BUFFALO
FUNDS
Balanced Fund
Equity Fund
High Yield Fund
USA Global Fund
SEMIANNUAL REPORT
September 30, 1997
MESSSAGE
To Our Shareholders
We are pleased to bring you the Buffalo Funds' semiannual report for the
six months ended September 30, 1997. Since publication of our annual
report earlier in the year, the market has generally been very positive,
although investor confidence has been somewhat strained by fears that
inflation might worsen and that the long-standing bull market might come
to an end. Relative performance for the Buffalo Funds has been
quite favorable, and will be discussed in detail in the Portfolio
Management Review which follows. The Funds continue to grow, and the
group has added over 2,900 shareholder accounts and $57 million of total
assets since March 31, 1997.
In our March 1997 annual report we included a Portfolio Management
Review section to allow the Funds' investment counsel, Kornitzer Capital
Management, Inc., to
discuss various items of interest to Fund shareholders. A similar
section is included in this semiannual report, and will be included in
shareholder reports in the future.
We welcome new shareholders since the last report. Please let us know if
you have any questions or comments about your investment, or if we can
be of further assistance with your financial and investment needs.
Sincerely,
/s/Larry D. Armel
Larry D. Armel
President
PICTURE - Left to right: Kent Gasaway, John Kornitzer and Tom Laming.
Portfolio Management Review
We hope all of you had the opportunity to read the March 31, 1997 annual
report. We recommend that new Buffalo shareholders call and ask for a
copy. At that time, we at Kornitzer Capital Management, Inc. (KCM) set
forth our long-term goals as investment counsel of the Buffalo Funds.
Also, we spent a good deal of time describing our investment
philosophies as well as our unique equity and fixed income strategies.
In this semiannual report we will share more information about our
investment staff and how our research and portfolio management process
works. We feel it is important that you get to know our names, faces and
our backgrounds. As always, we will discuss each of the Buffalo Funds in
detail, including our latest strategies, noteworthy holdings and a
performance update.
We are happy to announce that at the end of August the Buffalo Balanced
Fund received a 4-star performance rating from Morningstar, Inc.
Morningstar is a highly regarded mutual fund evaluation firm which rates
funds (on a 1 through 5 star system) after a minimum of three years of
existence. We our particularly proud of receiving a favorable three-year
rating from Morningstar because they measure and rate funds on both
performance and risk. Buffalo Balanced scored comparatively well on
Morningstar's proprietary risk statistics which evaluate the Fund's
downside volatility relative to that of others in its class. We have
made it a priority to pay close attention to the risk profile of all the
Funds. This fits our investment philosophy that the compounding of
consistent returns over time is the key to above average performance. We
look forward to the spring of 1998 when the other three Buffalo Funds
will be eligible for three-year ratings.
Morningstar's proprietary ratings reflect historical risk-adjusted
performance and are subject to change every month. Ratings are
calculated from the fund's three-, five-, and ten-year average annual
total return (based upon available track records) in excess of 90-day
Treasury bill returns. The top 10% of funds in an investment category
receive 5 stars; the next 22.5% receive 4 stars; the next 36% receive 3
stars; the next 22.5% receive 2 stars; and the next 10% receive 1 star.
As of 9/30/97 there were 2,143 domestic equity funds in the rating
universe for the three-year period.
As was mentioned in the annual report, KCM has a unique breakdown of
responsibilities in managing the Buffalo Funds. Each professional has a
different background, having researched or worked in various industries
over time. Based on their area of expertise each individual is
responsible for closely covering certain industries and is empowered to
recommend the purchase/sale of both stocks and bonds in those industries
for the Buffalo Funds. Each Buffalo Fund has a lead manager whose job is
to both contribute research to the team and execute trades and allocate
recommendations to the proper Fund. In greater detail, individual
backgrounds and responsibilities to the Funds break down as
follows:
John Kornitzer - John is President, founder and Chief Investment
Officer of KCM. John created both the "Buffalo" name and the USA Global
investment concept. John's investment career spans some 35 years and
includes experience in the bear markets of 1969-70 and 1973-74. John
shaped the firm's basic investment philosophies and acts as a research
generalist having covered the broadest range of industries over his
career.
Kent Gasaway - Kent is Senior Vice President of KCM and acts as lead
manager for both the Buffalo Balanced and High Yield Funds. Kent has
over 15 years of stock and bond research and portfolio management
experience. Kent's major industry responsibilities include Oil & Gas,
Metals, Autos, Capital Goods, Paper and Healthcare Services.
Tom Laming - Tom is Senior Vice President of KCM and acts as lead
manager for both the Buffalo Equity and USA Global Funds. Tom was
instrumental in creating the firm's proprietary equity screening
discipline. Tom's areas of industry expertise include Technology,
Airlines, Chemicals, Railroads, Food & Beverage and Pollution Control.
Robert Male - Bob is Vice President of KCM and has over 10 years of
stock and bond research experience. Bob's major industry
responsibilities include Retail, Banks, Insurance, Telecommunications,
Household Products and Gaming.
Rich Rosenthal - Rich is a Senior Research Analyst at KCM. Rich's areas
of industry expertise include Aerospace, Defense, Technology, Drugs,
Biotech and Medical Supplies.
Stock selection by the research team is assisted by a proprietary
screening process which helps identify attractive companies in both the
growth and value categories. However, the final decision to purchase any
security (stock or bond) is based on rigorous fundamental research of
the company. This includes detailed analysis and modeling of company
financial statements and often includes visiting with company
management. KCM anticipates there will be further additions to the
research team over the next year and will familiarize Buffalo
shareholders with new names and responsibilities as they come on board.
The following is a snapshot and comment on how each of the Buffalo
Fund's have performed over the past six and twelve months and since
inception. Please note that some of the individual stock and bonds
mentioned in these reports may have already been sold and therefore
should not be taken as recommendations.
Buffalo Balanced Fund
Buffalo Balanced Fund generated total returns (price change and
reinvested distributions) of 18.59% and 23.89% for the six months and
year ended September 30, 1997. Since inception (August 12, 1994) the
Fund has produced an average annualized return of 16.82%. The Lipper
Balanced Fund Index registered returns of 17.82%, 24.92% and 17.41%, for
the respective periods.
Performance data contained in this report is for past periods only.
Past performance is not predictive of future performance. Investment
return and share value will fluctuate, and redemption value may be more
or less than original cost.
Investment Results - Total Return
Six Months One Since
Ended Year Inception
9/30/97 9/30/97 8/12/94
BUFFALO BALANCED FUND 18.59% 23.89% 16.82%
Lipper Balanced
Fund Index 17.82% 24.92% 17.41%
The Fund's six month performance gained from a favorable environment for
stocks, high yield bonds and convertible securities. Leading stock
performers for the Fund included Federal Express, Southwest Airlines,
Cummins Engine and Diebold. Leading convertible securities included
companies such as McDermott International, Rentway, National
Semiconductor and Bay Networks. The Fund's asset allocation changed very
little over the past six months with the exception of the cash position
which fell from nearly 11% to 4%.
The research team continued to uncover exciting new ideas in all asset
categories over the past six months. New stock holdings include names
such as Texas Industries - a leading producer of cement and structural
steel which we believe will benefit from a coming surge in commercial
construction, and Chase Manhattan Corp. - which we believe is the most
attractive large bank in the country. New corporate bond and convertible
security holdings include names such as Loral Space & Communications -
a leading satellite manufacturer and information services provider and
Callon Petroleum and Wiser Oil - two underfollowed oil and gas
exploration companies.
Buffalo Equity Fund
Buffalo Equity Fund generated total returns (price change and reinvested
distributions) of 29.85% and 38.67% for the six months and year ended
September 30, 1997. Since inception (May 19, 1995) the Fund has produced
an average annualized return of 34.89%. The Lipper Capital Appreciation
Fund Index registered returns of 28.67%, 25.12% and 24.25%, for the
respective periods.
Investment Results - Total Return
Six Months One Since
Ended Year Inception
9/30/97 9/30/97 5/19/95
BUFFALO EQUITY FUND 29.85% 38.67% 34.89%
Lipper Capital Appreciation
Fund Index 28.67% 25.12% 24.25%
The Fund profited from strong performances during the past six months by
stocks such as Federal Express, AMP, National Semiconductor, CompUSA,
Pfizer and Schlumberger. The Fund made no dramatic changes in industry
weightings during the period. The Fund's greatest industry emphasis
continues to be in capital goods (21%), technology (18%) and energy (14%).
With the economy on a steady course and the market at lofty levels, we
believe there are fewer opportunities to find entire industries out of favor
and undervalued. At present we are focusing less on industry weightings and
more on individual stockpicking.
Recent new stock ideas include names such
as Sundstrand - a beneficiary of the strong upturn in commercial aerospace,
Eaton - a leading parts supplier to the surging U.S. heavy truck market,
Diebold - the world's leading supplier of automated teller machines to a
consolidating banking industry, and Enron - a worldwide energy firm which
may be a large beneficiary of the coming electric utility deregulation in
the U.S.
Buffalo High Yield Fund
Buffalo High Yield Fund generated total returns (price change and
reinvested distributions) of 14.18% and 21.38% for the six months and
year ended September 30, 1997. Since inception (May 19, 1995) the Fund
produced an average annualized return of 19.29%. The Lipper High Current
Yield Fund Index produced returns of 10.82%, 14.96% and 13.12%, for the
respective
periods.
Investment Results - Total Return
Six Months One Since
Ended Year Inception
9/30/97 9/30/97 5/19/95
BUFFALO HIGH YIELD FUND 14.18% 21.38% 19.29%
Lipper High Current Yield
Fund Index 10.82% 14.96% 13.12%
The Fund's performance over the past six months was benefit-
ed by investors continued hunger for high current income. Large inflows
of cash into the high yield mutual fund sector combined with purchases
by non-traditional buyers - such as investment grade and foreign
institutions - caused yield spreads to tighten. Strong performers for
the Fund included many of the same names highlighted in the Balanced Fund.
Other outperforming convertible issues included K mart, Swift Energy, VLSI
Technology and ICO.
Over the past six months the Fund shifted some 5% of
assets from corporate bonds to convertible securities, reflecting the lower
yields and lower quality of new issue corporate bonds. The research team
continued to find good values in high yield convertible securities.
Recent purchases in the technology sector included Intevac and HMT
Technology - two high quality suppliers to the computer disk drive
industry. Proprietary research is the key to finding smaller company
securities such as these. Both companies are only sparsely covered by
Wall Street.
Buffalo USA Global Fund
Buffalo USA Global Fund generated total returns (price change and
reinvested distributions) of 24.91% and 35.50% for the six months and
year ended September 30, 1997. Since inception (May 19, 1995) the Fund
has produced an annualized return of 31.28%. The Lipper Capital
Appreciation Fund Index registered returns of 28.67%, 25.12% and 24.25%,
for the respective
periods.
Investment Results - Total Return
Six Months One Since
Ended Year Inception
9/30/97 9/30/97 5/19/95
BUFFALO USA GLOBAL FUND 24.91% 35.50% 31.28%
Lipper Capital Appreciation
Fund Index 28.67% 25.12% 24.25%
Reflecting the Fund's emphasis on U.S. companies with high international
sales exposure (minimum 40% of total sales), the Fund benefited during
the period from the higher than average growth prospects of it's
holdings. This return was achieved in the face of a strong rise in the
U.S. dollar versus the currencies of most major trading partners. A
strong dollar can cause U.S. exports of goods and services to be higher
priced to foreign buyers and can result in lower translated sales and
earnings from foreign based operations of U.S. companies. Despite these
formidable hurdles the Fund's holdings performed well. This performance
gives us confidence that leading U.S. multinational companies are
working diligently to preserve their position as worldwide low cost
producers - regardless of the relative value of the U.S. dollar.
During the period the Fund maintained it's emphasis on the capital
goods, consumer non-durable and technology sectors. However, in an
effort to reduce risk in a lofty market, the Fund's highest P/E stocks
across all industries were trimmed to lower weightings. Execution of
this strategy included selling stocks and writing (selling) call options
on stocks. Stocks trimmed or eliminated included well known names such
as Intel, Microsoft and Oracle.
New positions added to the Fund over the period included Pride
International - a leading operator of land-based oil workover rigs in
South America, Boston Scientific - a leading manufacturer of medical
devices and Praxair - a major supplier of industrial gases.
All of us on the KCM team appreciate your support of the Buffalo Funds
and as fellow shareholders we will continue our drive to make ownership
of the Funds a rewarding experience over the long-term. When you discuss
investments with your friends, family and business associates we hope
you will mention the Buffalo Funds. We look forward to tracking each
Fund's progress for you in future letters.
Sincerely,
/S/John C. Kornitzer /s/Kent W. Gasaway
John C. Kornitzer Kent W. Gasaway
President Sr. Vice President
/s/Tom W. Laming
Tom W. Laming
Sr. Vice President
BUFFALO
BALANCED FUND
STATEMENT OF NET ASSETS
September 30, 1997 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 30.30%
BASIC MATERIALS - 2.37%
10,000 Aluminum Company of America $ 820,000
10,000 Texas Industries, Inc. . 424,375
1,244,375
CAPITAL GOODS - 7.41%
8,800 Blount International, Inc. Cl. A 443,850
5,000 Cummins Engine Inc. 390,313
15,000 Ingersoll-Rand Co. 645,938
10,000 Rockwell International Corp. 629,375
12,500 Teleflex, Inc. 432,813
5,000 TRW, Inc. 274,375
5,000 United Technologies Corp. 405,000
15,000 York International Corp. 671,250
3,892,914
CONSUMER CYCLICAL - 6.87%
25,000 Chrysler Corp. 920,313
5,000 Dillard's, Inc. Cl. A 219,063
8,500 Federal Express Corp. 680,000
10,000 Goodyear Tire & Rubber Co. 687,500
24,000 K mart Corp. 336,000
22,000 Modine Manufacturing Co. . 767,250
3,610,126
CONSUMER STAPLES - 0.62%
10,000 Dial Corp. 174,375
10,000 Pilgrim's Pride Corp. 148,750
323,125
ENERGY - 3.76%
10,000 Coastal Corp. 612,500
5,000 Enron Corp. 192,500
10,000 McDermott International, Inc. 365,000
5,000 Sonat, Inc. 254,375
15,000 United Meridian Corp. 551,250
1,975,625
FINANCIAL - 2.27%
7,500 Allstate Corp. 602,812
5,000 Chase Manhattan Corp. New 590,000
1,192,812
TECHNOLOGY - 6.09%
5,000 A T & T Corp. 221,562
10,000 Diebold, Inc. 473,750
7,500 Hewlett-Packard Co. 521,718
10,000 HMT Technology Corp. 156,875
10,000 Intel Corp. 923,125
5,000 Motorola, Inc. 359,375
15,000 Seagate Technology, Inc. 541,875
3,198,280
TRANSPORTATION & SERVICES - 0.91%
15,000 Southwest Airlines Co. 479,062
TOTAL COMMON STOCKS 15,916,319
CONVERTIBLE PREFERRED STOCKS - 7.47%
2,044 Fedders Corp. Cl. A (non-voting) 12,136
53,900 ICO Inc., dep. shrs.
repstg. 1/4 pfd. cv. 1,384,556
2,000 K mart Financing I,
7.750% tr. cv. pfd. secs. 117,000
10,000 Loral Space & Communications Ltd.,
Series C 597,500
10,000 McDermott International, Inc., Series A 362,500
26,210 McDermott International, Inc., Series C 1,448,103
TOTAL CONVERTIBLE PREFERRED STOCKS 3,921,795
FACE
AMOUNT DESCRIPTION MARKET VALUE
CORPORATE BONDS - 27.78%
$ 690,000 Argosy Gaming Co.,
13.25% 1st. mtg. note, due 6-1-04 695,175
1,500,000 Callon Petroleum Co. Delaware,
10.125% sr. sub. note, due 9-15-02 1,496,250
800,000 Clark Material Handling Co.,
10.75% sr. note, due 11-15-06 854,000
1,300,000 CompUSA, Inc.,
9.50% gtd. sr. sub. note, due 6-15-00 1,355,250
750,000 Fairchild Semiconductor Corp.,
10.125% sr. sub. note, due 3-15-07 810,000
1,000,000 Giant Industries, Inc.,
9.75% gtd. sr. sub. note, due 11-15-03 1,043,750
1,785,000 AS Resources, Inc.,
9.875% sr. sub. note, due 12-1-03 1,863,094
250,000 ICO, Inc., Series A,
10.375% sr. note, due 6-1-07 264,375
1,000,000 Kaiser Aluminum & Chemical Corp.,
9.875% sr. note, due 2-15-02 1,045,000
250,000 K mart Corp.,
8.375% note, due 7-1-22 241,250
750,000 Nortek, Inc.,
9.875% sr. sub. note, due 3-1-04 775,312
415,000 Pilgrim's Pride Corp.,
10.875% sr. sub. note, due 8-1-03 437,825
425,000 Rutherford-Moran Oil Corp.,
10.75% sr. sub. note 144A, due 10-1-04 425,000
150,000 Stone Container Corp.,
10.75% 1st. mtg. note, due 10-1-02 159,000
100,000 Triangle Pacific Corp. Delaware,
10.50% sr. note, due 8-1-03 107,500
1,000,000 United Refining Co., Series A,
10.75% sr. note, due 6-15-07 1,035,000
52,000 Wainoco Oil Corp.,
10.75% sub. deb., due 10-1-98 52,260
919,000 Wainoco Oil Corp.,
12.00% sr. note, due 8-1-02 955,760
1,000,000 Wiser Oil Co.,
9.50% sr. sub. note 144A, due 5-15-07 980,000
TOTAL CORPORATE BONDS 14,595,801
CONVERTIBLE CORPORATE BONDS - 30.05%
1,500,000 Air & Water Technologies Corp.,
8.00% sub. deb., due 5-15-15 1,194,375
1,099,000 Allwaste, Inc.,
7.25% sub. deb., due 6-1-14 1,107,243
1,870,000 Argosy Gaming Co.,
12.00% sub. note, due 6-01-01 1,640,925
495,000 Beverly Enterprises Inc.,
7.625% sub. deb., due 3-15-03 503,662
1,500,000 Exide Corp.,
2.90% sr. sub. note, due 12-15-05 956,250
700,000 HMT Technology Corp.,
5.75% sub. note, due 1-15-04 665,000
1,658,000 Integrated Device Technology, Inc,
5.50% sub note, due 6-1-02 1,425,880
750,000 Intervac, Inc.,
6.50% sub. note, due 3-1-04 702,187
500,000 Moran Energy Inc.,
8.75% sub. deb., due 1-15-08 491,250
500,000 National Semiconductor Corp.,
6.50% sub. note, due 10-1-02 576,250
595,000 Oryx Energy Co.,
7.50% sub. deb., due 5-15-14 600,206
1,300,000 Rent-Way, Inc.,
7.00% sub. deb., due 2-1-07 2,083,250
500,000 Rohr Industries, Inc.,
7.00% sub. deb., due 10-1-12 496,250
415,000 Sun, Inc.,
6.75% sub. deb., due 6-15-12 502,669
127,000 Swift Energy Co.,
6.25% sub. note, due 11-15-06 140,017
1,185,000 Synoptics Communications, Inc.,
5.25% sub. deb., due 5-15-03 1,247,213
191,000 UNC Inc.,
7.50% sub. deb., due 3-31-06 191,716
680,000 VLSI Technology, Inc.,
8.25% sub. note, due 10-1-05 716,550
570,000 Wainoco Oil Corp.,
7.75% sub. deb., due 6-1-14 545,063
TOTAL CONVERTIBLE CORPORATE BONDS 15,785,956
REPURCHASE AGREEMENT - 4.38%
2,300,000 UMB Bank, n.a., 5.30%, due 10-1-97
(Collateralized by U.S. Treasury Notes,
5.00%, due 1-31-99) 2,300,000
TOTAL INVESTMENTS - 99.98% $ 52,519,871
Other assets less liabilities - 0.02% 10,153
TOTAL NET ASSETS - 100.00%
(equivalent to $12.22 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
4,299,343 shares outstanding) $ 52,530,024
See accompanying Notes to Financial Statements.
BUFFALO
EQUITY FUND
STATEMENT OF NET ASSETS
September 30, 1997 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 94.82%
BASIC MATERIALS - 8.90%
8,100 Air Products & Chemicals, Inc. $ 671,794
8,500 Aluminum Company of America 697,000
6,400 Eastman Chemical Co. 396,800
15,500 Georgia Gulf Corp. 474,688
2,000 Praxair, Inc. 102,375
13,500 Sigma Aldrich Corp. 444,656
1,300 Texas Industries, Inc. 54,275
2,841,588
CAPITAL GOODS - 20.85%
9,000 Boeing Co. 489,938
19,900 Cincinnati Milacron, Inc. 534,813
8,800 Cummins Engine Inc. 686,950
5,500 Eaton Corp. 508,062
10,000 General Motors Corp. Cl. H 661,250
16,500 Ingersoll-Rand Co. 710,531
1,500 Lockheed Martin Corp. 159,938
1,500 Northrop Grumman Corp. 182,063
11,500 Rockwell International Corp. 723,781
7,500 Sun Hydraulics, Inc. 93,750
11,000 Sundstrand Corp. 633,875
9,200 TRW, Inc. 504,850
7,600 United Technologies Corp. 615,600
3,300 York International Corp. 147,675
6,653,076
CONSUMER CYCLICAL - 6.20%
17,800 CompUSA Inc. 623,000
4,300 Dillard's, Inc. Cl. A 188,394
12,650 Federal Express Corp. 1,012,000
4,600 Tandy Corp. 154,675
1,978,069
CONSUMER STAPLES - 9.02%
7,600 CPC international, Inc. 703,950
10,000 Dial Corp. 174,375
14,000 McDonald's Corp. 666,750
13,000 Sara Lee Corp. 669,500
9,000 Tupperware Corp. 253,125
21,500 Viad Corp. 409,844
2,877,544
ENERGY - 13.93%
6,100 Amoco Corp. 587,887
8,150 British Petroleum PLC Sh F ADR 740,122
3,400 Chevron Corp. 282,837
13,700 Coastal Corp. 839,125
13,100 Enron Corp. 504,350
10,000 Schlumberger, Ltd. 841,875
3,000 Sonat, Inc. 152,625
12,000 Triton Energy Ltd. 497,250
4,446,071
FINANCIAL - 7.49%
11,500 Allstate Corp. 924,312
3,400 Chase Manhattan Corp. 401,200
6,400 Chubb Corp. 454,800
4,000 Golden West Financial Corp. Delaware 359,000
2,000 Hartford Financial Services Group, Inc. 164,500
1,500 PMI Group, Inc. 85,969
2,389,781
HEALTH CARE - 6.21%
9,500 Allergan, Inc. 343,781
5,300 Johnson & Johnson 305,413
9,500 Merck & Company, Inc. 949,406
6,400 Pfizer, Inc. 384,400
1,983,000
TECHNOLOGY - 17.71%
11,000 A T & T Corp. 487,437
15,500 AMP, Inc. 830,219
5,000 Bay Networks, Inc. 193,125
3,000 Best Software, Inc. 39,000
4,400 Cisco Systems, Inc. 321,475
5,700 Computer Sciences Corp. 403,275
9,000 Dallas Semiconductor Corp. 402,750
10,700 Diebold, Inc. 506,913
16,700 Hewlett-Packard Co. 1,161,694
10,000 Loral Space & Communications, Ltd. 206,250
2,500 Melita International Corp. 29,375
17,400 National Semiconductor Corp. 713,400
1,500 Network Solutions, Inc. Cl. A 32,625
5,500 Scientific-Atlanta, Inc. 124,437
5,000 Seagate Technology 180,625
5,000 Sync Research, Inc. 19,375
5,651,975
TRANSPORTATION & SERVICES - 4.51%
4,300 ProBusiness Services, Inc. 82,237
19,600 Southwest Airlines Co. 625,975
11,700 Union Pacific Corp. 732,712
1,440,924
TOTAL COMMON STOCKS 30,262,028
FACE
AMOUNT DESCRIPTION MARKET VALUE
REPURCHASE AGREEMENT - 6.26%
$ 2,000,000 UMB Bank, n.a., 5.30%, due 10-1-97
(Collateralized by U.S. Treasury Notes,
5.00%, due 1-31-99) 2,000,000
TOTAL INVESTMENTS - 101.08% $ 32,262,028
Other assets less liabilities - (1.08%) (345,946)
TOTAL NET ASSETS - 100.00%
(equivalent to $18.01 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
1,771,963 shares outstanding) $ 31,916,082
See accompanying Notes to Financial Statements.
BUFFALO
HIGH YIELD FUND
STATEMENT OF NET ASSETS
September 30, 1997 (unaudited)
SHARES COMPANY MARKET VALUE
CONVERTIBLE PREFERRED STOCKS - 11.04%
71,233 Fedders Corp. Cl. A (non-voting) $ 422,946
30,000 ICO, Inc., dep. shrs. repstg. 1/4 pfd. cv. 770,625
7,300 K mart Financing I, 7.750% tr. cv. pfd. secs. 427,050
17,300 Loral Space & Communications Ltd., Series C 1,033,675
4,100 McDermott International, Inc., Series A 148,625
13,000 McDermott International, Inc., Series C 718,250
7,200 Snyder Oil Corp., dep. shrs. repstg. 1/4 pfd. cv. 198,900
TOTAL CONVERTIBLE PREFERRED STOCKS 3,720,071
FACE
AMOUNT DESCRIPTION MARKET VALUE
CORPORATE BONDS - 37.04%
$ 400,000 Argosy Gaming Co.,
13.25% 1st. mtg. note, due 6-1-04 403,000
65,000 Bethlehem Steel Corp.,
10.375% sr. note, due 9-1-03 70,200
1,000,000 Callon Petroleum Co. Delaware,
10.125% sr. sub. note, due 9-15-02 997,500
700,000 Clark Material Handling Co.,
10.75% unrestricted sr. note 144A, due 11-15-06 747,250
500,000 Cliffs Drilling Co.,
10.25% sr. note, Series B, due 5-15-03 546,250
545,000 CompUSA, Inc.,
9.50% gtd. sr. sub. note, due 6-15-00 568,162
500,000 Exide Corp.,
10.00% sr. note, due 4-15-05 529,375
535,000 Fairchild Semiconductor Corp.,
10.125% sr. sub. note, due 3-15-07 577,800
435,000 Giant Industries, Inc.,
9.75% gtd. sr. sub. note, due 11-15-03 454,031
765,000 HS Resources, Inc.,
9.875% sr. sub. note, due 12-1-03 798,469
500,000 ICO, Inc.,
10.375% sr. note, due 6-1-07 528,750
500,000 Interface, Inc.,
9.50% sr. sub note, Series B, due 11-15-05 533,750
575,000 K mart Corp.,
8.25% note, due 1-1-22 554,875
650,000 Kaiser Aluminum & Chemical Corp.,
9.875% sr. note, due 2-15-02 679,250
505,000 Nortek, Inc.,
9.875% sr. sub. note, due 3-1-04 522,044
100,000 Parker Drilling Co.,
9.75% sr. note, Series B, due 10-15-06 107,500
600,000 Pilgrim's Pride Corp.,
10.875% sr. sub. note, due 8-1-03 633,000
25,000 Plains Resources, Inc.,
10.25% sr. sub. note, Series B, due 3-15-06 27,000
150,000 Premier Parks, Inc.,
9.75% sr. note, due 1-15-07 159,000
500,000 Rutherford-Moran Oil Corp.,
10.75% sr. sub. note 144A, due 10-1-04 500,000
500,000 Southdown, Inc.,
10.00% sr. sub. note, Series B, due 3-1-06 551,250
790,000 United Refining Co.,
10.75% sr. note, Series A, due 6-15-07 817,650
25,000 URS Corp. New,
8.625% sr. sub. deb., due 1-15-04 25,500
158,000 Wainoco Oil Corp.,
12.00% sr. note, due 8-1-02 164,320
1,000,000 Wiser Oil Co.,
9.50% sr. sub. note 144A, due 5-15-07 980,000
TOTAL CORPORATE BONDS 12,475,926
CONVERTIBLE CORPORATE BONDS - 38.51%
570,000 Air & Water Technologies Corp.,
8.00% sub. deb., due 5-15-15 453,863
1,076,000 Allwaste, Inc.,
7.25% sub. deb., due 6-1-14 1,084,070
675,000 Argosy Gaming Co.,
12.00% sub. note, due 6-1-01 592,313
500,000 Exide Corp.,
2.90% sr. sub. note, due 12-15-05 318,750
1,000,000 HMT Technology Corp.,
5.75% sub. note, due 1-15-04 950,000
1,150,000 Integrated Device Technology, Inc.,
5.50% sub. note, due 6-1-02 989,000
925,000 Intevac, Inc.,
6.50% sub. note, due 3-1-04 866,605
761,000 Moran Energy Inc.,
8.75% sub. deb., due 1-15-08 747,683
500,000 National Semiconductor Corp.,
6.50% sub. note, due 10-1-02 576,250
550,000 OHM Corp.,
8.00% sub. deb., due 10-1-06 532,812
535,000 Oryx Energy Co.,
7.50% sub. deb., due 5-15-14 539,681
700,000 Rent-Way, Inc.,
7.00% sub. deb., due 2-1-07 1,121,750
520,000 Rohr Industries, Inc.,
7.00% sub. deb., due 10-1-12 516,100
525,000 Swift Energy Co.,
6.25% sub. note, due 11-15-06 578,812
800,000 Synoptics Communications, Inc.,
5.25% sub. deb., due 5-15-03 842,000
281,000 UNC, Inc.,
7.50% sub. deb., due 3-31-06 282,054
600,000 VLSI Technology, Inc.,
8.25% sub. note, due 10-1-05 632,250
1,050,000 Wainoco Oil Corp.,
7.75% sub. deb., due 6-1-14 1,004,062
378,000 Weston (Roy F.), Inc.,
7.00% sub. deb., due 4-15-02 345,397
TOTAL CONVERTIBLE CORPORATE BONDS 12,973,452
REPURCHASE AGREEMENT - 13.63%
4,590,000 UMB Bank, n.a.,
5.30%, due 10-1-97
(Collateralized by U.S. Treasury Notes,
5.00%, due 1-31-99) 4,590,000
TOTAL INVESTMENTS - 100.22% $ 33,759,449
Other assets less liabilities - (0.22%) (74,295)
TOTAL NET ASSETS - 100.00%
(equivalent to $13.00 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
2,590,849 shares outstanding) $ 33,685,154
See accompanying Notes to Financial Statements.
BUFFALO
USA GLOBAL FUND
STATEMENT OF NET ASSETS
September 30, 1997 (unaudited)
SHARES COMPANY MARKET VALUE
COMMON STOCKS - 91.27%
BASIC MATERIALS - 6.56%
13,600 Air Products & Chemicals, Inc. $ 1,127,950
17,300 Aluminum Company of America 1,418,600
14,000 Praxair, Inc. 716,625
3,263,175
CAPITAL GOODS - 18.59%
16,950 Boeing Co. 922,716
37,700 Cincinnati Milacron, Inc. 1,013,188
17,900 Cummins Engine, Inc. 1,397,319
24,000 Ingersoll-Rand Co. 1,033,500
36,500 Teleflex, Inc. 1,263,813
26,400 TRW, Inc. 1,448,700
15,200 United Technologies Corp. 1,231,200
21,100 York International Corp 944,225
9,254,661
CONSUMER CYCLICAL - 5.67%
500 Goodyear Tire & Rubber Co. 34,375
25,000 Interface Inc. Cl. A 728,125
21,800 Lear Corp. 1,073,650
28,300 Modine Manufacturing Co. 986,962
2,823,112
CONSUMER STAPLES - 12.36%
10,200 Coca-Cola Co. 621,563
15,900 CPC International, Inc. 1,472,738
27,350 McDonald's Corp. 1,302,544
24,500 Sara Lee Corp. 1,261,750
19,800 Wrigley, (Wm.) Jr. Co. 1,491,188
6,149,783
ENERGY - 6.26%
20,100 Mobil Corp. 1,487,400
8,000 Pride International, Inc. 272,000
13,400 Schlumberger, Ltd. 1,128,112
5,550 Triton Energy Ltd. 229,978
3,117,490
FINANCIAL - 6.69%
26,700 AFLAC, Inc. 1,448,475
13,900 American International Group, Inc. 1,434,306
3,350 Citicorp 448,691
3,331,472
HEALTH CARE - 10.27%
16,700 Allergan, Inc. 604,331
7,300 American Home Products Corp. 532,900
14,700 Bristol-Myers Squibb Co. 1,216,425
20,700 Johnson & Johnson 1,192,837
9,300 Pfizer, Inc. 558,581
19,500 Schering-Plough Corp. 1,004,250
5,109,324
TECHNOLOGY - 24.87%
29,000 AMP, Inc. 1,553,313
23,200 Analog Devices, Inc. 777,200
3,500 Applied Materials, Inc. 333,375
13,000 Bay Networks, Inc. 502,125
5,500 Boston Scientific Corp. 303,531
14,400 Cisco Systems, Inc. 1,052,100
3,000 Computer Motion, Inc. 40,500
6,400 Dallas Semiconductor Corp. 286,400
16,900 Hewlett-Packard Co. 1,175,606
28,300 HMT Technology Corp. 443,956
38,900 Integrated Device Technology, Inc. 469,231
8,700 Intevac, Inc. 122,888
12,700 Motorola, Inc. 912,813
32,500 National Semiconductor Corp. 1,332,500
5,850 Oracle Systems Corp. 213,159
23,400 Rockwell International Corp. 1,472,737
25,100 Seagate Technology 906,737
23,500 Technology Modeling Associates, Inc. 359,843
6,100 Thermoquest Corp. 122,000
12,380,014
TOTAL COMMON STOCKS 45,429,031
FACE
AMOUNT DESCRIPTION MARKET VALUE
REPURCHASE AGREEMENT - 8.55%
$ 4,255,000 UMB Bank, n.a., 5.30%, due 10-1-97
(Collateralized by U.S. Treasury Notes,
5.00%, due 1-31-99) 4,255,000
TOTAL INVESTMENTS - 99.82% $ 49,684,031
Other assets less liabilities - 0.18% 89,112
TOTAL NET ASSETS - 100.00%
(equivalent to $17.61 per share;
10,000,000 shares of $1.00 par value
capital shares authorized;
2,825,816 shares outstanding) $ 49,773,143
See accompanying Notes to Financial Statements.
STATEMENTS OF ASSETS
AND LIABILITIES
September 30, 1997 (unaudited)
<TABLE>
<CAPTION>
BALANCED EQUITY HIGH YIELD USA GLOBAL
FUND FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value
(identified cost $45,699,226,
$27,509,176, $31,299,256, and
$42,313,105, respectively) $ 52,519,871 $ 32,262,028 $ 33,759,449 $ 49,684,031
Cash 20,428 33,487 154,470 98,114
Dividends receivable 65,080 46,262 26,957 26,067
Interest receivable 768,586 - 611,580 -
Receivables for investments sold - 460,695 - 304,296
Total assets 53,373,965 32,802,472 34,552,456 50,112,508
LIABILITIES AND NET ASSETS:
Payable for investments purchased 843,941 857,515 867,302 323,271
Call options written - 28,875 - 16,094
Total liabilities 843,941 886,390 867,302 339,365
NET ASSETS $ 52,530,024 $ 31,916,082 $ 33,685,154 $ 49,773,143
NET ASSETS CONSIST OF:
Capital (capital stock and
paid-in capital) $ 42,379,269 $ 24,348,605 $ 30,529,119 $ 39,587,506
Accumulated net investment income 167,555 2,704 73,735 50,051
Accumulated net realized gain on
investment transactions 3,162,555 2,810,950 622,107 2,746,469
Net unrealized appreciation in
value of investments 6,820,645 4,753,823 2,460,193
7,389,117
NET ASSETS APPLICABLE TO OUTSTANDING
SHARES $ 52,530,024 $ 31,916,082 $ 33,685,154 $ 49,773,143
Capital shares, $1.00 par value
Authorized 10,000,000 10,000,000 10,000,000 10,000,000
Outstanding 4,299,343 1,771,963 2,590,849 2,825,816
NET ASSET VALUE PER SHARE $ 12.22 $ 18.01 $ 13.00 $ 17.61
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENTS
OF OPERATIONS
Six months ended September 30, 1997 (unaudited)
<TABLE>
<CAPTION>
BALANCED EQUITY HIGH YIELD USA GLOBAL
FUND FUND FUND FUND
</CAPTION>
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Income:
Dividends $ 211,220 $ 159,004 $ 84,427 $ 217,828
Interest 1,385,175 40,297 961,874 87,704
1,596,395 199,301 1,046,301 305,532
Expenses (Note 2):
Management fees 232,084 129,129 128,991 200,150
Registration fees and expenses 17,515 21,232 22,020 30,020
249,599 150,361 151,011 230,170
Net investment income 1,346,796 48,940 895,290 75,362
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Realized gain from investment transactions
(excluding repurchase agreements):
Proceeds from sales of investments 15,100,366 8,776,118 3,464,785 3,650,180
Cost of investments sold 13,796,735 7,487,482 3,083,332 2,315,621
Net realized gain from
sales of investments 1,303,631 1,288,636 381,453 1,334,559
Gain from option contracts written 33,873 216,458 - 326,534
Net realized gain from
investment transactions 1,337,504 1,505,094 381,453 1,661,093
Unrealized appreciation (depreciation)
on investments:
Beginning of period 1,603,437 (248,434) 307,013 828,942
End of period 6,820,645 4,753,823 2,460,193 7,389,117
Increase in net unrealized appreciation
on investments 5,217,208 5,002,257 2,153,180 6,560,175
Net gain on investments 6,554,712 6,507,351 2,534,633 8,221,268
Increase in net assets resulting
from operations $ 7,901,508 $ 6,556,291 $ 3,429,923 $ 8,296,630
</TABLE>
See accompanying Notes to Financial Statements.
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
BALANCED FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 1,346,796 $ 2,769,432
Net realized gain from
investment transactions 1,337,504 4,210,481
Unrealized appreciation
(depreciation) of investments
during the period 5,217,208 (1,590,961)
Net increase in net assets
resulting from operations 7,901,508 5,388,952
DISTRIBUTIONS TO SHAREHOLDERS FROM:**
Net investment income (1,217,695) (2,730,978)
In excess of net investment income - -
Net realized gain from investment
transactions - (2,986,358)
Total distributions to shareholders (1,217,695) (5,717,336)
INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS:*
Proceeds from shares sold 7,735,571 11,993,517
Net asset value of shares issued for
reinvestment of distributions 1,164,398 5,290,321
8,899,969 17,283,838
Cost of shares repurchased (6,802,411) (23,280,181)
Net increase (decrease) from
capital share transactions 2,097,558 (5,996,343)
Total increase (decrease)
in net assets 8,781,371 (6,324,727)
NET ASSETS:
Beginning of period 43,748,653 50,073,380
End of period (including undistributed
net investment income of $167,555) $ 52,530,024 $ 43,743,653
*Shares issued and repurchased:
Number of shares sold 667,920 1,078,525
Number of shares issued for
reinvestment of distributions 99,275 484,825
Number of shares repurchased (606,891) (2,102,645)
Net increase (decrease) 160,304 (539,295)
**Distributions to shareholders:
Income dividends per share $ .30 $ .707
Captial gains distribution per share $ - $ .833
</TABLE>
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
EQUITY FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 48,940 $ 180,281
Net realized gain from
investment transactions 1,505,094 2,410,435
Unrealized appreciation
(depreciation) of investments
during the period 5,002,257 (562,926)
Net increase in net assets
resulting from operations 6,556,291 2,027,790
DISTRIBUTIONS TO SHAREHOLDERS FROM:**
Net investment income (109,218) (117,299)
In excess of net investment income - -
Net realized gain from investment
transactions - (1,104,579)
Total distributions to shareholders (109,218) (1,221,878)
INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS:*
Proceeds from shares sold 6,669,707 13,787,512
Net asset value of shares issued for
reinvestment of distributions 103,079 1,166,645
6,772,786 14,954,157
Cost of shares repurchased (1,372,899) (1,636,346)
Net increase (decrease) from
capital share transactions 5,399,887 13,317,811
Total increase (decrease)
in net assets 11,846,960 14,123,723
NET ASSETS:
Beginning of period 20,069,122 5,945,399
End of period (including undistributed
net investment income of $2,704) $ 31,916,082 $ 20,069,122
*Shares issued and repurchased:
Number of shares sold 410,727 995,159
Number of shares issued for
reinvestment of distributions 6,357 80,961
Number of shares repurchased (86,245) (116,210)
Net increase (decrease) 330,839 959,910
**Distributions to shareholders:
Income dividends per share $ 0.07 $ .1046
Capital gains distribution per share $ - $ .9854
</TABLE>
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
HIGH YIELD FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 895,290 $ 1,009,590
Net realized gain from
investment transactions 381,453 434,013
Unrealized appreciation
(depreciation) of investments
during the period 2,153,180 222,732
Net increase in net assets
resulting from operations 3,429,923 1,666,335
DISTRIBUTIONS TO SHAREHOLDERS FROM:**
Net investment income (855,416) (975,729)
In excess of net investment income - -
Net realized gain from investment
transactions - (193,359)
Total distributions to shareholders (855,416) (1,169,088)
INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS:*
Proceeds from shares sold 14,700,890 13,872,995
Net asset value of shares issued for
reinvestment of distributions 784,101 1,036,474
15,484,991 14,909,469
Cost of shares repurchased (3,960,949) (3,120,776)
Net increase (decrease) from
capital share transactions 11,524,042 11,788,693
Total increase (decrease)
in net assets 14,098,549 12,285,940
NET ASSETS:
Beginning of period 19,586,605 7,300,665
End of period (including undistributed
net investment income of $73,735) $ 33,685,154 $ 19,586,605
*Shares issued and repurchased:
Number of shares sold 1,178,368 1,192,596
Number of shares issued for
reinvestment of distributions 61,831 88,882
Number of shares repurchased (318,847) (266,952)
Net increase (decrease) 921,352 1,014,526
**Distributions to shareholders:
Income dividends per share $ 0.38 $ .798
Capital gains distribution per share $ - $ .147
</TABLE>
STATEMENTS OF CHANGES
IN NET ASSETS
<TABLE>
<CAPTION>
USA GLOBAL FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
</CAPTION>
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 75,362 $ 116,725
Net realized gain from
investment transactions 1,661,093 619,611
Unrealized appreciation
(depreciation) of investments
during the period 6,560,175 619,611
Net increase in net assets
resulting from operations 8,296,630 2,615,059
DISTRIBUTIONS TO SHAREHOLDERS FROM:**
Net investment income (72,943) (69,093)
In excess of net investment income - -
Net realized gain from investment
transactions - (793,347)
Total distributions to shareholders (72,943) (862,440)
INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS:*
Proceeds from shares sold 17,969,021 21,080,722
Net asset value of shares issued for
reinvestment of distributions 68,066 825,953
18,037,087 21,906,675
Cost of shares repurchased (3,579,312) (1,581,818)
Net increase (decrease) from
capital share transactions 14,457,775 20,324,857
Total increase (decrease)
in net assets 22,681,462 22,077,476
NET ASSETS:
Beginning of period 27,091,681 5,014,205
End of period (including undistributed
net investment income of $50,051) $ 49,773,143 $ 27,091,681
*Shares issued and repurchased:
Number of shares sold 1,114,115 1,536,130
Number of shares issued for
reinvestment of distributions 4,160 58,002
Number of shares repurchased (214,326) (113,650)
Net increase (decrease) 903,949 1,480,482
**Distributions to shareholders:
Income dividends per share $ 0.03 $ .0528
Capital gains distribution per share $ - $ .6072
</TABLE>
See accompanying Notes to Financial Statements.
NOTES TO FINANCIAL
STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES:
The Funds are registered under the Investment Company Act of 1940, as
amended, as diversified open-end management investment companies. The
following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements.
A. Security Valuation - Corporate stocks, bonds and options traded on a
national securities exchange or national market are
valued at the latest sales price thereof, or if no sale was reported on
that date, the mean between the closing bid and asked price is used.
Securities which are traded over-the-counter are priced at the mean
between the latest bid and asked price. Securities not currently
traded are valued at fair value as determined by the Board of Directors.
B. Federal and State Taxes - The Funds complied with the requirements
of the Internal Revenue Code applicable to regulated investment
companies and therefore, no provision for federal or state tax is
required.
C. Options - In order to produce incremental earnings and
protect gains, the Funds may write covered call options on portfolio
securities. When a Fund writes an option, an amount equal to the premium
received by the Fund is reflected as an asset and an equivalent
liability. The amount of the liability is subsequently marked to market
to reflect the current market value of the option written. If an option
which a Fund has written either expires on its stipulated expiration
date, or if a Fund enters into a closing purchase transaction, the Fund
realizes a gain (or loss if the cost of a closing purchase transaction
exceeds the premium received when the option was written) without regard
to any unrealized gain or loss on the underlying security, and the
liability related to such option is extinguished. If a call option which
the Fund has written is exercised, the Fund realizes a capital gain or
loss from the sale of the underlying security and the proceeds from such
sale are increased by the premium originally received.
D. Other - Security transactions are accounted for on the date the
securities are purchased or sold. Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Realized gains and
losses from investment transactions and unrealized appreciation and
depreciation of investments are reported on the identified cost basis.
2. MANAGEMENT FEES:
Management fees were paid to Jones & Babson, Inc. at the rate of 1% per
annum of the average daily net asset values of the Funds for services
which include administration, and all other operating expenses of the
Funds except the cost of acquiring and disposing of portfolio
securities, the taxes, if any, imposed directly on the Funds and its
shares and the cost of qualifying the Funds' shares for sale in any
jurisdiction. Certain officers and/or directors of the Funds are also
officers and/or directors of Jones & Babson, Inc.
3. INVESTMENT TRANSACTIONS:
Investment transactions for the period ended September 30, 1997,
(excluding maturities of short-term commercial notes and repurchase
agreements) are as follows:
Balanced Fund
Purchases $ 18,666,839
Proceeds from sales 15,100,366
Equity Fund
Purchases $ 14,277,191
Proceeds from sales 8,776,118
High Yield Fund
Purchases $ 13,119,881
Proceeds from sales 3,464,785
USA Global Fund
Purchases $ 23,503,549
Proceeds from sales 3,650,180
4. COVERED CALL OPTIONS:
The following Covered Call Options Written were outstanding
as of September 30, 1997:
Shares
Common Stocks/ Subject to
Expiration Date/Exercise Price Call Value
Equity Fund
Boeing Co./Oct/60 3,000 $ 375
Triton Energy Ltd/Oct/40 12,000 28,500
Total (premiums received $29,846) $ 28,875
Value of shares subject to call $660,563
USA Global Fund
Boeing Co./Oct/60 5,000 $ 625
Boston Scientific Corp./Oct/65 5,500 2,406
Triton Energy Ltd/Oct/40 5,500 13,063
Total (premiums received $34,285) $ 16,094
Value of shares subject to call $ 803,625
Transactions in call options written for the period ended
September 30, 1997, were as follows:
Number of Premium
Contracts Amount
Balanced Fund
Balance at March 31, 1997 - $ -
Opened 100 33,873
Expired (50) (20,874)
Exercised (50) (12,999)
Balance at September 30, 1997 - $ -
Equity Fund
Balance at March 31, 1997 278 $ 72,301
Opened 871 174,004
Expired (393) (70,583)
Exercised (606) (145,876)
Balance at September 30, 1997 150 $ 29,846
USA Global Fund
Balance at March 31, 1997 680 $ 101,114
Opened 1,475 259,705
Expired (1,394) (192,779)
Exercised (601) (133,755)
Balance at September 30, 1997 160 $ 34,285
This report has been prepared for the information of the Shareholders of
the Buffalo Funds,
and is not to be construed as an offering of the shares of the Funds.
Shares of the Funds are offered
only by the Prospectus, a copy of which may be obtained from Jones &
Babson, Inc.
This page left blank intentionally.
BUFFALO MUTUAL FUNDS
Balanced Fund
Equity Fund
High Yield Fund
USA Global Fund
Jones & Babson
700 Karnes Blvd.
Kansas City, Missouri 64108-3306
1-800-49-BUFFALO
(1-800-492-8332)
JB9C-1
<TABLE> <S> <C>
<ARTICLE> 6
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<NAME> BUFFALO BALANCED FUND INC
<S> <C>
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<INVESTMENTS-AT-COST> 45699226
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