FIRST INVESTORS
FIRST INVESTORS
SPECIAL BOND FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1997
The following appears at the bottom left of the first page:
First Investors Logo
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
LIF007
Portfolio Manager's Letter
FIRST INVESTORS SPECIAL BOND FUND, INC.
Dear Investor:
We are pleased to present the semi-annual report for First Investors Special
Bond Fund, Inc. for the six months ended June 30, 1997. During the period,
the Fund declared dividends from net investment income of 60 cents per share.
For the same period, the Fund's return on a net asset value basis was 4.9%
per share compared to a return of 5.9% for the average of all high yield
funds as measured by Lipper Analytical Services, Inc.
The first half of 1997 ended with an ideal economy: sustained, moderate
growth with little inflation. Early in the year it appeared that the economy
might be growing too fast as gross domestic product expanded at a 4.9% annual
rate during the first quarter. Concerned by the economy's strength, the
Federal Reserve raised short-term interest rates in March for the first time
in over two years as an "insurance policy" in case faster growth led to
higher inflation. The Federal Reserve's action subsequently appeared to be
unnecessary as the economy slowed down significantly in the second quarter
and consumer price inflation in fact decelerated to an annual rate of less
than 2.5%.
Although both the bond and stock markets suffered setbacks at times during
the first six months of the year, the combination of moderate growth and low
inflation ultimately provided a positive environment for investors. The
markets were also buoyed by an agreement between the President and Congress
to eliminate the Federal budget deficit over the next five years. Lastly, the
markets benefited from substantial demand for both stocks and bonds
throughout the first half of 1997.
Many of the circumstances that caused the high yield market and the Special
Bond Fund to perform well in 1996 continued through the first half of 1997.
These factors include buoyant capital markets and strong equity valuations,
which in turn supported credit sensitive debt securities. Indeed, the total
return from the junk bond market was 5.9%, according to the Credit Suisse
First Boston Index, which compares with a 2.5% return on ten-year Treasury
notes. This supportive background for financial markets stimulated demand for
high yield bonds. Investors with varying objectives sensed profit potential
and committed large amounts of money to junk bonds. The market therefore had
a voracious appetite for bonds and readily absorbed a total of $57.6 billion
in new issuance by the end of June.
High yield issuers have generally benefited from the benign economic
environment. We have seen many companies carry out bold strategies for growth
and operating improvement, aided by capital available at comparatively low
cost. Financial flexibility afforded to companies is illustrated by the fact
that the amount of extra yield earned on low rated (riskier) bonds continues
to decline relative to their more highly rated peers. For example, according
to Chase Securities, yields on B rated bonds have on average declined by .26%
versus BB rated bonds. This is an obvious positive for companies coming into
the market to borrow, as it bolsters precious corporate liquidity and has
helped to fuel the record issuance. Consistent with this overall landscape,
default rates have been low, amounting to .83% according to Merrill Lynch.
None have occurred in the Special Bond Fund during this period.
The Fund was affected by its slightly higher than average quality
distribution. Also, its duration, or maturity schedule, is slightly shorter
than some of its competitors. This is meant to protect the Fund, and has
succeeded at doing so, but in the circumstances of early 1997, it caused the
Fund to lag slightly. One holding, Semi- Tech Corp., encountered some
business volatility, from which it and its bonds have substantially
recovered. This bond continues to offer attractive return potential. The Fund
is reaping rewards from investments that have succeeded and redeploying cash
into issuers which are at earlier stages in their business plans. This will
have the effect of linking the Fund more closely to current market
conditions.
Merger and acquisition activity has been brisk, as companies have combined to
achieve stronger market positions and operating improvements. The Fund has
participated selectively in several such transactions that we expect will
lead to credit improvement that the market will applaud. Several portfolio
holdings have appreciated when they have received significant equity
investments or were involved in a stock for stock merger that directly
improved their credit strength.
Aware that this positive environment can change, we remain watchful for
corporate and industry developments that affect the credit direction of the
Fund's holdings and the relative values within our market, as well as for
investment opportunities.
Investors who buy bond funds--whether for income or total return--should be
aware that the value of their investment fluctuates as interest rates change.
For example, a 1% increase in yield on a ten-year Treasury bond results in
roughly a 7% decrease in that bond's price. In each of the last five years,
ten-year Treasury bond yields have moved more than 1%. In addition, the value
of a fund can fluctuate based on changes in the credit quality of the bonds
which it holds. In particular, high yield funds invest in lower-rated debt
obligations which are more sensitive than higher-rated investments to adverse
economic changes or individual corporate developments, and thus can be
subject to a higher incidence of default. Investors should be aware of these
risks and recognize that successful investing generally requires a long-term
commitment to the market.
The outlook for the financial markets continues to be positive. The economy
is growing moderately, inflation is subdued and the Federal Reserve is
unlikely to tolerate unsustainably fast economic growth. Demand for financial
assets is likely to remain strong both here and overseas. While the sizable
recent returns in some markets are not likely to continue, the factors which
might cause a sustained downturn are not readily apparent. Despite this
optimistic outlook, investors should keep in mind that a diversified
portfolio provides the best insurance against unexpected changes in the
financial markets.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
George V. Ganter
Vice President
and Portfolio Manager
July 28, 1997
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS SPECIAL BOND FUND, INC.
June 30, 1997
--------------------------------------------------------------------------------------------------------------------
Amount
Invested
Principal For Each
Amount $10,000 of
or Shares Security Value Net Assets
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CORPORATE BONDS--91.4%
Aerospace/Defense--.9%
$ 300M Moog Inc., 10%, 2006 $ 316,500 $ 89
--------------------------------------------------------------------------------------------------------------------
Automotive--5.0%
385M Aftermarket Technology Corp., 12%, 2004 428,312 121
500M Collins & Aikman Products Co., 11 1/2%, 2006 565,000 159
750M Exide Corp., 10%, 2005 785,625 221
--------------------------------------------------------------------------------------------------------------------
1,778,937 501
--------------------------------------------------------------------------------------------------------------------
Building Materials--4.3%
500M Falcon Building Products Corp., 9 1/2%, 2007 (Note 5) 498,750 140
1,000M Interface, Inc., 9 1/2%, 2005 1,040,000 292
- --------------------------------------------------------------------------------------------------------------------
1,538,750 432
--------------------------------------------------------------------------------------------------------------------
Chemicals--3.9%
475M Harris Chemical North America, Inc., 10 3/4%, 2003 480,938 135
800M Rexene Corp., 11 3/4%, 2004 908,000 254
--------------------------------------------------------------------------------------------------------------------
1,388,938 389
--------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--3.2%
700M Hines Horticulture, Inc., 11 3/4%, 2005 735,000 206
700M Semi-Tech. Corp., 0%-11 1/2%, 2003 421,750 118
--------------------------------------------------------------------------------------------------------------------
1,156,750 324
--------------------------------------------------------------------------------------------------------------------
Containers--4.8%
400M Plastic Containers, Inc., 10%, 2006 416,000 117
500M Tekni-Plex, Inc., 11 1/4%, 2007 542,500 152
700M U.S. Can Corp., 10 1/8%, 2006 745,500 209
--------------------------------------------------------------------------------------------------------------------
1,704,000 478
--------------------------------------------------------------------------------------------------------------------
Electrical Equipment--3.9%
725M Essex Group, Inc., 10%, 2003 761,250 214
618M Thermadyne Holdings Corp., 10 3/4%, 2003 637,313 179
--------------------------------------------------------------------------------------------------------------------
1,398,563 393
--------------------------------------------------------------------------------------------------------------------
Energy--6.6%
1,000M Clark R & M Holdings, Inc., 0%, 2000 762,500 214
600M Falcon Drilling Co., Inc., 9 3/4%, 2001 615,000 173
900M United Meridian Corp., 10 3/8%, 2005 981,000 276
--------------------------------------------------------------------------------------------------------------------
2,358,500 663
--------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--5.3%
250M Doane Products Co., 10 5/8%, 2006 262,500 74
750M Keebler Corp., 10 3/4%, 2006 834,375 234
700M TLC Beatrice International Holdings, Inc., 11 1/2%, 2005 787,500 221
--------------------------------------------------------------------------------------------------------------------
1,884,375 529
--------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--2.3%
800M Showboat, Inc., 9 1/4%, 2008 818,000 230
--------------------------------------------------------------------------------------------------------------------
Healthcare--7.9%
870M Abbey Healthcare Group, Inc., 9 1/2%, 2002 900,450 253
900M Integrated Health Services, Inc., 9 1/2%, 2007 924,750 260
900M Tenet Healthcare Corp., 10 1/8%, 2005 981,000 276
--------------------------------------------------------------------------------------------------------------------
2,806,200 789
--------------------------------------------------------------------------------------------------------------------
Media/Cable Television--15.2%
1,500M Affiliated Newspaper Investments, Inc., 0%-13 1/4%, 2006 1,350,000 379
500M Allbritton Communications Corp., 9 3/4%, 2007 491,875 138
1,000M Bell Cablemedia PLC, 0%-11.95%, 2004 908,750 255
500M Sinclair Broadcasting Group, Inc., 9%, 2007 486,250 137
1,400M Videotron Holdings, PLC, 0%-11 1/8%, 2004 1,265,250 355
900M World Color Press, Inc., 9 1/8%, 2003 922,500 259
--------------------------------------------------------------------------------------------------------------------
5,424,625 1,523
--------------------------------------------------------------------------------------------------------------------
Mining/Metals--6.1%
600M Commonwealth Aluminum Corp., 10 3/4%, 2006 631,500 177
800M CSN Iron, SA, 9 1/8%, 2007 (Note 5) 786,000 221
700M Euramax International, PLC, 11 1/4%, 2006 752,500 211
--------------------------------------------------------------------------------------------------------------------
2,170,000 609
--------------------------------------------------------------------------------------------------------------------
Miscellaneous--7.2%
900M Kindercare Learning Centers, Inc., 9 1/2%, 2009 874,125 246
600M Loomis Fargo & Co., 10%, 2004 (Note 5) 603,000 169
550M Pierce-Leahy Corp., 11 1/8%, 2006 607,750 171
500M Polymer Group, Inc., 9%, 2007 (Note 5) 491,955 138
--------------------------------------------------------------------------------------------------------------------
2,576,830 724
--------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--4.0%
500M Container Corp., 11 1/4%, 2004 548,125 154
900M Fonda Group, Inc., 9 1/2%, 2007 (Note 5) 866,250 243
--------------------------------------------------------------------------------------------------------------------
1,414,375 397
--------------------------------------------------------------------------------------------------------------------
Telecommunications--8.2%
850M Brooks Fiber Properties, Inc., 10%, 2007 (Note 5) 860,625 242
600M Comcast Cellular Corp., 9 1/2%, 2007 (Note 5) 603,750 170
1,100M McCaw International, Ltd, 0%-13%, 2007 (Note 5) 522,500 147
1,000M MFS Communications, Inc., 0%-9 3/8%, 2004 925,000 260
--------------------------------------------------------------------------------------------------------------------
2,911,875 819
--------------------------------------------------------------------------------------------------------------------
Transportation--2.6%
900M Eletson Holdings, Inc., 9 1/4%, 2003 913,500 257
--------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $31,038,768) 32,560,718 9,146
--------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.2%
Electrical Equipment--.1%
684 Thermadyne Holdings Corp. 21,546 6
--------------------------------------------------------------------------------------------------------------------
Media/Cable Television--.7%
1,500 Affiliated Newspaper Investments, Inc. - Class "B" 172,500 48
5,676 Echostar Communications Corp. - Class "A" 88,688 25
--------------------------------------------------------------------------------------------------------------------
261,188 73
--------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--.4%
17,394 Gaylord Container Corp. - Class "A" 133,716 38
--------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $73,375) 416,450 117
--------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--4.2%
Consumer Staples--1.1%
338 Time Warner Inc., 10 1/4%, PIK, Series "M" 375,180 105
--------------------------------------------------------------------------------------------------------------------
Financial Services--3.1%
10,000 California Federal Bank, 10 5/8%, Series "B" 1,115,000 313
--------------------------------------------------------------------------------------------------------------------
Total Value of Preferred Stocks (cost $1,340,530) 1,490,180 418
--------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--4.2%
1,500M Archer-Daniel-Midland Co., 6.20%, 7/1/97 (cost $1,500,000) 1,500,000 421
--------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $33,952,673) 101.0% 35,967,348 10,102
Excess of Liabilities Over Other Assets (1.0) (363,958) (102)
--------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $35,603,390 $10,000
====================================================================================================================
*Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
FIRST INVESTORS SPECIAL BOND FUND, INC.
June 30, 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in securities, at value (identified cost $33,952,673) (Note 1A) $35,967,348
Cash 426,314
Interest receivable 536,149
Investment securities sold 532,778
Other assets 4,373
------------
Total Assets 37,466,962
Liabilities
Payables:
Investment securities purchased $979,105
Dividend payable 839,524
Capital stock redeemed 12,000
Accrued advisory fee 22,419
Accrued expenses 10,524
--------
Total Liabilities 1,863,572
------------
Net Assets $35,603,390
============
Net Assets Consist of:
Capital paid in $52,297,871
Undistributed net investment income 1,070,053
Accumulated net realized loss on investment transactions (19,779,209)
Net unrealized appreciation in value of investments 2,014,675
------------
Total $35,603,390
============
Net Asset Value, Offering Price and Redemption Price Per Share
($35,603,390 divided by 2,789,549 shares outstanding),
25,000,000 shares authorized, $1.00 par value (Note 2) $12.76
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
FIRST INVESTORS SPECIAL BOND FUND, INC.
Six Months Ended June 30, 1997
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Income:
Interest $1,587,514
Dividends 71,007
Consent fees and other income 25,750
------------
Total income $1,684,271
Expenses (Notes 1 and 4):
Advisory fee 134,886
Professional fees 13,416
Custodian fees 3,220
Reports and notices to shareholders 244
Other expenses 1,088
------------
Total expenses 152,854
Less: Custodian fees paid indirectly (2,148)
------------
Net expenses 150,706
------------
Net investment income 1,533,565
Realized and Unrealized Gain (Loss) on Investments (Note 3):
Net realized gain on investments 383,428
Net unrealized depreciation of investments (192,177)
------------
Net gain on investments 191,251
------------
Net Increase in Net Assets Resulting from Operations $1,724,816
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS SPECIAL BOND FUND, INC.
- -------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
June 30, 1997 December 31, 1996
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $1,533,565 $3,371,184
Net realized gain (loss) on investments 383,428 (253,500)
Net unrealized appreciation (depreciation) of investments (192,177) 1,368,848
------------- -----------
Net increase in net assets resulting from operations 1,724,816 4,486,532
------------- -----------
Dividends to shareholders from net investment income (1,692,983) (2,988,275)
------------- -----------
Capital Share Transactions (a)
Proceeds from shares sold 85,024 779,652
Value of dividends reinvested 853,459 2,988,275
Cost of shares redeemed (2,314,777) (6,355,337)
------------- -----------
Net decrease in net assets resulting from share transactions (1,376,294) (2,587,410)
------------- -----------
Net decrease in net assets (1,344,461) (1,089,153)
Net Assets
Beginning of period 36,947,851 38,037,004
------------- -----------
End of period (including undistributed net investment income of
$1,070,053 and $1,229,471, respectively) $35,603,390 $36,947,851
============= ===========
(a) Capital Shares Issued and Redeemed
Sold 6,692 63,299
Issued for dividends reinvested 68,606 241,157
Redeemed (182,571) (516,532)
------------- -----------
Net decrease in capital shares (107,273) (212,076)
============= ===========
See notes to financial statements
</TABLE>
Notes to Financial Statements
FIRST INVESTORS SPECIAL BOND FUND, INC.
1. Significant Accounting Policies -- The Fund is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, open-end
management investment company. The investment objective of the Fund is to
seek high current income without undue risk to principal and secondarily to
seek growth of capital.
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 where the security is principally traded, and lacking
any sales, the security is valued at the mean between the closing bid and
asked prices. Each security traded in the over-the-counter market (including
securities listed on exchanges whose primary market is believed to be over-
the-counter) is 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 and other available information
in determining value. Short-term corporate notes which are purchased at a
discount are valued at amortized cost. Securities for which market quotations
are not readily available are valued on a consistent basis at fair value as
determined in good faith by or under the supervision of the Fund's officers
in a manner specifically authorized by the Board of Directors.
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 the 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, such taxes. At June 30, 1997,
the Fund had capital loss carryovers of $20,162,637, of which $16,599,362
expires in 1998, $3,021,871 in 1999, $287,903 in 2003 and $253,501 in 2004.
C. Distributions to Shareholders -- Dividends to shareholders from net
investment income are declared daily and paid quarterly. Distributions from
net realized capital gains are normally 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
capital loss carryforwards and post October 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 reporting period. Actual results
could differ from those estimates.
E. Other -- Security transactions are accounted for on the date the
securities are purchased or sold. Cost is determined, and gains and losses
are based, on the identified cost basis for both financial statement and
federal income tax purposes. Dividend income is recorded on the ex-dividend
date. Interest income and estimated expenses are accrued daily. The Fund's
custodian has provided credits in the amount of $2,148 against custodian
charges based on the uninvested cash balances of the Fund.
2. Capital Stock -- Shares of the Fund are sold only through the purchase of
annuity contracts issued by First Investors Life Variable Annuity Fund A.
3. Security Transactions -- For the six months ended June 30, 1997, purchases
and sales of investment securities, other than United States Government
obligations and short-term corporate notes, aggregated $11,048,705 and
$11,232,750, respectively.
At June 30, 1997, the cost of investments for federal income tax purposes was
$33,952,673. Accumulated net unrealized appreciation on investments was
$2,014,675, consisting of $2,243,020 gross unrealized appreciation and
$228,345 gross unrealized depreciation.
4. Advisory Fee and Other Transactions With Affiliates -- Certain officers
and directors of the Fund are officers and directors of its investment
adviser, First Investors Management Company, Inc. ("FIMCO") and its transfer
agent, Administrative Data Management Corp. Officers and directors of the
Fund received no remuneration from the Fund for serving in such capacities.
Their remuneration (together with certain other expenses of the Fund) is paid
by FIMCO or First Investors Corporation.
The Investment Advisory Agreement provides as compensation to FIMCO an annual
fee, payable monthly, at the rate of .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.
5. 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 resold to qualified institutional investors. At June 30, 1997,
the Fund held eight 144A securities with an aggregate value of $5,232,830
representing 14.7% of the Fund's net assets. These securities are valued as
set forth in Note 1A.
6. Concentration of Credit Risk -- The Fund's investment in high yield
securities, whether rated or unrated, may be considered speculative and
subject to greater market fluctuations and risk 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.
Independent Auditor's Report
To the Shareholders and Board of Directors of
First Investors Special Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of First
Investors Special Bond Fund, Inc., including the portfolio of investments, as
of June 30, 1997 and the related statement of operations for the six months
then ended, the statement of changes in net assets for the six months ended
June 30, 1997 and the year ended December 31, 1996, and financial highlights
for each of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's 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 June 30, 1997,
by correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
First Investors Special Bond Fund, Inc. as of June 30, 1997, and the results
of its operations, changes in its net assets and financial highlights for
each of the periods presented, in conformity with generally accepted
accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
July 31, 1997
<TABLE>
<CAPTION>
Financial Highlights
FIRST INVESTORS SPECIAL BOND FUND, INC.
The following table sets forth the operating performance data for a share of capital stock outstanding, total return, ratios
to average net assets and other supplemental data for each period indicated.
--------------------------------------------------------
Year Ended December 31
1/1/97 --------------------------------------------------------
to
6/30/97 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per Share Data
- --------------
Net Asset Value, Beginning of Period $12.75 $12.23 $11.03 $12.18 $11.38 $11.05
-------- -------- -------- -------- -------- --------
Income from Investment Operations:
Net investment income .56 1.17 1.20 1.09 1.14 1.27
Net realized and unrealized
gain (loss) on investments .05 .37 1.02 (1.22) .86 .29
-------- -------- -------- -------- -------- --------
Total from Investment Operations .61 1.54 2.22 (.13) 2.00 1.56
-------- -------- -------- -------- -------- --------
Less dividends from net investment income .60 1.02 1.02 1.02 1.20 1.23
-------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $12.76 $12.75 $12.23 $11.03 $12.18 $11.38
======== ======== ======== ======== ======== ========
Total Return(%)+ 4.90 13.10 20.76 (1.00) 18.15 14.56
- ----------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (in thousands) $35,603 $36,948 $38,037 $36,725 $43,056 $44,116
Ratio to Average Net Assets:(%)
Expenses .85(a) .86 .88 .87 .85 .88
Net investment income 8.53(a) 9.31 10.17 9.38 9.54 10.95
Portfolio Turnover Rate(%) 32 29 45 54 79 65
+ The effect of fees and charges incurred at the separate account level are not reflected in these performance figures.
(a) Annualized
See notes to financial statements
</TABLE>
FIRST INVESTORS SPECIAL BOND FUND, INC.
Directors
- ---------------------------------------
James J. Coy (Emeritus)
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
Nancy S. Schaenen
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- ---------------------------------------
Glenn O. Head
President
George V. Ganter
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
Shareholder Information
- ---------------------------------------
Investment Adviser
First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Fund's practice to mail only one copy of
its annual and semi-annual reports to any address at
which more than one shareholder with the same last
name has indicated that mail is to be delivered.
Additional copies of the reports will be mailed if
requested by any shareholder in writing or by
calling 800-423-4026. The Fund will ensure that
separate reports are sent to any shareholder who
subsequently changes his or her mailing address.
This report is authorized for distribution only to
existing shareholders, and, if given to prospective
shareholders, must be accompanied or preceded by
the Fund's prospectus.
