Five Funds: Small Growth Funds With Supersized Returns

5. (BUFSX Quote)Buffalo Small-Cap

Buffalo Small-Cap is not quite five years old -- its birthday is next month -- but it merits inclusion among our Five Funds because of its solid performance and leadership.

The fund, run by Kent Gasaway, Tom Laming and Bob Male since April 1998, made a name for itself by posting 30%-plus returns in 1999, 2000 and 2001. Not many funds can boast that accomplishment. It tumbled along with its peers in 2002, falling 25.8% -- better than 61% of all small-cap funds. Over three years, its average annual loss of 3.4% is among the top 5% of its peers.

One of the most impressive facts about the $671 million Buffalo Small-Cap is how low its turnover rate is -- a mere 6%. Buffalo's managers believe in finding growth stocks such as Ethan Allen and ITT Educational Services(ESI Quote) on the cheap and letting them ride. That helps the skippers keep the expense ratio at a trim 1.06%.

The fund has taken in a lot of new money in the past 12 months, but the managers have thus far inspired confidence in their ability to put it to good use.