FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
95 WALL STREET
NEW YORK, NY 10005
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A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
FIMM-103
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FIRST
INVESTORS
CASH
MANAGEMENT
FUND, INC.
FIRST
INVESTORS
TAX-EXEMPT
MONEY MARKET
FUND, INC.
ANNUAL REPORT
DECEMBER 31, 1997
Portfolio Manager's Letter
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Dear Investor:
1997 was a very good year for the U.S. economy and financial markets.
The economy grew at an annual pace of 3.8%, with the unemployment
rate falling to its lowest level since the 1970's. Despite faster
economic growth, inflation, as measured by the Consumer Price Index,
rose less than 2%, its smallest increase in over ten years.
Reflecting the strong economy, the Federal budget deficit declined
substantially and had almost been eliminated by year-end. Against
this backdrop, the Federal Reserve held monetary policy steady after
one small increase in the benchmark Federal funds rate in March.
Although both the U.S. bond and stock markets suffered setbacks at
times during the year, the combination of moderate growth and low
inflation ultimately provided a rewarding environment for investors.
Long-term bond yields fell to their lowest level in two years, while
the broad stock market indices recorded their third consecutive year
of substantial gains. While many overseas markets were buffeted by
the economic crisis in Southeast Asia, U.S. markets remained
relatively stable or -- in the case of the bond market -- benefited
from a "flight to safety" as investors sought the security of the
world's largest and most efficient financial markets.
Short-term interest rates edged higher during the first quarter of
1997 after the Federal Reserve raised the Federal funds rate by 25
basis points. The next few months were marked by on-again off-again
expectations of further tightenings from the Federal Reserve. During
the second half of the year, the market became more comfortable with
the outlook for stable short-term interest rates as continued growth
in the economy and tightness in labor markets failed to produce
little more than a hint of inflation.
Quality and product spreads held steady through most of the year
before widening sharply over the last two months, as financial
markets across the world reacted to the turmoil in Asia. Companies
with lower ratings had to pay relatively higher interest rates to
borrow money as investors became more cautious.
In 1997, investors continued to express their need to diversify their
financial assets by buying money market funds. Assets in taxable
money market funds increased by about 18% over the course of the
year, while assets in tax-exempt money market funds increased by
about 14%. Though investors realize that returns offered by money
market funds are generally lower than returns offered by other types
of mutual funds, the liquidity and relatively stable asset value of
money funds remain a key attraction to investors.
For 1997, the Cash Management Fund Class A shares returned 5.0% and
the Class B shares returned 4.2%. For the same period, the Tax-Exempt
Money Market Fund Class A shares returned 3.0% and the Class B shares
returned 2.2%, 100% of which was free from federal income taxes. The
Funds maintained a $1.00 net asset value for each class of shares
throughout the year.
The Funds will continue to focus on credit quality and liquidity in
1998 while maintaining their conservative approach to investing. The
Funds will invest only in those securities considered at the time of
purchase to present minimal market and credit risk to their
shareholders. Given the outlook for stable short-term interest rates,
the Funds will likely maintain weighted average maturities that are
similar to those of their peers.
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.
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.
Following 1997's strong performance, the outlook for U.S. financial
markets continues to be positive, although uncertainties do exist. In
particular, we believe that the economic problems in Southeast Asia
will slow growth in the U.S. However, it is unclear to what extent
growth will be slowed and, consequently, what the ultimate impact
will be on the financial markets. On a positive note, Southeast
Asia's problems should result in lower inflation worldwide.
Uncertainty often leads to volatile markets. During such times,
investors are generally best served by focusing on long-term
objectives and maintaining a disciplined approach to investing.
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 30, 1998
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
December 31, 1997
- ------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BANKERS' ACCEPTANCES--2.0%
$2,800M Regions Bank, 4/28/98 (cost $2,749,314) 5.57% $ 2,749,314 $ 197
- ------------------------------------------------------------------------------------------------------------------
CORPORATE NOTES--88.5%
3,000M Archer-Daniels Midland Co., 2/13/98 5.68 2,979,647 213
1,000M Associates Corp. N.A., 5/15/98 5.82 1,004,946 72
2,000M Avnet, Inc., 1/28/98 5.57 1,991,645 142
2,000M Avnet, Inc., 2/20/98 5.76 1,984,000 142
2,300M BellSouth Telecommunications, Inc., 2/25/98 5.75 2,279,795 163
5,485M Brown-Forman Corp., 1/7/98 6.05 5,479,469 392
5,000M Carolina Power & Light Co., 3/20/98 5.70 4,938,250 353
6,500M Engelhard Corporation, 2/27/98 5.72 6,441,132 460
1,000M Florida Power Corp., 1/14/98 5.82 997,898 71
5,000M Florida Power Corp., 2/26/98 5.83 4,954,656 354
1,500M Ford Motor Credit Corp., 1/23/98 5.60 1,494,866 107
5,000M Ford Motor Credit Corp., 2/26/98 5.70 4,955,666 354
4,800M Gannett, Inc., 3/1/98 5.84 4,795,358 343
2,000M General Electric Capital Corp., 1/21/98 5.72 1,993,644 142
500M General Electric Capital Corp., 1/23/98 5.60 498,289 36
2,000M General Electric Capital Corp., 2/25/98 5.71 1,982,553 142
3,000M Golden Peanut Co., 2/5/98 5.57 2,983,754 213
5,000M Kellogg Company, 1/2/98 6.60 4,999,083 358
3,450M McDonald's Corporation, 1/6/98 6.15 3,447,053 247
6,000M McGraw-Hill Incorporated, 3/19/98 5.67 5,927,235 424
2,500M Merrill Lynch & Co., 3/27/98 5.71 2,466,295 176
4,000M MetLife Funding, Inc., 2/17/98 5.66 3,970,442 284
5,000M Nalco Chemical Co., 2/17/98 5.75 4,962,465 355
3,000M National Rural Utilities Coop. Fin. Corp., 3/27/98 5.67 2,959,838 212
2,557M Peoples Gas Light Co., 1/5/98 6.40 2,555,182 183
5,000M Schering Corp., 3/17/98 5.70 4,940,625 353
5,800M Southern California Edison Company, 1/15/98 5.90 5,786,692 414
1,500M Southern Company, 1/9/98 5.83 1,498,057 107
2,350M Southern Company, 3/12/98 5.77 2,323,635 166
5,000M The Stanley Works, 2/3/98 5.57 4,974,471 356
5,000M Texaco Inc., 3/13/98 5.74 4,943,397 354
5,000M Washington Gas Light Company, 2/12/98 5.75 4,966,458 355
3,850M Winn-Dixie Stores, Inc., 1/13/98 5.58 3,842,839 275
2,500M Winn-Dixie Stores, Inc., 2/10/98 5.68 2,484,222 178
5,000M Wisconsin Power & Light Co., 2/5/98 5.90 4,971,320 356
- ------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Notes (cost $123,774,877) 123,774,877 8,852
- ------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES--3.3%
1,500M Federal Home Loan Mortgage Corp., 3/16/98 5.68 1,499,021 107
1,000M Federal Home Loan Mortgage Corp., 5/18/98 5.84 997,834 71
560M Federal National Mortgage Association, 5/13/98 5.72 559,014 40
1,550M Federal National Mortgage Association, 7/15/98 5.82 1,545,170 111
- ------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agencies
(cost $4,601,039) 4,601,039 329
- ------------------------------------------------------------------------------------------------------------------
VARIABLE RATE NOTES--5.4%
2,000M Bankers Trust Co., 7/14/98 6.20 1,999,756 143
1,800M IBM Credit Corp., 7/6/98 6.11 1,799,399 129
1,000M IBM Credit Corp., 7/28/98 6.18 1,002,294 71
2,800M PNC Bank N.A., 9/16/98 6.12 2,798,831 200
- ------------------------------------------------------------------------------------------------------------------
Total Value of Variable Rate Notes (cost $7,600,280) 7,600,280 543
- ------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $138,725,510)+ 99.2% 138,725,510 9,921
Other Assets, Less Liabilities .8 1,104,296 79
- ------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $139,829,806 $10,000
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
*The interest rates shown for the bankers' acceptances, corporate and U.S. Government agencies
notes are the effective rate at the time of purchase by the Fund. The interest rates shown on
variable rate notes are adjusted periodically; the interest shown are the rates that were in
effect at December 31, 1997.
+Aggregate cost for federal income tax purposes is the same.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
December 31, 1997
- ------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL NOTES AND VARIABLE RATE SECURITIES--98.0%
Alabama--4.8%
$ 900M City of Birmingham Wts., Series A, VR, 4.15%
(LOC; First Alabama Bank) $ 900,000 $ 482
- ------------------------------------------------------------------------------------------------------------------
California--5.4%
500M California State Rev. Antic. Notes, 4.5%, 6/30/98 501,552 268
500M L.A. County Tax & Rev. Antic. Notes, 4.5%, 6/30/98 501,542 268
- ------------------------------------------------------------------------------------------------------------------
1,003,094 536
- ------------------------------------------------------------------------------------------------------------------
Colorado--.1%
20M Clear Creek County Rev. Antic. Wts., VR, 3.65%
(LOC; National Westminster Bank) 20,000 11
- ------------------------------------------------------------------------------------------------------------------
District of Columbia--5.3%
1,000M District of Columbia Rev. Bonds (American University), VR, 3.85%
(LOC; National Westminister Bank) 1,000,000 535
- ------------------------------------------------------------------------------------------------------------------
Florida--2.7%
500M Jacksonville Health Facs. Auth. Rev. Bonds (Jacksonville Faculty Project),
VR, 4.25% (LOC; NationsBank, N.A.) 500,000 268
- ------------------------------------------------------------------------------------------------------------------
Illinois--5.3%
1,000M Illinois Edl. Facs. Auth. Rev. Bonds (Field Museum Nat. Hist.),
VR, 3.8% (LOC; Northern Trust Company) 1,000,000 535
- ------------------------------------------------------------------------------------------------------------------
Kansas--2.7%
500M Topeka Temporary Notes Series A, 4.25%, 3/4/98 500,454 268
- ------------------------------------------------------------------------------------------------------------------
Louisiana--5.3%
1,000M Jefferson Parish Hosp. Svc. Rev. Bonds (Service District No. 2),
VR, 3.8% (FGIC Insured) (SPA; FGIC Securities) 1,000,000 535
- ------------------------------------------------------------------------------------------------------------------
Maine--2.7%
500M Maine Health & Higher Ed. Fac. Auth. Rev. Bonds (New England Inc.--
Series B), VR, 3.7% (AMBAC Insured)(SPA; First National Bank Chicago) 500,000 268
- ------------------------------------------------------------------------------------------------------------------
Maryland--4.8%
900M Baltimore County Poll. Control Rev. Bonds (Baltimore Gas & Electric Co.),
CP, 3.7%, 4/9/98 900,000 481
- ------------------------------------------------------------------------------------------------------------------
Michigan--2.7%
500M Detroit Michigan City School Dist. School Aid Notes, 4.5%, 5/1/98 500,955 268
- ------------------------------------------------------------------------------------------------------------------
Missouri--4.7%
875M Missouri State Env. Impt. & Energy Res. Auth. Poll. Control Rev. Bonds
(National Rural Utilities Coop. Fin. Corp.), VR, 3.85% 875,000 468
- ------------------------------------------------------------------------------------------------------------------
New York--5.3%
1,000M Niagara County Indl. Dev. Agy. Rev. Bonds (American Ref.-Fuel Co. A),
VR, 3.8% 1,000,000 535
- ------------------------------------------------------------------------------------------------------------------
Ohio--5.9%
1,100M Scioto County Hosp. Facs. Rev. Bonds (Cent. Inc. Cap. Asset-B), VR, 3.7%
(AMBAC Insured) (SPA; First National Bank Chicago) 1,100,000 588
- ------------------------------------------------------------------------------------------------------------------
Oregon--2.7%
500M Klamath Falls, Elec. Rev. Bonds (Salt Caves Hydro. Project), 4.5%, 5/1/98
(Escrowed to put in U.S. Treasury Securities) 500,793 268
- ------------------------------------------------------------------------------------------------------------------
Pennsylvania--5.4%
1,000M York County General Auth. Pooled Fin. Rev. Bonds, VR, 4.2%
(LOC; First Union National Bank) 1,000,000 535
- ------------------------------------------------------------------------------------------------------------------
South Carolina--2.1%
400M South Carolina Ed. Facs. Auth. Rev. Bonds (Presbyterian Coll. Proj.),
VR, 4.2% (LOC; Wachovia Bank of South Carolina) 400,000 214
- ------------------------------------------------------------------------------------------------------------------
Tennessee--4.8%
900M Clarksville Public Building Authority Bonds, VR, 4.2%
(LOC; NationsBank of Florida) 900,000 481
- ------------------------------------------------------------------------------------------------------------------
Texas--4.1%
500M State of Texas Tax & Rev. Antic. Notes, 4.75%, 8/31/98 502,872 269
260M Texas State General Obligation Bonds, 8.1%, 6/1/98 (Prerefunded) 264,518 142
- ------------------------------------------------------------------------------------------------------------------
767,390 411
- ------------------------------------------------------------------------------------------------------------------
Utah--2.7%
500M Salt Lake City Tax & Rev. Antic. Notes, 4.5%, 6/30/98 501,533 268
- ------------------------------------------------------------------------------------------------------------------
Virginia--9.4%
750M Alexandria Indl. Dev. Auth. Rev. Bonds, VR, 4.1%
(LOC; First Union National Bank) 750,000 401
500M Louisiana County Indl. Dev. Auth. Rev. Bonds, VR, 4.2%
(LOC; NationsBank of Virginia) 500,000 267
400M Lynchburg Indl. Dev. Auth. Hosp. Fac. Rev. Bonds, (Mid Atlantic/Cap-G)
VR, 3.7% (AMBAC Insured)(SPA; Mellon Bank) (Escrowed in U.S.
Government Securities) 400,000 214
100M Lynchburg Indl. Dev. Auth. Hosp. Fac. Rev. Bonds, (Mid Atlantic/Cap-E)
VR, 3.7% (AMBAC Insured) (SPA; Mellon Bank) 100,000 54
- ------------------------------------------------------------------------------------------------------------------
1,750,000 936
- ------------------------------------------------------------------------------------------------------------------
Washington--4.3%
800M Port Kalama, Washington Pub. Corp. Rev. Bonds (Conagra Inc. Proj.),
VR, 3.7% (LOC; Morgan Guaranty Trust Co.) 800,000 428
- ------------------------------------------------------------------------------------------------------------------
West Virginia--1.1%
200M West Virginia Hosp. Fin. Auth. Hosp. Rev. Bonds (St. Joseph's Hospital
Proj.), VR, 3.75% (LOC; Bank One of West Virginia) 200,000 107
- ------------------------------------------------------------------------------------------------------------------
Wisconsin--3.7%
500M Racine Unified School District Tax & Rev. Antic. Notes, 4.25%, 8/24/98 501,241 268
200M Wisconsin State Operating Notes, 4.5%, 6/15/98 200,566 107
- ------------------------------------------------------------------------------------------------------------------
701,807 375
- ------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $18,321,026)+ 98.0% 18,321,026 9,801
Other Assets, Less Liabilities 2.0 372,426 199
- ------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $18,693,452 $10,000
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
The interest rates 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, 1997. 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:
CP Municipal Commercial Paper
LOC Letter of Credit
SPA Security Purchase Agreement
VR Variable Rate Securities
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
December 31, 1997
- --------------------------------------------------------------------------------------------------------------------------
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 $138,725,510 $18,321,026
============ ===========
At value $138,725,510 $18,321,026
Cash 1,308,912 272,512
Interest receivable 234,433 123,581
Other assets 24,200 4,891
------------ -----------
Total Assets 140,293,055 18,722,010
------------ -----------
Liabilities
Payables:
Capital shares redeemed 287,948 5,228
Dividend disbursing agent 14,343 457
Accrued expenses 103,898 14,804
Accrued advisory fee 57,060 8,069
------------ -----------
Total Liabilities 463,249 28,558
------------ -----------
Net Assets $139,829,806 $18,693,452
============ ===========
Capital shares outstanding (Note 2):
Class A 139,562,429 18,680,240
Class B 267,377 13,212
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
===== =====
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
Year Ended December 31, 1997
- --------------------------------------------------------------------------------------------------------------------------
First Investors First Investors
Cash Management Tax-Exempt Money
Fund, Inc. Market Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest income $7,547,590 $783,082
------------ -----------
Expenses (Notes 1 and 3):
Advisory fee 669,184 105,807
Shareholder servicing costs 734,312 81,834
Custodian fees 71,368 15,287
Reports and notices to shareholders 39,076 4,675
Professional fees 33,479 17,908
Other expenses 41,713 12,733
------------ -----------
Total expenses 1,589,132 238,244
Less: Expenses waived or assumed (559,860) (78,896)
Custodian fees paid indirectly (285) (220)
------------ -----------
Net expenses 1,028,987 159,128
------------ -----------
Net investment income 6,518,603 623,954
Net realized loss on investments (395) --
------------ -----------
Net Increase in Net Assets Resulting from Operations $6,518,208 $623,954
============ ===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------------------------------------------------
First Investors First Investors
Cash Management Tax-Exempt Money
Fund, Inc. Market Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $ 6,518,603 $ 5,984,942 $ 623,954 $ 690,980
Net realized gain (loss) on investments (395) 4,327 -- --
------------ ------------ ----------- -----------
Net increase in net assets resulting
from operations and declared as
distributions to shareholders
(Note 1C) $ 6,518,208 $ 5,989,269 $ 623,954 $ 690,980
============ ============ =========== ===========
Capital Share Transactions (Note 2)
Class A:
Proceeds from shares sold $233,709,809 $266,249,897 $28,663,885 $29,038,289
Value of distributions reinvested 6,358,311 5,804,016 613,112 681,810
Cost of shares redeemed (234,306,443) (266,887,931) (33,484,370) (31,877,037)
------------ ------------ ----------- -----------
5,761,677 5,165,982 (4,207,373) (2,156,938)
------------ ------------ ----------- -----------
Class B:
Proceeds from shares sold 743,487 545,531 8,935 99,668
Value of distributions reinvested 8,777 2,349 952 952
Cost of shares redeemed (591,831) ( 496,463) (76,506) (20,799)
------------ ------------ ----------- -----------
160,433 51,417 (66,619) 79,821
------------ ------------ ----------- -----------
Total increase (decrease) in net assets 5,922,110 5,217,399 (4,273,992) (2,077,117)
Net Assets
Beginning of year 133,907,696 128,690,297 22,967,444 25,044,561
------------ ------------ ----------- -----------
End of year $139,829,806 $133,907,696 $18,693,452 $22,967,444
============ ============ =========== ===========
See notes to financial statements
</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 that is 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 $285 and $220, respectively, against custodian charges
based on the uninvested cash balances of the Funds.
2. Capital Stock--At December 31, 1997, paid-in capital amounted to
$139,829,806 for the Cash Management Fund and $18,693,452 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) was paid by FIMCO or FIC. Effective
January 1, 1998, independent directors will be remunerated by the
Funds.
The Investment Advisory Agreements provide as compensation to FIMCO an
annual fee, payable monthly, at the rate of .50% of each Fund's
average daily net assets. For the year ended December 31, 1997, the
investment adviser assumed expenses of the Cash Management Fund and
the Tax-Exempt Money Market Fund of $379,265 and $57,762,
respectively.
For the year ended December 31, 1997, shareholder servicing costs of
the Cash Management Fund included transfer agent fees accrued to ADM
of $565,142 (of which $180,595 was waived) and $21,296 in IRA
custodian fees paid to FFS. The Tax-Exempt Money Market Fund's
shareholder servicing costs included transfer agent fees accrued to
ADM in the amount of $63,432 (of which $21,134 was waived).
For the year ended December 31, 1997, 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
$10,809 and $2,906, respectively. In addition, Class B shares are
subject to distribution plan fees which are payable monthly to FIC at
the annual rate of up to 1% of the Class B shares' average net assets.
For the year ended December 31, 1997, FIC received a total of $2,032
in distribution plan fees from the two Funds, after waiving $677 (or
25% of the fee). Such amounts are included in other expenses on the
Statement of Operations.
<TABLE>
<CAPTION>
Financial Highlights
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
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
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
1997 1.00 .049 .049 4.98 139,562 .77 4.87 1.19 4.45
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 4.03 1.94 3.54
1997 1.00 .041 .041 4.20 267 1.52 4.12 1.94 3.70
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
CLASS A
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
1997 1.00 .030 .030 3.00 18,680 .75 2.95 1.12 2.58
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
1997 1.00 .022 .022 2.20 13 1.50 2.20 1.87 1.83
+ 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
See notes to financial statements.
</TABLE>
Independent Auditors' 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, 1997, 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 the periods indicated thereon. 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 audits
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, 1997, 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,
1997, and the results of their operations, changes in their net assets
and financial highlights for the periods indicated thereon, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 30, 1998
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Directors
- ------------------------------------------------------
James J. Coy (Emeritus)
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
Nancy S. Schaenen
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
Eight Penn Center Plaza
Philadelphia, PA 19103
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.
