Portfolio Manager's Letter
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Dear Shareholder:
The principal factors that affected the Fund's performance in 1994 were
strong economic growth and fears of inflation. The U.S. economic recovery
hit full stride with gross domestic product growth of approximately 4%.
The unemployment rate fell from 6.4% to 5.4% as the economy created 3.5
million new jobs. Feeling secure about job prospects, consumers were
willing to borrow and spend. U.S. vehicle sales reached their highest
level since 1988. Despite strong growth, inflation remained below 3% as
low labor costs, improved productivity and international competition kept
prices from accelerating.
Nonetheless, concerned that strong economic growth would eventually lead
to inflation, the Federal Reserve in February engineered the first of six
short-term interest rate increases which in total raised rates 250 basis
points (2.50%). As is typical at this point in the economic cycle, long-
term interest rates also rose with the benchmark 30 year U.S. Treasury
bond yield increasing approximately 155 basis points (1.55%) during the
year. With higher interest rates creating concern that the economy might
slow, broad stock market indices were unable to advance and ended the
year unchanged to slightly lower despite strong earnings reported by many
companies.
The municipal bond market fell in stages during 1994. The first decline
was precipitated by the Federal Reserve's decision to begin raising
interest rates in February, causing long term municipal bond yields to
rise over 100 basis points (1.00%). The second decline -- which took rates
up another 95 basis points (.95%) -- ran from September through November.
Because economic growth remained strong, the Fed continued to raise
short-term rates, and municipal bond funds sustained high levels of
redemptions. Following a December rally, municipal bond yields ended the
year 145 basis points (1.45%) higher than they had begun 1994.
New issue supply totalled $163 billion, a drop of 44% from 1993's record
pace. The positive impact of lower supply was offset by the sale of bonds
by mutual funds. The municipal yield curve flattened during the year as
short-term interest rates rose more than long-term rates. In general,
sector and credit decisions had little impact on relative returns in the
municipal bond market. Rather, the sustained decline in the market made
"duration" -- which measures the interest rate sensitivity of bonds --
the key determinant of total return. While the bankruptcy of Orange
County, California disrupted the municipal bond market in general, and
the California market in particular, the First Investors Insured Tax
Exempt Fund was relatively unaffected because all the bonds in the
portfolio are insured as to payment of principal and interest.
The Insured Tax Exempt Fund declined 5.61% during 1994, compared to a
decline of 5.17% for the Lehman Municipal Bond Index. Although
underperforming the Index, the Fund's total return placed it in the top
30% of Insured Municipal Debt Funds for 1994 according to Lipper
Analytical Services. The Fund began 1994 with a relatively short duration
of 7 years -- in contrast to an average duration of 8 to 8.5 years for
other insured funds. This resulted in a better performance than most
other insured funds. As interest rates rose during 1994, the Fund
continued to remain defensively invested although its duration had
increased to 7.8 years by year- end to lock-in current high yields. The
Fund remained fully invested throughout the year in order to maximize
current income.
As always, we appreciate the opportunity to serve your investment
needs.
Sincerely,
/s/ Clark D. Wagner
Clark D. Wagner
Chief Investment Officer
and Portfolio Manager
January 31, 1995
Cumulative Performance Information
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Comparison of change in value of $10,000 investment in the First
Investors Insured Tax Exempt Fund, Inc.
(Class A shares) and the Lehman Brothers Municipal Bond Index.
The following table is the source data for the line chart which
appears at this point in the printed document. This table is
not part of the original printed document and is shown for
reference only. The same is also true for this descriptive
paragraph.
<TABLE>
<CAPTION>
Tax Exempt Lehman
<S> <C> <C>
Jan-85 $ 9,375 $10,000
Dec-85 11,110 12,004
Dec-86 12,833 14,323
Dec-87 13,132 14,537
Dec-88 14,525 16,013
Dec-89 15,779 17,740
Dec-90 16,746 19,033
Dec-91 18,463 21,345
Dec-92 19,950 23,227
Dec-93 21,922 26,078
Dec-94 20,692 24,730
</TABLE>
<TABLE>
<CAPTION>
Class A shares Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
<S> <C> <C>
One Year (5.61%) (11.48%)
Five Years 5.55% 4.19%
Ten Years 8.24% 7.54%
S.E.C. 30-Day Yield 5.70%
</TABLE>
The graph compares a $10,000 investment made in the First Investors
Insured Tax Exempt Fund, Inc. on 1/1/85 with a similar investment in the
Lehman Brothers Municipal Bond Index. For purposes of the graph and the
accompanying table, unless otherwise indicated, it has been assumed that
the maximum sales charge was deducted from the initial $10,000 investment
in the Fund and all dividends and distributions were reinvested.
Investors investing in periodic payment plans bear additional expenses.
The Lehman Brothers Municipal Bond Index is a total return
performance benchmark for the long-term investment grade tax exempt bond
market. Returns and attributes for the Index are calculated semi-monthly
using approximately 21,000 municipal bonds which are priced by Muller
Data Corp. The Index does not take into account fees and expenses or cost
of insurance of the bonds held by an insured tax-exempt bond fund. It is
not possible to invest in the Lehman Brothers Municipal Bond Index.
*Average Annual Total Return figures (for the period ended 12/31/94)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
6.25% (prior to 7/1/93 and 12/29/89, the maximum sales charges were 6.9%
and 7.25%, respectively) and are higher than they would have been had the
sales charge not been reduced. Results represent past performance and do
not indicate future results. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed,
may be worth more or less than the original cost. Lehman Brothers
Municipal Bond Index figures from Lehman Brothers Inc. and all other
figures from First Investors Management Company, Inc. Class A shares were
the only shares offered by the Fund during the period reported.
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
December 31, 1994
- - - - -----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- - - - -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MUNICIPAL BONDS--100.4%
Alabama--.4%
$ 5,245 M Alabama Special Care Facs. Fin. Auth. 10 1/8%, 6/1/2015 $ 5,441,687 $ 42
- - - - -----------------------------------------------------------------------------------------------------------------------
Alaska--.3%
8,000 M North Slope Boro, Alaska General Obligation Zero Coupon 6/30/2005 4,080,000 31
- - - - -----------------------------------------------------------------------------------------------------------------------
Arizona--1.4%
8,825 M Arizona State Ctfs. of Partn. 6 1/4%, 9/1/2010 8,483,031 65
8,550 M Arizona State Municipal Fing. Program Ctfs. of Partn. 7.7%, 8/1/2010 9,458,437 73
- - - - -----------------------------------------------------------------------------------------------------------------------
17,941,468 138
- - - - -----------------------------------------------------------------------------------------------------------------------
California--5.9%
2,910 M California Public Capital Improv. Fin. Auth. 8.1%, 3/1/2018 3,070,050 24
6,250 M Concord Calif. Redevelopment Agency 5 1/4%, 7/1/2013 5,195,313 40
Industry California General Obligation:
6,035 M 5 1/4%, 7/1/2019 4,843,087 37
6,485 M 5 1/4%, 7/1/2020 5,179,894 40
4,220 M Long Beach Finance Authority 6%, 11/1/2017 3,877,125 30
Sacramento, Calif. Municipal Utility District:
10,165 M 5 3/4%, 1/1/2010 9,300,975 72
4,500 M 5 1/4%, 11/15/2012 3,796,875 29
11,000 M San Francisco, Calif. City & County Redev. Agcy. 6 3/4%, 7/1/2025 10,848,750 83
14,700 M San Jose Redevelopment Agency Tax Allocation 5%, 8/1/2020 11,337,375 87
5,000 M Santa Clara County, Calif. Financing Authority 7 3/4%, 11/15/2010 5,637,500 43
5,720 M South Orange Cnty., Calif. Public Financing Authority 6 1/2%, 8/15/2010 5,755,750 44
8,500 M University of California Hsg. System 5 1/2%, 11/1/2010 7,522,500 58
- - - - -----------------------------------------------------------------------------------------------------------------------
76,365,194 587
- - - - -----------------------------------------------------------------------------------------------------------------------
Colorado--.2%
1,850 M Aurora Municipal Building Corp. 9.2%, 12/1/2008 2,055,812 16
- - - - -----------------------------------------------------------------------------------------------------------------------
Connecticut--.8%
6,000 M Connecticut State Housing Finance Authority 6.35%, 5/15/2017 5,722,500 44
4,500 M South Central Regional Water Authority 5 3/4%, 8/1/2012 4,111,875 32
- - - - -----------------------------------------------------------------------------------------------------------------------
9,834,375 76
- - - - -----------------------------------------------------------------------------------------------------------------------
Delaware--.6%
$ 7,000 M Delaware State Econ. Dev. Auth. Rev. Poll. Ctrl. 7.15%, 7/1/2018 $ 7,315,000 $ 56
- - - - -----------------------------------------------------------------------------------------------------------------------
District of Columbia--2.9%
Washington D.C. General Obligation:
10,530 M Series "C" 8%, 6/1/2008 11,504,025 88
5,800 M Series "A" 6 1/2%, 6/1/2009 5,763,750 44
8,875 M Series "A" 6%, 6/1/2011 8,253,750 63
13,255 M Series "E" 6%, 6/1/2012 12,227,737 94
- - - - -----------------------------------------------------------------------------------------------------------------------
37,749,262 289
- - - - -----------------------------------------------------------------------------------------------------------------------
Florida--3.6%
2,255 M Dade County Spec. Oblig. (Miami Beach Conv. Ctr.) 8 5/8%, 12/1/2008 2,483,319 19
Escambia County, Florida Utilities Authority:
5,485 M 6 1/4%, 1/1/2012 5,347,875 41
5,360 M 6 1/4%, 1/1/2013 5,199,200 40
1,070 M Florida Hsg. Fin. Agy. Res. Mtge. Rev. (Series 2) 8%, 12/15/2016 1,094,075 8
1,600 M Lee County Transn. Facs. Rev. 8 1/4%, 10/1/2017 1,680,000 13
Orange County Health Facilities:
8,465 M Mercy Medical 7 7/8%, 12/1/2025 8,581,394 66
7,770 M Sarasota, Lee Memorial, Venice 7 7/8%, 12/1/2025 7,876,838 61
1,750 M Palm Beach County Solid Waste Authority 8 3/8%, 7/1/2010 1,907,500 15
1,000 M St. Lucie County (Florida Power and Light Project) 10%, 4/1/2020 1,030,000 8
Sunrise Utilities System Revenue:
1,500 M 10 1/4%, 10/1/2013 1,833,750 14
1,500 M 10 3/4%, 10/1/2018 1,869,375 14
5,975 M Tampa Utilities Tax & Spl. Rev. 8 1/8%, 10/1/2015 6,505,281 50
1,395 M West Coast Regional Water Supply Auth. 10.4%, 10/1/2013 1,844,887 14
- - - - -----------------------------------------------------------------------------------------------------------------------
47,253,494 363
- - - - -----------------------------------------------------------------------------------------------------------------------
Georgia--5.0%
$ 1,490 M Fulco Hosp. Auth. Rev. Antic. Certs. 9.3%, 10/1/2015 1,568,225 12
9,400 M Fulton County, Ga. Hosp. Auth. (Northside Hosp.) 5 1/8%, 10/1/2016 7,743,250 59
6,000 M Fulton County, Georgia Water & Sewer Revenue 6 3/8%, 1/1/2014 5,925,000 46
Georgia Municipal Electric Authority Power Revenue:
5,000 M 6 1/4%, 1/1/2012 4,800,000 37
14,000 M 8 1/8%, 1/1/2017 15,050,000 116
2,000 M 8 3/8%, 1/1/2020 2,127,500 16
Metropolitan Atlanta Rapid Transit Authority:
20,600 M 6 1/4%, 7/1/2011 20,162,250 155
7,500 M 6 3/4%, 7/1/2013 7,575,000 58
- - - - -----------------------------------------------------------------------------------------------------------------------
64,951,225 499
- - - - -----------------------------------------------------------------------------------------------------------------------
Hawaii--.8%
Hawaii State General Obligation:
5,500 M 6%, 10/1/2009 5,273,125 40
5,000 M 6%, 10/1/2010 4,762,500 37
- - - - -----------------------------------------------------------------------------------------------------------------------
10,035,625 77
- - - - -----------------------------------------------------------------------------------------------------------------------
Illinois--9.1%
1,000 M Aurora Hosp. Facs. (Mercy Ctr. Health Care Svcs.) 9 5/8%, 10/1/2009 1,053,750 8
17,000 M Chicago Board of Education Lease Certificates 6%, 1/1/2020 15,321,250 118
3,500 M Chicago Gas Supply Rev. (Peoples Gas Lt. & Coke Co.) 10 1/4%, 3/1/2015 3,591,875 28
2,450 M Chicago Metropolitan Fair & Exp. Auth. 10 3/8%, 6/1/2014 2,582,398 20
Chicago Public Building Commission Building Revenue:
3,340 M 7 3/4%, 1/1/2006 3,657,300 28
3,500 M 8 3/4%, 1/1/2007 3,806,250 29
Chicago O'Hare International Airport Revenue:
15,500 M 5 3/4%, 1/1/2009 14,279,375 110
5,000 M 6 3/8%, 1/1/2012 4,843,750 37
2,500 M Des Plaines Hosp. Facs. (Holy Family Hosp.) 9 1/4%, 1/1/2014 2,643,750 20
2,800 M Hazel Crest Hosp. Facs. Rev. (South Sub. Proj.) 9 1/8%, 7/1/2017 3,097,500 24
$16,750 M Illinois Development Finance Auth. Poll. Ctrl. Rev. 6 3/4%, 3/1/2015 $ 16,666,250 $ 128
Illinois Development Finance Authority Rev. (Rockford School 205):
3,400 M 6.55%, 2/1/2009 3,391,500 26
5,000 M 6.60%, 2/1/2010 4,987,500 38
3,000 M 6.65%, 2/1/2011 2,992,500 23
Illinois Health Facilities Authority Revenue:
4,300 M Bromenn Healthcare Project 8%, 8/15/2017 4,730,000 36
1,500 M Grant Hospital 7 1/2%, 6/1/2013 1,591,875 12
3,390 M Highland Park Hospital 6.2%, 10/1/2010 3,203,550 25
1,300 M Memorial Hospital 9 1/2%, 5/1/2011 1,347,502 10
1,765 M Mercy Hospital & Medical Center 9 1/2%, 1/1/2015 1,846,631 14
1,000 M Methodist Medical Center 9 5/8%, 10/1/2010 1,050,000 8
2,600 M SSM Health Care Project Series "B" 8%, 6/1/2014 2,847,000 22
4,000 M University of Chicago Hospital 8.1%, 8/1/2014 4,335,000 33
1,000 M Illinois Housing Development Authority 11 1/4%, 7/1/2014 1,030,190 8
1,750 M Lansing Sales Tax Rfdg. 7.7%, 12/1/2008 1,896,563 15
4,000 M Regional Transportation Authority, Illinois 7 3/4%, 6/1/2019 4,490,000 35
Will County School District General Obligation:
3,600 M 7%, 12/1/2007 3,775,500 29
2,080 M 7.05%, 12/1/2008 2,176,200 17
1,175 M 7.1%, 12/1/2009 1,220,531 9
- - - - -----------------------------------------------------------------------------------------------------------------------
118,455,490 910
- - - - -----------------------------------------------------------------------------------------------------------------------
Indiana--1.3%
4,070 M Delaware Cnty. Hosp. Auth. (Ball Memorial Hosp.) 6 5/8%, 8/1/2006 4,187,013 32
1,100 M Frankfort Economic Dev. Rev. (Donaldson Co. Inc.) 11 1/8%, 12/1/2012 1,139,875 9
4,205 M Indiana Housing Fin. Auth. Single-Family Mtge. Rev. 7.6%, 1/1/2016 4,273,331 33
2,000 M Indiana State Edl. Facs. Auth. (Butler University) 8%, 11/1/2009 2,202,500 17
4,000 M Marion County Hosp. Auth. (St. Vincent Hosp.) 10 1/8%, 11/1/2015 4,225,000 32
1,000 M Muncie Certificates of Participation 8.1%, 8/1/2008 1,083,750 8
- - - - -----------------------------------------------------------------------------------------------------------------------
17,111,469 131
- - - - -----------------------------------------------------------------------------------------------------------------------
Kansas--.1%
$ 1,200 M Wellington Elec. Waterworks & Sewer Util. Sys. Rev. 9.4%, 11/1/2010 $ 1,257,000 $ 10
- - - - -----------------------------------------------------------------------------------------------------------------------
Kentucky--.6%
5,710 M Kenton County Hosp. Facs. Rev. (St. Elizabeth Med. Ctr.)
9.3%, 11/1/2010 6,031,187 46
1,160 M Kentucky Dev. Fin. Auth. (Baptist Hosp. Southeast) 9 3/4%, 2/1/2015 1,216,550 10
- - - - -----------------------------------------------------------------------------------------------------------------------
7,247,737 56
- - - - -----------------------------------------------------------------------------------------------------------------------
Louisiana--5.2%
1,030 M Bossier Cty. Public Imp. Sales & Use Tax Rev. 9 1/4%, 11/1/2011 1,145,875 9
2,000 M Calcasieu Parish Mem. Hosp.(Lake Charles Hosp.) 8.4%, 12/1/2012 2,195,000 17
3,000 M Greater New Orleans Expressway 7.8%, 11/1/2016 3,217,500 25
3,750 M Lafayette Public Power Authority 9 5/8%, 11/1/2012 4,003,125 31
2,205 M Louisiana Public Facs. Auth. (Tulane University) 6%, 2/15/2008 2,163,656 16
Louisiana Public Facilities Authority Hospital Revenue:
1,325 M Daughters of Charity 9 3/4%, 2/1/2015 1,412,781 11
2,350 M Touro Infirmary 8%, 6/1/2009 2,570,313 20
2,400 M Womens Hospital Foundation 8 1/8%, 10/1/2014 2,646,000 20
Louisiana Public Facilities Hlth. & Ed. Cap. Fac.:
5,905 M CP Program 7.9%, 12/1/2015 6,436,450 49
1,750 M Our Lady 8.2%, 12/1/2015 1,916,250 15
Louisiana State General Obligation:
14,555 M 6%, 5/1/2012 13,645,313 105
5,380 M 6%, 5/1/2013 5,010,125 38
14,000 M 6%, 5/1/2014 13,002,500 100
15,000 M New Orleans Regl. Transit Auth. Sales Tax Rev. Zero Cpn. 12/1/2021 2,306,250 18
3,000 M Regional Transportation Authority Revenue 8%, 12/1/2013 3,285,000 25
2,500 M Tangipahoa Parish School Board Sales & Use Tax Rev.
10%, 3/15/2010 2,600,125 20
- - - - -----------------------------------------------------------------------------------------------------------------------
67,556,263 519
- - - - -----------------------------------------------------------------------------------------------------------------------
Maryland--2.2%
Maryland Health & Higher Education:
$ 7,920 M Francis Scott Key Med. 5%, 7/1/2018 $ 6,355,800 $ 49
7,850 M Sinai Hosp. 5 1/2%, 7/1/2013 6,947,250 53
8,430 M Suburban Hosp. 5%, 7/1/2019 6,733,462 52
9,000 M Maryland Indl. Dev. Auth. 5.928%, 8/26/2022 8,145,000 63
- - - - -----------------------------------------------------------------------------------------------------------------------
28,181,512 217
- - - - -----------------------------------------------------------------------------------------------------------------------
Massachusetts--2.9%
4,750 M Boston General Obligation 7 3/8%, 2/1/2010 5,165,625 40
2,300 M Mass. Bay Transportation Authority Ctfs. of Partn. 7.65%, 8/1/2015 2,455,250 19
Mass. Health & Educational Facilities Authority:
2,300 M Berkshire Health Systems 7.6%, 10/1/2014 2,412,125 19
1,500 M Carney Hospital 7 3/4%, 7/1/2014 1,672,500 13
1,540 M Mass. Housing Finance Agency 7.7%, 6/1/2017 1,572,725 12
Massachusetts State General Obligation:
20,550 M 6%, 8/1/2009 19,805,063 152
3,000 M 6%, 8/1/2010 2,872,500 22
1,000 M Palmer Unlimited Tax General Obligation 7.3%, 3/1/2010 1,090,000 8
- - - - -----------------------------------------------------------------------------------------------------------------------
37,045,788 285
- - - - -----------------------------------------------------------------------------------------------------------------------
Michigan--3.6%
6,000 M Detroit Water Supply System Revenue 6 1/4%, 7/1/2012 5,782,500 45
7,500 M Michigan State Building Authority 5.3%, 10/1/2012 6,431,250 50
10,000 M Michigan State General Obligation 6 1/4%, 11/1/2012 9,737,500 75
6,000 M Michigan State Hosp. Fin. Auth. (St. John's Hosp.) 6%, 5/15/2008 5,775,000 44
Michigan State Housing Development Authority
Single-Family Mtge. Rev.:
4,685 M 7 1/2%, 6/1/2015 4,831,406 37
2,500 M 7.3%, 12/1/2016 2,515,625 19
2,540 M 7.7%, 12/1/2016 2,613,025 20
4,500 M Monroe Cnty. Econ. Dev. Corp. (Detroit Edison Co.) 6.95%, 9/1/2022 4,606,875 35
6,010 M Wayne Charter Cnty. Airport 5 1/4%, 12/1/2021 4,808,000 37
- - - - -----------------------------------------------------------------------------------------------------------------------
47,101,181 362
- - - - -----------------------------------------------------------------------------------------------------------------------
Minnesota--.8%
$ 1,340 M Eden Prairie Multi-Family Housing 8%, 7/1/2026 $ 1,378,525 $ 11
1,000 M Minnesota State Hsg. Fin. Agcy. Single-Family Mtge. 7.65%, 7/1/2008 1,050,000 8
5,750 M Southern Minnesota Municipal Power Agency 5%, 1/1/2012 4,801,250 37
1,000 M St. Louis Park Hosp. Rev. Facs. (Methodist Hosp.) 9 1/2%, 7/1/2015 1,041,250 8
1,240 M St. Paul Hsg. & Red. Auth. (Como-Lake Proj.) 7 1/2%, 3/1/2026
(Defaulted) (Note 1A) 1,240,000 9
1,000 M Western Minnesota Municipal Power Agency 9 1/2%, 1/1/2013 1,062,500 8
- - - - -----------------------------------------------------------------------------------------------------------------------
10,573,525 81
- - - - -----------------------------------------------------------------------------------------------------------------------
Mississippi--.5%
4,475 M Mississippi Hosp. Equip. & Facs. Auth. Rev. (Baptist Med. Ctr.)
7.6%, 5/1/2013 4,799,437 37
1,680 M Mississippi Hsg. Fin. Corp. Single-Family Mtge. Pur. Rev.
7.8%, 10/15/2016 1,707,300 13
- - - - -----------------------------------------------------------------------------------------------------------------------
6,506,737 50
- - - - -----------------------------------------------------------------------------------------------------------------------
Missouri--2.6%
3,640 M Kansas City School District Bldg. Cap. Improvement 7.9%, 2/1/2008 3,967,600 31
Missouri State Health & Educational Facilities Authority:
BJC Health System Series "A":
6,840 M 6 3/4%, 5/15/2010 6,925,500 53
10,175 M 6 3/4%, 5/15/2011 10,353,063 80
10,000 M Lester Cox Zero Cpn. 9/1/2016 2,275,000 17
5,245 M SSM Health Care 6 1/4%, 6/1/2007 5,225,331 40
4,945 M St. Louis Mun. Fin. Corp. Leasehold Revenue 6 1/4%, 2/15/2012 4,784,287 37
- - - - -----------------------------------------------------------------------------------------------------------------------
33,530,781 258
- - - - -----------------------------------------------------------------------------------------------------------------------
Montana--.5%
1,000 M Missoula Hosp. Facs. Rev. (Sisters of Charity) 9.4%, 9/1/2012 1,050,000 8
5,000 M Montana State Board Housing Single Family Proj. 6.3%, 6/1/2008 4,781,250 37
- - - - -----------------------------------------------------------------------------------------------------------------------
5,831,250 45
- - - - -----------------------------------------------------------------------------------------------------------------------
Nevada--.2%
$ 1,640 M Nevada Housing Div. Single-Family Prog. 7.6%, 10/1/2018 $ 1,648,200 $ 13
1,225 M Reno Hosp. Rev. (St. Mary's Hospital) 7 3/4%, 7/1/2015 1,353,625 10
- - - - -----------------------------------------------------------------------------------------------------------------------
3,001,825 23
- - - - -----------------------------------------------------------------------------------------------------------------------
New Jersey--3.6%
7,120 M Camden County Municipal Utilities Sewer Rev. 8 1/4%, 12/1/2017 7,725,200 59
New Jersey Economic Development Authority Market Trans. Fac. Rev.:
9,630 M 5.8%, 7/1/2009 9,052,200 70
5,375 M 5 7/8%, 7/1/2011 5,065,938 39
New Jersey Housing & Mortgage Financing Revenue:
5,380 M 7 1/2%, 4/1/2015 5,460,700 42
8,400 M 7 3/8%, 10/1/2017 8,568,000 66
4,195 M 8.1%, 10/1/2017 4,399,506 34
7,000 M New Jersey Sports & Exposition Authority Conv. Ctr. 6%, 7/1/2012 6,562,500 50
- - - - -----------------------------------------------------------------------------------------------------------------------
46,834,044 360
- - - - -----------------------------------------------------------------------------------------------------------------------
New Mexico--.5%
1,000 M Farmington Power Rev. Gen. Dev. 9 7/8%, 1/1/2013 1,298,750 10
New Mexico Mortgage Finance Authority, Single-Family Mortgage:
3,075 M 8%, 1/1/2017 3,075,000 24
1,320 M 8 5/8%, 7/1/2017 1,321,650 10
- - - - -----------------------------------------------------------------------------------------------------------------------
5,695,400 44
- - - - -----------------------------------------------------------------------------------------------------------------------
New York--8.0%
Metropolitan Transit Authority, Transit Facilities:
3,500 M 7 1/2%, 7/1/2016 3,740,625 29
10,000 M 8%, 7/1/2018 10,987,500 84
New York City General Obligation:
5,000 M Series "B" 7 3/4%, 8/1/2015 5,393,750 41
10,000 M Series "A" 8 3/4%, 11/1/2015 11,025,000 85
3,850 M Series "A" 8%, 8/1/2017 4,013,625 31
New York City Municipal Water Finance Authority:
6,000 M 5 1/2%, 6/15/2012 5,287,500 41
7,050 M 5 1/2%, 6/15/2015 6,107,062 47
$ 4,500 M New York State Dorm. Auth. Revs. City Univ. System
7 1/2%, 7/1/2020 $ 4,966,875 $ 38
New York State Dorm. Auth. Revs. State Univ. Educ. System:
11,300 M 7 3/8%, 5/15/2014 11,794,375 91
2,780 M 7 1/4%, 5/15/2015 3,030,200 23
New York State Med. Care Facs. Fin. Agcy. Rev.:
2,025 M Hosp. & Nursing 7.35%, 2/15/2029 2,103,469 16
5,000 M Mental Health 6.1/2%, 8/15/2024 4,793,750 37
10,500 M St. Luke's Hosp. 7.45%, 2/15/2029 11,510,625 88
4,000 M New York State Urban Dev. Corp. 7 1/2%, 1/1/2020 4,385,000 34
5,840 M Suffolk County. N.Y. Indl. Dev. Agcy. Southwest Sewer System
6%, 2/1/2008 5,686,700 44
6,000 M Suffolk County Water Authority 5%, 6/1/2015 4,890,000 37
4,900 M Triborough Bridge & Tunnel Authority 5%, 1/1/2015 3,932,250 30
- - - - -----------------------------------------------------------------------------------------------------------------------
103,648,306 796
- - - - -----------------------------------------------------------------------------------------------------------------------
North Carolina--1.7%
North Carolina Municipal Power Agency (Catawba):
7,525 M 6%, 1/1/2010 7,205,188 55
7,945 M 6%, 1/1/2011 7,557,681 58
8,900 M 5%, 1/1/2018 7,019,875 54
- - - - -----------------------------------------------------------------------------------------------------------------------
21,782,744 167
- - - - -----------------------------------------------------------------------------------------------------------------------
North Dakota--1.0%
12,520 M Mercer County Poll. Ctrl. Rev. (Basin Elec. Pwr. Coop.)
10 1/2%, 6/30/2013 12,780,666 98
- - - - -----------------------------------------------------------------------------------------------------------------------
Ohio--1.4%
5,250 M Clermont Cnty. Hosp. Facs. Rev. (Mercy Hlth. Care Sys.)
9 3/4%, 9/1/2013 5,525,625 43
1,145 M Cuyahoga Cnty. Hosp. Rev. (Richmond Hts. Gen. Hosp.)
10%, 12/1/2011 1,023,344 8
4,220 M Hamilton Cnty. Hlth. Care Sys. Rev. (Sisters of Charity)
6 1/4%, 5/15/2008 4,204,175 32
5,000 M Lucas Cnty. Hospital (Toledo Hosp.) 5%, 11/15/2022 3,943,750 30
1,435 M Ohio State Air Quality Dev. Auth. (Ohio Power Co.) 7.4%, 8/1/2009 1,461,906 11
1,230 M Westerville Minerva Pk. & Blendon Jt. Twp. Hosp. Dist. Rev.
9 1/2%, 9/15/2012 1,289,963 10
- - - - -----------------------------------------------------------------------------------------------------------------------
17,448,763 134
- - - - -----------------------------------------------------------------------------------------------------------------------
Oklahoma--1.8%
4,000 M Central Oklahoma Transp. & Pkg. Rev. 8%, 7/1/2006 4,245,000 33
Grand River Dam Authority Revenue:
9,675 M 5 3/4%, 6/1/2008 9,118,688 70
5,100 M 5 1/2%, 6/1/2010 4,755,750 36
1,685 M Muskogee County Home Fin. Auth. Rev. Single-Family Mtge.
7.6%, 12/1/2010 1,701,850 13
2,350 M Oklahoma County Ind. Auth. Hosp. Rev. (South Comm. Hosp.)
8.15%, 2/1/2008 2,555,625 20
1,420 M Tulsa County Home Fin. Auth. Single-Family Mtge. 7.35%, 11/1/2010 1,425,325 11
- - - - -----------------------------------------------------------------------------------------------------------------------
23,802,238 183
- - - - -----------------------------------------------------------------------------------------------------------------------
Oregon--.4%
5,250 M Western Lane, Or. Hospital District (Sisters St. Joseph) 5 3/4%, 8/1/2019 4,705,313 36
- - - - -----------------------------------------------------------------------------------------------------------------------
Pennsylvania--5.1%
6,500 M Allegheny County Hospital Develop. Auth. Rev. (Magee-Womens)
Zero Cpn. 10/1/2017 1,413,750 11
1,310 M Allegheny County Rev. Fin. Auth. Mtge. Single-Family Mtge.
8%, 6/1/2017 1,331,288 10
1,500 M Cambria County Hosp. Dev. Auth. (Conemaugh Valley Hosp.)
10%, 7/1/2003 1,571,280 12
1,750 M Pennsylvania Hsg. Fin. Agency Single-Family Mtge. 7.3%, 10/1/2017 1,756,562 14
Pennsylvania State Certificates of Participation:
7,500 M 5 1/4%, 7/1/2010 6,412,500 49
6,500 M 5%, 7/1/2015 5,159,375 40
5,000 M Pennsylvania State General Obligation 6 3/4%, 11/15/2013 5,050,000 39
8,300 M Pennsylvania State Ind. Dev. Auth. 5 1/2%, 1/1/2014 7,117,250 55
Pennsylvania State Turnpike Commission Turnpike Revenue:
$ 5,000 M 5 1/2%, 12/1/2012 $ 4,468,750 $ 34
6,000 M 5 3/4%, 12/1/2012 5,460,000 42
3,000 M Philadelphia Gas Works Revenue 9 1/8%, 3/15/2012 3,105,810 24
Philadelphia Water & Wastewater Revenue:
5,000 M 5%, 6/15/2017 3,950,000 30
5,000 M 5%, 6/15/2018 3,906,250 30
Pittsburgh Water & Sewer Authority:
5,500 M 6 1/2%, 9/1/2013 5,472,500 42
12,500 M 4 3/4%, 9/1/2016 9,500,000 73
1,000 M Sewickely Valley Hosp. Auth. (Sewickely Vy. Hosp.) 7 1/2%, 10/1/2014 1,093,750 8
- - - - -----------------------------------------------------------------------------------------------------------------------
66,769,065 513
- - - - -----------------------------------------------------------------------------------------------------------------------
Rhode Island--.8%
4,525 M Rhode Island General Obligation 6 1/4%, 5/15/2010 4,400,563 34
1,000 M Rhode Island Health & Ed. Bldg. Corp. (Roger Williams Hosp.)
11 3/8%, 7/1/2016 1,088,750 8
Rhode Island Housing & Mortgage Finance Corp.:
1,000 M 8 3/8%, 10/1/2013 1,033,750 8
1,500 M 8 3/8%, 10/1/2016 1,550,625 12
2,500 M 8 3/8%, 4/1/2019 2,584,375 20
- - - - -----------------------------------------------------------------------------------------------------------------------
10,658,063 82
- - - - -----------------------------------------------------------------------------------------------------------------------
South Carolina--1.2%
14,615 M Piedmont Municipal Power Agency Electric Revenue 9 1/4%, 1/1/2019 15,638,050 120
- - - - -----------------------------------------------------------------------------------------------------------------------
South Dakota--.4%
4,485 M South Dakota Health & Edl. Facs. Auth. (McKennan Hosp.) 7 5/8%, 7/1/2014 4,804,556 37
- - - - -----------------------------------------------------------------------------------------------------------------------
Tennessee--.4%
5,500 M Chattanooga-Hamilton Cntys. (Erlanger Med. Ctr.) 5 5/8%, 10/1/2009 5,032,500 39
- - - - -----------------------------------------------------------------------------------------------------------------------
Texas--14.5%
Austin, Texas Utilities System Revenue:
Capital Appreciation:
$30,465 M Zero Coupon 5/15/2018 $ 6,207,244 $ 48
29,410 M Zero Coupon 5/15/2019 5,624,662 43
5,120 M Series "A" 7.8%, 11/15/2012 5,612,800 43
4,280 M Series "B" 7.8%, 11/15/2012 4,595,650 35
2,000 M 8 5/8%, 11/15/2012 2,322,500 18
5,000 M Series "A" 5 3/4%, 11/15/2014 4,475,000 34
1,000 M 8 5/8%, 11/15/2017 1,161,250 9
5,000 M Bexar County, Texas Health Facs. (Baptist Memorial) 6 3/4%, 8/15/2019 4,962,500 38
10,000 M Brazos River Auth., Houston Light & Power Proj. 8.1%, 5/1/2019 10,750,000 83
23,400 M Coastal Bend Health Facilities 5.929%, 11/15/2013 21,352,500 164
9,215 M Coastal Water Auth. Water Conveyance System 8 1/8%, 12/15/2017 9,906,125 76
6,080 M East Texas Criminal Justice Facs. Fing. Corp. 5 3/4%, 11/1/2009 5,631,600 43
Harris County Toll Road Senior Lien:
11,065 M Series "A" 6 1/2%, 8/15/2012 10,995,844 84
7,305 M Series "A" 6 1/2%, 8/15/2013 7,222,819 55
8,375 M Series "A" 6 1/2%, 8/15/2017 8,814,687 68
3,355 M Series "B" 6 5/8%, 8/15/2017 3,522,750 27
Houston Water Conveyance System Certificates of Participation:
2,250 M 6 1/4%, 12/15/2012 2,160,000 17
4,705 M 6 1/4%, 12/15/2013 4,463,869 34
4,350 M 6 1/4%, 12/15/2014 4,143,375 32
5,860 M 6 1/4%, 12/15/2015 5,574,325 43
2,750 M Kerrville Electric System Rev. 8 3/8%, 11/1/2017 3,014,687 23
4,720 M North Cent. Texas Hlth. Fac. Dev. Corp. (Presbyt. "A" & "B")
8 7/8%, 12/1/2015 5,245,100 40
1,500 M Northeast Hospital Auth. Rev. (Northeast Med. Ctr. Hosp.)
8 1/8%, 7/1/2018 1,651,875 13
Rio Grande Valley Hlth. Fac. Dev. Corp. (Valley Baptist Med. Ctr.):
5,300 M 6.4%, 8/1/2012 5,207,250 40
3,910 M 8%, 8/1/2017 4,296,113 33
1,500 M Sabine River Auth. Poll. Control (Texas Util. Co. Proj.) 7 3/4%, 4/1/2016 1,550,625 12
San Antonio Electric & Gas Revenue:
$ 1,850 M 10 1/2%, 2/1/2013 $ 2,143,688 $ 16
2,000 M 9.6%, 2/1/2014 2,039,220 16
3,000 M 8%, 2/1/2016 3,270,000 25
1,800 M Texas Health Facs. Dev. Corp. (Fort Worth Med. Ctr.) 8 1/8%, 6/1/2018 1,977,750 15
10,395 M Texas Municipal Power Agency 5 1/2%, 9/1/2010 9,472,444 73
5,000 M Texas Public Fin. Auth. 6.2%, 2/1/2005 5,050,000 39
Texas Public Ppty. Fin. Corp. Rev. (Mental Health & Retardation):
2,700 M 7 7/8%, 1/1/2009 2,885,625 22
6,125 M 5 1/2%, 9/1/2013 5,275,156 41
5,000 M Texas Southern University Revenue 5%, 8/1/2013 4,162,500 32
1,700 M Trinity River Auth., Ten Mile Creek System Rev. 10 1/8%, 8/1/2009 1,753,125 14
- - - - -----------------------------------------------------------------------------------------------------------------------
188,494,658 1,448
- - - - -----------------------------------------------------------------------------------------------------------------------
Utah--2.4%
Intermountain Power Agency (Utah Power Supply):
8,395 M 9 5/8%, 7/1/2008 8,818,192 68
6,500 M 8 3/8%, 7/1/2012 7,058,125 54
3,000 M 9 1/2%, 7/1/2015 3,134,700 24
2,000 M Provo, Utah Electric System Revenue 10 3/8%, 9/15/2015 2,622,500 20
1,500 M Provo City, Utah Energy System Revenue 9 1/2%, 11/1/2010 1,601,250 12
2,000 M Salt Lake County Hosp. (IHC Hosp.) 7 7/8%, 8/1/2020 2,095,000 16
Salt Lake County Water Conservancy District Revenue:
3,800 M Zero Cpn. 10/1/2011 1,216,000 9
3,800 M Zero Cpn. 10/1/2012 1,125,750 9
3,760 M Zero Cpn. 10/1/2013 1,029,300 8
2,800 M Utah Associated Municipal Power System Revenue 9 7/8%, 7/1/2010 2,926,000 23
- - - - -----------------------------------------------------------------------------------------------------------------------
31,626,817 243
- - - - -----------------------------------------------------------------------------------------------------------------------
Washington--2.8%
Benton County Public Utilities District No. 1:
4,700 M 9 3/8%, 11/1/2004 4,923,250 38
2,850 M 11 5/8%, 11/1/2004 3,309,563 25
$ 3,500 M Chelan County Public Utility District No. 1, 9 3/4%, 6/1/2015 $ 3,635,625 $ 28
5,000 M Tacoma Electric System Revenue 8%, 1/1/2011 5,443,750 42
Washington Public Power Supply System:
4,960 M Project No. 2 - 7 3/8%, 7/1/2011 5,431,200 42
5,000 M Project No. 2 - 7 3/8%, 7/1/2012 5,475,000 42
958 M Project Nos. 4 & 5 - 8 1/2%, 7/1/2017 (Defaulted) (Note 1A) 958,120 7
2,500 M Washington State Hlth. & Educ. Facs. (Mason Med. Ctr.) 8%, 7/1/2015 2,675,000 21
4,365 M Washington State Hsg. Fin. Comm. Single-Family Mtge. 7.7%, 7/1/2016 4,430,475 34
- - - - -----------------------------------------------------------------------------------------------------------------------
36,281,983 279
- - - - -----------------------------------------------------------------------------------------------------------------------
West Virginia--.9%
1,050 M West Virginia State Hosp. Fin. Auth. Rev. (Monongalia Hosp.)
8 1/2%, 7/1/2007 1,127,437 9
13,885 M West Virginia Water Development Authority 5%, 11/1/2018 11,142,713 85
- - - - -----------------------------------------------------------------------------------------------------------------------
12,270,150 94
- - - - -----------------------------------------------------------------------------------------------------------------------
Wisconsin--2.0%
5,000 M Superior, Wisconsin Ltd. Oblig. Rev. (Midwest Energy) 6.9%, 8/1/2021 5,081,250 39
Wisconsin Housing & Economic Development Authority:
1,435 M 7 1/2%, 9/1/2017 1,442,175 11
4,145 M 7.6%, 9/1/2017 4,196,812 32
14,840 M 7 3/4%, 9/1/2017 15,136,800 116
1,545 M Wisconsin Municipal Insurance Comm. Rev. 8.7%, 4/1/2007 1,689,844 13
Wisconsin State Health & Educational Facilities Authority Revenue:
2,000 M Hospital Sisters Services Inc. 7 5/8%, 11/15/2018 2,182,500 17
1,500 M Novus Health Group 8%, 12/1/2008 1,655,625 13
- - - - -----------------------------------------------------------------------------------------------------------------------
31,385,006 241
- - - - -----------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $1,304,290,792) 1,306,082,022 10,035
- - - - -----------------------------------------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENTS--.0%
Pennsylvania
$ 100 M Sayre Health Care Facs. Auth. Floating Rate Note
Series "I" 5.25%, (cost $100,000)* $ 100,000 $ 1
- - - - -----------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Investments (cost $1,304,390,792) 100.4% 1,306,182,022 10,036
Excess of Liabilities Over Other Assets (.4) (4,645,388) (36)
- - - - -----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $1,301,536,634 $10,000
=======================================================================================================================
</TABLE>
* Interest rates are determined and reset weekly by the issuer. Interest
rate shown is the rate in effect at December 31, 1994.
See notes to financial statements
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
December 31, 1994
- - - - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in securities, at value (identified cost $1,304,390,792)
(Note 1A) $1,306,182,022
Cash 874,293
Receivables:
Interest $25,809,895
Capital stock sold 1,156,858
Investment securities sold 617,874 27,584,627
------------
Other assets 81,733
--------------
Total Assets 1,334,722,675
Liabilities
Payables:
Investment securities purchased 25,576,096
Capital stock redeemed 4,960,079
Dividend payable January 10, 1995 1,395,950
Accrued advisory fee 751,989
Accrued expenses 501,927
------------
Total Liabilities 33,186,041
--------------
Net Assets $1,301,536,634
==============
Net Assets Consist of:
Capital paid in $1,321,263,958
Undistributed net investment income 493,895
Accumulated net realized loss on investment transactions (22,012,449)
Net unrealized appreciation in value of investments 1,791,230
--------------
Total $1,301,536,634
==============
Net Asset Value and Redemption Price Per Share--Class A (Note 5)
($1,301,536,634 divided by 138,224,936 shares outstanding),
300,000,000 shares authorized, $1.00 par value $ 9.42
======
Maximum Offering Price Per Share--Class A ($9.42/.9375)* $10.05
======
*On purchases of $25,000 or more, the sales charge is reduced.
</TABLE>
See notes to financial statements
<TABLE>
<CAPTION>
Statement of Operations
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Year Ended December 31, 1994
- - - - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest income $ 95,184,151
Expenses:
Advisory fee (Note 3) $ 9,654,489
Distribution plan expenses (Note 4) 4,183,859
Shareholder servicing costs (Note 3) 1,128,925
Bond insurance premiums (Note 1A) 447,252
Reports and notices to shareholders 429,555
Professional fees 152,114
Other expenses 466,506
-----------
Total expenses 16,462,700
--------------
Net investment income 78,721,451
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized loss on investments (21,856,239)
Net unrealized depreciation of investments (141,170,233)
------------
Net loss on investments (163,026,472)
--------------
Net Decrease in Net Assets Resulting from Operations $ (84,305,021)
==============
</TABLE>
See notes to financial statements
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
- - - - ---------------------------------------------------------------------------------------------------------------
Year Ended December 31 1994 1993
- - - - ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 78,721,451 $ 82,535,503
Net realized gain (loss) on investments (21,856,239) 21,340,808
Net unrealized appreciation (depreciation) of investments (141,170,233) 31,128,222
------------- -------------
Net increase (decrease) in net assets resulting from operations (84,305,021) 135,004,533
------------- -------------
Distributions to Shareholders from:
Net investment income (78,422,877) (82,896,361)
Net realized gain on investments -- (21,340,808)
------------- -------------
Total distributions (78,422,877) (104,237,169)
------------- -------------
Capital Share Transactions - Class A (a)
Issued 98,224,276 176,343,339
Issued on reinvestments 61,033,013 83,068,182
Redeemed (202,387,164) (145,485,843)
------------- -------------
Net increase (decrease) in net assets resulting from
capital share transactions (43,129,875) 113,925,678
------------- -------------
Total increase (decrease) in net assets (205,857,773) 144,693,042
Net Assets
Beginning of year 1,507,394,407 1,362,701,365
------------- -------------
End of year (including undistributed net investment income of
$493,895 and $195,321, respectively) $1,301,536,634 $1,507,394,407
============= =============
(a)Capital shares issued and redeemed--Class A (Note 5)
Issued 9,853,687 16,682,844
Issued on reinvestments 6,238,112 7,852,275
Redeemed (20,662,077) (13,745,284)
------------- -------------
Net increase (decrease) in shares (4,570,278) 10,789,835
============= =============
</TABLE>
See notes to financial statements
Notes to Financial Statements
FIRST INVESTORS INSURED TAX EXEMPT 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.
A. Security Valuation--The Municipal Bonds in which the Fund invests are
traded primarily in the over-the-counter markets. Such securities are
valued daily at their fair value on the basis of valuations provided by a
pricing service approved by the Board of Directors. The pricing service
considers security type, rating, market condition and yield data, as well
as market quotations and prices provided by market makers. "When Issued
Securities" are reflected in the assets of the Fund as of the date the
securities are purchased.
The Fund's Municipal Bonds are insured as to payment of principal and
interest by the issuer or under insurance policies written by independent
insurance companies. It is the intention of the Fund to retain any
insured securities which are in default or in significant risk of default
and to place a value on the defaulted securities equal to the value of
similar securities which are not in default.
B. Federal Income Taxes--It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute exempt-
interest dividends, by complying with the provisions available to certain
investment companies, as defined in the Internal Revenue Code, and to
make distributions of income and net realized capital gains, sufficient
to relieve it from all, or substantially all, federal income taxes. At
December 31, 1994, the Fund had a capital loss carryover of $20,025,997
expiring in the year 2002.
C. Distributions to Shareholders--Dividends from net investment income
are declared daily and are paid monthly. Distributions from net realized
capital gains are normally declared and paid annually. To the extent that
net realized capital gains can be offset by capital loss carryovers, it
is the policy of the Fund not to distribute such gains.
D. Security Transactions and Investment Income--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. Interest
income is earned from settlement date and recorded on the accrual basis.
Estimated expenses are accrued daily.
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, deferral of wash
sales and post October losses.
2. Securities Transactions--For the year ended December 31, 1994,
purchases and sales of investment securities, other than United States
Government obligations and short-term notes, aggregated $767,693,564 and
$744,824,295, respectively.
At December 31, 1994, the cost of investments for federal income tax
purposes was $1,304,398,342. Accumulated net unrealized appreciation on
investments was $1,783,680, consisting of $41,938,397 gross unrealized
appreciation and $40,154,717 gross unrealized depreciation.
3. Advisory Fee and Other Transactions With Affiliates (Also See Note 4)-
- - - - -Certain officers and directors of the Fund are officers and directors of
its investment adviser, First Investors Management Company, Inc.
("FIMCO"), its underwriter, First Investors Corporation ("FIC") and/or
its transfer agent, Administrative Data Management Corp. ("ADM").
Officers and directors of the Fund received no remuneration from the Fund
for serving in such capacity. Their remuneration (together with certain
other expenses of the Fund) is paid by FIMCO or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO an
annual fee, payable monthly, at the rate of .75% of 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.
Pursuant to certain state regulations, FIMCO has agreed to reimburse the
Fund if and to the extent that the Fund's aggregate operating expenses,
including the advisory fee but generally excluding interest, bond
insurance premiums, taxes, brokerage commissions and extraordinary
expenses, exceed any limitation on expenses applicable to the Fund in
those states (unless waivers of such limitation have been obtained). The
amount of any such reimbursement is limited to the amount of the yearly
advisory fee. For the year ended December 31, 1994, no reimbursement was
required pursuant to these provisions.
For the year ended December 31, 1994, FIC, as underwriter, received
$1,033,292 in commissions, after allowing $173,429 to other dealers.
Shareholder servicing costs included $918,970 in transfer agent fees paid
to ADM.
4. Distribution Plan--Pursuant to a Distribution Plan adopted under Rule
12b-1 of the 1940 Act, the Fund is authorized to pay FIC a fee equal to
.30% of its average net assets on an annualized basis each fiscal 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 Fund.
5. Capital Stock--By action of the Board of Directors, the Fund amended
its Articles of Incorporation on October 21, 1994 so that of the
500,000,000 shares originally authorized, 300,000,000 shares were
allocated as Class A capital stock and 200,000,000 shares were allocated
as Class B capital stock. As of December 31, 1994, only Class A shares
have been issued.
<TABLE>
<CAPTION>
Financial Highlights
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
The following table sets forth the per share operating performance for a
share of Class A capital stock outstanding, total return, ratios to
average net assets and other supplemental data for each year indicated.
- - - - ----------------------------------------------------------------------------------------------
Year Ended December 31
-------------------------------------------------
1994 1993 1992 1991 1990
- - - - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data
Net Asset Value,
Beginning of Year $10.56 $10.32 $10.22 $ 9.92 $10.03
------ ------ ------ ------ ------
Income from Investment Operations
Net investment income .56 .60 .65 .69 .70
Net realized and unrealized gain (loss)
on investments (1.15) .40 .15 .30 (.11)
------ ------ ------ ------ ------
Total from Investment Operations (.59) 1.00 .80 .99 .59
------ ------ ------ ------ ------
Less Distributions from:
Net investment income .55 .61 .65 .69 .70
Net realized gains -- .15 .05 -- --
------ ------ ------ ------ ------
Total Distributions .55 .76 .70 .69 .70
------ ------ ------ ------ ------
Net Asset Value,
End of Year $ 9.42 $10.56 $10.32 $10.22 $ 9.92
====== ====== ====== ====== ======
Total Return(%)+ (5.61) 9.88 8.05 10.26 6.13
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $1,302 $1,507 $1,363 $1,208 $1,132
Ratio to Average Net Assets:(%)
Expenses 1.18 1.15 1.16 1.13 1.14
Net Investment Income 5.64 5.69 6.32 6.82 7.03
Portfolio Turnover Rate(%) 57 58 52 34 28
<CAPTION>
- - - - ----------------------------------------------------------------------------------------------
Year Ended December 31
-------------------------------------------------
1989 1988 1987 1986 1985
- - - - ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data
Net Asset Value,
Beginning of Year $ 9.91 $ 9.64 $10.14 $ 9.48 $ 8.69
------ ------ ------ ------ ------
Income from Investment Operations
Net investment income .71 .72 .72 .75 .78
Net realized and unrealized gain (loss)
on investments .12 .27 (.50) .68 .79
------ ------ ------ ------ ------
Total from Investment Operations .83 .99 .22 1.43 1.57
------ ------ ------ ------ ------
Less Distributions from:
Net investment income .71 .72 .72 .76 .78
Net realized gains -- -- -- .01 --
------ ------ ------ ------ ------
Total Distributions .71 .72 .72 .77 .78
------ ------ ------ ------ ------
Net Asset Value,
End of Year $10.03 $ 9.91 $ 9.64 $10.14 $ 9.48
====== ====== ====== ====== ======
Total Return(%)+ 8.64 10.61 2.33 15.51 18.64
Ratios/Supplemental Data
Net Assets, End of Year
(in millions) $1,079 $971 $853 $730 $507
Ratio to Average Net Assets:(%)
Expenses 1.01 1.04 1.13 1.02 1.11
Net Investment Income 7.16 7.33 7.39 7.75 8.62
Portfolio Turnover Rate(%) 26 43 18 16 24
</TABLE>
+Calculated without sales charge
See notes to financial statements
Independent Auditor's Report
To the Shareholders and Board of Directors of
First Investors Insured Tax Exempt Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
First Investors Insured Tax Exempt Fund, Inc., including the portfolio of
investments, as of December 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended and financial
highlights for each of the ten years in the period then ended. 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 December
31, 1994, 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 Insured Tax Exempt Fund, Inc. at December 31,
1994, and the results of its operations, changes in its net assets and
financial highlights for each of the respective periods presented, in
conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 31, 1995
(This page has been left blank intentionally.)
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Directors
James J. Coy
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
F. William Ortman, Jr.
Rex R. Reed
Herbert Rubinstein
John T. Sullivan
Robert F. Wentworth
Officers
Glenn O. Head
President
Concetta Durso
Vice President and Secretary
Clark D. Wagner
Vice President
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
Shareholder Information
Investment Adviser
First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
10 Woodbridge Center Drive
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart
1800 M Street, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
For more complete information about First Investors Insured Tax Exempt
Fund, Inc., including charges and expenses, you may obtain a prospectus
from your registered representative or by calling 1-800-423-4026. Read it
carefully before you invest or send money.
FIRST INVESTORS
FIRST INVESTORS INSURED TAX EXEMPT FUND, INC.
95 WALL STREET
NEW YORK, NY 10005
First Investors LOGO
LOGO is described as follows: The arabic numeral one separated into seven
vertical segments followed by the words "First Investors".
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
FITE113
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 1796" in a box
to the right of a circle containing the words "MAILED FROM
ZIP CODE 17604" appears to the right of the above language in the
printed piece.
Vertically reading from bottom to top in center of the page the words
"FIRST INVESTORS" appear in the printed piece.
FIRST
INVESTORS
INSURED
TAX EXEMPT
FUND, INC.
ANNUAL
REPORT
DECEMBER 31, 1994
