<PAGE>
[LOGO] [ART]
GOVERNMENT
INVESTMENT GRADE
FUND FOR INCOME
HIGH YIELD
TAXABLE BOND FUNDS
SEMI-ANNUAL REPORT
MARCH 31, 1999
<PAGE>
MARKET OVERVIEW
First Investors Government Fund, Inc.
First Investors Investment Grade Fund
First Investors Fund For Income, Inc.
First Investors High Yield Fund, Inc.
Dear Investor:
We are pleased to present the semi-annual report for the First Investors taxable
bond funds for the six month period ended March 31, 1999. The period under
review was characterized by a strong U.S. economy, rising interest rates and a
rising stock market.
The U.S. economy, now in its eighth year of expansion, continued its remarkable
performance. Growth in the fourth quarter of 1998 was very strong, at 6.0%
annualized, and the momentum continued into the first quarter of 1999, with
growth of 4.5% on an annual basis. Although the economy continued to expand,
inflation stayed under control. As of March 31, the rate of inflation for the
previous 12 months was less than 2%, as measured by the Consumer Price Index
(CPI). The unemployment rate also continued to fall, reaching 4.2% as of the end
of March, its lowest level since 1970. Rising personal income, high consumer
confidence and wealth from stock market gains combined to power economic growth.
By October of 1998, the international financial crisis that began in Southeast
Asia during the summer, had reached its peak. After having negligible effects on
U.S. financial markets for several months, the overseas financial turmoil
finally impacted on domestic markets. A sharp decline in the stock market left
the Dow Jones Industrial Average nearly 2,000 points below its August high. The
weakness in the U.S. stock market served to intensify a "flight to quality," in
which investors who sold stocks sought the relative safety of Treasury
securities. This caused Treasury bond yields to decline to record lows.
Having already lowered short-term interest rates in late September, the Federal
Reserve responded with two more rate cuts by mid-November. These actions helped
restore stability to world financial markets and boosted equity markets, while
bond prices fell as the flight to quality trend reversed. Long-term Treasury
bond yields rose almost 100 basis points (1%), moving from 4.72% in early
October to 5.7% in early March. The strong U.S. economy, and the fear toward the
end of the reporting period that the Fed would raise rates, also helped push
Treasury yields upward. Despite the rising interest rate environment, high yield
corporate and mortgage-backed bond markets performed well because of their
historically attractive yields relative to Treasury securities at the beginning
of the reporting period.
1
<PAGE>
MARKET OVERVIEW (continued)
First Investors Government Fund, Inc.
First Investors Investment Grade Fund
First Investors Fund For Income, Inc.
First Investors High Yield Fund, Inc.
Going forward, our long-term outlook for the bond markets is generally positive.
However, we are concerned about a number of situations that could lead to higher
interest rates and lower bond prices. One such situation is the possible
recovery of the Japanese and other Asian economies. Another concern is the
possibility that the continued strength of the U.S. economy will lead to
inflation. Lastly, we are watchful of higher Japanese interest rates due to the
huge amount of borrowing by the Japanese government. We also believe there are a
number of positive factors which may help keep interest rates low. They include
continued low inflation, weakness in overseas economies, the expectation that
the U.S. economy may slow somewhat, and the U.S. budget surplus. Overall, we
believe that the positive factors outweigh the concerns, and that interest rates
are likely to fall by year-end, creating a favorable environment for bond
investors.
Thank you for your continued confidence in First Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Clark D. Wagner
Chief Investment Officer
First Investors Management Company, Inc.
April 30, 1999
2
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GOVERNMENT FUND, INC.
March 31, 1999
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- -----------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MORTGAGE-BACKED CERTIFICATES--83.6%
FEDERAL NATIONAL MORTGAGE ASSOCIATION--5.7%
$ 8,600M 8%, 9/1/2027 $ 8,952,107 $ 574
--------------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION I PROGRAM--35.6%
8,045M 6.50%, 9/15/2028-1/15/2029 8,018,154 515
26,955M 7%, 7/15/2027-1/15/2029 27,405,025 1,759
15,568M 7.50%, 11/15/2022-5/15/2028 16,050,656 1,030
3,614M 9.50%, 8/15/2009-1/15/2010 3,912,776 251
--------------------------------------------------------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION II PROGRAM--42.3%
39,448M 7%, 6/20/2023-11/20/2027 39,884,645 2,559
16,435M 7.50%, 12/20/2022-10/20/2023 16,875,806 1,083
8,510M 9%, 10/20/2015-7/20/2021 9,096,020 584
--------------------------------------------------------------------------------------
TOTAL VALUE OF MORTGAGE-BACKED CERTIFICATES (cost $128,898,895) 130,195,189 8,355
--------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--14.0%
9,000M United States Treasury Bonds, 5.50%, 8/15/2028 8,609,067 552
13,000M United States Treasury Notes, 5.625%, 5/15/2008 13,239,694 850
--------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT OBLIGATIONS (COST $22,441,152) 21,848,761 1,402
--------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.2%
3,500M General Electric Capital Corp., 4.92%, 4/6/1999 (cost
$3,497,607) 3,497,607 224
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $154,837,654) 99.8% 155,541,557 9,981
OTHER ASSETS, LESS LIABILITIES .2 294,672 19
- -----------------------------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 155,836,229 $ 10,000
- -----------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
3
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--86.5%
AEROSPACE/DEFENSE--5.8%
$ 750M Lockheed Martin Corp., 7.25%, 2006 $ 788,651 $ 139
700M Raytheon Co., 6.15%, 2008 691,284 122
300M Raytheon Co., 6.55%, 2010 303,109 54
750M Rockwell International Corp., 8.375%, 2001 786,473 139
700M Thiokol Corp., 6.625%, 2008 687,192 121
- --------------------------------------------------------------------------------------
3,256,709 575
- --------------------------------------------------------------------------------------
APPAREL/TEXTILES--1.8%
250M VF Corp., 9.50%, 2001 268,514 47
740M Westpoint Stevens, Inc., 7.875%, 2008 760,350 134
- --------------------------------------------------------------------------------------
1,028,864 181
- --------------------------------------------------------------------------------------
BASIC MATERIALS--1.3%
730M Navistar International Corp., 8%, 2008 755,550 133
- --------------------------------------------------------------------------------------
CHEMICALS--2.7%
750M Du Pont (E.I.) de Nemours & Co., 8.125%, 2004 823,462 145
700M Lubrizol Corp., 7.25%, 2025 717,953 127
- --------------------------------------------------------------------------------------
1,541,415 272
- --------------------------------------------------------------------------------------
CONGLOMERATES--2.7%
700M Hanson Overseas B.V., 7.375%, 2003 732,544 129
750M Tenneco, Inc., 7.875%, 2027 770,144 136
- --------------------------------------------------------------------------------------
1,502,688 265
- --------------------------------------------------------------------------------------
CONSUMER PRODUCTS--2.6%
750M Dial Corp., 6.50%, 2008 752,344 133
735M Mattel, Inc., 6%, 2003 732,844 129
- --------------------------------------------------------------------------------------
1,485,188 262
- --------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--10.3%
750M Baltimore Gas and Electric Co., 6.50%, 2003 767,269 135
735M Consumers Energy Co., 6.375%, 2008 735,840 130
900M Duke Energy Corp., 5.875%, 2003 902,681 159
800M Kansas Gas & Electric Co., 7.60%, 2003 845,946 149
350M Niagara Mohawk Power Corp., 7.625%, 2005 361,317 64
421M Old Dominion Electric Cooperative, 7.97%, 2002 433,408 77
- --------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRIC & GAS UTILITIES (continued)
$ 750M Philadelphia Electric Co., 8%, 2002 $ 793,474 $ 140
925M Southwestern Electric Power Co., 7%, 2007 987,240 174
- --------------------------------------------------------------------------------------
5,827,175 1,028
- --------------------------------------------------------------------------------------
ENERGY--5.0%
700M Baroid Corp., 8%, 2003 755,228 133
500M Mobil Corp., 8.625%, 2021 616,347 109
725M Occidental Petroleum Corp., 6.50%, 2005 703,926 124
750M Phillips Petroleum Co., 7.20%, 2023 766,897 135
- --------------------------------------------------------------------------------------
2,842,398 501
- --------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--1.9%
350M Time Warner, Inc., 6.875%, 2018 349,717 62
700M Walt Disney Co., 6.75%, 2006 728,897 129
- --------------------------------------------------------------------------------------
1,078,614 191
- --------------------------------------------------------------------------------------
FINANCIAL SERVICES--12.4%
700M Chase Manhattan Bank, 7%, 2005 731,347 129
800M Citicorp, 8%, 2003 852,060 150
800M First Union Corp., 8.125%, 2002 851,662 150
750M Fleet Capital, 7.92%, 2026 778,956 138
700M KeyCorp, 7.50%, 2006 747,650 132
750M Mellon Bank NA, 6.50%, 2005 762,474 135
550M Meridian Bancorp, 7.875%, 2002 582,144 103
925M Morgan Guaranty Trust Co., 7.375%, 2002 960,758 170
700M NationsBank Corp., 8.125%, 2002 747,556 132
- --------------------------------------------------------------------------------------
7,014,607 1,239
- --------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--7.8%
750M Anheuser-Busch Cos., Inc., 7%, 2005 764,316 135
550M Coca-Cola Enterprises, Inc., 7.875%, 2002 580,428 103
700M Hershey Foods Corp., 6.70%, 2005 727,824 129
725M Pepsi Bottling Group, Inc., 7%, 2029 + 727,550 128
900M Philip Morris Cos., Inc., 7.125%, 2002 932,477 165
650M Universal Corp., 9.25%, 2001 686,002 121
- --------------------------------------------------------------------------------------
4,418,597 781
- --------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
GAS TRANSMISSION--2.6%
$ 700M Columbia Energy Group, 6.80%, 2005 $ 715,892 $ 126
700M Enron Corp., 7.125%, 2007 731,903 129
- --------------------------------------------------------------------------------------
1,447,795 255
- --------------------------------------------------------------------------------------
HEALTHCARE--2.5%
725M Merck & Co., Inc., 5.95%, 2028 674,924 119
700M Warner-Lambert Co., 6%, 2008 714,624 126
- --------------------------------------------------------------------------------------
1,389,548 245
- --------------------------------------------------------------------------------------
INVESTMENT/FINANCE COMPANIES--4.4%
700M Associates Corp. of North America, 7.875%, 2001 734,974 130
700M General Electric Capital Corp., 7.875%, 2006 785,782 139
700M General Motors Acceptance Corp., 6.625%, 2005 719,366 127
250M International Lease Finance Corp., 8.875%, 2001 265,538 47
- --------------------------------------------------------------------------------------
2,505,660 443
- --------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--4.0%
700M New York Times Co., Inc., 7.625%, 2005 757,457 134
750M News America Holdings, Inc., 8.50%, 2005 824,574 146
700M PanAmSat Corp., 6.375%, 2008 668,975 118
- --------------------------------------------------------------------------------------
2,251,006 398
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.4%
750M Temple Inland, Inc., 9%, 2001 793,219 140
- --------------------------------------------------------------------------------------
RETAIL - FOOD/DRUG--1.2%
700M Kroger Co., 7%, 2018 703,954 124
- --------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--2.7%
700M Federated Department Stores, Inc., 7.45%, 2017 732,120 129
700M Wal-Mart Stores, Inc., 8%, 2006 789,729 139
- --------------------------------------------------------------------------------------
1,521,849 268
- --------------------------------------------------------------------------------------
TECHNOLOGY--2.7%
750M International Business Machines Corp., 7%, 2025 788,943 139
725M Xerox Corp., 7.20%, 2016 759,427 134
- --------------------------------------------------------------------------------------
1,548,370 273
- --------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TELECOMMUNICATIONS--9.4%
$ 360M AT&T Corp., 6.50%, 2029 $ 353,695 $ 62
850M MCI Communications Corp., 7.50%, 2004 906,930 160
700M New York Telephone Co., 7.25%, 2024 710,709 126
1,000M Pacific Bell Telephone Co., 7%, 2004 1,047,652 185
725M Sprint Capital Corp., 6.125%, 2008 713,992 126
700M TCI Communications, Inc., 6.375%, 2003 715,636 126
800M WorldCom, Inc., 8.875%, 2006 861,919 152
- --------------------------------------------------------------------------------------
5,310,533 937
- --------------------------------------------------------------------------------------
TRANSPORTATION--1.3%
700M Norfolk Southern Corp., 7.35%, 2007 750,419 133
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $47,709,777) 48,974,158 8,644
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--7.2%
4,000M United States Treasury Notes, 5.625%, 2008 (cost
$4,099,219) 4,073,752 719
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--2.6%
1,500M Federal National Mortgage Association, 5.75%,
2008 (cost $1,502,100) 1,493,784 263
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.0%
1,150M American General Finance Corp., 4.90%, 4/6/99
(cost $1,149,217) 1,149,217 203
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $54,460,313) 98.3% 55,690,911 9,829
OTHER ASSETS, LESS LIABILITIES 1.7 966,371 171
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $56,657,282 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
+ See Note 4
See notes to financial statements
7
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--88.6%
AEROSPACE/DEFENSE--1.3%
$ 2,000M Burke Industries, Inc., 10%, 2007 $ 1,810,000 $ 42
1,600M L-3 Communications Corp., 10.375%, 2007 1,764,000 41
2,000M L-3 Communications Corp., 8%, 2008 2,030,000 47
--------------------------------------------------------------------------------------
5,604,000 130
--------------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS--1.3%
5,500M Terra Industries, Inc., 10.50%, 2005 5,555,000 130
--------------------------------------------------------------------------------------
APPAREL/TEXTILES--3.5%
3,500M Dan River, Inc., 10.125%, 2003 3,596,250 84
4,480M GFSI, Inc., 9.625%, 2007 4,144,000 97
2,450M Pillowtex Corp., 10%, 2006 2,560,250 60
4,600M Polymer Group, Inc., 9%, 2007 4,726,500 110
--------------------------------------------------------------------------------------
15,027,000 351
--------------------------------------------------------------------------------------
AUTOMOTIVE--3.7%
4,000M Accuride Corp., 9.25%, 2008 4,060,000 95
1,650M Cambridge Industries, Inc., 10.25%, 2007 1,361,250 32
2,800M Collins & Aikman Products Co., 11.50%, 2006 2,996,000 70
4,000M Exide Corp., 10%, 2005 3,940,000 92
3,610M Safelite Glass Corp., 9.875%, 2006 3,384,375 79
--------------------------------------------------------------------------------------
15,741,625 368
--------------------------------------------------------------------------------------
BUILDING MATERIALS--1.7%
3,500M American Architectural Products Corp.,
11.75%, 2007 2,922,500 68
3,000M Nortek, Inc., 9.125%, 2007 3,127,500 73
1,277M Waxman USA, Inc., 11.125%, 2001 1,104,605 26
--------------------------------------------------------------------------------------
7,154,605 167
--------------------------------------------------------------------------------------
CHEMICALS--5.0%
5,300M AEP Industries, Inc., 9.875%, 2007 5,459,000 127
6,600M Huntsman Polymers Corp., 11.75%, 2004 7,111,500 166
3,450M Hydrochem Industrial Services, Inc., 10.375%,
2007 3,053,250 71
1,500M Precise Technology, Inc., 11.125%, 2007 1,432,500 33
4,500M Texas Petrochemicals Corp., 11.125%, 2006 4,207,500 98
--------------------------------------------------------------------------------------
21,263,750 495
--------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER DURABLES--.5%
$ 2,000M Republic Group, Inc., 9.50%, 2008 $ 2,027,500 $ 47
--------------------------------------------------------------------------------------
CONSUMER PRODUCTS--3.0%
1,300M AKI, Inc., 10.50%, 2008 1,280,500 30
4,000M Chattem, Inc., 8.875%, 2008 4,050,000 94
4,070M Herff Jones, Inc., 11%, 2005 4,436,300 103
1,300M Hines Horticulture, Inc., 11.75%, 2005 1,413,750 33
2,700M Syratech Corp., 11%, 2007 1,917,000 45
--------------------------------------------------------------------------------------
13,097,550 305
--------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--.8%
3,300M Tekni-Plex, Inc., 9.25%, 2008 3,399,000 79
--------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--2.1%
1,000M Amtrol, Inc., 10.625%, 2006 975,000 23
1,200M Columbus McKinnon Corp., 8.50%, 2008 1,191,000 28
2,500M Day International Group, Inc., 11.125%, 2005 2,637,500 62
4,275M Fairfield Manufacturing, Inc., 11.375%, 2001 4,429,969 103
--------------------------------------------------------------------------------------
9,233,469 216
--------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--.5%
1,000M Amphenol Corp., 9.875%, 2007 1,045,000 24
1,000M Applied Power, Inc., 8.75%, 2009 1,016,250 24
--------------------------------------------------------------------------------------
2,061,250 48
--------------------------------------------------------------------------------------
ELECTRONICS/INSTRUMENTS/COMPONENTS--1.0%
4,000M Advanced Micro Devices, Inc., 11%, 2003 4,160,000 97
--------------------------------------------------------------------------------------
ENERGY--3.2%
1,200M Chesapeake Energy Corp., 9.625%, 2005 1,002,000 23
5,000M KCS Energy, Inc., 11%, 2003 3,500,000 82
4,500M Magnum Hunter Resources, Inc., 10%, 2007 3,982,500 93
2,000M RBF Finance Co., 11.375%, 2009+ 2,105,000 49
3,000M Tesoro Petroleum Corp., 9%, 2008 2,977,500 69
--------------------------------------------------------------------------------------
13,567,000 316
--------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--3.0%
1,540M Carmike Cinemas, Inc., 9.375%, 2009+ 1,565,987 37
4,000M KSL Recreation Group, Inc., 10.25%, 2007 4,100,000 96
--------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENTERTAINMENT/LEISURE (continued)
$ 3,800M Loews Cineplex Entertainment Corp., 8.875%, 2008 $ 3,795,250 $ 89
4,000M Outboard Marine Corp., 10.75%, 2008+ 3,300,000 77
--------------------------------------------------------------------------------------
12,761,237 299
--------------------------------------------------------------------------------------
FINANCIAL--1.0%
4,500M Bay View Capital Corp., 9.125%, 2007 4,387,500 102
--------------------------------------------------------------------------------------
FOOD SERVICE--1.2%
5,000M Domino's, Inc., 10.375%, 2009+ 5,200,000 121
--------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--1.4%
1,500M Canandaigua Brands, Inc., 8.50%, 2009 1,541,250 36
1,000M Delta Beverage Group, Inc., 9.75%, 2003 1,050,000 24
3,500M Di Giorgio Corp., 10%, 2007 3,360,000 78
--------------------------------------------------------------------------------------
5,951,250 138
--------------------------------------------------------------------------------------
GAMING/LODGING--1.9%
4,000M Casino America, Inc., 12.50%, 2003 4,615,000 108
1,000M Mohegan Tribal Gaming Authority, 8.75%, 2009+ 1,047,500 24
2,250M Prime Hospitality Corp., 9.25%, 2006 2,348,437 55
--------------------------------------------------------------------------------------
8,010,937 187
--------------------------------------------------------------------------------------
HEALTHCARE--4.1%
2,250M Alaris Medical Systems, Inc., 9.75%, 2006 2,283,750 53
2,750M Conmed Corp., 9%, 2008 2,770,625 65
4,100M Fisher Scientific International, Inc., 9%, 2008 4,141,000 97
4,000M Genesis Health Ventures, Inc., 9.75%, 2005 3,480,000 81
3,750M Integrated Health Services, Inc., 10.25%, 2006 2,601,562 61
2,200M Owens & Minor, Inc., 10.875%, 2006 2,387,000 56
--------------------------------------------------------------------------------------
17,663,937 413
--------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--12.4%
1,000M Ackerley Group, Inc., 9%, 2009+ 1,033,750 24
2,000M Bresnan Communications Group, LLC,
0% - 9.25%, 2009+ 1,357,500 32
5,000M Charter Communications Holdings, LLC, 8.625%,
2009+ 5,112,500 119
5,000M Comcast United Kingdom Cable Partners, Ltd., 0% -
11.20%, 2007 4,425,000 103
--------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
MEDIA (CABLE TV/BROADCASTING) (continued)
$ 4,750M Diamond Cable Communications PLC,
0% - 11.75%, 2005 $ 4,263,125 $ 99
4,150M Diva Systems Corp., 0% - 12.625%, 2008 1,390,250 32
13,500M Echostar DBS Corp., 9.375%, 2009+ 14,107,500 329
4,000M Mediacom LLC/Mediacom Capital Corp., 8.50%, 2008 4,100,000 96
4,000M Mediacom LLC/Mediacom Capital Corp., 7.875%,
2011+ 3,960,000 92
3,000M Rogers Cantel, Inc., 8.80%, 2007 3,146,250 73
3,000M Sinclair Broadcasting Group, Inc., 10%, 2005 3,172,500 74
3,850M Star Choice Communications, Inc., 13%, 2005 3,869,250 90
3,000M Young Broadcasting Corp., 10.125%, 2005 3,195,000 75
--------------------------------------------------------------------------------------
53,132,625 1,238
--------------------------------------------------------------------------------------
MEDIA (OTHER)--3.3%
3,000M Mail-Well Corp., 8.75%, 2008 3,090,000 72
6,000M MDC Communications Corp., 10.50%, 2006 6,180,000 144
1,500M R. H. Donnelly, Inc., 9.125%, 2008 1,582,500 37
3,000M Von Hoffman Press, Inc., 10.375%, 2007+ 3,112,500 73
--------------------------------------------------------------------------------------
13,965,000 326
--------------------------------------------------------------------------------------
MINING/METALS--4.4%
4,400M Euramax International PLC, 11.25%, 2006 4,576,000 107
3,000M Murrin Murrin Holdings Property, Ltd., 9.375%,
2007 2,745,000 64
4,000M Renco Metals, Inc., 11.50%, 2003 4,120,000 96
4,000M Russel Metals, Inc., 10.25%, 2000 4,030,000 94
3,500M Wheeling-Pittsburgh Corp., 9.25%, 2007 3,465,000 81
--------------------------------------------------------------------------------------
18,936,000 442
--------------------------------------------------------------------------------------
MISCELLANEOUS--.2%
1,025M Kindercare Learning Centers, Inc., 9.50%, 2009 1,037,813 24
--------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--5.4%
4,000M Container Corp., 11.25%, 2004 4,220,000 98
1,450M Fonda Group, Inc., 9.50%, 2007 1,218,000 28
3,650M Packaging Corp. of America, 9.625%, 2009 3,750,375 87
5,500M Riverwood International Corp., 10.25%, 2006 5,685,625 133
--------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
PAPER/FOREST PRODUCTS (continued)
$ 5,600M S.D. Warren Co., Inc., 12%, 2004 $ 6,083,000 $ 142
2,400M Stone Container Corp., 10.75%, 2002 2,421,000 56
--------------------------------------------------------------------------------------
23,378,000 544
--------------------------------------------------------------------------------------
REAL ESTATE/CONSTRUCTION--.2%
4,000M Cathay International, Ltd., 13%, 2008+ 1,000,000 23
--------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--.5%
2,000M Big 5 Corp., 10.875%, 2007 2,040,000 48
--------------------------------------------------------------------------------------
TELECOMMUNICATIONS--18.9%
1,350M 21st Century Telecom Group, Inc., 0% - 12.25%,
2008 475,875 11
5,300M E. Spire Communications, Inc., 0% - 13%, 2005 3,484,750 81
3,000M Facilicom International, Inc., 10.50%, 2008 2,340,000 55
4,600M GST USA, Inc., 0% - 13.875%, 2005 3,450,000 80
4,000M Hyperion Telecommunications, Inc., 0% - 13%, 2003 3,305,000 77
5,000M Intermedia Communications, Inc., 8.50%, 2008 5,000,000 117
4,300M Level 3 Communications, Inc., 9.125%, 2008 4,343,000 101
5,500M MetroNet Communications Corp., 0% - 9.95%, 2008 4,276,250 100
5,000M Nextel Communications, Inc., 0% - 9.95%, 2008 3,537,500 82
7,000M NextLink Communications, Inc., 12.50%, 2006 7,752,500 181
1,700M NextLink Communications, Inc., 9%, 2008 1,693,625 40
750M NextLink Communications, Inc., 0% - 9.45%, 2008 480,938 11
2,000M NTL, Inc., 11.50%, 2008+ 2,265,000 53
6,000M Omnipoint Corp., 11.625%, 2006 5,310,000 124
6,000M Orion Network Systems, Inc., 11.25%, 2007 5,550,000 129
4,000M Pac-West Telecommunications, Inc., 13.50%, 2009+ 3,980,000 93
5,000M Paging Network, Inc., 10%, 2008 4,275,000 100
3,800M Powertel, Inc., 0% - 12%, 2006 2,842,020 66
4,000M Powertel, Inc., 11.125%, 2007 4,140,000 97
4,175M Qwest Communications International, Inc.,
0% - 9.47%, 2007 3,308,688 77
6,000M RCN Corp., 0% - 11.125%, 2007 4,050,000 94
8,000M Triton PCS, Inc., 0% - 11%, 2008 4,760,000 111
1,000M Viatel, Inc., 0% - 12.50%, 2008 622,500 15
--------------------------------------------------------------------------------------
81,242,646 1,895
--------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000
AMOUNT, OF
SHARES NET
OR WARRANTS SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--3.1%
$ 4,000M Coach USA, Inc., 9.375%, 2007 $ 4,180,000 $ 97
5,700M Eletson Holdings, Inc., 9.25%, 2003 5,529,000 129
3,100M Moran Transportation Co., 11.75%, 2004 3,394,500 79
--------------------------------------------------------------------------------------
13,103,500 305
--------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $387,961,432) 379,702,194 8,854
--------------------------------------------------------------------------------------
COMMON STOCKS--.3%
MEDIA (CABLE TV/BROADCASTING)
15,753 *Echostar Communications Corp. - Class "A" (cost
$0) 1,285,839 30
--------------------------------------------------------------------------------------
PREFERRED STOCKS--3.9%
MEDIA (CABLE TV/BROADCASTING)--2.6%
98,669 CSC Holdings, Inc., 11.125%, PIK, Series "M" 11,297,629 263
--------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.3%
100,000 *S.D. Warren Co., Inc., 14%, Series "B" 5,350,000 125
--------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.0%
527 Viatel, Inc., 10%, Series "A" 105,400 3
--------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $12,261,524) 16,753,029 391
--------------------------------------------------------------------------------------
WARRANTS--.2%
GAMING/LODGING--.0%
7,000 *Goldriver Finance Corp., Liquidating Trust 7,000 --
--------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--.1%
12,450 *Diva Systems Corp. (expiring 3/1/08)+ 16,185 --
89,166 *Star Choice Communications, Inc. (expiring
12/15/05)+ 234,061 6
--------------------------------------------------------------------------------------
250,246 6
--------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
AMOUNT
INVESTED
WARRANTS, FOR EACH
UNITS $10,000
OR OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- ------------------------------------------------------------------------------------------
<C> <S> <C> <C>
PAPER/FOREST PRODUCTS--.1%
100,000 *S.D. Warren Co., Inc. (expiring 12/15/06)+ $ 500,000 $ 12
--------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.0%
7,300 *E. Spire Communications, Inc. (expiring 11/1/05) 73,000 2
--------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $17) 830,246 20
--------------------------------------------------------------------------------------
UNITS--.7%
AEROSPACE/DEFENSE
3,000 Decrane Aircraft Holdings, Inc. (a)+ (cost
$3,000,000) 3,045,000 71
--------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--1.9%
$ 7,500M U.S. Treasury Note, 7.25%, 2004 (cost $8,163,281) 8,189,062 191
--------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--3.9%
13,250M American General Finance Corp., 4.90%, 4/6/99 13,240,981 309
2,500M Chevron USA, Inc., 4.90%, 4/6/99 2,498,298 58
1,000M Washington Gas Light Co., 5.05%, 4/1/99 1,000,000 23
--------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost $16,739,279) 16,739,279 390
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $428,125,533) 99.5% 426,544,649 9,947
OTHER ASSETS, LESS LIABILITIES .5 2,290,254 53
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 428,834,903 $ 10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
+ See Note 4
(a)Each unit consists of one 12% senior discount note due 2008 and one warrant
to buy 1.55 shares of common stock.
See notes to financial statements
14
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--85.5%
AEROSPACE/DEFENSE--.5%
$ 1,000M Moog, Inc., 10%, 2006 $ 1,035,000 $ 51
- --------------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS--.7%
1,400M Terra Industries, Inc., 10.50%, 2005 1,414,000 70
- --------------------------------------------------------------------------------------
APPAREL/TEXTILES--2.8%
1,000M Pillowtex Corp., 10%, 2006 1,045,000 52
2,650M Polymer Group, Inc., 9%, 2007 2,722,875 135
2,250M Worldtex, Inc., 9.625%, 2007 1,833,750 91
- --------------------------------------------------------------------------------------
5,601,625 278
- --------------------------------------------------------------------------------------
AUTOMOTIVE--5.3%
385M Aftermarket Technology Corp., Series "B",
12%, 2004 397,512 20
1,120M Aftermarket Technology Corp., Series "D",
12%, 2004 1,156,400 57
2,000M Cambridge Industries, Inc., 10.25%, 2007 1,650,000 82
1,750M Cooperative Computing, Inc., 9%, 2008 1,531,250 76
2,185M Safelite Glass Corp., 9.875%, 2006 2,048,437 101
2,400M Special Devices, Inc., 11.375%, 2008+ 2,424,000 120
1,500M Walbro Corp., 9.875%, 2005 1,511,250 75
- --------------------------------------------------------------------------------------
10,718,849 531
- --------------------------------------------------------------------------------------
BUILDING MATERIALS--.7%
1,650M American Architectural Products Corp., 11.75%,
2007 1,377,750 68
- --------------------------------------------------------------------------------------
CHEMICALS--3.5%
2,250M AEP Industries, Inc., 9.875%, 2007 2,320,794 115
2,800M Huntsman Polymers Corp., 11.75%, 2004 3,017,000 149
1,900M Hydrochem Industrial Services, Inc., 10.375%,
2007 1,681,500 83
- --------------------------------------------------------------------------------------
7,019,294 347
- --------------------------------------------------------------------------------------
CONSUMER PRODUCTS--3.7%
2,000M AKI Holding Corp., 0% - 13.50%, 2009 805,000 40
1,000M AKI, Inc., 10.50%, 2008 985,000 49
1,000M Corning Consumer Products, Inc., 9.625%, 2008 840,000 42
2,500M Herff Jones, Inc., 11%, 2005 2,725,000 135
1,235M Hines Horticulture, Inc., 11.75%, 2005 1,343,062 67
1,200M Syratech Corp., 11%, 2007 852,000 42
- --------------------------------------------------------------------------------------
7,550,062 375
- --------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS HIGH YIELD FUND, INC.
March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONTAINERS/PACKAGING--3.2%
$ 2,850M Radnor Holdings, Inc., 10%, 2003 $ 2,949,750 $ 146
1,250M Tekni-Plex, Inc., 9.25%, 2008 1,287,500 64
2,000M U. S. Can Corp., 10.125%, 2006 2,120,000 105
- --------------------------------------------------------------------------------------
6,357,250 315
- --------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--1.4%
750M Amtrol, Inc., 10.625%, 2006 731,250 36
2,070M Fairfield Manufacturing, Inc., 11.375%, 2001 2,145,037 106
- --------------------------------------------------------------------------------------
2,876,287 142
- --------------------------------------------------------------------------------------
ENERGY--3.2%
1,500M Giant Industries, Inc., 9.75%, 2003 1,477,500 73
3,000M Gulf Canada Resources, Ltd., 9.625%, 2005 3,071,250 152
1,900M Stone Energy Corp., 8.75%, 2007 1,888,125 94
- --------------------------------------------------------------------------------------
6,436,875 319
- --------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--3.6%
1,000M Bell Sports, Inc., 11%, 2008 1,035,000 51
3,600M Loews Cineplex Entertainment Corp., 8.875%, 2008 3,595,500 178
3,300M Outboard Marine Corp., 10.75%, 2008+ 2,722,500 135
- --------------------------------------------------------------------------------------
7,353,000 364
- --------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--1.1%
2,000M International Home Foods, Inc., 10.375%, 2006 2,175,000 108
- --------------------------------------------------------------------------------------
GAMING/LODGING--2.3%
2,400M Casino America, Inc., 12.50%, 2003 2,769,000 137
1,750M Prime Hospitality Corp., 9.25%, 2006 1,826,563 90
- --------------------------------------------------------------------------------------
4,595,563 227
- --------------------------------------------------------------------------------------
HEALTHCARE--6.3%
1,700M Genesis Health Ventures, Inc., 9.75%, 2005 1,479,000 73
2,000M Integrated Health Services, Inc., 10.25%, 2006 1,387,500 69
2,100M Integrated Health Services, Inc., 9.25%, 2008 1,372,875 68
2,150M Leiner Health Products, Inc., 9.625%, 2007 2,176,875 108
2,489M Owens & Minor, Inc., 10.875%, 2006 2,700,565 134
- --------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE (continued)
$ 1,500M Packard Bioscience, Inc., 9.375%, 2007 $ 1,458,750 $ 72
2,200M Tenet Healthcare Corp., 8.625%, 2007 2,194,500 109
- --------------------------------------------------------------------------------------
12,770,065 633
- --------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--11.9%
1,000M Allbritton Communications Corp., 9.75%, 2007 1,068,750 53
2,000M Century Communications Corp., 9.50%, 2005 2,155,000 107
3,000M Diva Systems Corp., 0% - 12.625%, 2008+ 1,005,000 50
5,000M Echostar DBS Corp., 9.375%, 2009+ 5,225,000 259
1,000M Groupe Videotron, Ltee, 10.625%, 2005 1,085,000 54
2,250M Grupo Televisa, SA, 11.875%, 2006 2,337,188 116
2,000M Lenfest Communication, Inc., 10.50%, 2006 2,287,500 113
1,500M Mediacom LLC/Mediacom Capital Corp., 8.50%, 2008 1,537,500 76
1,300M Rogers Cablesystems, Inc., 10%, 2005 1,465,750 73
1,700M Rogers Communications, Inc., 8.875%, 2007 1,780,750 88
2,000M Salem Communications Corp., 9.50%, 2007 2,140,000 106
2,000M Star Choice Communications, Inc., 13%, 2005 2,010,000 100
- --------------------------------------------------------------------------------------
24,097,438 1,195
- --------------------------------------------------------------------------------------
MEDIA (OTHER)--1.8%
1,800M Garden State Newspapers, Inc., 8.75%, 2009 1,827,000 90
1,800M Garden State Newspapers, Inc., 8.625%, 2011+ 1,820,250 90
- --------------------------------------------------------------------------------------
3,647,250 180
- --------------------------------------------------------------------------------------
MINING/METALS--4.5%
2,500M Commonwealth Aluminum, Corp., 10.75%, 2006 2,512,500 124
3,200M CSN Iron, SA, 9.125%, 2007+ 2,424,000 120
2,000M Renco Metals, Inc., 11.50%, 2003 2,060,000 102
2,100M Wheeling-Pittsburgh Corp., 9.25%, 2007 2,079,000 103
- --------------------------------------------------------------------------------------
9,075,500 449
- --------------------------------------------------------------------------------------
MISCELLANEOUS--3.6%
1,500M Iron Mountain, Inc., 10.125%, 2006 1,620,000 80
3,600M Kindercare Learning Centers, Inc., 9.50%, 2009 3,645,000 181
2,000M Loomis Fargo & Co., 10%, 2004 2,030,000 101
- --------------------------------------------------------------------------------------
7,295,000 362
- --------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS HIGH YIELD FUND, INC.
March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000
OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
PAPER/FOREST PRODUCTS--3.6%
$ 2,850M Fonda Group, Inc., 9.50%, 2007 $ 2,394,000 $ 119
1,000M Riverwood International Corp., 10.25%, 2006 1,033,750 51
2,600M S.D. Warren Co., Inc., 12%, 2004 2,824,250 140
1,000M Stone Container Corp., 10.75%, 2002 1,008,750 50
- --------------------------------------------------------------------------------------
7,260,750 360
- --------------------------------------------------------------------------------------
REAL ESTATE/CONSTRUCTION--.3%
2,200M Cathay International, Ltd., 13%, 2008+ 550,000 27
- --------------------------------------------------------------------------------------
RETAIL - FOOD/DRUG--.5%
1,000M Randall's Food Markets, Inc., 9.375%, 2007 1,090,000 54
- --------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--.9%
1,700M Big 5 Corp., 10.875%, 2007 1,734,000 86
- --------------------------------------------------------------------------------------
TELECOMMUNICATIONS--17.1%
2,000M 21st Century Telecom Group, Inc., 0% - 12.25%,
2008 705,000 35
2,100M Comcast Cellular Holdings, Inc., 9.50%, 2007 2,388,750 118
3,750M E. Spire Communications, Inc., 0% - 13%, 2005 2,465,625 122
2,300M Facilicom International, Inc., 10.50%, 2008 1,794,000 89
2,400M ICG Services, Inc., 0% - 10%, 2008 1,494,000 74
1,700M Level 3 Communications, Inc., 9.125%, 2008 1,717,000 85
3,200M McCaw International, Ltd., 0% - 13%, 2007+ 1,920,000 95
2,300M McLeodUSA, Inc., 9.25%, 2007 2,412,125 119
2,000M Netia Holdings BV, 0% - 11.25%, 2007 1,370,000 68
2,750M NextLink Communications, Inc., 0% - 9.45%, 2008 1,763,438 87
3,000M Omnipoint Corp., 11.625%, 2006 2,655,000 132
1,300M Orion Network Systems, Inc., 11.25%, 2007 1,202,500 60
2,100M Pac-West Telecommunications, Inc., 13.50%, 2009+ 2,089,500 103
2,000M Paging Network, Inc., 10%, 2008 1,710,000 85
1,750M Powertel, Inc., 0% - 12%, 2006 1,350,300 67
3,100M Powertel, Inc., 0% - 12%, 2006 2,318,490 115
2,000M Qwest Communications International, Inc.,
0% - 9.47%, 2007 1,585,000 79
3,000M RCN Corp., 0% - 11.125%, 2007 2,025,000 100
2,500M Viatel, Inc., 0% - 12.50%, 2008 1,556,250 77
- --------------------------------------------------------------------------------------
34,521,978 1,710
- --------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000
AMOUNT OF
OR NET
SHARES SECURITY VALUE ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--3.0%
$ 2,500M American Commercial Lines, LLC, 10.25%, 2008 $ 2,575,000 $ 128
3,550M Eletson Holdings, Inc., 9.25%, 2003 3,443,500 171
- --------------------------------------------------------------------------------------
6,018,500 299
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $180,068,848) 172,571,036 8,550
- --------------------------------------------------------------------------------------
CONVERTIBLE BONDS--1.8%
CHEMICALS--.8%
2,000M Hexcel Corp., 7%, 2003 1,657,500 82
- --------------------------------------------------------------------------------------
MEDIA (OTHER)--1.0%
2,000M Mail-Well, Inc., 5%, 2002 1,957,500 97
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE BONDS (cost $3,669,100) 3,615,000 179
- --------------------------------------------------------------------------------------
COMMON STOCKS--.6%
CHEMICALS--.1%
20,000 *Polymer Group, Inc. 185,000 9
- --------------------------------------------------------------------------------------
HEALTHCARE--.1%
16,000 *Tenet Healthcare Corporation 303,000 15
- --------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--.4%
8,846 *Echostar Communications Corp. - Class "A" 722,055 36
- --------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $611,898) 1,210,055 60
- --------------------------------------------------------------------------------------
PREFERRED STOCKS--3.7%
FINANCIAL--.5%
40,800 Astoria Financial Corp., 12%, Series "B" 1,071,000 53
- --------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--2.4%
42,284 CSC Holdings, Inc., 11.125%, PIK, Series "M" 4,841,500 240
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.8%
30,200 *S.D. Warren Co., Inc., 14%, Series "B"+ 1,615,700 80
- --------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $6,153,991) 7,528,200 373
- --------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS HIGH YIELD FUND, INC.
March 31, 1999
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
WARRANTS $10,000
OR OF
PRINCIPAL NET
AMOUNT SECURITY VALUE ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
WARRANTS--.2%
GAMING/LODGING--.0%
17,660 *President Riverboat Casinos, Inc. (expiring
9/30/99) $ 177 $ --
- --------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--.1%
9,000 *Diva Systems Corp. (expiring 3/1/08) 117,000 6
46,320 *Star Choice Communications, Inc. (expiring
12/15/05)+ 121,590 6
- --------------------------------------------------------------------------------------
238,590 12
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.1%
30,200 *S.D. Warren Co., Inc. (expiring 12/15/06)+ 151,000 8
- --------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.0%
3,750 *E. Spire Communications, Inc. (expiring 11/1/05) 37,500 2
3,000 *McCaw International, Ltd. (expiring 4/15/07) 7,500 --
5,600 *Powertel, Inc. (expiring 2/1/06) 22,400 1
- --------------------------------------------------------------------------------------
67,400 3
- --------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $91,816) 457,167 23
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--2.5%
$ 4,500M United States Treasury Note, 7%, 2006 (cost
$4,795,281) 4,923,283 244
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.2%
4,500M American General Finance Corp., 4.90%, 4/6/99
(cost $4,496,937) 4,496,937 223
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $199,887,871) 96.5% 194,801,678 9,652
OTHER ASSETS, LESS LIABILITIES 3.5 7,026,572 348
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 201,828,250 $ 10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
+ See Note 4
See notes to financial statements
20
<PAGE>
This page intentionally left blank.
21
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS
March 31, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
INVESTMENT
GOVERNMENT GRADE
- ---------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $ 154,837,654 $ 54,460,313
------------- ------------
------------- ------------
At value (Note 1A)................... $ 155,541,557 $ 55,690,911
Cash................................... 307,372 284,209
Receivables:
Investment securities sold........... -- --
Interest and dividends............... 1,118,992 947,589
Shares sold.......................... 20,518 135,434
Other assets........................... 27,482 --
------------- ------------
Total Assets........................... 157,015,921 57,058,143
------------- ------------
LIABILITIES
Payables:
Investment securities purchased...... -- --
Dividends payable.................... 686,784 255,646
Shares redeemed...................... 384,094 123,591
Accrued advisory fee................... 78,465 21,624
Accrued expenses....................... 30,349 --
------------- ------------
Total Liabilities...................... 1,179,692 400,861
------------- ------------
NET ASSETS............................. $ 155,836,229 $ 56,657,282
------------- ------------
------------- ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $ 174,192,566 $ 55,335,416
Undistributed net investment income.... 223,458 65,193
Accumulated net realized gain (loss) on
investments.......................... (19,283,698) 26,075
Net unrealized appreciation
(depreciation) of investments........ 703,903 1,230,598
------------- ------------
Total.................................. $ 155,836,229 $ 56,657,282
------------- ------------
------------- ------------
NET ASSETS:
Class A.............................. $ 152,821,563 $ 50,008,825
Class B.............................. $ 3,014,666 $ 6,648,457
SHARES OUTSTANDING (Note 6):
Class A.............................. 13,595,252 4,947,293
Class B.............................. 268,425 657,317
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A................. $ 11.24 $ 10.11
------ ------
------ ------
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A
(Net asset value/.9375)*............. $ 11.99 $ 10.78
------ ------
------ ------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B (Note 6)............ $ 11.23 $ 10.11
------ ------
------ ------
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
22
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
INCOME HIGH YIELD
- -------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $428,125,533 $199,887,871
------------ ------------
------------ ------------
At value (Note 1A)................... $426,544,649 $194,801,678
Cash................................... 653,578 767,536
Receivables:
Investment securities sold........... -- 3,440,403
Interest and dividends............... 9,821,737 4,549,025
Shares sold.......................... 577,322 269,422
Other assets........................... 168,816 59,061
------------ ------------
Total Assets........................... 437,766,102 203,887,125
------------ ------------
LIABILITIES
Payables:
Investment securities purchased...... 4,678,920 216,802
Dividends payable.................... 3,168,360 1,452,245
Shares redeemed...................... 743,504 231,470
Accrued advisory fee................... 258,691 125,813
Accrued expenses....................... 81,724 32,545
------------ ------------
Total Liabilities...................... 8,931,199 2,058,875
------------ ------------
NET ASSETS............................. $428,834,903 $201,828,250
------------ ------------
------------ ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $632,063,652 $324,438,505
Undistributed net investment income.... 5,003,170 1,183,428
Accumulated net realized gain (loss) on
investments.......................... (206,651,035) (118,707,490)
Net unrealized appreciation
(depreciation) of investments........ (1,580,884) (5,086,193)
------------ ------------
Total.................................. $428,834,903 $201,828,250
------------ ------------
------------ ------------
NET ASSETS:
Class A.............................. $416,816,464 $191,977,042
Class B.............................. $ 12,018,439 $ 9,851,208
SHARES OUTSTANDING (Note 6):
Class A.............................. 98,906,943 36,849,221
Class B.............................. 2,859,666 1,893,817
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A................. $ 4.21 $ 5.21
----- -----
----- -----
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A
(Net asset value/.9375)*............. $ 4.49 $ 5.56
----- -----
----- -----
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B (Note 6)............ $ 4.20 $ 5.20
----- -----
----- -----
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
23
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS
Six Months Ended March 31, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
INVESTMENT
GOVERNMENT GRADE
- ---------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $ 5,169,040 $ 1,861,131
Dividends (Note 1F).................. -- --
------------- ------------
Total income........................... 5,169,040 1,861,131
------------- ------------
Expenses (Notes 1 and 3):
Advisory fee......................... 802,680 210,227
Distribution plan expenses - Class
A.................................. 216,707 75,094
Distribution plan expenses - Class
B.................................. 15,571 29,988
Shareholder servicing costs.......... 173,944 65,121
Reports and notices to
shareholders....................... 8,491 2,833
Professional fees.................... 21,078 7,691
Custodian fees....................... 8,875 4,650
Other expenses....................... 26,107 7,571
------------- ------------
Total expenses......................... 1,273,453 403,175
Less: Expenses waived or assumed....... (300,757) (73,604)
Custodian fees paid indirectly.... (8,875) (1,321)
------------- ------------
Net expenses........................... 963,821 328,250
------------- ------------
Net investment income.................. 4,205,219 1,532,881
------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 615,329 49,921
Net unrealized appreciation
(depreciation) of investments........ (4,012,696) (1,983,998)
------------- ------------
Net gain (loss) on investments......... (3,397,367) (1,934,077)
------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $ 807,852 $ (401,196)
------------- ------------
------------- ------------
</TABLE>
See notes to financial statements
24
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
INCOME HIGH YIELD
- -------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $ 21,602,223 $ 10,065,547
Dividends (Note 1F).................. 816,957 367,898
------------ ------------
Total income........................... 22,419,180 10,433,445
------------ ------------
Expenses (Notes 1 and 3):
Advisory fee......................... 1,559,560 1,008,726
Distribution plan expenses - Class
A.................................. 618,867 289,685
Distribution plan expenses - Class
B.................................. 51,081 46,711
Shareholder servicing costs.......... 395,483 247,860
Reports and notices to
shareholders....................... 54,151 18,806
Professional fees.................... 55,381 22,024
Custodian fees....................... 28,055 14,295
Other expenses....................... 30,795 19,401
------------ ------------
Total expenses......................... 2,793,373 1,667,508
Less: Expenses waived or assumed....... -- (249,481)
Custodian fees paid indirectly.... (3,399) (2,972)
------------ ------------
Net expenses........................... 2,789,974 1,415,055
------------ ------------
Net investment income.................. 19,629,206 9,018,390
------------ ------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 1,236,201 480,404
Net unrealized appreciation
(depreciation) of investments........ 3,306,257 (201,067)
------------ ------------
Net gain (loss) on investments......... 4,542,458 279,337
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $ 24,171,664 $ 9,297,727
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
25
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
GOVERNMENT
----------------------------------------
10/1/98 1/1/98 1/1/97
TO TO TO
3/31/99 9/30/98 12/31/97
- --------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................ $ 4,205,219 $ 7,106,026 $ 10,923,827
Net realized gain on investments..... 615,329 1,183,567 639,617
Net unrealized appreciation
(depreciation) of investments...... (4,012,696) 1,409,717 2,599,700
------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations....................... 807,852 9,699,310 14,163,144
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A...... (4,227,347) (6,724,124) (10,429,404)
Net investment income - Class B...... (72,095) (81,974) (87,929)
Net realized gains - Class A......... -- -- --
Net realized gains - Class B......... -- -- --
------------ ------------ ------------
Total distributions................ (4,299,442) (6,806,098) (10,517,333)
------------ ------------ ------------
SHARE TRANSACTIONS*
Class A:
Proceeds from shares sold............ 13,097,936 9,525,532 5,908,414
Reinvestment of distributions........ 3,510,094 4,926,021 8,585,051
Cost of shares redeemed.............. (20,862,185) (26,851,304) (34,742,760)
------------ ------------ ------------
(4,254,155) (12,399,751) (20,249,295)
------------ ------------ ------------
Class B:
Proceeds from shares sold............ 591,329 1,211,035 771,873
Reinvestment of distributions........ 61,952 61,087 77,395
Cost of shares redeemed.............. (627,049) (255,377) (293,938)
------------ ------------ ------------
26,232 1,016,745 555,330
------------ ------------ ------------
Net increase (decrease) from share
transactions....................... (4,227,923) (11,383,006) (19,693,965)
------------ ------------ ------------
Net increase (decrease) in net
assets........................... (7,719,513) (8,489,794) (16,048,154)
NET ASSETS
Beginning of period.................. 163,555,742 172,045,536 188,093,690
------------ ------------ ------------
End of period+....................... $155,836,229 $163,555,742 $172,045,536
------------ ------------ ------------
------------ ------------ ------------
+Includes undistributed net investment
income of............................. $ 223,458 $ 317,681 $ 17,753
------------ ------------ ------------
------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 1,155,369 840,674 532,781
Issued for distributions
reinvested......................... 309,271 435,243 772,790
Redeemed............................. (1,840,685) (2,371,443) (3,132,875)
------------ ------------ ------------
Net increase (decrease) in Class A
shares outstanding................. (376,045) (1,095,526) (1,827,304)
------------ ------------ ------------
------------ ------------ ------------
Class B:
Sold................................. 52,100 106,792 69,580
Issued for distributions
reinvested......................... 5,465 5,403 6,967
Redeemed............................. (55,380) (22,630) (26,527)
------------ ------------ ------------
Net increase in Class B shares
outstanding........................ 2,185 89,565 50,020
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See notes to financial statements
26
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE INCOME
------------------------------------- ----------------------------------------
10/1/98 1/1/98 1/1/97 10/1/98 1/1/98 1/1/97
TO TO TO TO TO TO
3/31/99 9/30/98 12/31/97 3/31/99 9/30/98 12/31/97
- --------------------------------------- ----------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income................ $ 1,532,881 $ 2,251,025 $ 2,902,275 $ 19,629,206 $ 28,808,714 $ 37,617,154
Net realized gain on investments..... 49,921 332,824 145,546 1,236,201 6,072,547 7,801,754
Net unrealized appreciation
(depreciation) of investments...... (1,983,998) 1,502,946 1,059,248 3,306,257 (32,899,878) 7,327,698
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net
assets resulting from
operations........................ (401,196) 4,086,795 4,107,069 24,171,664 1,981,383 52,746,606
----------- ----------- ----------- ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A...... (1,401,118) (2,031,526) (2,740,532) (19,037,795) (28,271,152) (37,571,202)
Net investment income - Class B...... (147,421) (157,556) (148,190) (443,306) (427,881) (367,759)
Net realized gains - Class A......... (315,829) -- (145,340) -- -- --
Net realized gains - Class B......... (34,277) -- (10,710) -- -- --
----------- ----------- ----------- ------------ ------------ ------------
Total distributions................ (1,898,645) (2,189,082) (3,044,772) (19,481,101) (28,699,033) (37,938,961)
----------- ----------- ----------- ------------ ------------ ------------
SHARE TRANSACTIONS*
Class A:
Proceeds from shares sold............ 5,839,678 7,654,519 6,253,282 14,381,763 19,191,549 16,851,806
Reinvestment of distributions........ 1,374,785 1,382,541 2,236,906 13,516,562 17,811,002 26,312,729
Cost of shares redeemed.............. (4,903,788) (6,018,074) (10,870,685) (25,274,602) (39,843,145) (50,837,153)
----------- ----------- ----------- ------------ ------------ ------------
2,310,675 3,018,986 (2,380,497) 2,623,723 (2,840,594) (7,672,618)
----------- ----------- ----------- ------------ ------------ ------------
Class B:
Proceeds from shares sold............ 2,064,582 2,122,648 1,206,438 3,628,326 4,069,154 2,600,932
Reinvestment of distributions........ 139,242 97,513 110,137 259,180 222,517 234,762
Cost of shares redeemed.............. (581,319) (438,399) (402,070) (912,090) (634,541) (543,250)
----------- ----------- ----------- ------------ ------------ ------------
1,622,505 1,781,762 914,505 2,975,416 3,657,130 2,292,444
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) from share
transactions....................... 3,933,180 4,800,748 (1,465,992) 5,599,139 816,536 (5,380,174)
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in net
assets............................ 1,633,339 6,698,461 (403,695) 10,289,702 (25,901,114) 9,427,471
NET ASSETS
Beginning of period.................. 55,023,943 48,325,482 48,729,177 418,545,201 444,446,315 435,018,844
----------- ----------- ----------- ------------ ------------ ------------
End of period+....................... $56,657,282 $55,023,943 $48,325,482 $428,834,903 $418,545,201 $444,446,315
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
+Includes undistributed net investment
income of............................ $ 65,193 $ 80,851 $ 18,908 $ 5,003,170 $ 4,855,065 $ 4,745,384
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 566,383 746,328 628,030 3,452,368 4,340,514 3,881,531
Issued for distributions
reinvested......................... 133,266 135,264 224,425 3,243,255 4,026,825 6,059,302
Redeemed............................. (476,173) (587,942) (1,095,164) (6,062,132) (9,003,279) (11,715,604)
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in Class A
shares outstanding................. 223,476 293,650 (242,709) 633,491 (635,940) (1,774,771)
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
Class B:
Sold................................. 200,177 206,853 120,858 874,240 928,514 599,023
Issued for distributions
reinvested......................... 13,498 9,529 11,021 62,317 50,572 54,064
Redeemed............................. (56,334) (42,765) (40,307) (220,435) (144,214) (124,769)
----------- ----------- ----------- ------------ ------------ ------------
Net increase in Class B shares
outstanding........................ 157,341 173,617 91,572 716,122 834,872 528,318
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
</TABLE>
See notes to financial statements
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
FIRST INVESTORS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
HIGH YIELD
----------------------------------------
10/1/98 1/1/98 1/1/97
TO TO TO
3/31/99 9/30/98 12/31/97
- --------------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................ $ 9,018,390 $ 13,476,215 $ 17,677,606
Net realized gain on investments..... 480,404 2,887,542 713,528
Net unrealized appreciation
(depreciation) of investments...... (201,067) (16,132,114) 5,114,885
------------ ------------ ------------
Net increase in net assets
resulting from operations........ 9,297,727 231,643 23,506,019
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A...... (8,381,079) (12,837,075) (18,059,105)
Net investment income - Class B...... (375,328) (469,260) (449,764)
------------ ------------ ------------
Total distributions................ (8,756,407) (13,306,335) (18,508,869)
------------ ------------ ------------
SHARE TRANSACTIONS*
Class A:
Proceeds from shares sold............ 5,420,830 13,015,941 18,043,474
Reinvestment of distributions........ 6,098,449 8,343,126 12,110,096
Cost of shares redeemed.............. (13,705,660) (23,733,242) (28,096,512)
------------ ------------ ------------
(2,186,381) (2,374,175) 2,057,058
------------ ------------ ------------
Class B:
Proceeds from shares sold............ 1,786,369 3,149,731 3,582,510
Reinvestment of distributions........ 226,996 232,619 255,493
Cost of shares redeemed.............. (780,512) (1,125,496) (1,007,361)
------------ ------------ ------------
1,232,853 2,256,854 2,830,642
------------ ------------ ------------
Net increase (decrease) from share
transactions....................... (953,528) (117,321) 4,887,700
------------ ------------ ------------
Net increase (decrease) in net
assets........................... (412,208) (13,192,013) 9,884,850
NET ASSETS
Beginning of period.................. 202,240,458 215,432,471 205,547,621
------------ ------------ ------------
End of period+....................... $201,828,250 $202,240,458 $215,432,471
------------ ------------ ------------
------------ ------------ ------------
+Includes undistributed net investment
income of............................ $ 1,183,428 $ 921,445 $ 751,565
------------ ------------ ------------
------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 1,044,223 2,358,746 3,324,677
Issued for distributions
reinvested......................... 1,173,364 1,516,355 2,233,259
Redeemed............................. (2,641,414) (4,319,040) (5,175,518)
------------ ------------ ------------
Net increase (decrease) in Class A
shares outstanding................. (423,827) (443,939) 382,418
------------ ------------ ------------
------------ ------------ ------------
Class B:
Sold................................. 345,427 571,087 661,609
Issued for distributions
reinvested......................... 43,732 42,398 46,771
Redeemed............................. (149,930) (206,051) (185,884)
------------ ------------ ------------
Net increase in Class B shares
outstanding........................ 239,229 407,434 522,496
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See notes to financial statements
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES--First Investors Government Fund, Inc.
("Government Fund"), a Maryland corporation; First Investors Investment Grade
Fund ("Investment Grade Fund"), a series of First Investors Series Fund ("Series
Fund"), a Massachusetts business trust; First Investors Fund For Income, Inc.
("Income Fund"), a Maryland corporation; and First Investors High Yield Fund,
Inc. ("High Yield Fund"), a Maryland corporation; are registered under the
Investment Company Act of 1940 (the "1940 Act") as diversified, open-end
management investment companies. Each Fund accounts separately for the assets,
liabilities and operations of the Fund. Series Fund offers four additional
series which are not included in this report. The objective of each Fund is as
follows:
GOVERNMENT FUND seeks to achieve a significant level of current income which is
consistent with security and liquidity of principal.
INVESTMENT GRADE FUND seeks to generate a maximum level of income consistent
with investment in investment grade debt securities.
INCOME FUND primarily seeks high current income and secondarily seeks capital
appreciation.
HIGH YIELD FUND primarily seeks high current income and secondarily seeks
capital appreciation.
On March 19, 1998, the Boards of Directors/Trustees of the Government Fund,
Series Fund, Income Fund and High Yield Fund approved a change in the fiscal
year-ends of each of the above listed Funds to September 30. Previously, the
fiscal year-ends were December 31 for each of the Funds.
A. Security Valuation--Except as provided below, a security listed or traded on
an exchange or the Nasdaq Stock Market is valued at its last sale price on the
exchange or market where the security is principally traded, and lacking any
sales, the security is valued at the mean between the closing bid and asked
prices. Securities traded in the over-the-counter ("OTC") market (including
securities listed on exchanges whose primary market is believed to be OTC) are
valued at the mean between the last bid and asked prices based upon quotes
furnished by a market maker for such securities. Securities may also be priced
by a pricing service. The pricing service uses quotations obtained from
investment dealers or brokers, information with respect to market transactions
in comparable securities, and other available information in determining values.
Short-term debt securities that mature in 60 days or less are valued at
amortized cost. Securities for which market quotations are not readily
available, and any other assets are valued on a consistent basis at fair value
as determined in good faith by or under the
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
supervision of the Fund's officers in a manner specifically authorized by the
Board of Directors/Trustees.
B. Federal Income Taxes--No provision has been made for federal income taxes on
net income or capital gains since it is the policy of each Fund 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 (in excess of any available capital loss carryovers) to relieve it from
all, or substantially all, federal income taxes. At September 30, 1998, capital
loss carryovers were as follows:
<TABLE>
<CAPTION>
Year Capital Loss Carryovers Expire
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Fund Total 1999 2001 2002 2003 2004 2005
- --------------------------------------- ------------ ------------ ---------- ----------- -------- ---------- ----------
Government............................. $ 19,899,027 $ -- $ -- $19,694,519 $ -- $ 204,508 $ --
Income................................. 207,887,236 207,520,038 -- 254,689 -- -- 112,509
High Yield............................. 119,187,894 109,407,947 1,762,042 135,416 593,956 4,405,482 2,883,051
</TABLE>
C. Distributions to Shareholders--Dividends to shareholders from net investment
income are generally declared daily and paid monthly. Distributions from net
realized capital gains, if any, are generally declared and paid annually. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
mortgage-backed securities, capital loss carryforwards and post-October capital
losses.
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 reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the accounting period. Actual results could differ
from those estimates.
E. Expense Allocation--Expenses directly charged or attributable to a Fund are
paid from the assets of that Fund. General expenses of Series Fund are allocated
among and charged to the assets of each Fund in Series Fund on a fair and
equitable basis, which may be based on the relative assets of each Fund or the
nature of the services performed and relative applicability to each Fund.
F. 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
identified cost basis for both financial statement and federal income tax
purposes.
30
<PAGE>
Dividend income is recorded on the ex-dividend date. Shares of stock received in
lieu of cash dividends on certain preferred stock holdings of Income Fund and
High Yield Fund are recognized as dividend income and recorded at the market
value of the shares received. During the six months ended March 31, 1999, Income
Fund and High Yield Fund recognized $816,957 and $306,698, respectively, from
these taxable "pay-in-kind" distributions. Interest income and estimated
expenses are accrued daily. For the six months ended March 31, 1999, the Bank of
New York, custodian for the Funds, has provided total credits in the amount of
$16,567 against custodian charges based on the uninvested cash balances of the
Funds.
2. SECURITIES TRANSACTIONS--For the six months ended March 31, 1999, purchases
and sales (including pay-downs on Government Fund) of securities and long-term
U.S. Government obligations (excluding U.S. Treasury bills, short-term U.S.
Government obligations and short-term securities) were as follows:
<TABLE>
<CAPTION>
Long-Term
U.S. Government
Securities Obligations
------------------------ --------------------------
<S> <C> <C> <C> <C>
Cost of Proceeds Cost of Proceeds
Fund Purchases from Sales Purchases from Sales
- --------------------------------------- ----------- ----------- ------------ ------------
Government............................. $ -- $ -- $102,016,808 $106,582,417
Investment Grade....................... 4,595,905 2,309,171 5,150,479 3,245,609
Income................................. 79,463,782 67,565,843 -- --
High Yield............................. 30,196,556 33,226,468 -- --
</TABLE>
At March 31, 1999, aggregate cost and net unrealized appreciation (depreciation)
of securities for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Aggregate Unrealized Unrealized Appreciation
Fund Cost Appreciation Depreciation (Depreciation)
- --------------------------------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Government............................. $154,837,654 $ 1,605,237 $ 901,334 $ 703,903
Investment Grade....................... 54,460,313 1,498,362 267,764 1,230,598
Income................................. 428,125,533 16,317,384 17,898,268 (1,580,884)
High Yield............................. 199,887,871 7,396,942 12,483,135 (5,086,193)
</TABLE>
3. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
directors/trustees of the Funds are officers and directors of the Funds'
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
investment adviser, First Investors Management Company, Inc. ("FIMCO"), its
underwriter, First Investors Corporation ("FIC"), its transfer agent,
Administrative Data Management Corp. ("ADM") and/or First Financial Savings
Bank, S.L.A. ("FFS"), custodian of the Funds' Individual Retirement Accounts.
Directors/ trustees of the Funds who are not "interested persons" of the Funds
as defined in the 1940 Act are remunerated by the Funds. For the six months
ended March 31, 1999, total directors/trustees fees accrued by the Funds
amounted to $18,000.
The Investment Advisory Agreements provide as compensation to FIMCO an annual
fee, payable monthly, at the following rates:
GOVERNMENT AND HIGH YIELD FUNDS--1% on the first $200 million of each Fund's
average daily net assets, .75% on the next $300 million, declining by .03% on
each $250 million thereafter, down to .66% on average daily net assets over $1
billion. FIMCO has waived 35% and 40%, respectively, of the 1% annual fee on the
first $200 million of Government Fund's average daily net assets for the periods
October 1, 1998 through December 31, 1998 and January 1, 1999 through March 31,
1999. For the six months ended March 31, 1999, FIMCO also has waived 25% of the
1% annual fee on the first $200 million of High Yield Fund's average daily net
assets.
INVESTMENT GRADE FUND--.75% on the first $300 million of the Fund's average
daily net assets, .72% on the next $200 million, .69% on the next $250 million,
and .66% on average daily assets over $750 million. FIMCO waived 20% of the .75%
annual fee on the first $300 million of the Fund's average daily net assets for
the six months ended March 31, 1999.
INCOME FUND--.75% on the first $250 million of the Fund's average daily net
assets, declining by .03% on each $250 million thereafter, down to .66% on
average daily net assets over $750 million.
For the six months ended March 31, 1999, total advisory fees accrued to FIMCO by
the Funds were $3,581,195 of which $592,283 was waived. In addition, FIMCO
assumed $31,559 of Investment Grade Fund expenses.
For the six months ended March 31, 1999, FIC, as underwriter, received $772,033
in commissions from the sale of shares of the Funds after allowing $99,962 to
other dealers. Shareholder servicing costs included $557,719 in transfer agent
fees accrued to ADM and $179,317 in IRA custodian fees accrued to FFS.
Pursuant to Distribution Plans adopted under Rule 12b-1 of the 1940 Act, each
Fund is authorized to pay FIC a fee up to .30% of the average daily net assets
of the Class A shares and 1% of the average daily net assets of the Class B
shares
32
<PAGE>
on an annual basis each year, payable monthly. The fee consists of a
distribution fee and a service fee. The service fee is paid for the ongoing
servicing of clients who are shareholders of the Funds.
4. RULE 144A SECURITIES--Under Rule 144A, certain restricted securities are
exempt from the registration requirements of the Securities Act of 1933 and may
only be sold to qualified institutional investors. At March 31, 1999, Investment
Grade held one 144A security with a value of $727,550 representing 1.3% of the
Fund's net assets, Income Fund held eighteen 144A securities with an aggregate
value of $52,942,483 representing 12.3% of the Fund's net assets and High Yield
Fund held twelve 144A securities with an aggregate value of $22,068,540
representing 10.9% of the Fund's net assets. These securities are valued as set
forth in Note 1A.
5. CONCENTRATION OF CREDIT RISK--The investments of Income Fund and High Yield
Fund in high yield securities whether rated or unrated may be considered
speculative and subject to greater market fluctuations and risks of loss of
income and principal than lower yielding, higher rated, fixed income securities.
The risk of loss due to default by the issuer may be significantly greater for
the holders of high yielding securities, because such securities are generally
unsecured and are often subordinated to other creditors of the issuer.
6. CAPITAL--Each Fund sells two classes of shares, Class A and Class B, each
with a public offering price that reflects different sales charges and expense
levels. Class A shares are sold with an initial sales charge of up to 6.25% of
the amount invested and together with the Class B shares are subject to
distribution plan fees as described in Note 3. Class B shares are sold without
an initial sales charge, but are generally subject to a contingent deferred
sales charge which declines in steps from 4% to 0% over a six-year period. Class
B shares automatically convert into Class A shares after eight years. Realized
and unrealized gains or losses, investment income and expenses (other than
distribution plan fees) are allocated daily to each class of shares based upon
the relative proportion of net assets to each class. Of the 1,000,000,000 shares
originally authorized by both Government Fund and Income Fund, each Fund has
designated 500,000,000 shares as Class A and 500,000,000 as Class B. Series
Fund, of which Investment Grade Fund is a series, has established an unlimited
number of shares of beneficial interest for both Class A and Class B shares. Of
the 500,000,000 shares originally authorized by High Yield Fund, the Fund has
designated 250,000,000 shares as Class A and 250,000,000 shares as Class B.
33
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS
The following table sets forth the per share operating performance data for a
share, total return, ratios to average net assets and other supplemental data
for each period indicated.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
---------------------------------------
NET REALIZED LESS DISTRIBUTIONS
NET ASSET AND FROM
VALUE UNREALIZED ----------------------
--------- NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GOVERNMENT FUND
CLASS A
1993........... $ 11.83 $ .72 ($ .26) $ .46 $ .74 $ -- $ .74
1994........... 11.55 .69 (1.06) (.37) .68 -- .68
1995........... 10.50 .71 .82 1.53 .72 -- .72
1996........... 11.31 .68 (.30) .38 .64 -- .64
1997........... 11.05 .69 .21 .90 .66 -- .66
1998(a)........ 11.29 .49 .18 .67 .47 -- .47
1999(c)........ 11.49 .30 (.25) .05 .30 -- .30
CLASS B
1995(b)........ 10.52 .63 .80 1.43 .64 -- .64
1996........... 11.31 .60 (.31) .29 .56 -- .56
1997........... 11.04 .61 .21 .82 .59 -- .59
1998(a)........ 11.27 .42 .19 .61 .40 -- .40
1999(c)........ 11.48 .26 (.25) .01 .26 -- .26
- ----------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
CLASS A
1993........... $ 9.90 $ .65 $ .50 $ 1.15 $ .65 $ .07 $ .72
1994........... 10.33 .62 (1.09) (.47) .62 -- .62
1995........... 9.24 .64 1.10 1.74 .64 -- .64
1996........... 10.34 .62 (.39) .23 .62 .02 .64
1997........... 9.93 .62 .25 .87 .61 .03 .64
1998(a)........ 10.16 .46 .36 .82 .45 -- .45
1999(c)........ 10.53 .28 (.34) (.06) .29 .07 .36
CLASS B
1995(b)........ 9.26 .54 1.10 1.64 .55 -- .55
1996........... 10.35 .55 (.39) .16 .55 .02 .57
1997........... 9.94 .55 .26 .81 .55 .03 .58
1998(a)........ 10.17 .41 .36 .77 .40 -- .40
1999(c)........ 10.54 .25 (.36) (.11) .25 .07 .32
- ----------------------------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
The following table sets forth the per share operating performance data for a
share, total return, ratios to average net assets and other supplemental data
for each period indicated.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
----------------------------------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
RATIO TO AVERAGE ASSETS BEFORE EXPENSES
NET ASSETS++ WAIVED OR ASSUMED
NET ASSET NET ASSETS ------------------------ ---------------------------
VALUE TOTAL END OF NET NET PORTFOLIO
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER
END * (IN EXPENSES INCOME EXPENSES INCOME RATE
OF PERIOD (%) MILLIONS) (%) (%) (%) (%) (%)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GOVERNMENT FUND
CLASS A
1993........... $ 11.55 3.99 $ 288 1.32 6.14 1.48 5.98 584
1994........... 10.50 (3.22) 219 1.40 6.31 1.60 6.11 260
1995........... 11.31 14.98 217 1.38 6.50 1.61 6.27 163
1996........... 11.05 3.51 187 1.39 6.15 1.63 5.90 121
1997........... 11.29 8.40 170 1.34 6.16 1.64 5.86 134
1998(a)........ 11.49 6.03 161 1.28+ 5.71+ 1.62+ 5.37+ 62
1999(c)........ 11.24 .48 153 1.20+ 5.25+ 1.56+ 4.89+ 65
CLASS B
1995(b)........ 11.31 13.94 1 2.13+ 5.75+ 2.37+ 5.51+ 163
1996........... 11.04 2.73 1 2.09 5.44 2.34 5.20 121
1997........... 11.27 7.60 2 2.04 5.46 2.34 5.16 134
1998(a)........ 11.48 5.54 3 1.98+ 5.01+ 2.32+ 4.67+ 62
1999(c)........ 11.23 .11 3 1.90+ 4.55+ 2.26+ 4.19+ 65
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
CLASS A
1993........... $ 10.33 11.82 $ 49 .86 6.27 1.40 5.73 38
1994........... 9.24 (4.62) 46 .95 6.46 1.47 5.94 17
1995........... 10.34 19.40 50 1.10 6.43 1.43 6.10 27
1996........... 9.93 2.39 46 1.11 5.96 1.42 5.65 22
1997........... 10.16 9.14 45 1.11 6.18 1.43 5.86 34
1998(a)........ 10.53 8.29 50 1.10+ 6.02+ 1.40+ 5.72+ 49
1999(c)........ 10.11 (.63) 50 1.10+ 5.55+ 1.36+ 5.29+ 4
CLASS B
1995(b)........ 10.35 18.08 1 1.80+ 5.73+ 2.13+ 5.40+ 27
1996........... 9.94 1.64 2 1.81 5.26 2.12 4.95 22
1997........... 10.17 8.40 3 1.81 5.48 2.13 5.16 34
1998(a)........ 10.54 7.73 5 1.80+ 5.32+ 2.10+ 5.02+ 49
1999(c)........ 10.11 (1.06) 7 1.80+ 4.85+ 2.06+ 4.59+ 4
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
FIRST INVESTORS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
---------------------------------------
NET REALIZED LESS DISTRIBUTIONS
NET ASSET AND FROM
VALUE UNREALIZED ----------------------
--------- NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME FUND
CLASS A
1993........... $ 3.89 $ .39 $ .29 $ .68 $ .40 $ -- $ .40
1994........... 4.17 .37 (.35) .02 .38 -- .38
1995........... 3.81 .38 .30 .68 .36 -- .36
1996........... 4.13 .39 .14 .53 .37 -- .37
1997........... 4.29 .38 .14 .52 .38 -- .38
1998(a)........ 4.43 .29 (.26) .03 .29 -- .29
1999(c)........ 4.17 .19 .04 .23 .19 -- .19
CLASS B
1995(b)........ 3.81 .31 .33 .64 .32 -- .32
1996........... 4.13 .38 .12 .50 .35 -- .35
1997........... 4.28 .34 .15 .49 .35 -- .35
1998(a)........ 4.42 .26 (.26) -- .26 -- .26
1999(c)........ 4.16 .18 .04 .22 .18 -- .18
- ----------------------------------------------------------------------------------------------------------
HIGH YIELD FUND
CLASS A
1993........... $ 4.97 $ .47 $ .34 $ .81 $ .48 $ -- $ .48
1994........... 5.30 .48 (.46) .02 .48 -- .48
1995........... 4.84 .47 .39 .86 .48 -- .48
1996........... 5.22 .47 .20 .67 .49 -- .49
1997........... 5.40 .46 .15 .61 .48 -- .48
1998(a)........ 5.53 .35 (.34) .01 .34 -- .34
1999(c)........ 5.20 .23 .01 .24 .23 -- .23
CLASS B
1995(b)........ 4.84 .42 .40 .82 .43 -- .43
1996........... 5.23 .44 .18 .62 .45 -- .45
1997........... 5.40 .43 .14 .57 .44 -- .44
1998(a)........ 5.53 .32 (.34) (.02) .32 -- .32
1999(c)........ 5.19 .22 -- .22 .21 -- .21
- ----------------------------------------------------------------------------------------------------------
</TABLE>
* Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed (Note 3)
(a) For the period January 1, 1998 to September 30, 1998
(b) For the period January 12, 1995 (date Class B shares first offered) to
December 31, 1995
(c) For the period October 1, 1998 to March 31, 1999
See notes to financial statements
36
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
----------------------------------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
RATIO TO AVERAGE ASSETS BEFORE EXPENSES
NET ASSETS++ WAIVED OR ASSUMED
NET ASSET NET ASSETS ------------------------ ---------------------------
VALUE TOTAL END OF NET NET PORTFOLIO
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER
END * (IN EXPENSES INCOME EXPENSES INCOME RATE
OF PERIOD (%) MILLIONS) (%) (%) (%) (%) (%)
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME FUND
CLASS A
1993........... $ 4.17 18.06 $ 431 1.32 9.54 N/A N/A 76
1994........... 3.81 .58 401 1.22 9.34 N/A N/A 39
1995........... 4.13 18.54 425 1.18 9.53 N/A N/A 33
1996........... 4.29 13.40 432 1.16 9.27 N/A N/A 30
1997........... 4.43 12.62 439 1.15 8.63 N/A N/A 45
1998(a)........ 4.17 .49 410 1.27+ 8.68+ N/A N/A 28
1999(c)........ 4.21 5.69 417 1.30+ 9.30+ N/A N/A 17
CLASS B
1995(b)........ 4.13 17.46 2 1.92+ 8.78+ N/A N/A 33
1996........... 4.28 12.51 3 1.86 8.57 N/A N/A 30
1997........... 4.42 11.95 6 1.85 7.93 N/A N/A 45
1998(a)........ 4.16 (.06) 9 1.97+ 7.98+ N/A N/A 28
1999(c)........ 4.20 5.40 12 2.00+ 8.60+ N/A N/A 17
- --------------------------------------------------------------------------------------------------------------------
HIGH YIELD FUND
CLASS A
1993........... $ 5.30 16.95 $ 191 1.69 8.96 N/A N/A 87
1994........... 4.84 .39 170 1.56 9.48 1.59 9.44 32
1995........... 5.22 18.43 187 1.45 9.22 1.55 9.12 42
1996........... 5.40 13.35 202 1.37 8.99 1.52 8.84 29
1997........... 5.53 11.84 209 1.29 8.17 1.48 7.98 46
1998(a)........ 5.20 .08 194 1.36+ 8.36+ 1.59+ 8.13+ 20
1999(c)........ 5.21 4.61 192 1.37+ 8.94+ 1.61+ 8.70+ 16
CLASS B
1995(b)........ 5.23 17.40 1 2.22+ 8.45+ 2.32+ 8.35+ 42
1996........... 5.40 12.41 4 2.07 8.28 2.22 8.13 29
1997........... 5.53 11.11 7 1.99 7.47 2.18 7.28 46
1998(a)........ 5.19 (.59) 9 2.06+ 7.66+ 2.29+ 7.43+ 20
1999(c)........ 5.20 4.27 10 2.07+ 8.24+ 2.31+ 8.00+ 16
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
* Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed (Note 3)
(a) For the period January 1, 1998 to September 30, 1998
(b) For the period January 12, 1995 (date Class B shares first offered) to
December 31, 1995
(c) For the period October 1, 1998 to March 31, 1999
See notes to financial statements
37
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Boards of Directors/Trustees of
First Investors Government Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors High Yield Fund, Inc.
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the First Investors Government Fund,
Investment Grade Fund (a series of First Investors Series Fund), Fund For Income
and High Yield Fund as of March 31, 1999, the related statement of operations
for the six months ended March 31, 1999, the statement of changes in net assets
and financial highlights for each of 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 March
31, 1999, by correspondence with the custodian and brokers. Where brokers have
not replied to our confirmation requests, we have carried out other auditing
procedures. 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 the
First Investors Government Fund, Investment Grade Fund, Fund For Income and High
Yield Fund at March 31, 1999, and the results of their operations, changes in
their net assets and financial highlights for the periods presented, in
conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
April 30, 1999
38
<PAGE>
FIRST INVESTORS TAXABLE BOND FUNDS
DIRECTORS
- --------------------------------
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
NANCY W. JONES
Vice President
GEORGE V. GANTER
Vice President
CLARK D. WAGNER
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
39
<PAGE>
FIRST INVESTORS TAXABLE BOND FUNDS
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 the 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.
40
<PAGE>
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