
on:

(1) a written request for redemption;

(2) a separate instrument of assignment,
which should specify the total number
of shares to be redeemed (this "stock
power" may be obtained from the Fund
or from most banks or stock brokers);
or

(3) all stock certificates tendered for
redemption.

MANAGEMENT AND
INVESTMENT COUNSEL

As a part of the Management Agreements
between Jones & Babson, Inc., and Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc. and Buffalo USA
Global Fund, Inc., Jones & Babson, Inc.
employs at its own expense Kornitzer Capital
Management, Inc., as its investment counsel.

Kornitzer Capital Management, Inc., was
founded in 1989. It is a private investment
research and counseling organization serving
individual, corporate and other institutional
clients.

The aggregate management fee paid to Jones
& Babson, Inc. by Buffalo Balanced Fund
during the most recent fiscal year ended March
31, 1996, from which Jones & Babson, Inc. paid
all the Fund's expenses except those payable
directly by the Fund, was $446,385. The

9
<PAGE>

1% annual fee charged by Jones & Babson, Inc.
covers all normal operating costs of the Fund.

The aggregate management fee paid to Jones
& Babson, Inc. by Buffalo Equity Fund during
the most recent fiscal year ended March 31,
1996, from which Jones & Babson, Inc. paid all
the Fund's expenses except those payable
directly by the Fund, was $29,668. The 1%
annual fee charged by Jones & Babson, Inc.
covers all normal operating costs of the Fund.

The aggregate management fee paid to Jones
& Babson, Inc. by Buffalo High Yield Fund
during the most recent fiscal year ended March
31, 1996, from which Jones & Babson, Inc. paid
all the Fund's expenses except those payable
directly by the Fund, was $37,196. The 1%
annual fee charged by Jones & Babson, Inc.
covers all normal operating costs of the Fund.

The aggregate management fees paid to Jones
& Babson, Inc. by Buffalo USA Global Fund
during the most recent fiscal year ended March
31, 1996, from which Jones & Babson, Inc. paid
all the Fund's expenses except those payable
directly by the Fund, was $25,935. The 1%
annual fee charged by Jones & Babson, Inc.
covers all normal operating costs of the Fund.

For its investment supervisory services and
counsel in connection with Buffalo Balanced
Fund, Buffalo Equity Fund, Buffalo High Yield
Fund and Buffalo USA Global Fund, Jones &
Babson, Inc. pays Kornitzer Capital
Management, Inc., a fee computed on an annual
basis at the rate of .50% of the average daily
total net assets of each of these Funds.

During the most recent fiscal year ended
March 31, 1996, Jones & Babson, Inc. paid
Kornitzer Capital Management, Inc., fees in
connection with Buffalo Balanced Fund
$223,192.

During the most recent fiscal year ended
March 31, 1996, Jones & Babson, Inc. paid
Kornitzer Capital Management, Inc.,. fees in
connection with Buffalo Equity Fund $14,866.

During the most recent fiscal year ended
March 31, 1996, Jones & Babson, Inc. paid
Kornitzer Capital Management, Inc., fees in
connection with Buffalo High Yield Fund
$18,630.

During the most recent fiscal year ended
March 31, 1996, Jones & Babson, Inc. paid
Kornitzer Capital Management, Inc., fees in
connection with Buffalo USA Global Fund
$12,999.

Kornitzer Capital Management, Inc., has an
experienced investment analysis and research
staff which eliminates the need for Jones &
Babson, Inc. and the Funds to maintain an
extensive duplicate staff, with the consequent
increase in the cost of investment advisory
service. The cost of the services of Kornitzer
Capital Management, Inc. is included in the fee
of Jones & Babson, Inc.

HOW SHARE PRICE
IS DETERMINED

The net asset value per share of each of the
Fund's portfolio is computed once daily, Monday
through Friday, at the specific time during the
day that the Boards of Directors of the Funds
sets at least annually, except on days on which
changes in the value of a Fund's portfolio
securities will not materially affect the net asset
value, or days during which no security is
tendered for redemption and no order to
purchase or sell such security is received by a
Fund, or the following holidays:

New Year's Day January 1
Presidents' Holiday Third Monday
in February
Good Friday Friday before Easter
Memorial Day Last Monday
in May
Independence Day July 4
Labor Day First Monday
in September
Thanksgiving Day Fourth Thursday
in November
Christmas Day December 25

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OFFICERS AND DIRECTORS

The Funds are managed by Jones & Babson,
Inc. subject to the supervision and control of the
Board of Directors. The following table lists the
Officers and Directors of the Funds. Unless
noted otherwise, the address of each Officer and
Director is 2440 Pershing Road, Suite G-15,
Kansas City, Missouri 64108. Except as
indicated, each has been an employee of Jones &
Babson, Inc. for more than five years.

* Larry D. Armel, President and Director.
President and Director, Jones & Babson,
Inc.; David L. Babson Growth Fund, Inc.,
D. L. Babson Money Market Fund, Inc., D.L.
Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise
Fund II, Inc. Babson Value Fund, Inc.,
Shadow Stock Fund, Inc., Babson-Stewart
Ivory International Fund, Inc.; Buffalo
Balanced Fund, Inc., Buffalo High Yield
Fund, Inc., Buffalo USA Global Fund, Inc.,
Buffalo Equity Fund, Inc.; Scout Stock Fund,
Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund,
Inc., Scout WorldWide Fund, Inc.; President
and Trustee, D. L. Babson Bond Trust.

* Kent W. Gasaway, Director.
Senior Vice President, Kornitzer Capital
Management, Inc., KCM Building, Shawnee
Mission, Kansas 66201. Formerly Assistant
Vice President, Waddell & Reed, Inc., 6300
Lamar Avenue, Shawnee Mission, Kansas
66202; Director, Buffalo Balanced Fund,
Inc., Buffalo Equity Fund, Inc., Buffalo High
Yield Fund, Inc., Buffalo USA Global Fund,
Inc., Buffalo Equity Fund, Inc.

Thomas S. Case, Director.
3485 Paydirt Dr., Placerville, California
95667. Formerly President and Chief
Executive Officer, the Frankona American
Companies, 2405 Grant Blvd., Suite 900,
Kansas City, Missouri 64108; Director,
Buffalo Balanced Fund, Inc., Buffalo Equity

Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc.

* Stephen S. Soden, Director.
President, BMA Financial Services, BMA
Tower, One Penn Valley Park, Kansas City,
Missouri, 64141, Chairman and Director,
Jones & Babson, Inc.; Director, Buffalo
Balanced Fund, Inc., Buffalo Equity Fund,
Inc., Buffalo High Yield Fund, Inc., Buffalo
USA Global Fund, Inc.

Francis C. Rood, Director.
Retired, 6429 West 92nd Street, Overland
Park, Kansas 66212. Formerly, Group Vice
President-Administration, Hallmark Cards,
Inc.; Director, David L. Babson Growth
Fund, Inc., D. L. Babson Money Market
Fund, Inc., D. L. Babson Tax-Free Income
Fund, Inc., Babson Enterprise Fund, Inc.,
Babson Enterprise Fund II, Inc., Babson
Value Fund, Inc., Shadow Stock Fund, Inc.;
Buffalo Balanced Fund, Inc., Buffalo Equity
Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc., Trustee,
D.L. Babson Bond Trust.

William H. Russell, Director.
Financial consultant, 645 West 67th Street,
Kansas City, Missouri 64113; Director,
David L. Babson Growth Fund, Inc., D. L.
Babson Money Market Fund, Inc., D. L.
Babson Tax-Free Income Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise
Fund II, Inc., Babson Value Fund, Inc.,
Shadow Stock Fund, Inc. and Babson-
Stewart Ivory International Fund, Inc.;
Buffalo Balanced Fund, Inc., Buffalo Equity
Fund, Inc., Buffalo High Yield Fund, Inc.,
Buffalo USA Global Fund, Inc., Trustee, D.
L. Babson Bond Trust.

_______________________________________

* Directors who are interested persons as
that term is defined in the Investment
Company Act of 1940, as amended

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<PAGE>

H. David Rybolt, Director.
Consultant, HDR Associates, P.O. Box 2468,
Shawnee Mission, Kansas 66202; Director,
David L. Babson Growth Fund, Inc., D. L.
Babson Money Market Fund, Inc., D. L. Babson
Tax-Free Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II, Inc.,
Babson Value Fund, Inc., Shadow Stock Fund,
Inc.; Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.; Trustee,
D. L. Babson Bond Trust.

P. Bradley Adams, Vice President and
Treasurer.
Vice President and Treasurer, Jones & Babson,
Inc.; David L. Babson Growth Fund, Inc., D. L.
Babson Money Market Fund, Inc., D. L. Babson
Tax-Free Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II, Inc.,
Babson Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International Fund,
Inc., D. L. Babson Bond Trust; Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc.; Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo
High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.

Michael A. Brummel, Vice President,
Assistant Secretary and Assistant Treasurer.
Vice President, Assistant Secretary and
Assistant Treasurer, Jones & Babson, Inc.;
David L. Babson Growth Fund, Inc., D. L.
Babson Money Market Fund, Inc., D. L. Babson
Tax-Free Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II, Inc.,
Babson Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International Fund,
Inc., D. L. Babson Bond Trust; Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc.; Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo
High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.

Martin A. Cramer, Vice President and
Secretary.
Vice President and Secretary, Jones & Babson,
Inc.; David L. Babson Growth Fund, Inc., D..L.
Babson Money Market Fund, Inc., D. L. Babson
Tax-Free Income Fund, Inc., Babson Enterprise
Fund, Inc., Babson Enterprise Fund II, Inc.,
Babson Value Fund, Inc., Shadow Stock Fund,
Inc., Babson-Stewart Ivory International Fund,
Inc., D. L. Babson Bond Trust; Scout Stock
Fund, Inc., Scout Bond Fund, Inc., Scout Money
Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc.,
Scout WorldWide Fund, Inc.; Buffalo Balanced
Fund, Inc., Buffalo Equity Fund, Inc., Buffalo
High Yield Fund, Inc., Buffalo USA Global
Fund, Inc.

John G. Dyer, Vice President.
Vice President, Scout Stock Fund, Inc., Scout
Bond Fund, Inc., Scout Money Market Fund,
Inc., Scout Tax-Free Money Market Fund, Inc.,
Scout Regional Fund, Inc., Scout WorldWide
Fund, Inc.; Buffalo Balanced Fund, Inc., Buffalo
Equity Fund, Inc., Buffalo High Yield Fund,
Inc., Buffalo USA Global Fund, Inc.

None of the officers or directors will be
remunerated by the Funds for their normal
duties and services. Their compensation and
expenses arising out of normal operations will
be paid by Jones & Babson, Inc. under the
provisions of the Management Agreement.

Messrs. Case, Rood, Russell and Rybolt have
no financial interest in, nor are they affiliated
with, either Jones & Babson, Inc. or Kornitzer
Capital Management, Inc.

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<PAGE>

The Audit Committee of the Board of
Directors is composed of Messrs. Case, Rood,
Russell and Rybolt.

The Officers and Directors of each of the
Funds as a group own less than 1% of each of
the respective Funds.

COMPENSATION TABLE

Pension or Estimated Total
Aggregate Retirement Annual Compensation
Name of Compensation Benefits Accrued Benefits From All Scout
Director From each As Part of Fund Upon Funds Paid to
Fund Expenses Retirement Directors**
______________ ____________ ________________ __________ _____________
Larry D. Armel* -- -- -- --
Kent W. Gasaway* -- -- -- --
Thomas S. Case $5,250 -- -- $5,250
Stephen S. Soden* -- -- -- --
Francis C. Rood $2,000 -- -- $2,000
William H. Russell $2,000 -- -- $2,000
H. David Rybolt $2,000 -- -- $2,000

* As interested directors, Messrs. Armel, Gasaway and Soden receive
no compensation for their services as directors.

** The amounts reported in this column reflect the total compensation paid to
each director for his services as a director of four Buffalo Funds during the
fiscal year ended March 31, 1996. Directors fees are paid by the Funds'
manager and not by the Funds themselves.

The Funds will not hold annual meetings except as
required by the Investment Company Act of 1940
and other applicable laws. The Funds are Maryland
corporations. Under Maryland law, a special meeting
of stockholders of a Fund must be held if the Fund
receives the written request for a meeting from the
stockholders entitled to cast at least 25 percent of all
the votes entitled to be cast at the meeting. The
Funds have undertaken that their Directors will call
a meeting of stockholders if such a meeting is
requested in writing by the holders of not less than
10% of the outstanding shares of the Fund. To the
extent required by the undertaking, each Fund will
assist shareholder communications in such matters.

CUSTODIAN

The Funds' portfolio assets are held for safe-
keeping by an independent custodian, UMB Bank,
n.a. This means the bank, rather than the Fund, has
possession of the Funds' cash and securities. The
custodian bank is not responsible for the Funds'
investment management or administration. But, as
directed by the Fund's officers, it delivers cash to
those who have sold securities to a Fund in return for
such securities, and to those who have purchased
portfolio securities from a Fund, it delivers such
securities in return for their cash purchase price. It
also collects income directly from issuers of
securities owned by a Fund and holds this for
payment to shareholders after deduction of a Fund's
expenses. The custodian is compensated for its
services by the manager. There is no charge to the
Funds.

INDEPENDENT AUDITORS

The Funds' financial statements are audited
annually by independent auditors approved by the
directors each year, and in years in which an annual
meeting is held the directors may submit their
selection of independent auditors to the shareholders
for ratification. Ernst & Young, LLP, One Kansas
City Place, 1200 Main Street, Suite 2000, Kansas
City, Missouri 64105, is the present independent
auditor for the Funds.

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<PAGE>

Reports to shareholders will be published at least
semiannually.

OTHER JONES & BABSON FUNDS

Jones & Babson, Inc. also sponsors and manages
nine no-load funds comprising the Babson Mutual
Fund Group managed by Jones & Babson, Inc. in
association with David L. Babson & Co. Inc. They
are: David L. Babson Growth Fund, Inc., Babson
Enterprise Fund, Inc., Babson Enterprise Fund II,
Inc., Shadow Stock Fund, Inc., Babson-Stewart Ivory
International Fund, Inc., Babson Value Fund, Inc.,
D. L. Babson Bond Trust, D. L. Babson Money
Market Fund, Inc. and D. L. Babson Tax-Free
Income Fund, Inc.

Jones & Babson, Inc. also sponsors and manages
seven mutual funds which especially seek to provide
services to customers of affiliate banks of UMB
Financial Corporation (UMB). They are: Scout
Stock Fund, Inc., Scout Bond Fund, Inc., Scout
Money Market Fund, Inc., Scout Tax-Free Money
Market Fund, Inc., Scout Regional Fund, Inc., Scout
WorldWide Fund, Inc. and Scout Balanced Fund,
Inc.

A prospectus for any of the Funds may be obtained
from Jones & Babson, Inc., 2440 Pershing Road,
Suite G-15, Kansas City, Missouri 64108.

DESCRIPTION OF COMMERCIAL
PAPER RATINGS

Moody's . . . Moody's commercial paper rating is an
opinion of the ability of an issuer to repay punctually
promissory obligations not having an original
maturity in excess of nine months. Moody's has one
rating - prime. Every such prime rating means
Moody's believes that the commercial paper note will
be redeemed as agreed. Within this single rating
category are the following classifications:

Prime - 1 Highest Quality
Prime - 2 Higher Quality
Prime - 3 High Quality

The criteria used by Moody's for rating a
commercial paper issuer under this graded system
include, but are not limited to the following factors:

(1) evaluation of the management of the issuer;

(2) economic evaluation of the issuer's industry
or industries and an appraisal of speculative
type risks which may be inherent in certain
areas;

(3) evaluation of the issuer's products in
relation to competition and customer
acceptance;

(4) liquidity;

(5) amount and quality of long-term debt;

(6) trend of earnings over a period of ten years;

(7) financial strength of a parent company and
relationships which exist with the issue; and

(8) recognition by the management of obliga-
tions which may be present or may arise as
a result of public interest questions and
preparations to meet such obligations.

S&P . . . Standard & Poor's commercial paper rating
is a current assessment of the likelihood of timely
repayment of debt having an original maturity of no
more than 270 days. Ratings are graded into four
categories, ranging from "A" for the highest quality
obligations to "D" for the lowest. The four
categories are as follows:

"A" Issues assigned this highest rating are
regarded as having the greatest capacity for
timely payment. Issues in this category are
further refined with the designations 1, 2,
and 3 to indicate the relative degree of
safety.

"A-1" This designation indicates that the degree of
safety regarding timely payment is very
strong.

"A-2" Capacity for timely payment on issues with
this designation is strong. However, the
relative degree of safety is not as
overwhelming.

"A-3" Issues carrying this designation have a
satisfactory capacity for timely payment.
They are, however, somewhat more

14
<PAGE>

vulnerable to the adverse effects of changes
in circumstances than obligations carrying
the higher designations.

"B" Issues rated "B" are regarded as having only
an adequate capacity for timely payment.
Furthermore, such capacity may be
damaged by changing conditions or short-
term adversities.

"C" This rating is assigned to short-term debt
obligations with a doubtful capacity for
payment.

"D" This rating indicates that the issuer is either
in default or is expected to be in default
upon maturity.

FINANCIAL STATEMENTS

The audited financial statements of Buffalo
Balanced Fund, Inc., Buffalo Equity Fund, Inc.,
Buffalo High Yield Fund, Inc. and Buffalo USA
Global Fund, Inc. which are contained in the March
31, 1996, Annual Report to Shareholders, are
incorporated herein by reference.

15
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