Paradigm Capital Management

Overview

Objective:

The Paradigm Value Fund seeks long-term capital appreciation.

Investment Philosophy:

The Paradigm Value Fund invests primarily in the common stocks of small capitalization companies ($2.5 billion or less at the time of purchase) that the Advisor believes have the potential for capital appreciation. The Advisor primarily searches for value stocks with market capitalizations of $2.5 billion or less that exhibit attractive valuations on several metrics, such as price to earnings, price to cash flow, price to book and price to revenue.

Investment Process:

The Advisor identifies potential investments using a proprietary valuation model to pinpoint companies that are trading at a discount to peers and/or historical valuations. Once investment ideas meet screening criteria, the Advisor studies public filings and trade journals, and will generally interview company management. The Advisor continues research by contacting vendors, competitors and customers to determine why the stock is trading at a discount and to identify catalysts that the Advisor believes will result in capital appreciation. The Advisor frequently contacts company management and also uses these communications to determine whether management's goals are aligned with those of shareholders. Final investment decisions are based on the Advisor's confidence in management's ability to execute its strategy and the attractiveness of the stock's price based on internally prepared models and valuation metrics. The Advisor will generally sell a Fund position if the company no longer meets these criteria.

Prospectus:

Please click on the link below to obtain a copy of the Fund's Prospectus.

Paradigm Funds' Prospectus

Portfolio Characteristics:
(as of 6/30/2010)


Inception Date:	1/1/2003
Cusip:	69901E104
Ticker:	PVFAX
NAV:	$42.37
Net Assets ($ million)	$167.6
Number of Holdings:	70
One-Year Turnover:	69.39%
Weighted Average Market Cap ($ million):	$1,408.1
Median Market Cap ($ million):	$1,033.6
Management Fees*:	1.50%
Sales Load:	none
Index:	Russell 2000 Value

Key Differentiators:

Capacity: Because of the fund's relatively small size, the portfolio managers can afford to take meaningful positions in smaller companies.
Risk-adjusted approach to small-cap investing

Market Capitalization:

(as of 6/30/2010)

Past Performance Is No Guarantee Of Future Results
Please Read The Prospectus Carefully Before You Invest Or Send Money
*The Advisor has contractually agreed to waive management fees and reimburse expenses to the extent necessary to maintain total annual operating expenses of the Value Fund (excluding brokerage fees and commissions, interest and other borrowing expenses, taxes, extraordinary expenses and the indirect costs of investing in Acquired Funds) at 1.50% of its average daily net assets through May 1, 2011. The fee waiver will automatically terminate on May 1, 2011 unless it is renewed by the Advisor. The Advisor may not terminate the fee waiver before May 1, 2011.