Five Funds: Small Growth Funds With Supersized Returns

5. (BUFSX)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) 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.

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