Paradigm Capital Management

Financial Advisor Client Talking Points Labor Day 2011

Paradigm Value Fund (PVFAX) Featured on CNBC
"Five Star Manager: Small Caps Offer Big Potential"

Co-Portfolio Manager Jonathan Vyorst was interviewed on CNBC's Best Trade Now segment. To see the interview, click here.

San Jose Mercury News Picks Up Associated Press Article About Paradigm Value Fund
Click here to read "Investing in small-cap stocks during downturn can require patience, strong stomach."

Paradigm Value Fund (PVFAX) Achieves Five-Year, Five-Star Rating from Morningstar

Small-Cap Value Mutual Fund Averages 26.03% Per Year Over Five Years
Ranked #5 Among 180 Peer Funds for Five-Year Performance

Albany, NY, February 11, 2008 – Paradigm Funds Advisor is pleased to announce that its oldest fund, the Paradigm Value Fund (PVFAX), reached a significant milestone: The fund completed its fifth year Dec. 31, 2007. Over that five-year period, the fund returned an average of 26.03% per year, outperforming 175 of the 180 funds in its Lipper small-cap value peer group. One-year performance was 5.03%, outperforming the fund’s benchmark Russell 2000 Value index by 14.81%.

Despite this strong performance, the fund remains relatively undiscovered, with only $116 million in assets as of Dec. 31, 2007. “As a self-distributed fund with no load and no 12b-1 fees, we primarily serve fee-based advisors looking for institutional-quality investment strategies as part of an overall asset allocation model,” says Paradigm Chief Operating Officer Charles DiVencenzo. “We’re growing at a sustainable rate to protect our investors and minimize liquidity constraints for the portfolio management team.”

The Paradigm Value Fund is co-managed by Portfolio Managers Jason Ronovech, CFA, and Jonathan Vyorst, MBA, supported by a team of analysts. “"The fund has generated strong returns for investors over the last five years. We remain committed to a disciplined, value-oriented stock selection process despite current market volatility,” says Co-Portfolio Manager Jason Ronovech. “Many companies that we’ve been watching are now attractively valued,” says Co-Portfolio Manager Jonathan Vyorst, “We are opportunistic buyers, but we are still evaluating potential holdings carefully to see how economic conditions will affect their businesses.”

“We conduct extensive ongoing research and due diligence to find the best managers for our clients,” says Hall Gardner, CFA CPA, Director of Investments for Legacy Wealth Management in Memphis, TN. “We identified the Paradigm Value Fund back in 2006 as a strong performer with a disciplined investment process that could help our clients achieve their long-term investment goals. And because Paradigm is a relatively small fund family, we’ve also found the firm to be accessible: We get access we might not get from a huge fund complex.”

The Paradigm Value Fund uses fundamental, bottom-up research to exploit the inefficiencies of the small-cap market. The fund typically targets companies with market capitalizations between $100 million and $1.5 billion at acquisition because these companies have the most potential for rapid appreciation. The portfolio management team looks to invest in good companies that are selling at substantial discounts to estimated intrinsic value. Ideal holdings are undiscovered or unloved companies with strong balance sheets and cash flows, proven and consistent management teams, stable or increasing market share, and potential for margin expansion.

Paradigm Value Fund #1 for 3-Year Performance
Morningstar rated the Paradigm Value Fund, our small-cap value fund, the top-performing fund for the three calendar years ending in 2006, outperforming the #2 fund by 400 bps. “We’re very pleased to bring our long-term record of small-cap value outperformance to the mutual fund market,” says Paradigm CIO Candace King Weir. The Paradigm Value Fund has recently been featured in Kiplinger’s, the Wall Street Journal, and Ticker.com.

SMID Value Portfolio Beats Benchmark by 300 bps,
Wins “Five Star Top Gun” Award
Paradigm’s $458 million SMID-cap value portfolio beat the benchmark Russell 2500 Value by 300 bps in 2006, returning 23.52%. The portfolio also received a “Five Star Top Gun” Award from PSN for top-10 performance in its universe and four stars for top 20 overall. The equally weighted portfolio is constructed of 60-70 holdings with market capitalizations ranging from $500 million to $3.5 billion.