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CASH MANAGEMENT
TAX-EXEMPT MONEY MARKET
MONEY MARKET FUNDS
ANNUAL REPORT
DECEMBER 31, 1998
Portfolio Manager's Letter
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Dear Investor:
We are pleased to present the annual report for the First Investors Cash
Management Fund, Inc. and First Investors Tax-Exempt Money Market Fund,
Inc. (collectively, "the Funds") for the fiscal year ending December 31,
1998.
For 1998, 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 2.8% and the Class B shares returned 1.8%, 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' performance was primarily the result of substantial declines in
interest rates, which occurred in an already low interest rate environment.
The Federal Reserve lowered short-term interest rates three times in an
eight week period that began in September.
Short-term interest rates had remained generally low through most of 1998,
before edging even lower late in the third quarter and throughout the
fourth quarter. It was during that time period that the Federal Reserve
lowered short-term interest rates in an effort to add liquidity to the
marketplace and stem the disruption in the U.S. financial markets caused by
the turmoil in several of the world's emerging economies.
In a year in which economists continuously called for the U.S. economy to
slow, investors focused their efforts on the quality of their portfolios.
Consequently, quality spreads widened over the course of the year, with
lower-rated companies having to pay higher interest rates to borrow money
than did higher-rated borrowers. In addition, issuers that generated a
significant portion of their revenues from sales in foreign markets came
under greater scrutiny and were also subject to relatively higher borrowing
costs.
Investors continued to express their need to diversify their financial
assets by buying money market funds. In 1998, assets in taxable money
market funds increased by about 27% over the course of the year, while
assets in tax exempt money market funds increased by about 17%. Though
investors realize that the potential returns offered by money market funds
are generally lower than the returns offered by other types of mutual
funds, the liquidity and relatively stable net asset value nature of a
money market fund remains a key attraction to investors. According to the
Investment Company Institute, money market funds accounted for more than
50% of all net new cash flows into the mutual fund industry.
Money market funds continue to be among the most conservative investment
vehicles available, offering relative stability of principal, easy access
to account information and a return that is generally higher than that
available on most bank savings and checking accounts. Even though the Funds
are conservative, 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 any bank or other entity.
Your Funds will continue to focus on credit quality and liquidity in 1999.
The Funds will continue to purchase only those securities considered at the
time of purchase to present minimal market and credit risk to their
shareholders. Given the uncertainty of the direction of interest rates, the
Funds will likely maintain weighted average maturities that are similar to
those of their peers.
Thank you for placing your trust in First Investors. 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 29, 1999
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
December 31, 1998
- ------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE NOTES--88.3%
$2,000M Air Products & Chemicals, Inc., 1/29/99 5.22% $1,991,880 $123
5,000M Alabama Power Co., 8/1/99 5.67 5,018,652 310
550M Alabama Power Co., 8/1/99 5.03 553,930 34
4,000M Anheuser Busch Co., Inc., 12/1/99 5.00 4,132,250 255
539M Anheuser Busch Co., Inc., 12/1/99 5.25 555,620 34
1,975M Associates First Capital Corp., 5/15/99 5.05 1,991,604 123
4,300M BellSouth Telecommunications, Inc.,
1/13/99 4.87 4,293,020 265
6,000M Carolina Power & Light Co., 2/3/99 5.13 5,971,785 369
2,500M Chevron USA, Inc., 1/8/99 5.41 2,497,370 154
5,000M Chevron USA, Inc., 1/14/99 5.25 4,990,521 308
6,000M Coca-Cola Company, 2/26/99 5.05 5,952,866 368
5,000M Consolidated Natural Gas Company,
2/1/99 5.10 4,978,041 307
5,250M Dow Chemical Company, 1/4/99 5.20 5,247,725 324
750M Duke Energy Co., 11/1/99 5.01 767,863 47
3,300M Eastman Kodak Company, 2/1/99 5.30 3,284,939 203
1,280M Florida Power Corp., 1/12/99 5.25 1,277,947 79
310M Ford Motor Credit Corp., 1/15/99 5.70 309,978 19
1,100M Ford Motor Credit Corp., 3/26/99 5.50 1,107,152 68
500M Ford Motor Credit Corp., 5/15/99 5.65 502,722 31
500M Ford Motor Credit Corp., 5/15/99 5.20 503,453 31
3,000M General Electric Capital Corp., 1/13/99 5.35 2,994,650 185
250M General Electric Capital Corp., 8/20/99 5.76 250,783 15
500M GTE Northwest, Inc., 2/15/99 5.09 500,481 31
2,000M Hartford Steam Boiler Insp. & Ins. Co.,
2/17/99 5.25 1,986,292 123
3,250M Hartford Steam Boiler Insp. & Ins. Co.,
3/3/99 5.11 3,221,859 199
5,000M Heinz (H.J.) Company, 2/17/99 5.13 4,966,512 307
1,000M IBM Credit Corp., 5/10/99 5.07 1,005,217 62
2,540M Kellogg Co., 1/26/99 5.60 2,530,122 156
3,000M Kellogg Co., 3/11/99 5.10 2,970,675 183
4,000M Laclede Gas Co., 1/11/99 5.12 3,994,311 247
6,000M McGraw-Hill, Inc., 2/19/99 5.17 5,957,778 368
420M Michigan Bell Telephone Co., 9/15/99 5.20 421,879 26
2,650M Nalco Chemical Co., 3/22/99 5.05 2,620,261 162
1,000M National Rural Utilities Coop. Fin. Corp.,
1/15/99 5.51 1,000,831 62
500M Northern States Power Co., 2/1/99 5.66 499,882 31
2,000M Paccar Financial Corp., 4/15/99 5.25 2,004,540 124
1,500M Paccar Financial Corp., 7/15/99 5.73 1,503,602 93
1,000M Pacific Telephone & Telegraph Co.,
4/1/99 5.22 998,321 62
6,000M PepsiCo, Inc. 1/21/99 5.15 5,982,834 369
1,000M PepsiCo, Inc. 9/1/99 5.22 1,006,439 62
635M Pitney Bowes Credit Corp., 7/15/99 5.70 637,751 39
3,000M Pitney Bowes, Inc., 1/6/99 5.65 2,997,646 185
3,000M Pitney Bowes, Inc., 1/14/99 4.95 2,994,638 185
7,000M Proctor & Gamble Co., 1/14/99 5.30 6,986,603 431
6,000M Southern California Edison Company,
1/14/99 5.45 5,988,191 370
500M Southern California Edison Company,
4/15/99 5.04 503,338 31
4,000M Texaco, Inc., 1/6/99 5.75 3,996,806 247
2,500M Texaco Capital, Inc., 7/15/99 5.57 2,516,733 155
740M Texaco Capital, Inc., 7/15/99 5.40 745,563 46
500M Texaco Capital, Inc., 12/15/99 5.10 511,989 32
2,700M The New York Times Co., 1/6/99 5.30 2,698,013 167
5,100M Washington Gas Light Co., 1/19/99 5.12 5,086,944 314
1,500M Winn-Dixie Stores, Inc., 1/12/99 5.07 1,497,676 92
3,500M Xerox Corp., 3/31/99 5.30 3,515,377 217
- ------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Notes (cost $143,023,855) 143,023,855 $8,830
- ------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--4.2%
500M Fannie Mae, 3/1/99 4.97 500,186 31
200M Federal Home Loan Bank, 2/2/99 5.78 200,000 12
1,000M Federal Home Loan Bank, 4/13/99 5.05 1,004,073 62
2,900M Federal Home Loan Bank, 10/26/99 4.98 2,899,538 179
2,100M Federal Home Loan Bank, 10/28/99 5.07 2,099,722 130
- ------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Obligations
(cost $6,703,519) 6,703,519 414
- ------------------------------------------------------------------------------------------------------------------
FLOATING RATE NOTES--6.7%
2,900M Key Bank, N.A., 3/4/99 5.24 2,900,176 179
3,000M Merrill Lynch & Co., Inc., 9/23/99 4.95 3,000,000 185
3,000M Merrill Lynch & Co., Inc., 10/21/99 5.54 3,000,000 185
2,000M Nationsbank, N.A., 4/21/99 5.00 2,000,532 124
- ------------------------------------------------------------------------------------------------------------------
Total Value of Floating Rate Notes (cost $10,900,708) 10,900,708 673
- ------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $160,628,082)+ 99.2% $160,628,082 $9,917
Other Assets, Less Liabilities .8 1,336,636 83
- ------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $161,964,718 $10,000
==================================================================================================================
*The interest rates shown for the corporate notes and U.S. Government
agency obligations are the effective rates at time of purchase by the
Fund. The interest rates shown on floating rate notes are adjusted
periodically; the interest rates shown are the rates that were in effect
at December 31, 1998.
+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, 1998
- -----------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL NOTES AND VARIABLE RATE SECURITIES--97.7%
Alabama--5.5%
$900M City of Birmingham Wts., Series A, VR, 4.0%
(LOC; First Alabama Bank) $900,000 $552
- -----------------------------------------------------------------------------------------------------------------
California--5.2%
700M California Poll. Control Rev. Bonds
(Southern California Edison), VR, 5.2% 700,000 429
150M San Francisco City & County General
Obligation Bonds, 3.63%, 6/15/99 (MBIA Insured) 150,573 92
- -----------------------------------------------------------------------------------------------------------------
850,573 521
- -----------------------------------------------------------------------------------------------------------------
District of Columbia--8.8%
435M District of Columbia General Obligation Bonds, 3.70%,
6/1/99 (AMBAC Insured) 440,738 270
1,000M District of Columbia Rev. Bonds (American University),
VR, 4.0% (LOC; National Westminster Bank) 1,000,000 613
- -----------------------------------------------------------------------------------------------------------------
1,440,738 883
- -----------------------------------------------------------------------------------------------------------------
Florida--3.1%
500M Miami-Dade County Special Assessment Rev. Bonds,
3.65%, 7/1/99 (MBIA Insured) 500,836 307
- -----------------------------------------------------------------------------------------------------------------
Hawaii--2.1%
335M Hawaii State General Obligation Bonds, 3.50%, 10/1/99
(Escrowed to maturity; collateralized by
U.S. Govt. securities) 338,653 208
- -----------------------------------------------------------------------------------------------------------------
Illinois--6.1%
1,000M Illinois Edl. Facs. Auth. Rev. Bonds
(Field Museum Nat. Hist.), VR, 4.1%
(LOC; Northern Trust Company) 1,000,000 613
- -----------------------------------------------------------------------------------------------------------------
Louisiana--10.2%
1,000M Jefferson Parish Hosp. Svc. Rev. Bonds
(Service District No. 2), VR, 4.0% (FGIC Insured)
(SPA; FGIC Securities) 1,000,000 613
455M Jefferson Sales Tax District Special Sales Tax Rev.
Bonds, 3.60%, (Prerefunded 7/1/99; collateralized by
U.S. Govt. securities) 465,259 285
200M Jefferson Sales Tax District Special Sales Tax Rev.
Bonds, 3.70%, (Prerefunded 7/1/99; collateralized by
U.S. Govt. securities) 204,156 125
- -----------------------------------------------------------------------------------------------------------------
1,669,415 1,023
- -----------------------------------------------------------------------------------------------------------------
Maryland--4.9%
800M Baltimore County Poll. Control Rev. Bonds (Baltimore
Gas & Electric Co.), CP, 2.90%, 3/5/99 800,000 491
- -----------------------------------------------------------------------------------------------------------------
Missouri--6.8%
360M Missouri Association Rural Ed. Lease Part. Ctfs.,
3.80%, 4/1/99 (MBIA Insured) 360,000 221
745M Missouri State Env. Impt. & Energy Res. Auth. Poll.
Control Rev. Bonds, (National Rural Utilities Coop.
Fin. Corp.), VR, 4.05% 745,000 457
- -----------------------------------------------------------------------------------------------------------------
1,105,000 678
- -----------------------------------------------------------------------------------------------------------------
Nebraska--5.5%
900M Norfolk Indl. Dev. Rev. Bonds (Supervalu Inc. Proj.),
VR, 3.95% (LOC; Wachovia Bank of Georgia) 900,000 552
- -----------------------------------------------------------------------------------------------------------------
New York--1.2%
194M East Ramapo Central School District General
Obligation Bonds, Series A, 4.60%, 5/15/99
(FSA Insured) 194,622 119
- -----------------------------------------------------------------------------------------------------------------
Oregon--4.9%
300M Klamath Falls, Elec. Rev. Bonds (Salt Caves Hydro.
Project), VR, 3.8% (Escrowed to put in U.S. Treasury
Securities) 300,000 184
500M Multnomah County School District No. 1J Portland
Tax & Revenue Anticipation Notes, 3.65%, 6/30/99 501,427 307
- -----------------------------------------------------------------------------------------------------------------
801,427 491
- -----------------------------------------------------------------------------------------------------------------
Pennsylvania--5.5%
500M Philadelphia School District Tax & Revenue
Anticipation Series, 3.63%, 6/30/99
(LOC; First Union National Bank) 501,476 308
400M York County General Auth. Pooled Fin. Rev. Bonds,
VR, 4.1% (LOC; First Union National Bank) 400,000 245
- -----------------------------------------------------------------------------------------------------------------
901,476 553
- -----------------------------------------------------------------------------------------------------------------
Tennessee--4.3%
700M Clarksville Public Building Authority Bonds, VR, 4.05%
(LOC; NationsBank of Florida) 700,000 429
- -----------------------------------------------------------------------------------------------------------------
Texas--2.5%
400M State of Texas General Obligation Bonds, 3.20%,
6/1/99 (Escrowed to maturity; collateralized by
U.S. Govt. securities) 404,972 248
- -----------------------------------------------------------------------------------------------------------------
Utah--1.9%
300M Springville Electric Rev. Bonds, 3.40%, 3/1/99
(MBIA Insured) 301,680 185
- -----------------------------------------------------------------------------------------------------------------
Virginia--4.3%
700M Alexandria Indl. Dev. Auth. Rev. Bonds, Pooled Loan
Program, VR, 4.05% (LOC; NationsBank) 700,000 429
- -----------------------------------------------------------------------------------------------------------------
Washington--13.7%
700M Port Kalama, Washington Pub. Corp. Rev. Bonds
(Conagra Inc. Proj.), VR, 4.05% (LOC; Morgan
Guaranty Trust Co.) 700,000 429
535M Washington State Hsg. Fin. Commn. Rev. Bonds
(Nikkei Concerns Proj.), VR, 4.1%
(LOC; U.S. Bank of Washington) 535,000 328
800M Washington State Hsg. Fin. Commn. Rev. Bonds
(Mill Plain Crossing Proj.), VR, 4.1%
(LOC; Harris Trust & Savings Bank) 800,000 490
195M Yakima Water & Sewer Rev. Bonds, 3.60%, 9/1/99
(FSA Insured) 195,503 120
- -----------------------------------------------------------------------------------------------------------------
2,230,503 1,367
- -----------------------------------------------------------------------------------------------------------------
West Virginia--1.2%
200M West Virginia Hosp. Fin. Auth. Hosp. Rev. Bonds
(St. Joseph's Hospital Proj.), VR, 4.05%
(LOC; Bank One of West Virginia) 200,000 123
- -----------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $15,939,895)+ 97.7% 15,939,895 9,772
Other Assets, Less Liabilities 2.3 371,298 228
- -----------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $16,311,193 $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, 1998. 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, 1998
- --------------------------------------------------------------------------------------------------------------------------
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 $160,628,082 $15,939,895
------------ -----------
At value $160,628,082 $15,939,895
Cash 941,272 264,604
Interest receivable 739,200 122,697
Other assets 24,200 4,891
------------ -----------
Total Assets 162,332,754 16,332,087
------------ -----------
Liabilities
Payables:
Capital shares redeemed 256,942 13,217
Dividend disbursing agent 12,685 755
Accrued expenses 30,302 --
Accrued advisory fee 68,107 6,922
------------ -----------
Total Liabilities 368,036 20,894
------------ -----------
Net Assets $161,964,718 $16,311,193
============ ===========
Capital shares outstanding (Note 2):
Class A 160,470,102 16,310,180
Class B 1,494,616 1,013
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, 1998
- --------------------------------------------------------------------------------------------------------------------------
First Investors First Investors
Cash Management Tax-Exempt Money
Fund, Inc. Market Fund, Inc.
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest income $8,387,063 $619,916
------------ -----------
Expenses (Notes 1 and 3):
Advisory fee 748,196 87,754
Shareholder servicing costs 764,537 77,639
Custodian fees 77,439 10,489
Professional fees 41,853 20,862
Reports and notices to shareholders 40,880 4,667
Other expenses 42,446 7,455
------------ -----------
Total expenses 1,715,351 208,866
Less: Expenses waived or assumed (511,295) (67,942)
Custodian fees paid indirectly -- (499)
------------ -----------
Net expenses 1,204,056 140,425
------------ -----------
Net investment income 7,183,007 479,491
Net realized gain on investments 962 --
------------ -----------
Net Increase in Net Assets Resulting
from Operations $7,183,969 $479,491
============ ===========
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 1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operations
Net investment income $7,183,007 $6,518,603 $479,491 $623,954
Net realized gain (loss)
on investments 962 (395) -- --
------------ ------------ ----------- -----------
Net increase in net assets resulting
from operations and declared as
dividends to shareholders
(Note 1C) $7,183,969 $6,518,208 $479,491 $623,954
============ ============ =========== ===========
Capital Share Transactions
(Note 2)
Class A:
Proceeds from shares sold $275,726,040 $233,709,809 $20,996,053 $28,663,885
Reinvestment of dividends 7,004,723 6,358,311 473,346 613,112
Cost of shares redeemed (261,823,090) (234,306,443) (23,839,459) (33,484,370)
------------ ------------ ----------- -----------
20,907,673 5,761,677 (2,370,060) (4,207,373)
------------ ------------ ----------- -----------
Class B:
Proceeds from shares sold 2,414,995 743,487 5,208 8,935
Reinvestment of dividends 30,219 8,777 54 952
Cost of shares redeemed (1,217,975) (591,831) (17,461) (76,506)
------------ ------------ ----------- -----------
1,227,239 160,433 (12,199) (66,619)
------------ ------------ ----------- -----------
Total increase (decrease) in
net assets 22,134,912 5,922,110 (2,382,259) (4,273,992)
Net Assets
Beginning of year 139,829,806 133,907,696 18,693,452 22,967,444
------------ ------------ ----------- -----------
End of year $161,964,718 $139,829,806 $16,311,193 $18,693,452
============ ============ =========== ===========
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--Each Fund values its portfolio securities in
accordance with the amortized cost method of valuation under Rule 2a-7
under the 1940 Act. Amortized cost is an approximation of market value of
an instrument, whereby the difference between its acquisition cost and
value at maturity is amortized on a straight-line basis over the remaining
life of the instrument. The effect of changes in the market value of a
security as a result of fluctuating interest rates is not taken into
account and thus the amortized cost method of valuation may result in the
value of a security being higher or lower than its actual market value.
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 plus or minus all realized short-term gains and 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. For
the year ended December 31, 1998, the custodian of Tax-Exempt Money Market
Fund has provided credits in the amount of $499 against custodian charges
based on the uninvested cash balances of the Fund.
2. Capital Stock--At December 31, 1998, paid-in capital amounted to
$161,964,718 for the Cash Management Fund and $16,311,193 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% over a six-year period, which is
payable to First Investors Corporation ("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, 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. Directors of the
Funds who are not "interested persons" of the Funds as defined in the 1940
Act are remunerated by the Funds. For the year ended December 31, 1998,
total directors fees accrued by the Funds amounted to $8,700 for the Cash
Management Fund and $290 for the Tax-Exempt Money Market Fund.
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, 1998, the investment
adviser assumed expenses of the Cash Management Fund and the Tax-Exempt
Money Market Fund of $323,850 and $47,827, respectively.
For the year ended December 31, 1998, shareholder servicing costs of the
Cash Management Fund included transfer agent fees accrued to ADM of
$744,052 (of which $187,445 was waived) and $20,485 in 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 $77,639 (of
which $20,115 was waived).
For the year ended December 31, 1998, 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 $13,709 and $125,
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 daily net assets. For the year ended December 31,
1998, FIC received a total of $6,098 in distribution plan fees from the two
Funds, after waiving $2,029 (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 period 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
- -------
1994 $1.00 $.036 $.036 3.69 $128,495 .70 3.72 1.15 3.27
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
1998 1.00 .048 .048 4.92 160,470 .80 5.00 1.14 4.66
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
1998 1.00 .041 .041 4.14 1,495 1.55 4.25 1.89 3.91
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
- --------------------------------------------------
CLASS A
- -------
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 .70 3.20 1.06 2.84
1996 1.00 .028 .028 2.85 22,888 .70 2.81 1.08 2.43
1997 1.00 .030 .030 3.00 18,680 .75 2.95 1.12 2.58
1998 1.00 .027 .027 2.77 16,310 .80 2.73 1.19 2.34
CLASS B
- -------
1995* 1.00 .024 .024 2.40 .01 1.45(a) 2.45(a) 1.81(a) 2.09(a)
1996 1.00 .020 .020 2.04 80 1.45 2.06 1.83 1.68
1997 1.00 .022 .022 2.20 13 1.50 2.20 1.87 1.83
1998 1.00 .018 .018 1.78 1 1.55 1.98 1.94 1.59
+ 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 Boards 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, 1998, 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 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, 1998, 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, 1998, 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 29, 1999
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
Directors/Trustees
- ------------------------------------------------------
James J. Coy (Emeritus)
Glenn O. Head
Kathryn S. Head
Larry R. Lavoie
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.
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS TAX-EXEMPT MONEY MARKET FUND, INC.
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 the Funds' 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. The Funds 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 Funds' prospectus.
