IN 2013, the Buffalo Emerging Opportunities fund returned a stunning 61.7 per cent. Lipper, which tracks mutual funds, named it the best small-capitalisation growth fund over the previous three and five years, and investors stormed in. It began 2013 with just US$66 million in assets and attracted US$380 million in new money for the year.
But in the first half of this year, even after a June rebound, the fund was down 6.66 per cent, badly trailing the Standard & Poor's 500-stock index, which had total returns, with dividends, of 7.14 per cent. The fund also had net outflows of US$97.6 million.
The portfolio manager, John Bichelmeyer, is philosophical about the reversal. "It's a healthy correction,"...
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