FIRST
INVESTORS
CASH
MANAGEMENT
FUND, INC.
FIRST
INVESTORS
TAX-EXEMPT
MONEY MARKET
FUND, INC.
ANNUAL
REPORT
DECEMBER 31, 1996
Vertically reading from bottom to top in the center of the page the words
"FIRST INVESTORS" appear.
The following appears in a box to the left of the above language:
First Investors Logo (as described above)
NEED SERVICE?
If you have questions about your account...or would like information regarding
other products or services...please contact your representative or call our
Shareholder Services Department at...
(800) 423-4026
The following appears in a box within the above box:
Our business is...putting investors first
The following appears on the bottom lefthand side:
FIMM-103
Portfolio Manager's Letter
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Dear Investor:
The current economic expansion extended to its fifth year in 1996. The
economy grew by 3.4% during the year with the core rate of consumer
price inflation increasing 2.6%, its slowest pace since the mid-1960's.
The combination of moderate growth and low inflation provided a positive
background for the financial markets. The broad stock market averages
made new highs in 1996 while long-term interest rates moved somewhat
higher during the year. Besides the economy, the markets benefited from
strong demand for U.S. securities. Individual investors bought a record
amount of stock mutual funds, while foreign investors bought a record
amount of U.S. Treasury bonds.
Though both taxable and tax free short-term interest rates closed 1996
generally where they opened the year, market sentiments clearly changed
during the period. The market opened the year with a clear outlook for
lower interest rates. The economy appeared to be exhibiting modest
growth and the Federal Reserve was still in an accommodative mode,
having most recently lowered rates in December of 1995 and in late
January of 1996. Late in the first quarter, however, the economy began
to show signs of strength that upset the market's outlook for interest
rates and its comfort with a low inflation outlook. Continued signs of
strength in the economy and labor market have caused inflation concerns
among some fixed income investors, driving short-term interest rates
marginally higher.
For 1996, the Cash Management Fund Class A shares returned 4.9% and
Class B shares returned 4.1%. For the same period, the Tax-Exempt Money
Market Fund Class A shares returned 2.9% and Class B shares returned
2.0%. The Funds maintained a $1.00 net asset value for each class of
shares throughout the year.
Money market funds continue to be among the most conservative investment
vehicles available, offering stability of principal, free check writing
privileges, easy access to account information, and a return that is
generally better than that available on most bank savings or checking
accounts. The First Investors money market Funds are particularly
conservative, investing only in "first tier" securities that are
considered to present minimal risk to investors. In addition, the Funds'
weighted average maturities have been shorter than those of their peer
group averages. Even though the Funds are conservatively managed, there
can be no assurance that the Funds will be able to maintain a stable net
asset value of $1.00 per share. Money market mutual funds are not
insured by the Federal Deposit Insurance Corporation and are not
guaranteed by a bank or other entity.
Looking forward, the factors that benefited the markets in 1996 appear
likely to continue in 1997: moderate growth, low inflation, and strong
demand for financial assets. The primary risk to the market is that
inflation may increase due to the length of the economic expansion. This
could lead the Federal Reserve to raise interest rates, hurting both the
bond and stock markets. On the other hand, the markets may be positively
surprised by legislation from the President and Congress to eliminate
the federal budget deficit. The Funds will continue to invest
conservatively in 1997, focusing on credit quality and portfolio
liquidity. We will only purchase securities considered to present
minimal credit and market risk to Fund shareholders.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
/S/ Michael J. O'Keefe
Michael J. O'Keefe
Vice President
and Portfolio Manager
January 31, 1997
Portfolio Manager's Letter
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Dear Investor:
The current economic expansion extended to its fifth year in 1996. The
economy grew by 3.4% during the year with the core rate of consumer
price inflation increasing 2.6%, its slowest pace since the mid-1960's.
The combination of moderate growth and low inflation provided a positive
background for the financial markets. The broad stock market averages
made new highs in 1996 while long-term interest rates moved somewhat
higher during the year. Besides the economy, the markets benefited from
strong demand for U.S. securities. Individual investors bought a record
amount of stock mutual funds, while foreign investors bought a record
amount of U.S. Treasury bonds.
Though both taxable and tax free short-term interest rates closed 1996
generally where they opened the year, market sentiments clearly changed
during the period. The market opened the year with a clear outlook for
lower interest rates. The economy appeared to be exhibiting modest
growth and the Federal Reserve was still in an accommodative mode,
having most recently lowered rates in December of 1995 and in late
January of 1996. Late in the first quarter, however, the economy began
to show signs of strength that upset the market's outlook for interest
rates and its comfort with a low inflation outlook. Continued signs of
strength in the economy and labor market have caused inflation concerns
among some fixed income investors, driving short-term interest rates
marginally higher.
For 1996, the Cash Management Fund Class A shares returned 4.9% and
Class B shares returned 4.1%. For the same period, the Tax-Exempt Money
Market Fund Class A shares returned 2.9% and Class B shares returned
2.0%. The Funds maintained a $1.00 net asset value for each class of
shares throughout the year.
Money market funds continue to be among the most conservative investment
vehicles available, offering stability of principal, free check writing
privileges, easy access to account information, and a return that is
generally better than that available on most bank savings or checking
accounts. The First Investors money market Funds are particularly
conservative, investing only in "first tier" securities that are
considered to present minimal risk to investors. In addition, the Funds'
weighted average maturities have been shorter than those of their peer
group averages. Even though the Funds are conservatively managed, there
can be no assurance that the Funds will be able to maintain a stable net
asset value of $1.00 per share. Money market mutual funds are not
insured by the Federal Deposit Insurance Corporation and are not
guaranteed by a bank or other entity.
Looking forward, the factors that benefited the markets in 1996 appear
likely to continue in 1997: moderate growth, low inflation, and strong
demand for financial assets. The primary risk to the market is that
inflation may increase due to the length of the economic expansion. This
could lead the Federal Reserve to raise interest rates, hurting both the
bond and stock markets. On the other hand, the markets may be positively
surprised by legislation from the President and Congress to eliminate
the federal budget deficit. The Funds will continue to invest
conservatively in 1997, focusing on credit quality and portfolio
liquidity. We will only purchase securities considered to present
minimal credit and market risk to Fund shareholders.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
/S/ Michael J. O'Keefe
Michael J. O'Keefe
Vice President
and Portfolio Manager
January 31, 1997
Portfolio of Investments
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BANKERS' ACCEPTANCES--2.9%
$1,000M Regions Bank, 2/4/97 5.34% $ 994,956 $ 74
2,000M Regions Bank, 2/24/97 5.33 1,984,010 148
1,000M Regions Bank, 4/16/97 5.40 984,250 74
- --------------------------------------------------------------------------------------------------------------
Total Value of Bankers' Acceptances (cost $3,963,216) 3,963,216 296
- --------------------------------------------------------------------------------------------------------------
CORPORATE NOTES--93.3%
2,500M Alabama Power Company, 2/4/97 5.32 2,487,439 186
4,000M Allegheny University Hospital, 2/18/97 5.40 3,971,200 296
1,100M American General Finance Corp., 1/15/97 5.45 1,100,837 82
1,540M Ameritech Capital Funding Corp., 1/8/97 5.48 1,538,359 115
1,500M Associates Corporation of North America, 2/13/97 5.11 1,403,299 105
3,000M Avnet Inc., 2/7/97 5.33 2,983,566 223
1,000M Baltimore Gas & Electric Company, 1/9/97 5.93 998,682 74
6,000M BellSouth Telecommunications, Inc., 2/4/97 5.50 5,968,834 446
6,000M Clorox Company, 3/14/97 5.30 5,936,400 443
4,180M Coca-Cola Company, 2/28/97 5.30 4,144,307 309
3,000M CPC International, Inc., 4/7/97 5.28 2,957,760 221
4,000M Engelhard Corp., 7/16/97 5.33 3,991,709 298
4,000M Ford Motor Credit Corp., 1/9/97 6.20 3,994,489 298
1,000M General Electric Capital Corp., 1/10/97 5.80 1,000,444 75
5,000M General Electric Capital Corp., 1/20/97 5.55 5,005,378 374
2,000M GTE Florida, Inc., 1/10/97 5.50 1,997,250 149
4,000M GTE North, Inc., 1/22/97 5.50 3,987,167 298
2,026M Hartford Steam Boiler Insp. & Ins. Company, 1/23/97 5.57 2,019,104 151
4,000M Heinz (H.J.) Company, 1/22/97 5.37 3,987,470 298
2,000M Heinz (H.J.) Company, 2/5/97 5.45 1,989,402 149
1,235M Kellogg Company, 1/9/97 5.37 1,233,526 92
3,000M Kellogg Company, 1/17/97 5.28 2,992,960 223
6,000M Laclede Gas Company, 1/28/97 5.80 5,973,900 446
2,825M Michigan Consolidated Gas Company, 1/7/97 5.44 2,822,438 211
3,000M National Rural Utilities Coop. Fin. Corp., 1/22/97 5.31 2,990,708 223
3,000M National Rural Utilities Coop. Fin. Corp., 2/19/97 5.28 2,978,440 222
4,000M Paccar Financial Corp., 2/28/97 5.30 3,965,844 296
2,000M Penney (J.C.) Funding Corp., 1/31/97 5.31 1,991,150 149
4,800M PepsiCo, Inc., 1/31/97 5.50 4,778,000 357
500M Phillip Morris Corp., 5/1/97 5.66 506,468 38
3,000M Pitney Bowes Credit, Inc., 1/6/97 5.56 2,997,683 224
2,000M Pitney Bowes Credit, Inc., 4/30/97 5.28 1,965,093 147
3,000M Schering Corp., 3/18/97 5.25 2,966,750 222
3,000M Schering Corp., 6/17/97 5.25 2,926,938 219
1,530M Southern California Edison Company, 1/9/97 5.31 1,528,194 114
5,000M The Stanley Works, 2/14/97 5.33 4,967,428 371
6,000M Texaco Inc., 1/24/97 5.64 5,978,380 446
5,000M USAA Capital Corp., 2/10/97 5.28 4,970,667 371
5,000M Walt Disney Company, 3/3/97 5.28 4,955,267 370
- --------------------------------------------------------------------------------------------------------------
Total Value of Corporate Notes (cost $124,952,930) 124,952,930 9,331
- --------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES--3.5%
825M Federal National Mortgage Association, 2/13/97 5.45 824,884 62
3,855M Federal National Mortgage Association, 2/24/97 5.27 3,813,804 285
- --------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agencies (cost $4,638,688) 4,638,688 347
- --------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $133,554,834)+ 99.7% 133,554,834 9,974
Other Assets, Less Liabilities .3 352,862 26
- --------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $133,907,696 $ 10,000
==============================================================================================================
* The interest rates shown are the effective rates at the time of purchase by the Fund.
+ Aggregate cost for federal income tax purposes is the same.
</TABLE>
See notes to financial statements
Portfolio of Investments
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL NOTES AND VARIABLE RATE SECURITIES--101.9%
Alabama--4.4%
$1,000M City of Birmingham Wts., Series A, VR, 4.2%
(LOC; Regions Bank) $1,002,804 $437
- --------------------------------------------------------------------------------------------------------------
Colorado--5.4%
1,200M Adams County, Ind. Dev. Rev. Bonds, VR, 4.15%
(LOC; Barclays Bank PLC) 1,203,446 524
45M Clear Creek County Rev. Antic. Notes, VR, 4.05%
(LOC; National Westminster Bank) 45,135 20
- ----------------------------------------------------------------------------------------------------------------
1,248,581 544
- --------------------------------------------------------------------------------------------------------------
District of Columbia--4.4%
1,000M District of Columbia, University Rev. Bonds, VR, 4.15%
(American University) (LOC; National Westminster Bank) 1,002,923 437
- --------------------------------------------------------------------------------------------------------------
Florida--6.3%
400M Jacksonville Health Facs. Auth. Rev. Bonds, VR, 4.35%
(LOC; NationsBank) 400,086 174
500M Jacksonville Health Facs. Auth. Rev. Bonds, VR, 5.5%
(LOC; Barnett Bank) 500,668 218
535M Pinellas County, Health Facs. Auth. Rev. Bonds, VR, 3.8%
(LOC; Barnett Bank) 536,474 234
- --------------------------------------------------------------------------------------------------------------
1,437,228 626
- --------------------------------------------------------------------------------------------------------------
Georgia--2.2%
500M Georgia State Unlimited Tax General Obligation Bonds, 3.7%, 3/1/97 513,812 224
- --------------------------------------------------------------------------------------------------------------
Iowa--4.5%
1,000M Iowa School Corp. Warrants Certificates, 3.68%, 1/30/97 1,039,312 452
- --------------------------------------------------------------------------------------------------------------
Kansas--2.2%
500M Wichita Temporary Notes, 3.25%, 2/27/97 508,211 221
- --------------------------------------------------------------------------------------------------------------
Louisiana--7.4%
700M De Soto Parish Poll. Control Rev. Bonds, VR, 4.05%
(Central LA Electric) (LOC; Swiss Bank) 701,915 305
1,000M Jefferson Parish LA Hosp. Svc. Rev. Bonds., VR, 4.1%
(FGIC Insured) (SPA; FGIC Securities) 1,002,884 437
- --------------------------------------------------------------------------------------------------------------
1,704,799 742
- --------------------------------------------------------------------------------------------------------------
Maryland--5.9%
1,000M Baltimore County, Poll. Control Rev. Bonds, CP, 3.45%, 2/3/97
(Baltimore Gas & Electric Co.) 1,002,449 436
250M State of Maryland Dept. of Trans. Rev. Bonds, 4%, 7/1/97 254,103 111
100M State of Maryland General Obligation Bonds, 3.65%, 3/1/97 102,645 45
- --------------------------------------------------------------------------------------------------------------
1,359,197 592
- --------------------------------------------------------------------------------------------------------------
Massachusetts--5.3%
200M Commonwealth General Obligation Bonds, 3.6%, 6/1/97
(AMBAC Insured) 203,854 89
1,000M Commonwealth General Obligation Notes, 3.82%, 6/10/97 1,024,199 446
- --------------------------------------------------------------------------------------------------------------
1,228,053 535
- --------------------------------------------------------------------------------------------------------------
Mississippi--1.8%
400M Claiborne County, Poll. Control Rev. Bonds, CP, 3.6%, 3/10/97
(National Rural Utilities Coop. Fin. Corp.) 405,493 176
- --------------------------------------------------------------------------------------------------------------
Missouri--5.5%
250M City of Saint Louis, Tax & Rev. Antic. Notes, 3.96%, 6/30/97 256,922 112
1,010M Missouri State Env. Imp. & Energy Res. Auth. Poll. Control Rev.
Bonds, VR, 4.15%, (National Rural Utilities Coop. Fin. Corp.) 1,010,507 440
- --------------------------------------------------------------------------------------------------------------
1,267,429 552
- --------------------------------------------------------------------------------------------------------------
New Jersey--2.4%
250M City of Bayonne Bond Antic. Notes, 3.9%, 9/12/97 250,990 109
300M New Jersey State Turnpike Auth. Rev. Bonds, VR, 3.75%
(FGIC Insured) (LOC; Societe Generale) 300,000 131
- --------------------------------------------------------------------------------------------------------------
550,990 240
- --------------------------------------------------------------------------------------------------------------
New Mexico--2.2%
500M New Mexico State Highway Commission Rev. Bonds, VR, 3.7%
(FSA Insured) 501,014 218
- --------------------------------------------------------------------------------------------------------------
New York--3.1%
300M New York City Unlimited Tax General Obligation Bonds, VR, 3.75%
(LOC; Morgan Guaranty) 300,893 131
400M Triborough Bridge & Tunnel Auth. Rev. Bonds, VR, 4%
(FGIC Insured) (SPA; FGIC Securities) 401,163 175
- --------------------------------------------------------------------------------------------------------------
702,056 306
- --------------------------------------------------------------------------------------------------------------
Ohio--4.4%
1,000M Scioto County, Hosp. Facs. Rev. Bonds, VR, 3.9%
(AMBAC Insured) (First National Chicago) 1,002,836 437
- --------------------------------------------------------------------------------------------------------------
Pennsylvania--9.7%
500M City of Philadelphia Tax Rev. Antic. Notes, 3.95%, 6/30/97 512,521 223
700M Sayre County Health Facs. Auth. Rev. Bonds, VR, 4%
(SPA; Mellon Bank) 702,093 306
1,000M York County General Auth. Pooled Fin. Rev. Bonds, VR, 4.15%
(LOC; First Union) 1,002,099 436
- --------------------------------------------------------------------------------------------------------------
2,216,713 965
- --------------------------------------------------------------------------------------------------------------
Puerto Rico--3.1%
200M Commonwealth of Puerto Rico Tax Rev. Antic. Notes, 3.43%, 7/30/97 209,226 91
500M Government Development Bank of Puerto Rico, CP, 3.55%, 2/6/97 500,973 218
- --------------------------------------------------------------------------------------------------------------
710,199 309
- --------------------------------------------------------------------------------------------------------------
Rhode Island--2.3%
500M Rhode Island State Tax Antic. Notes, 3.85%, 6/30/97 520,281 226
- --------------------------------------------------------------------------------------------------------------
South Carolina--6.1%
1,000M Charleston County, Hosp. Facs. Rev. Bonds, VR, 4.35% 1,003,005 437
(Brown Schools) (LOC; Bankers Trust)
400M South Carolina Ed. Facs. Rev. Bonds, VR, 4.3%
(Presbyterian Coll. Proj.) (LOC; Wachovia Bank) 401,239 175
- --------------------------------------------------------------------------------------------------------------
1,404,244 612
- --------------------------------------------------------------------------------------------------------------
Texas--4.4%
500M Capital Industrial Dev. Auth., Ind. Dev. Rev. Bonds, VR, 4.15%
(LOC; Wachovia Bank) 501,556 218
500M State of Texas Rev. Antic. Notes, 3.96%, 8/29/97 510,658 222
- --------------------------------------------------------------------------------------------------------------
1,012,214 440
- --------------------------------------------------------------------------------------------------------------
Virginia--2.6%
600M Lynchburg Hosp. Facs. Rev. Bonds, VR, 4%
(SPA; Mellon Bank) 601,790 262
- --------------------------------------------------------------------------------------------------------------
Washington--5.5%
300M Clark County Unlimited Tax General Obligation Notes, 3.8%, 6/1/97
(FSA Insured) 305,105 133
950M Port of Kalama, Washington Pub. Corp. Rev. Bonds, VR, 4%
(Conagra Corp.) (LOC; Morgan Guaranty Trust Co.) 952,580 415
- --------------------------------------------------------------------------------------------------------------
1,257,685 548
- --------------------------------------------------------------------------------------------------------------
West Virginia--.8%
200M West Virginia Hosp. Fin. Auth. Hosp. Rev. Bonds, VR, 4.15%
(St. Joseph's Hosp. Proj.) (LOC; Bank One) 200,601 87
- --------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $23,398,465)+ 101.9% 23,398,465 10,188
Excess of Liabilities Over Other Assets (1.9) (431,021) (188)
- --------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $22,967,444 $10,000
==============================================================================================================
The interest rate shown for municipal notes and bonds are the effective rates at the time of purchase by the Fund. Interest
rates on variable rate securities are adjusted periodically; the rates shown are the rates that were in effect at December 31,
1996. The variable rate securities are subject to optional tenders (which are exercised through put options) or mandatory
redemptions. The put options are exercisable on a daily, weekly, monthly or semi-annual basis at a price equal to the
principal amount plus accrued interest.
+ Aggregate cost for federal income tax purposes is the same.
Summary of Abbreviations:
LOC Letter of Credit
SPA Security Purchase Agreement
VR Variable Rate Notes
CP Municipal Commercial Paper
</TABLE>
See notes to financial statements
Statement of Assets and Liabilities
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
First Investors First Investors
Cash Management Tax-Exempt Money
Fund, Inc. Market Fund, Inc.
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in securities (Note 1A):
At amortized cost $133,554,834 $23,398,465
============ ==============
At value $133,554,834 $23,398,465
Cash (overdraft) 424,153 (375,987)
Interest receivable 230,049 --
Other assets 24,200 4,891
------------ --------------
Total Assets 134,233,236 23,027,369
------------ --------------
Liabilities
Payables:
Dividend disbursing agent 14,042 21,842
Capital shares redeemed 179,022 10,452
Accrued expenses 84,541 16,295
Accrued advisory fee 47,935 11,336
------------ --------------
Total Liabilities 325,540 59,925
------------ --------------
Net Assets $133,907,696 $22,967,444
============ ==============
Capital shares outstanding (Note 2):
Class A 133,800,752 22,887,613
Class B 106,944 79,831
Net asset value, offering price and redemption price per share--
Class A and Class B (Net assets divided by shares outstanding) $1.00 $1.00
============ ==============
</TABLE>
Statement of Operations
Year Ended December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
First Investors First Investors
Cash Management Tax-Exempt Money
Fund, Inc. Market Fund, Inc.
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest income $6,861,330 $863,941
------------ --------------
Expenses (Notes 1E and 3):
Advisory fee 625,485 123,037
Shareholder servicing costs 675,051 86,431
Custodian fees 51,097 15,845
Professional fees 47,073 22,716
Reports and notices to shareholders 58,389 4,723
Other expenses 36,614 12,417
------------ --------------
Total expenses 1,493,709 265,169
Less: Expenses waived or assumed (615,961) (90,880)
Custodian fees paid indirectly (1,360) (1,328)
------------ --------------
Net expenses 876,388 172,961
------------ --------------
Net investment income 5,984,942 690,980
Net realized gain on investments 4,327 --
------------ --------------
Net Increase in Net Assets Resulting from Operations $5,989,269 $690,980
============ ==============
</TABLE>
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
First Investors First Investors
Cash Management Tax-Exempt Money
Fund, Inc. Market Fund, Inc.
---------------------------------- ---------------------------------
Year Ended December 31 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 5,984,942 $ 6,474,202 $ 690,980 $ 792,563
Net realized gain (loss) on investments 4,327 6,967 -- (742)
------------ ------------ ------------ ------------
Net increase in net assets resulting
from operations and declared as
distributions to shareholders
(Note 1C) $ 5,989,269 $ 6,481,169 $ 690,980 $ 791,821
============ ============ ============ ============
Capital Share Transactions (Note 2)
Class A:
Proceeds from shares sold $266,249,897 $270,334,802 $29,038,289 $34,618,262
Value of distributions reinvested 5,804,016 6,848,793 681,810 772,248
Cost of shares redeemed (266,887,931) (277,043,961) (31,877,037) (36,769,598)
------------ ------------ ------------ ------------
5,165,982 139,634 (2,156,938) (1,379,088)
------------ ------------ ------------ ------------
Class B:
Proceeds from shares sold 545,531 90,178 99,668 10
Value of distributions reinvested 2,349 349 952 --
Cost of shares redeemed (496,463) (35,000) (20,799) --
------------ ------------ ------------ ------------
51,417 55,527 79,821 10
------------ ------------ ------------ ------------
Total increase (decrease) in net assets 5,217,399 195,161 (2,077,117) (1,379,078)
Net Assets
Beginning of year 128,690,297 128,495,136 25,044,561 26,423,639
------------ ------------ ------------ ------------
End of year $133,907,696 $128,690,297 $22,967,444 $25,044,561
============ ============ ============ ============
</TABLE>
Notes to Financial Statements
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
1. Significant Accounting Policies--The Funds are registered under the
Investment Company Act of 1940 (the "1940 Act") as diversified, open-end
management investment companies. The objective of each Fund is as
follows:
Cash Management Fund seeks to earn a high rate of current income
consistent with the preservation of capital and maintenance of
liquidity.
Tax-Exempt Money Market Fund seeks to earn a high rate of current income
exempt from federal income tax and is not an item of tax preference for
purposes of the federal alternative minimum tax, consistent with the
preservation of capital and maintenance of liquidity.
A. Security Valuation--The Funds value portfolio securities using the
amortized cost method, which excludes unrealized gains or losses from
the computation of portfolio value. This is accomplished by valuing a
security at cost plus amortization of discount or accretion of premium.
While this method of valuation tends to produce stable valuation of
securities held to their maturity, the actual market value of the
security, if sold prior to maturity, may vary from the security's value
to the Funds while in the Funds' portfolios.
B. Federal Income Taxes--It is the policy of the Funds to continue to
comply with the special provisions of the Internal Revenue Code
applicable to investment companies and to make sufficient distributions
of income and capital gains to relieve the Funds from all, or
substantially all, federal income taxes.
C. Distributions--The Funds declare distributions daily and pay
distributions monthly. Distributions are declared from the total of net
investment income and net realized gains or losses on investments.
Distributions paid by the Tax-Exempt Money Market Fund from net
investment income are considered exempt-interest dividends and as such
should not be subject to federal income taxes.
D. Use of Estimates--The preparation of the financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the recorded
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
E. Other--Security transactions are accounted for on the date the
securities are purchased or sold. Cost is determined, and gains and
losses are based, on the amortized cost basis for both financial
statement and federal income tax purposes. Interest income and estimated
expenses are accrued daily. The custodian of Cash Management Fund and
Tax-Exempt Money Market Fund has provided credits in the amounts of
$1,360 and $1,328, respectively, against custodian charges based on the
uninvested cash balances of the Funds.
2. Capital Stock--At December 31, 1996, paid-in capital amounted to
$133,907,696 for the Cash Management Fund and $22,967,444 for the Tax-
Exempt Money Market Fund. The numbers of shares transacted during the
period are the same as the amounts included in the Statement of Changes
in Net Assets since shares are recorded at $1.00 per share.
Each Fund offers two classes of shares, Class A and B. Both classes are
sold without an initial sales charge. However, Class B shares, which may
only be acquired through an exchange of Class B shares from another
First Investors eligible fund or through the reinvestment of dividends
on Class B shares are generally subject to a contingent deferred sales
charge at the rate of 4% in the first year and declining to 0% after the
sixth year which is payable to FIC as underwriter of the Funds.
3. Advisory Fee and Other Transactions With Affiliates--Certain officers
and directors of the Funds are officers and directors of the investment
adviser, First Investors Management Company, Inc. ("FIMCO"), the
underwriter, First Investors Corporation ("FIC"), the transfer agent,
Administrative Data Management Corp. ("ADM") and/or First Financial
Savings Bank, S.L.A. ("FFS"), custodian of the Cash Management Fund's
Individual Retirement Accounts. Officers and directors of the Funds
received no remuneration from the Funds for serving in such capacities.
Their remuneration (together with certain other expenses of the Funds)
is paid by FIMCO or FIC.
The Investment Advisory Agreements provide as compensation to FIMCO an
annual fee, payable monthly, at the rate of 1/2 of 1% of each Fund's
average daily net assets. For the year ended December 31, 1996, the
investment adviser assumed expenses of the Cash Management Fund and the
Tax-Exempt Money Market Fund of $443,804 and $68,412, respectively.
For the year ended December 31, 1996, shareholder servicing costs of the
Cash Management Fund included transfer agent fees and out of pocket
expenses accrued to ADM of $344,803 (of which $172,001 was waived) and
$22,113 in custodian fees paid to FFS. The Tax-Exempt Money Market
Fund's shareholder servicing costs included transfer agent fees and out
of pocket expenses accrued to ADM in the amount of $44,713 (of which
$22,357 was waived).
For the year ended December 31, 1996, FIC received contingent deferred
sales charges from the redemption of Class B shares of the Cash
Management Fund and the Tax-Exempt Money Market Fund amounting to
$12,307 and $799, respectively. In addition, Class B shares are subject
to monthly 12b-1 fees which are payable to FIC at the rate of 1% of the
Class B shares' average net assets. For the year ended December 31,
1996, FIC received a total of $802 in 12b-1 fees from the two Funds,
after waiving $267 (or 1/4 of the 1% fee).
Financial Highlights
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
<TABLE>
<CAPTION>
The following table sets forth the per share operating performance data for a share of capital stock
outstanding, total return, ratios to average net assets and other supplemental data for each year indicated.
- ------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA RATIOS / SUPPLEMENTAL DATA
------------------------------------ ---------------------------------------------------------
Ratio to Average
Net Assets
Ratio to Prior to Waiver
Average Net Assets+ of Fees (Note 3)
Net Asset -------------------- -------------------
Value Dividends Net Assets, Net Net
(unchanged Net from Net Total End of Investment Investment
during each Investment Investment Return Year Expenses Income Expenses Income
year) Income Income (%) (thousands) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
- ------------------------------------------
CLASS A
- -------
1987 $1.00 $.058 $.058 6.01 $218,099 .98 5.84 1.02 5.80
1988 1.00 .068 .068 7.03 222,715 .85 6.83 .95 6.73
1989 1.00 .085 .085 8.80 335,678 .84 8.44 .96 8.32
1990 1.00 .074 .074 7.71 372,081 .86 7.45 .96 7.35
1991 1.00 .052 .052 5.35 217,150 .94 5.33 1.13 5.14
1992 1.00 .030 .030 3.03 150,895 .87 3.02 1.16 2.72
1993 1.00 .025 .025 2.57 127,178 .70 2.54 1.15 2.09
1994 1.00 .036 .036 3.69 128,495 .70 3.72 1.15 3.26
1995 1.00 .053 .053 5.42 128,635 .70 5.29 1.18 4.81
1996 1.00 .048 .048 4.89 133,801 .70 4.78 1.19 4.29
CLASS B
- -------
1995* 1.00 .044 .044 4.46 56 1.45(a) 4.54(a) 1.93(a) 4.06(a)
1996 1.00 .040 .040 4.11 107 1.45 4.04 1.94 3.54
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
- --------------------------------------------------
CLASS A
- -------
1987 $1.00 $.039 $.039 4.01 $ 40,106 .76 3.92 N/A N/A
1988 1.00 .046 .046 4.68 39,467 .75 4.59 N/A N/A
1989 1.00 .055 .055 5.67 36,736 .81 5.52 N/A N/A
1990 1.00 .052 .052 5.31 40,745 .80 5.19 N/A N/A
1991 1.00 .038 .038 3.87 31,157 .94 3.83 1.02 3.74
1992 1.00 .023 .023 2.36 25,399 .95 2.33 1.05 2.23
1993 1.00 .018 .018 1.85 23,857 .70 1.83 .92 1.61
1994 1.00 .022 .022 2.24 26,424 .70 2.24 1.02 1.92
1995 1.00 .032 .032 3.24 25,045 .71 3.18 1.06 2.84
1996 1.00 .028 .028 2.85 22,888 .71 2.81 1.08 2.44
CLASS B
- -------
1995* 1.00 .024 .024 2.40 .01 1.46(a) 2.43(a) 1.81(a) 2.09(a)
1996 1.00 .020 .020 2.04 80 1.46 2.06 1.83 1.69
- ------------------------------------------------------------------------------------------------------------------------
+ Net of fees waived or assumed
* For the period January 12, 1995 (date Class B shares were first offered) to December 31, 1995
(a) Annualized
</TABLE>
Independent Auditor's Report
To the Shareholders and Board of Directors of
First Investors Cash Management Fund, Inc. and
First Investors Tax-Exempt Money Market Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
First Investors Cash Management Fund, Inc. and First Investors Tax-
Exempt Money Market Fund, Inc. including the portfolios of investments,
as of December 31, 1996, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the
two years in the period then ended and financial highlights for each of
the periods presented. These financial statements and financial
highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1996, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of First Investors Cash Management Fund, Inc. and
First Investors Tax-Exempt Money Market Fund, Inc. at December 31, 1996,
and the results of their operations, changes in their net assets and
financial highlights for each of the respective periods presented, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 31, 1997
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Directors
- -------------------------------------
James J. Coy
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- -------------------------------------
Glenn O. Head
President
Michael J. O'Keefe
Vice President
Concetta Durso
Vice President and Secretary
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
Gregory R. Kingston
Assistant Treasurer
Mark S. Spencer
Assistant Treasurer
Each Fund is a money market fund and seeks to maintain a stable net
asset value of $1.00 per share. However, there can be no assurance that
either Fund will be able to do so or to achieve its investment
objective. An investment in either Fund is neither insured nor
guaranteed by the U.S. Government.
Shareholder Information
- -------------------------------------
Investment Adviser
First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is each Fund's practice to mail only one copy of its annual and semi-
annual reports to any address at which more than one shareholder with
the same last name has indicated that mail is to be delivered.
Additional copies of the reports will be mailed if requested by any
shareholder in writing or by calling 800-423-4026. Each Fund will ensure
that separate reports are sent to any shareholder who subsequently
changes his or her mailing address.
This report is authorized for distribution only to existing
shareholders, and, if given to prospective shareholders, must be
accompanied or preceded by the Fund's prospectus.
