<PAGE>
[LOGO] First Investors
TOTAL RETURN
GROWTH & INCOME
BLUE CHIP
UTILITIES INCOME
MID-CAP OPPORTUNITY
SPECIAL SITUATIONS
GLOBAL
EQUITY FUNDS
ANNUAL REPORT
SEPTEMBER 30, 1998
<PAGE>
MARKET OVERVIEW
FIRST INVESTORS TOTAL RETURN FUND
FIRST INVESTORS GROWTH & INCOME FUND
FIRST INVESTORS BLUE CHIP FUND
FIRST INVESTORS UTILITIES INCOME FUND
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
FIRST INVESTORS SPECIAL SITUATIONS FUND
FIRST INVESTORS GLOBAL FUND, INC.
Dear Investor:
We are pleased to present the annual reports for the First Investors equity
funds for the fiscal year ending September 30, 1998. Included are annual reports
for: First Investors Total Return Fund ("Total Return Fund"), First Investors
Growth & Income Fund ("Growth & Income Fund"), First Investors Blue Chip Fund
("Blue Chip Fund"), First Investors Utilities Income Fund ("Utilities Income
Fund"), First Investors Mid-Cap Opportunity Fund ("Mid-Cap Opportunity Fund"),
First Investors Special Situations Fund ("Special Situations Fund") and First
Investors Global Fund, Inc. ("Global Fund").
You will note that the Funds have a new fiscal year-end, September 30. In prior
years, the Total Return Fund, Blue Chip Fund, Special Situations Fund and Global
Fund had fiscal years ending December 31; the Growth & Income Fund, Utilities
Income Fund and Mid-Cap Opportunity Fund had fiscal years ending October 31.
Consequently, reports for Funds that previously had a December 31 year-end will
cover a nine month period: January 1, 1998 through September 30, 1998. Reports
for Funds that previously had an October 31 year-end will cover an 11 month
period: November 1, 1997 through September 30, 1998.
During the past twelve months, investors experienced the downside of economic
and capital market globalization. The economic crisis that began in Thailand
quickly spread through the rest of Southeast Asia, eventually undermining the
capital markets and economies of Russia and Latin America. During the first half
of 1998, the U.S. markets seemed immune to the "Asian Contagion." However, as
the second half of the year began, investors in U.S. markets became more attuned
to the risks associated with a global economy. As Alan Greenspan, the chairman
of the Federal Reserve, noted, the U.S. could not remain an "oasis of
prosperity" in a world facing growing economic turmoil.
Investors in the U.S. equity market were specifically concerned about the impact
that a slowdown in the global economy would have on the earnings of the large
public, multi-national companies. That concern spread to all areas of the equity
market, ultimately undermining investor sentiment, which has been a major pillar
of this decade's bull market. In addition to earnings concerns, the possibility
of impeachment proceedings against President Clinton raised the level of
political risk, which is normally not a major concern for investors in the U.S.
equity market.
1
<PAGE>
MARKET OVERVIEW (continued)
FIRST INVESTORS TOTAL RETURN FUND
FIRST INVESTORS GROWTH & INCOME FUND
FIRST INVESTORS BLUE CHIP FUND
FIRST INVESTORS UTILITIES INCOME FUND
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
FIRST INVESTORS SPECIAL SITUATIONS FUND
FIRST INVESTORS GLOBAL FUND, INC.
While returns on large-cap stocks, as measured by the Standard & Poor's 500
Index and the Dow Jones Industrial Average, remained above consensus
expectations through the first half of the year, concerns about exposure to a
decelerating world economy led to a broad downturn in large-cap equity prices in
the third quarter. As the worldwide economic activity began to be reflected in
earnings revisions, many investors in large caps moved funds from equities into
bonds, Treasury bills or cash. During the quarter, the problems at Long Term
Capital Management surfaced, increasing investors' concerns about the exposure
of large-cap financial institutions to unregulated hedge funds and the overall
liquidity in the market. The combination of the decelerating worldwide economic
growth, downward earnings revisions and the Long Term Capital Management issue
created a defensive investment climate in the large-cap equity market.
Returns on mid- and small-cap equities fared no better than those in the
large-cap area. In general, both classes of stock had little direct exposure to
the economic crisis in the emerging markets or hedge funds, and were less
expensive than large-cap stocks on a relative price-to-earnings basis. However,
as investor sentiment towards equities in general deteriorated, the overall lack
of liquidity and the perception of a higher degree of risk to earnings in the
mid- and small-cap areas led to a dramatic underperformance for both classes of
stock as compared to returns for large-cap stocks.
The utilities sector was one relative bright spot in the equity market.
Supported by defensive fundamentals and the belief that utilities' earnings were
less exposed to emerging market risk or decelerating economic growth, equity
utilities investments had a solid quarter and respectable year-to-date returns.
The above-market yields and solid cash flows added to the attractiveness of the
utilities sector.
Through September, 1998 has been a difficult year for equity investors. The
raging debate in the third quarter was whether the market action was a much
needed correction or the beginning of a bear market. However, many lost sight of
the fact that small- and mid-cap stocks had already dropped more than twenty
percent, which usually defines a bear market. While large-cap stocks suffered
too, the decline was not as great due to the fact that large-cap stocks are
supported by greater liquidity, track records and consistency of earnings. While
1998 has been difficult, we do not believe we are facing an extended bear
market.
The strength of the U.S. economy has always been the consumer. Bolstered by the
first real wage gains in almost a generation and improving household balance
sheets, we
2
<PAGE>
expect the consumer to continue to support modest growth in the domestic economy
through 1999 and into the year 2000. Also, we believe the Federal Reserve will
support a more accommodative monetary stance, leading to a continued benign
interest rate environment. While the consumer is enjoying real wage gains,
inflation remains dormant, further supporting the Fed's policy on interest
rates.
While we continue to believe the fundamentals of the U.S. economy remain sound,
investors should remain aware of the risks associated with investing in the
stock market. The stock market tends to follow cycles and the current upward
cycle or bull market is now the longest in history. On a technical basis, the
length of the cycle could present some pressure against continued gains in the
short term. The impact of lower global economic growth due to Asian economic
turmoil, and its possible impact on U.S. corporate profits, could also present a
risk to U.S. equity investors. Investors should be aware of these risks and
recognize that successful investing generally requires a long-term commitment to
the market.
The strength of the U.S. economy should allow for modest corporate profit gains
in 1999. Equity investors should keep in mind that modest profit gains,
translating into modest equity price appreciation, represent a return to the
norm in the equity market. The extremely strong corporate profit gains and very
high stock market returns over the past three years have been a historical
anomaly and it would not be rational to continue to expect such "outsized"
returns. In this environment, investors are best served by focusing on long-term
objectives and maintaining a disciplined approach to investing.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Patricia D. Poitra
Director of Equities
First Investors Management Company, Inc.
October 30, 1998
3
<PAGE>
PORTFOLIO MANAGERS' LETTER
FIRST INVESTORS TOTAL RETURN FUND
Dear Investor:
We are pleased to present this annual report for the First Investors Total
Return Fund for the fiscal year ending September 30, 1998. As noted in the
Market Overview, this is a new fiscal year-end for the Fund.
For the reporting period, the Fund's return on a net asset value basis was 4.8%
on Class A shares and 4.3% on Class B shares. The Fund outperformed the Lipper
Analytical Services' flexible funds group, which returned an average of 2.4%.
During the period, the Fund declared dividends from net investment income of 13
cents per share on Class A shares and 8 cents per share on Class B shares.
During the reporting period, returns on financial assets varied substantially
among asset classes, consequently making asset allocation the key to the Fund's
performance. At the beginning of the period, the Fund's asset allocation was 55%
stocks, 35% bonds and 10% cash. The equity allocation was approximately 73%
large cap, 18% mid cap and 9% small cap. The bond allocation was approximately
34% investment grade corporate bonds, 30% high yield corporate bonds, 18%
Treasury bonds and 18% municipal bonds.
During the first quarter, the Fund's equity allocation was increased from 55% to
65% of assets, bonds were decreased from 35% to 33% and cash was decreased from
10% to 2%. Also, the Fund's equity holdings changed to substantially all
large-cap companies, mirroring the largest holdings in the First Investors
Growth & Income Fund. These changes reflected the positive outlook for the stock
market, particularly large-cap stocks. The Fund benefited from these weightings
as the stock market, led by large-cap stocks, rallied to all-time highs in July.
In the beginning of August, asset allocation was adjusted, with stocks
decreasing from 65% to 55%, and bonds increasing from 33% to 43%. This shift was
based on the belief that increasing global financial and economic instability
would negatively affect the U.S. stock market, but would benefit the bond
market. This shift enhanced the Fund's relative performance as the U.S. stock
market fell 10% as measured by the Standard & Poor's 500 Index during August and
September, and 30-year U.S. Treasury prices rallied to all-time highs. The Fund
ended the reporting period with an asset allocation of 53% stocks, 45% bonds and
2% cash.
4
<PAGE>
Going forward, we anticipate that the Federal Reserve will continue to lower
short-term interest rates to help stabilize the markets. The Fed's actions
should place a floor beneath the stock market and help keep bond yields low.
Despite this favorable outlook, the financial markets are likely to remain
volatile. In this environment, investors are best served by focusing on
long-term objectives and maintaining a disciplined approach to investing.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Nancy W. Jones
Vice President
and Co-Portfolio Manager
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Co-Portfolio Manager
[SIGNATURE]
Clark D. Wagner
Chief Investment Officer
and Co-Portfolio Manager
October 30, 1998
5
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS TOTAL RETURN FUND
Comparison of change in value of $10,000 investment in the First Investors Total
Return Fund (Class A shares), Lehman Brothers Government/Corporate Bond Index
and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
TOTAL RETURN FUND LEHMAN GOV/CORP S&P 500
<S> <C> <C> <C>
Apr-90 $9,375 $10,000 $10,000
Dec-90 9,543 10,829 10,242
Dec-91 11,606 12,576 13,367
Dec-92 11,489 13,528 14,326
Dec-93 12,314 15,024 15,727
Dec-94 11,879 14,497 15,929
Dec-95 15,065 17,286 22,443
Dec-96 16,665 17,787 27,596
Dec-97 19,678 19,523 36,731
Sep-98 20,615 21,345 38,936
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 3.80% (2.70%)
Five Years 10.89% 9.47%
Since Inception (4/24/90) 9.78% 8.95%
Class B Shares
One Year 3.10% (0.90%)
Since Inception (1/12/95) 15.14% 14.58%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS TOTAL RETURN
FUND (CLASS A SHARES) BEGINNING 4/24/90 (INCEPTION DATE) WITH THEORETICAL
INVESTMENTS IN THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX AND THE
STANDARD & POOR'S 500 INDEX. THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND
INDEX COMBINES THE LEHMAN BROTHERS GOVERNMENT BOND INDEX WITH THE LEHMAN
BROTHERS CORPORATE BOND INDEX. THE GOVERNMENT BOND INDEX IS MADE UP OF THE
TREASURY BOND INDEX (ALL PUBLIC OBLIGATIONS OF THE U.S. TREASURY) AND THE
AGENCY BOND INDEX (ALL PUBLICLY ISSUED DEBT OF U.S. GOVERNMENT AGENCIES AND
QUASI-FEDERAL CORPORATIONS, AND CORPORATE DEBT GUARANTEED BY THE U.S.
GOVERNMENT). THE CORPORATE BOND INDEX INCLUDES ALL PUBLICLY ISSUED,
FIXED-RATE, NONCONVERTIBLE INVESTMENT GRADE DOLLAR-DENOMINATED,
S.E.C.-REGISTERED CORPORATE DEBT. THE STANDARD & POOR'S 500 INDEX IS AN
UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE
PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE
MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. IT IS NOT
POSSIBLE TO INVEST DIRECTLY IN THESE INDICES. IN ADDITION, THE INDICES DO NOT
TAKE INTO ACCOUNT FEES AND EXPENSES. 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. CLASS B SHARES
PERFORMANCE MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH
ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25% (PRIOR TO 7/1/93, THE
MAXIMUM SALES CHARGE WAS 6.9%). THE CLASS B "S.E.C. STANDARDIZED" RETURNS ARE
ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE (MAXIMUM OF 4% IN THE FIRST
YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND WERE WAIVED OR ASSUMED. IF SUCH
EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS A "S.E.C. STANDARDIZED" AVERAGE
ANNUAL TOTAL RETURN FOR ONE YEAR, FIVE YEARS AND SINCE INCEPTION WOULD HAVE
BEEN (2.97%), 9.20% AND 8.51%, RESPECTIVELY. THE CLASS B "S.E.C. STANDARDIZED"
AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN
(1.16%) AND 14.32%, RESPECTIVELY. 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
GOVERNMENT/CORPORATE BOND INDEX FIGURES FROM LEHMAN BROTHERS, INC., STANDARD &
POOR'S 500 INDEX FIGURES FROM STANDARD & POOR'S AND ALL OTHER FIGURES FROM
FIRST INVESTORS MANAGEMENT COMPANY, INC.
6
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
September 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--53.1%
BASIC MATERIALS--2.1%
12,200 Air Products and Chemicals, Inc. $ 362,950 $ 47
4,200 Dow Chemical Company 358,837 47
9,300 Du Pont (E.I.) de Nemours & Company 521,962 68
8,700 International Paper Company 405,637 53
- -------------------------------------------------------------------------------------
1,649,386 215
- -------------------------------------------------------------------------------------
CAPITAL GOODS--2.7%
16,100 General Electric Company 1,280,956 167
8,100 Illinois Tool Works, Inc. 441,450 58
5,100 United Technologies Corporation 389,831 51
- -------------------------------------------------------------------------------------
2,112,237 276
- -------------------------------------------------------------------------------------
COMMUNICATION SERVICES--3.2%
7,200 Bell Atlantic Corporation 348,750 46
13,700 GTE Corporation 753,500 98
13,560 *MCI WorldCom, Inc. 662,745 86
16,100 SBC Communications, Inc. 715,444 93
- -------------------------------------------------------------------------------------
2,480,439 323
- -------------------------------------------------------------------------------------
CONSUMER CYCLICALS--5.3%
13,600 E.W. Scripps Company - Cl. "A" 591,600 77
25,500 Family Dollar Stores, Inc. 401,625 52
14,700 Gannett Company, Inc. 787,369 103
14,400 Gap, Inc. 759,600 99
3,300 Home Depot, Inc. 130,350 17
8,600 Knight-Ridder, Inc. 382,700 50
7,800 Sears, Roebuck and Company 344,662 45
12,000 Wal-Mart Stores, Inc. 655,500 85
- -------------------------------------------------------------------------------------
4,053,406 528
- -------------------------------------------------------------------------------------
CONSUMER STAPLES--8.2%
19,100 Coca-Cola Enterprises, Inc. 482,275 63
11,400 Comcast Corporation - Spec. Cl. "A" 535,087 70
20,000 CVS Corporation 876,250 114
8,600 Estee Lauder Companies, Inc. - Cl. "A" 440,750 57
8,200 General Mills, Inc. 574,000 75
11,900 Kellogg Company 391,956 51
- -------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS TOTAL RETURN FUND
September 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
10,300 McDonald's Corporation $ 614,781 $ 80
12,500 PepsiCo, Inc. 367,969 48
16,900 Philip Morris Companies, Inc. 778,456 101
5,600 Procter & Gamble Company 397,250 52
9,500 *Revlon, Inc. - Cl. "A" 302,219 39
5,200 Storage USA, Inc. 180,050 24
8,700 *Tele-Communications, Inc. Liberty Media Group -
Ser. "A" 319,181 42
- -------------------------------------------------------------------------------------
6,260,224 816
- -------------------------------------------------------------------------------------
ENERGY--4.0%
5,400 Chevron Corporation 453,938 59
15,600 Exxon Corporation 1,094,925 143
6,200 Kerr-McGee Corporation 282,100 37
7,300 Sun Company, Inc. 233,600 30
10,400 Texaco, Inc. 651,950 85
9,800 Unocal Corporation 355,250 46
- -------------------------------------------------------------------------------------
3,071,763 400
- -------------------------------------------------------------------------------------
FINANCIAL--10.2%
27,900 Ace, Ltd. 837,000 109
7,600 American Express Company 589,950 77
8,400 American International Group, Inc. 646,800 84
10,800 Citigroup, Inc. 405,000 53
13,500 Fannie Mae 867,375 113
13,500 First Union Corporation 691,031 90
11,900 Hertz Corporation - Cl. "A" 492,363 64
9,500 Kimco Realty Corporation 361,000 47
2,600 Lincoln National Corporation 213,850 28
12,950 Marsh & McLennan Companies, Inc. 644,263 84
10,700 PNC Bank Corporation 481,500 63
17,700 Reliance Group Holdings, Inc. 248,906 32
19,300 U.S. Bancorp 686,356 89
7,800 Wachovia Corporation 664,950 87
- -------------------------------------------------------------------------------------
7,830,344 1,020
- -------------------------------------------------------------------------------------
HEALTHCARE--6.2%
20,300 Abbott Laboratories 881,781 115
10,100 American Home Products Corporation 528,988 69
- -------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE (continued)
4,900 Bristol-Myers Squibb Company $ 508,988 $ 66
7,800 Johnson & Johnson 610,350 80
3,000 Merck & Company, Inc. 388,688 51
4,300 Pfizer, Inc. 455,531 59
10,300 Warner-Lambert Company 777,650 101
17,900 Zeneca Group PLC (ADR) 626,500 82
- -------------------------------------------------------------------------------------
4,778,476 623
- -------------------------------------------------------------------------------------
TECHNOLOGY--8.4%
19,700 *ADC Telecommunications, Inc. 416,163 54
10,400 Automatic Data Processing, Inc. 777,400 101
13,275 *Cisco Systems, Inc. 820,561 107
16,800 Compaq Computer Corporation 531,300 69
5,000 *Compuware Corporation 294,375 38
17,600 *EMC Corporation 1,006,500 131
2,100 Intel Corporation 180,075 24
5,100 International Business Machines Corporation 652,800 85
5,000 *Microsoft Corporation 550,313 72
7,000 Xerox Corporation 593,250 77
16,900 *Xilinx, Inc. 591,500 77
- -------------------------------------------------------------------------------------
6,414,237 835
- -------------------------------------------------------------------------------------
TRANSPORTATION--.6%
4,600 Delta Air Lines, Inc. 447,350 58
- -------------------------------------------------------------------------------------
UTILITIES--2.2%
10,350 Connectiv, Inc. 236,109 31
9,500 Enron Corporation 501,719 65
16,100 Williams Companies, Inc. 462,875 60
15,200 Wisconsin Energy Corporation 479,750 63
- -------------------------------------------------------------------------------------
1,680,453 219
- -------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $34,939,422) 40,778,315 5,313
- -------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS TOTAL RETURN FUND
September 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--24.1%
APPAREL/TEXTILES--.7%
$ 500M Westpoint Stevens, Inc., 7.875%, 2008 $ 512,500 $ 67
- -------------------------------------------------------------------------------------
AUTOMOTIVE--.6%
500M Titan International, Inc., 8.75%, 2007 483,750 63
- -------------------------------------------------------------------------------------
BUILDING MATERIALS--1.4%
1,000M Interface, Inc., 7.30%, 2008 1,048,086 137
- -------------------------------------------------------------------------------------
CHEMICALS--.9%
650M Huntsman Polymers Corp., 11.75%, 2004 698,750 91
- -------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--.6%
500M PrintPack, Inc., 9.875%, 2004 502,500 66
- -------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--.7%
500M Niagara Mohawk Power Corp., 7.625%, 2005 517,035 67
- -------------------------------------------------------------------------------------
ENERGY EXPLORATION/PRODUCTS--1.4%
1,000M Gulf Canada Resources, Ltd., 8.35%, 2006 1,056,094 138
- -------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--1.2%
1,000M AMC Entertainment, Inc., 9.50%, 2009 940,000 122
- -------------------------------------------------------------------------------------
FINANCIAL--1.0%
1,000M IBJ Preferred Capital Co., LLC, 8.79%, 2008 (Note
6) 740,000 96
- -------------------------------------------------------------------------------------
FINANCIAL SERVICES--.7%
500M NationsBank Corp., 8.125%, 2002 544,107 71
- -------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--.8%
600M Universal Corp., 9.25%, 2001 652,516 85
- -------------------------------------------------------------------------------------
GAS TRANSMISSION--1.4%
1,000M Enron Corp., 7.125%, 2007 1,098,878 143
- -------------------------------------------------------------------------------------
HEALTHCARE--.8%
600M Healthsouth Rehabilitation Corp., 9.50%, 2001 601,500 78
- -------------------------------------------------------------------------------------
INSURANCE--1.4%
1,000M First Colony Corp., 6.625%, 2003 1,058,653 138
- -------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
INVESTMENT/FINANCE COMPANIES--2.7%
$ 1,000M Ford Motor Credit Co., 6.625%, 2003 $ 1,052,301 $ 137
1,000M International Lease Finance Corp., 6.375%, 2002 1,039,107 135
- -------------------------------------------------------------------------------------
2,091,408 272
- -------------------------------------------------------------------------------------
MISCELLANEOUS--1.1%
250M Iron Mountain, Inc., 10.125%, 2006 261,250 34
500M Signature Brands, Inc., 13%, 2002 562,500 73
- -------------------------------------------------------------------------------------
823,750 107
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.1%
840M Fort Howard Corp., 11%, 2002 852,123 111
- -------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--1.4%
1,000M Federated Department Stores, Inc., 7.45%, 2017 1,074,622 140
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS--2.8%
1,000M MCI WorldCom, Inc., 6.40%, 2005 1,050,824 137
553M MCI WorldCom, Inc., 8.875%, 2006 575,120 75
500M TCI Communications, Inc., 6.375%, 2003 522,287 68
- -------------------------------------------------------------------------------------
2,148,231 280
- -------------------------------------------------------------------------------------
TRANSPORTATION--1.4%
1,000M Norfolk Southern Corp., 6.95%, 2002 1,057,220 138
- -------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $18,294,025) 18,501,723 2,410
- -------------------------------------------------------------------------------------
MUNICIPAL BONDS--7.4%
HOSPITAL--2.2%
1,750M North Carolina Med. Care Comm. Hlth. Facs. Rev.,
5%, 2028 1,728,125 225
- -------------------------------------------------------------------------------------
MISCELLANEOUS--1.3%
1,000M Union County, N.J. Utilities Auth. Solid Waste
Rev., 5%, 2015 1,015,000 132
- -------------------------------------------------------------------------------------
TRANSPORTATION--3.9%
3,000M Wayne Charter County, Mich. Airport Rev., 5%,
2028 2,977,500 388
- -------------------------------------------------------------------------------------
TOTAL VALUE OF MUNICIPAL BONDS (cost $5,545,665) 5,720,625 745
- -------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS TOTAL RETURN FUND
September 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--13.3%
$ 1,000M Federal Home Loan Bank, 6.75%, 2008 $ 1,001,394 $ 131
6,500M Federal National Mortgage Association, 5.75%,
2008 6,888,486 897
2,000M United States Treasury Bond, 6.125%, 2027 2,305,626 300
- -------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT OBLIGATIONS (cost $9,541,301) 10,195,506 1,328
- -------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--3.3%
2,500M Prudential Funding Corp., 5.35%, 10/2/98
(cost $2,499,628) 2,499,628 326
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $70,820,041) 101.2% 77,695,797 10,122
EXCESS OF LIABILITIES OVER OTHER ASSETS (1.2) (935,823) (122)
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $76,759,974 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
12
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS GROWTH & INCOME FUND
Dear Investor:
We are pleased to present this annual report for the First Investors Growth &
Income Fund for the fiscal year ending September 30, 1998. As noted in the
Market Overview, this is a new fiscal year-end for the Fund.
For the reporting period, the Fund's return on a net asset value basis was 8.8%
on Class A shares and 8.2% on Class B shares. The Fund outperformed the Lipper
Analytical Services' growth and income peer group average, which returned an
average of 2.5%. During the period, the Fund declared dividends from net
investment income of 3 cents per share on Class A shares. The Fund also declared
a capital gain distribution of 27.4 cents per share on Class A and Class B
shares. The principal forces behind the Fund's positive return were its focus on
income-producing securities, which provided a cushion during the third quarter
downturn in equity prices (which is described in the Market Overview), industry
allocations and stock selections. The Fund's outperformance of its Lipper peer
group was attributable to its investments in the technology, healthcare,
consumer cyclical and telecommunication sectors. However, investments in the
energy, basic material and capital goods sector did not contribute to the Fund's
outperformance.
The Fund's return was bolstered by technology investments, such as Microsoft,
EMC and International Business Machines. Microsoft continues to dominate desktop
software and generate improvements in revenues, earnings and margins. Investors
believed the business fundamentals at Microsoft outweighed concerns regarding
the Federal Government's antitrust action. EMC, a database management company,
continued to benefit from strong demand for accessible, user friendly data
storage capabilities. IBM continued its shift from a hardware driven company to
a "solutions" driven technology company, taking advantage of trends such as
corporate outsourcing and "rightsizing."
Solid performance from the major pharmaceutical companies also contributed to
the Growth & Income's outperformance for the period. American Home Products,
Pfizer, Merck and Warner-Lambert continued to benefit from the "graying of
America," technological improvements in drug research and a friendlier Food and
Drug Administration.
In the consumer cyclical area, Wal-Mart and CVS were substantial contributors to
the Fund's performance. Wal-Mart continues to be classified as a category
killer, giving the consumer the best value in the broad based retail sector. The
company has also been using the international market turmoil as an opportunity
to enter into select emerging markets. CVS, a national drugstore chain,
continues to generate growth in revenues and earnings from consolidation and
synergies in the drugstore business.
13
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS GROWTH & INCOME FUND
In the telecommunications sector, post-merger MCI WorldCom appears to be well
positioned to become a dominant international and domestic long distance
carrier. Results and estimates continue to climb, as does the stock price.
Investments in the energy area were affected across the board by the continuing
slump in oil prices. Schlumberger, a premier oil exploration company, was hurt
by the possibility of a downturn in exploration spending by the major oil
companies. Ultramar Diamond Shamrock, an oil and gas refiner, was hurt as lower
oil prices, along with competitive pressures, put a substantial squeeze on
profit margins.
Basic materials suffered in general from an overcapacity in production as demand
began to drop due to the widening Asian economic crisis. Investments in the
stocks of companies like Phelps Dodge, a large mining company, did not
contribute to the Fund's performance. Also, Minnesota Mining and Manufacturing
fell prey to the declining demand from Asia.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Dennis T. Fitzpatrick
Portfolio Manager*
* Mr. Fitzpatrick became sole Portfolio Manager of the Fund on September 15,
1998.
October 30, 1998
14
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS GROWTH & INCOME FUND
Comparison of change in value of $10,000 investment in the First Investors
Growth & Income Fund (Class A shares) and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 1998
GROWTH & INCOME FUND S&P 500
<S> <C> <C>
Oct-93 $9,375 $10,000
Oct-94 9,723 10,530
Oct-95 11,635 13,192
Oct-96 14,155 16,369
Oct-97 17,864 21,624
Sep-98 19,443 24,395
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 5.72% (0.92%)
Since Inception (10/4/93) 15.74% 14.25%
Class B Shares
One Year 5.07% 1.07%
Since Inception (1/12/95) 20.68% 20.19%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS GROWTH & INCOME
FUND (CLASS A SHARES) BEGINNING 10/4/93 (INCEPTION DATE) WITH A THEORETICAL
INVESTMENT IN THE STANDARD & POOR'S 500 INDEX. THE STANDARD & POOR'S 500 INDEX
IS AN UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO
MEASURE PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE
AGGREGATE MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES.
IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX
DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. 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. CLASS B SHARES
PERFORMANCE MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH
ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25%. THE CLASS B "S.E.C.
STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE
(MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND
WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS
A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN SINCE INCEPTION WOULD HAVE
BEEN 13.70%. THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
SINCE INCEPTION WOULD HAVE BEEN 19.85%. 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. STANDARD & POOR'S 500 INDEX FIGURES
FROM STANDARD & POOR'S AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT
COMPANY, INC.
15
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--80.7%
BASIC MATERIALS--3.5%
72,000 Air Products and Chemicals, Inc. $ 2,142,000 $ 71
27,000 Dow Chemical Company 2,306,812 77
60,000 Du Pont (E.I.) de Nemours & Company 3,367,500 112
56,000 International Paper Company 2,611,000 87
--------------------------------------------------------------------------------------
10,427,312 347
--------------------------------------------------------------------------------------
CAPITAL GOODS--4.3%
95,000 General Electric Company 7,558,437 251
52,000 Illinois Tool Works, Inc. 2,834,000 94
33,000 United Technologies Corporation 2,522,437 84
--------------------------------------------------------------------------------------
12,914,874 429
--------------------------------------------------------------------------------------
COMMUNICATION SERVICES--3.8%
61,000 GTE Corporation 3,355,000 112
80,000 *MCI WorldCom, Inc. 3,910,000 130
95,000 SBC Communications, Inc. 4,221,562 140
--------------------------------------------------------------------------------------
11,486,562 382
--------------------------------------------------------------------------------------
CONSUMER CYCLICALS--8.0%
85,000 E.W. Scripps Company - Cl. "A" 3,697,500 123
150,000 Family Dollar Stores, Inc. 2,362,500 79
87,000 Gannett Company, Inc. 4,659,937 155
90,000 Gap, Inc. 4,747,500 158
55,000 Knight-Ridder, Inc. 2,447,500 81
50,000 Sears, Roebuck and Company 2,209,375 73
75,000 Wal-Mart Stores, Inc. 4,096,875 136
--------------------------------------------------------------------------------------
24,221,187 805
--------------------------------------------------------------------------------------
CONSUMER STAPLES--12.1%
112,700 Coca-Cola Enterprises, Inc. 2,845,675 95
70,000 Comcast Corporation - Spec. Cl. "A" 3,285,625 109
118,000 CVS Corporation 5,169,875 172
50,900 Estee Lauder Companies, Inc. - Cl. "A" 2,608,625 87
53,000 General Mills, Inc. 3,710,000 123
70,000 Kellogg Company 2,305,625 77
66,000 McDonald's Corporation 3,939,375 131
75,000 PepsiCo, Inc. 2,207,813 73
--------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
100,000 Philip Morris Companies, Inc. $ 4,606,250 $ 153
36,000 Procter & Gamble Company 2,553,750 85
60,800 *Revlon, Inc. - Cl. "A" 1,934,200 64
33,300 Storage USA, Inc. 1,153,013 38
--------------------------------------------------------------------------------------
36,319,826 1,207
--------------------------------------------------------------------------------------
ENERGY--6.3%
35,000 Chevron Corporation 2,942,188 98
92,000 Exxon Corporation 6,457,250 215
40,000 Kerr-McGee Corporation 1,820,000 61
45,000 Sun Company, Inc. 1,440,000 48
65,200 Texaco, Inc. 4,087,225 136
63,000 Unocal Corporation 2,283,750 76
--------------------------------------------------------------------------------------
19,030,413 634
--------------------------------------------------------------------------------------
FINANCIAL--16.0%
165,000 Ace, Ltd. 4,950,000 165
45,000 American Express Company 3,493,125 116
49,500 American International Group, Inc. 3,811,500 127
67,500 Citigroup, Inc. 2,531,250 84
80,000 Fannie Mae 5,140,000 171
80,000 First Union Corporation 4,095,000 136
70,300 Hertz Corporation - Cl. "A" 2,908,663 97
70,000 Kimco Realty Corporation 2,660,000 88
17,000 Lincoln National Corporation 1,398,250 47
76,500 Marsh & McLennan Companies, Inc. 3,805,875 127
80,000 PNC Bank Corporation 3,600,000 120
105,000 Reliance Group Holdings, Inc. 1,476,563 49
114,000 U.S. Bancorp 4,054,125 135
50,000 Wachovia Corporation 4,262,500 142
--------------------------------------------------------------------------------------
48,186,851 1,604
--------------------------------------------------------------------------------------
HEALTHCARE--10.0%
120,000 Abbott Laboratories 5,212,500 173
65,200 American Home Products Corporation 3,414,850 114
31,500 Bristol-Myers Squibb Company 3,272,063 109
50,000 Johnson & Johnson 3,912,500 130
19,300 Merck & Company, Inc. 2,500,556 83
30,000 Pfizer, Inc. 3,178,125 106
--------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS GROWTH & INCOME FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE (continued)
66,000 Warner-Lambert Company $ 4,983,000 $ 166
105,714 Zeneca Group PLC (ADR) 3,699,990 123
--------------------------------------------------------------------------------------
30,173,584 1,004
--------------------------------------------------------------------------------------
TECHNOLOGY--12.2%
116,000 *ADC Telecommunications, Inc. 2,450,500 82
65,000 Automatic Data Processing, Inc. 4,858,750 162
85,500 *Cisco Systems, Inc. 5,284,969 176
99,000 Compaq Computer Corporation 3,130,875 104
104,000 *EMC Corporation 5,947,500 198
33,000 International Business Machines Corporation 4,224,000 141
32,000 *Microsoft Corporation 3,522,000 117
43,000 Xerox Corporation 3,644,250 121
100,000 *Xilinx, Inc. 3,500,000 116
--------------------------------------------------------------------------------------
36,562,844 1,217
--------------------------------------------------------------------------------------
TRANSPORTATION--.9%
27,000 Delta Air Lines, Inc. 2,625,750 87
--------------------------------------------------------------------------------------
UTILITIES--3.6%
65,250 Connectiv, Inc. 1,488,516 50
10,875 Connectiv, Inc. - Cl. "A" 401,695 13
61,200 Enron Corporation 3,232,125 108
95,000 Williams Companies, Inc. 2,731,250 91
90,000 Wisconsin Energy Corporation 2,840,625 94
--------------------------------------------------------------------------------------
10,694,211 356
--------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $174,613,977) 242,643,414 8,072
--------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--3.5%
CONSUMER CYCLICALS--1.0%
70,000 Merrill Lynch Structured Yield Product
(exchangeable into Cox Communications, Inc.
Common Stock), 6% 3,141,250 104
--------------------------------------------------------------------------------------
FINANCIAL--.8%
100,000 Lincoln National Corp., 7.75%, 8/16/01 2,462,500 82
--------------------------------------------------------------------------------------
TECHNOLOGY--1.0%
30,000 Microsoft Corp., 2.196%, 12/15/99 2,891,250 96
--------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--.7%
25,000 Royal Caribbean Cruises, Ltd. -- Ser. "A", 7.25% $ 2,126,590 $ 71
--------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE PREFERRED STOCKS (cost $9,387,787) 10,621,563 353
--------------------------------------------------------------------------------------
CONVERTIBLE BONDS--2.2%
CONSUMER CYCLICALS--.9%
$ 1,600M Home Depot, Inc., 3.25%, 2001 2,792,000 93
--------------------------------------------------------------------------------------
HEALTHCARE--.8%
3,000M Healthsouth Corp., 3.25%, 2003 2,265,000 75
--------------------------------------------------------------------------------------
TECHNOLOGY--.5%
1,500M Analog Devices, Inc., 3.50%, 2000 1,531,875 51
--------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE BONDS (cost $6,700,321) 6,588,875 219
--------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--13.6%
3,200M Abbott Laboratories, 5.49%, 10/21/98 3,190,240 106
2,800M BellSouth Telecommunications, Inc., 5.50%,
10/28/98 2,788,534 93
5,400M Coca Cola Co., 5.46%, 10/9/98 5,393,448 179
3,200M Consolidated Natural Gas Co., Inc., 5.49%,
10/1/98 3,200,000 106
4,600M H.J. Heinz, 5.47%, 10/22/98 4,585,322 153
2,000M Illinois Tool Works, Inc., 5.51%, 10/20/98 1,994,184 66
5,400M Illinois Tool Works, Inc., 5.20%, 11/17/98 5,363,340 178
4,200M Interstate Engine Co., 5.53%, 10/8/98 4,195,484 140
5,000M Lubrizol Corp., 5.52%, 10/13/98 4,990,800 166
3,600M Prudential Funding Corp., 5.50%, 10/8/98 3,596,150 120
500M Prudential Funding Corp., 5.48%, 10/20/98 498,570 17
1,000M Prudential Funding Corp., 5.25%, 10/29/98 995,916 33
--------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost $40,791,988) 40,791,988 1,357
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $231,494,073) 100.0% 300,645,867 10,001
EXCESS OF LIABILITIES OVER OTHER ASSETS (.0) (27,631) (1)
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $300,618,236 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
19
<PAGE>
This page intentionally left blank.
20
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS BLUE CHIP FUND
Dear Investor:
We are pleased to present this annual report for the First Investors Blue Chip
Fund for the fiscal year ending September 30, 1998. As noted in the Market
Overview, this is a new fiscal year-end for the Fund.
For the reporting period, the Fund's return on a net asset value basis was -1.6%
on Class A shares and -2.1% on Class B shares. The Lipper Analytical Services'
large-cap fund group returned an average of -1.9%. During the period, the Fund
declared dividends from net investment income of 3 cents per share on Class A
shares. The principal force that drove the Fund's negative return was the broad
downturn in large-cap equity prices in the third quarter (which was described in
the Market Overview). The Fund's investments in the technology,
telecommunications, healthcare and consumer cyclical sectors contributed to the
Fund's return. Investments in the energy sector and financial area, along with a
number of one-time, unforeseeable events, had a negative effect on the Fund's
return.
In the technology area, stocks of companies like Microsoft, Cisco Systems and
Lucent Technologies all generated above average returns for the period.
Microsoft, in spite of anti-trust action taken by the Federal Government,
continued to outpace its competitors in the desktop computer software business.
Revenues, earnings and margin improvements continued to drive Microsoft's stock
to new levels. Both Cisco and Lucent benefited from the increased need for
bandwidth on all levels of communication. The need for high performance
communication routing and switching equipment drove the stocks of both companies
to new highs during the period.
Investments in the major pharmaceutical companies continued to benefit from the
aging of the U.S. population, advances in drug development and a friendlier Food
and Drug Administration. The stocks of companies like Pfizer and Warner-Lambert,
both owned by the Fund, continued their solid performance. Pfizer continues to
have one of the strongest drug development teams and product pipelines in the
industry. The introduction of Viagra, a male impotence drug developed by Pfizer,
was one of the major news events of the year. Warner-Lambert also continued to
develop and dominate the cholesterol-fighting drug market.
Airtouch Communications, a provider of wireless phone service domestically and
abroad, continued to benefit from the growth in the wireless telecommunications
industry. Time Warner, the cable television company, continued to benefit from
strong consumer demand, solid entertainment offerings and declining capital
expenditures, which all led to an improved earnings outlook. The stocks of
companies like Home Depot and Wal-Mart also continued to enjoy robust growth,
supported by healthy domestic consumer demand.
21
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS BLUE CHIP FUND
With oil prices depressed throughout most of the year due to declining demand
from emerging markets and overproduction, the stocks in most energy companies
did not keep up with the overall market for the period. As the major oil
companies began to send signals that they would be reducing exploration
expenditures into the foreseeable future, the stocks in companies such as
Schlumberger and Kerr-McGee, both owned by the Fund, suffered more than the
general market.
As concerns about the slowdown in the Asian crisis rolled into the debacle in
the Russian capital markets, many of the large money center banks and
international brokerage houses were hurt. Due to their worldwide trading and
credit exposures, stocks in companies like Merrill Lynch and Citicorp declined
more than the market. BankBoston, one of the new "super-regional" banks,
suffered due to exposure to Latin American credit markets and the concern that
problems in Asia and Russia would spill over into other areas.
During the reporting period, a number of companies in which the Fund had
invested experienced accounting discrepancies. Cendant, which had been a Wall
Street darling, fell on hard times when it was discovered that the revenue
numbers at CUC International, one of the companies merged into Cendant, had been
inflated. MedPartners, one of the nation's largest physician practice management
companies, was to merge with Phycor, another major player in physician practice
management. However, due to concerns regarding MedPartners' accounting, Phycor
called off the deal. Both events were unique and difficult to foresee and had a
negative impact on the Fund's performance.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely
[SIGNATURE]
Dennis T. Fitzpatrick
Portfolio Manager*
* Mr. Fitzpatrick became sole Portfolio Manager of the Fund on September 15,
1998.
October 30, 1998
22
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS BLUE CHIP FUND
Comparison of change in value of $10,000 investment in the First Investors Blue
Chip Fund (Class A shares) and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
BLUE CHIP FUND S&P 500
<S> <C> <C>
Jan-89 $9,375 $10,000
Dec-89 10,813 12,261
Dec-90 10,435 11,885
Dec-91 13,308 15,460
Dec-92 14,181 16,554
Dec-93 15,283 18,155
Dec-94 14,821 18,388
Dec-95 19,862 25,908
Dec-96 23,945 31,856
Dec-97 30,183 42,402
Sep-98 29,715 44,947
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year (0.80%) (7.00%)
Five Years 14.45% 12.99%
Since Inception (1-3-89)
Class B Shares 12.56% 11.82%
One Year (1.51%) (5.45%)
Since Inception (1/12/95) 19.65% 19.15%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS BLUE CHIP FUND
(CLASS A SHARES) BEGINNING 1/3/89 (INCEPTION DATE) WITH A THEORETICAL
INVESTMENT IN THE STANDARD & POOR'S 500 INDEX. THE STANDARD & POOR'S 500
INDEX IS AN UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO
MEASURE PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE
AGGREGATE MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES.
IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX
DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. 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. CLASS B SHARES
PERFORMANCE MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH
ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25% (PRIOR TO 7/1/93 AND
12/4/89, THE MAXIMUM SALES CHARGES WERE 6.9% AND 7.25%, RESPECTIVELY). THE
CLASS B "S.E.C. STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED
SALES CHARGE (MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF
THE FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND,
THE CLASS A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR,
FIVE YEARS AND SINCE INCEPTION WOULD HAVE BEEN (7.24%), 12.75% AND 11.42%,
RESPECTIVELY. THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN (5.69%) AND 18.90%,
RESPECTIVELY. 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. STANDARD & POOR'S 500 INDEX FIGURES FROM STANDARD & POOR'S
AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
23
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--86.7%
BASIC MATERIALS--1.7%
61,200 Du Pont (E.I.) de Nemours & Company $ 3,434,850 $ 83
42,500 Ecolab, Inc. 1,208,594 29
42,100 Monsanto Company 2,373,387 57
--------------------------------------------------------------------------------------
7,016,831 169
--------------------------------------------------------------------------------------
CAPITAL GOODS--8.4%
79,400 Avery Dennison Corporation 3,468,787 84
151,700 General Electric Company 12,069,631 291
106,600 Ingersoll-Rand Company 4,044,137 97
35,400 Pitney-Bowes, Inc. 1,860,712 45
64,500 Textron, Inc. 3,910,312 94
77,000 Tyco International, Ltd. 4,254,250 103
110,200 Waste Management, Inc. 5,296,487 128
--------------------------------------------------------------------------------------
34,904,316 842
--------------------------------------------------------------------------------------
COMMUNICATION SERVICES--6.1%
98,100 *AirTouch Communications, Inc. 5,591,700 135
93,900 Bell Atlantic Corporation 4,548,281 110
24,800 Century Telephone Enterprises, Inc. 1,171,800 28
52,300 GTE Corporation 2,876,500 69
71,717 *MCI WorldCom, Inc. 3,505,168 84
113,468 *Qwest Communications International, Inc. 3,552,967 86
95,600 SBC Communications, Inc. 4,248,225 102
--------------------------------------------------------------------------------------
25,494,641 614
--------------------------------------------------------------------------------------
CONSUMER CYCLICALS--7.9%
75,400 *Costco Companies, Inc. 3,572,075 86
57,200 Federal-Mogul Corporation 2,674,100 64
78,900 Home Depot, Inc. 3,116,550 75
92,300 *Lear Corporation 4,038,125 97
120,600 Masco Corporation 2,969,775 72
45,900 McGraw-Hill Companies, Inc. 3,637,575 88
63,600 Omnicom Group, Inc. 2,862,000 69
74,100 Tribune Company 3,728,156 90
116,000 Wal-Mart Stores, Inc. 6,336,500 153
--------------------------------------------------------------------------------------
32,934,856 794
--------------------------------------------------------------------------------------
CONSUMER STAPLES--15.7%
51,600 Anheuser-Busch Companies, Inc. 2,786,400 67
71,500 Bestfoods 3,463,281 83
63,900 Coca-Cola Company 3,682,238 89
161,000 Coca-Cola Enterprises, Inc. 4,065,250 98
--------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
75,600 Comcast Corporation - Spec. Cl. "A" $ 3,548,475 $ 85
91,900 General Mills, Inc. 6,433,000 155
95,300 Kellogg Company 3,138,944 76
136,300 PepsiCo, Inc. 4,012,331 97
121,400 Philip Morris Companies, Inc. 5,591,988 135
65,900 Procter & Gamble Company 4,674,781 113
81,200 Rite Aid Corporation 2,882,600 69
78,400 *Safeway, Inc. 3,635,800 88
142,100 *Tele-Communications, Inc. Liberty Media
Group - Ser. "A" 5,213,294 126
57,300 Time Warner, Inc. 5,017,331 121
46,400 Unilever, N.V. 2,842,000 68
88,300 *USA Networks, Inc. 1,716,331 41
92,400 Walt Disney Company 2,338,875 56
--------------------------------------------------------------------------------------
65,042,919 1,567
--------------------------------------------------------------------------------------
ENERGY--6.3%
33,300 Chevron Corporation 2,799,281 67
132,800 Exxon Corporation 9,320,900 225
46,000 Kerr-McGee Corporation 2,093,000 50
81,000 Sun Company, Inc. 2,592,000 62
93,300 Texaco, Inc. 5,848,744 141
98,800 Unocal Corporation 3,581,500 86
--------------------------------------------------------------------------------------
26,235,425 631
--------------------------------------------------------------------------------------
FINANCIAL--12.8%
23,500 American Express Company 1,824,188 44
71,650 American International Group, Inc. 5,517,050 133
34,800 BankAmerica Corporation 2,092,350 50
113,600 BankBoston Corporation 3,748,800 90
71,200 Citigroup, Inc. 2,670,000 64
92,400 Conseco, Inc. 2,823,975 68
59,200 Fannie Mae 3,803,600 92
44,200 Fifth Third Bancorp 2,541,500 61
88,900 First Union Corporation 4,550,569 110
79,300 Freddie Mac 3,920,394 94
45,900 Jefferson-Pilot Corporation 2,776,950 67
31,700 Lincoln National Corporation 2,607,325 63
47,900 Merrill Lynch & Company, Inc. 2,269,263 55
36,700 *NationsBank Corporation 1,963,450 47
141,400 Norwest Corporation 5,063,888 122
109,400 PNC Bank Corporation 4,923,000 119
--------------------------------------------------------------------------------------
53,096,302 1,279
--------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS BLUE CHIP FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE--10.7%
65,400 Abbott Laboratories $ 2,840,813 $ 68
48,200 American Home Products Corporation 2,524,475 61
32,800 Becton Dickinson & Company 1,348,900 32
53,200 Bristol-Myers Squibb Company 5,526,150 133
35,600 *Genetech, Inc. 2,558,750 62
90,675 *Health Management Associates, Inc. - Cl. "A" 1,654,819 40
63,600 Johnson & Johnson 4,976,700 120
64,900 Merck & Company, Inc. 8,408,606 203
40,300 Pfizer, Inc. 4,269,281 103
185,600 *Tenet Healthcare Corporation 5,336,000 129
65,400 Warner-Lambert Company 4,937,700 119
--------------------------------------------------------------------------------------
44,382,194 1,070
--------------------------------------------------------------------------------------
TECHNOLOGY--12.1%
71,600 *Altera Corporation 2,514,950 61
116,500 *Cadence Design Systems, Inc. 2,978,031 72
81,150 *Cisco Systems, Inc. 5,016,084 121
127,100 Compaq Computer Corporation 4,019,538 97
52,900 *Gartner Group, Inc. - Cl. "A" 1,104,288 27
84,800 HBO & Company 2,448,600 59
72,100 Intel Corporation 6,182,575 149
50,500 International Business Machines Corporation 6,464,000 156
50,100 Lucent Technologies, Inc. 3,460,031 83
51,500 *Microsoft Corporation 5,668,219 137
151,700 *Newbridge Networks Corporation 2,721,119 66
82,700 *Sterling Commerce, Inc. 2,863,488 69
55,100 Xerox Corporation 4,669,725 113
--------------------------------------------------------------------------------------
50,110,648 1,210
--------------------------------------------------------------------------------------
TRANSPORTATION--1.2%
148,500 Burlington Northern Santa Fe Corporation 4,752,000 114
--------------------------------------------------------------------------------------
UTILITIES--3.8%
44,400 Duke Energy Corporation 2,938,725 71
88,800 Enron Corporation 4,689,750 113
55,300 FPL Group, Inc. 3,853,719 93
143,600 Williams Companies, Inc. 4,128,500 99
--------------------------------------------------------------------------------------
15,610,694 376
--------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $274,451,172) 359,580,826 8,666
--------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--12.4%
$ 7,000M Abbott Laboratories, 5.49%, 10/21/98 $ 6,978,650 $ 168
5,275M Baltimore Gas and Electric Co., 5.49%, 10/9/98 5,268,564 127
2,300M BellSouth Telecommunications, Inc., 5.51%,
10/6/98 2,298,240 55
4,300M Consolidated Natural Gas Co., Inc., 5.25%,
11/3/98 4,279,306 103
3,500M Eastman Kodak Co., 5.51%, 10/21/98 3,489,286 84
3,000M Ford Motor Credit Corp., 5.40%, 10/1/98 3,000,000 72
5,000M General Electric Capital Corp., 5.51%, 10/6/98 4,996,174 121
1,000M General Electric Capital Corp., 5.37%, 11/6/98 994,630 24
2,600M General Mills, Inc., 5.48%, 10/16/98 2,594,063 63
1,000M Illinois Tool Works, Inc., 5.51%, 10/20/98 997,092 24
2,300M Illinois Tool Works, Inc., 5.20%, 11/17/98 2,284,386 55
13,700M McCormick & Company, Inc., 5.51%, 10/13/98 13,674,838 330
800M Prudential Funding Corp., 5.50%, 10/8/98 799,144 19
--------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost $51,654,373) 51,654,373 1,245
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $326,105,545) 99.1% 411,235,199 9,911
OTHER ASSETS, LESS LIABILITIES .9 3,675,306 89
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $414,910,505 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
27
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS UTILITIES INCOME FUND
Dear Investor:
We are pleased to present this annual report for the First Investors Utilities
Income Fund for the fiscal year ending September 30, 1998. As noted in the
Market Overview, this is a new fiscal year-end for the Fund.
For the reporting period, the Fund's return on a net asset value basis was 16.1%
on Class A shares and 15.4% on Class B shares. The Fund slightly underperformed
the Lipper Analytical Services' utility funds group, which returned an average
of 19.4%. During the period, the Fund declared dividends from net investment
income of 14 cents per share on Class A shares and 10 cents per share on Class B
shares. The Fund also declared a capital gain distribution of 37.4 cents per
share on Class A and Class B shares. The broad third quarter downturn in the
equity market and the ensuing "flight to quality" (which is described in the
Market Overview) actually benefited the utilities market. The Fund's performance
was also affected by industry allocation and stock selection.
The Fund's positive performance is attributable in part to the strong
performance of the telephone and electric sectors, which were relatively
unscathed by the economic malaise in Asia. The increased demand for data and
wireless services benefited the telephone sector, and helped offset the effects
of increased competition. A number of the Fund's telephone sector holdings fared
well, such as Century Telephone Enterprises, the nation's tenth largest local
exchange carrier and cellular company providing services in rural areas
including the Pacific Northwest and Midwest. MCI WorldCom, the second largest
long distance company formed by WorldCom's acquisition of MCI, also performed
well.
The electric utility sector performed well as regulatory concerns lessened.
States that passed regulatory legislation allowed for industry restructuring
plans that were generally reasonable from the utilities' perspective. One
example is Consolidated Edison, the best performing electric company in the
Fund. A restructuring agreement with New York regulators called for rate
reductions for customers, but allowed Con Ed to cut costs, sell its generating
assets and recapitalize in order to enhance shareholder value.
The Fund was hampered by the fact that its weighting in the two best performing
sectors--telecommunications and electric utilities--was at times not in-sync
with their performance. Energy stocks hurt performance, primarily reflecting
weak commodity prices. Oil and gas holdings were impacted by decreasing prices
brought on by weak Asian demand and abnormally warm weather in the U.S. during
the 1997-1998 winter heating season. Also, the Fund maintained a relatively
modest corporate bond position during a period of time when the bond market
rallied amid declining interest rates.
28
<PAGE>
We believe that the Fund is well positioned to benefit from the opportunities
present in the current environment. Utility companies tend to generate
consistent streams of income, distribute steady dividend payments and have
relatively minor foreign exposure. In times of market turbulence, these
attributes make utilities stocks an appropriate defensive hedge.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Matthew S. Wright
Portfolio Manager*
* Mr. Wright assumed the position of Portfolio Manager of the Fund on September
28, 1998.
October 30, 1998
29
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS UTILITIES INCOME FUND
Comparison of change in value of $10,000 investment in the First Investors
Utilities Income Fund (Class A shares), the Standard & Poor's 500 Index and the
Standard & Poor's Utilities Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
UTILITIES INCOME S&P 500 S&P
<S> <C> <C> <C>
Fund Utilities
Feb-93 $9,375 $10,000 $10,000
Oct-93 10,112 10,741 10,748
Oct-94 9,085 11,160 8,927
Oct-95 10,909 14,102 11,492
Oct-96 12,267 17,498 12,658
Oct-97 13,845 23,115 13,912
Sep-98 16,237 26,077 17,946
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 15.14% 7.87%
Five Years 9.77% 8.36%
Since Inception (2/22/93) 10.29% 9.03%
Class B Shares
One Year 14.45% 10.45%
Since Inception (1/12/95) 16.45% 15.91%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS UTILITIES
INCOME FUND (CLASS A SHARES) BEGINNING 2/22/93 (INCEPTION DATE) WITH
THEORETICAL INVESTMENTS IN THE STANDARD & POOR'S 500 INDEX AND THE STANDARD &
POOR'S UTILITIES INDEX. THE STANDARD & POOR'S 500 INDEX IS AN UNMANAGED
CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE PERFORMANCE
OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE MARKET VALUE
OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. THE STANDARD & POOR'S
UTILITIES INDEX IS A CAPITALIZATION-WEIGHTED INDEX OF 37 STOCKS DESIGNED TO
MEASURE THE PERFORMANCE OF THE UTILITY SECTOR OF THE STANDARD & POOR'S 500
INDEX. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THESE INDICES. IN ADDITION,
THE INDICES DO NOT TAKE INTO ACCOUNT FEES AND EXPENSES. 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.
CLASS B SHARES PERFORMANCE MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE
LINE GRAPH ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN SALES LOADS AND
FEES PAID BY SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25%. THE CLASS B "S.E.C.
STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE
(MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND
WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS
A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR FIVE YEARS AND SINCE
INCEPTION WOULD HAVE BEEN 7.23% AND 7.94%, RESPECTIVELY. THE CLASS B "S.E.C.
STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN SINCE INCEPTION WOULD HAVE BEEN
15.55%. 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. STANDARD & POOR'S 500 INDEX AND STANDARD & POOR'S UTILITIES
INDEX FIGURES FROM STANDARD & POOR'S AND ALL OTHER FIGURES FROM FIRST
INVESTORS MANAGEMENT COMPANY, INC.
30
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS UTILITIES INCOME FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--86.5%
CAPITAL GOODS--.9%
16,400 General Electric Company $ 1,304,825 $ 95
--------------------------------------------------------------------------------------
COMMUNICATION SERVICES--23.0%
18,300 *AirTouch Communications, Inc. 1,043,100 76
16,600 AT & T Corporation 970,062 71
95,200 Bell Atlantic Corporation 4,611,250 337
43,800 BellSouth Corporation 3,295,950 241
3,800 British Telecommunication PLC (ADR) 505,637 37
87,600 Century Telephone Enterprises, Inc. 4,139,100 303
20,600 Cia. de Telecomunicaciones de Chile SA (ADR) 393,975 29
6,600 France Telecom SA (ADR) 387,750 28
7,600 GTE Corporation 418,000 31
7,700 *IDT Corporation 177,100 13
44,300 *Intermedia Communications, Inc. 1,088,119 80
75,804 *MCI WorldCom, Inc. 3,704,920 271
55,115 *Qwest Communications International, Inc. 1,725,788 126
98,000 SBC Communications, Inc. 4,354,875 318
15,200 Telecom Italia SpA (ADR) 1,018,400 74
56,700 US West, Inc. 2,973,206 217
62,300 *Viatel, Inc. 661,937 48
--------------------------------------------------------------------------------------
31,469,169 2,300
--------------------------------------------------------------------------------------
ENERGY--3.4%
7,700 Atlantic Richfield Company 546,219 40
3,500 British Petroleum Co. Ltd. (ADR) 305,375 22
7,700 Exxon Corporation 540,444 40
16,300 Halliburton Company 465,569 34
23,000 *Seagull Energy Corporation 283,187 21
93,933 Sempra Energy 2,448,129 179
--------------------------------------------------------------------------------------
4,588,923 336
--------------------------------------------------------------------------------------
UTILITIES--59.2%
18,900 AGL Resources, Inc. 366,187 27
37,860 Ameren Corporation 1,587,754 116
31,400 American Water Works Company, Inc. 985,175 72
59,600 Baltimore Gas and Electric Company 1,989,150 145
56,700 BEC Energy 2,469,994 181
38,800 Central & South West Corporation 1,108,225 81
--------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS UTILITIES INCOME FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
UTILITIES (continued)
30,500 Cinergy Corporation $ 1,166,625 $ 85
64,000 Coastal Corporation 2,160,000 158
12,000 Columbia Energy Group 703,500 51
79,500 Consolidated Edison, Inc. 4,143,937 303
47,000 Dominion Resources, Inc. 2,097,375 153
102,700 DQE, Inc. 3,966,787 290
43,000 DTE Energy Company 1,943,063 142
42,000 El Paso Energy Corporation 1,362,375 100
48,000 Endesa SA (ADR) 1,056,000 77
19,200 Energen Corporation 364,800 27
36,300 Enron Corporation 1,917,094 140
22,800 FirstEnergy Corporation 708,225 52
93,600 Florida Progress Corporation 4,054,050 296
71,100 FPL Group, Inc. 4,954,781 362
69,300 GPU, Inc. 2,945,250 215
74,500 Houston Industries, Inc. 2,318,813 169
22,800 Kansas City Power & Light Company 693,975 51
17,800 Lakehead Pipe Line Partners, L. P. 921,150 67
12,000 Maine Public Service Company 173,250 13
65,600 MDU Resources Group, Inc. 1,722,000 126
63,200 New Century Energies, Inc. 3,077,050 225
30,000 New Jersey Resources Corporation 1,068,750 78
19,500 NICOR, Inc. 808,031 59
68,900 NIPSCO Industries, Inc. 2,265,088 166
46,700 Northern States Power Company 1,310,519 96
127,400 OGE Energy Corporation 3,678,675 269
29,000 Oneok, Inc. 986,000 72
26,600 PECO Energy Company 972,563 71
25,000 Piedmont Natural Gas Company, Inc. 846,875 62
22,800 Pinnacle West Capital Corporation 1,021,725 75
51,600 Public Service Enterprise Group, Inc. 2,028,525 148
60,000 Questar Corporation 1,155,000 84
101,400 SCANA Corporation 3,403,238 249
37,400 Sierra Pacific Resources 1,451,588 106
66,500 Texas Utilities Company 3,096,406 226
79,700 Unicom Corporation 2,978,788 218
103,700 Williams Companies, Inc. 2,981,375 218
--------------------------------------------------------------------------------------
81,009,731 5,921
--------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $93,643,139) 118,372,648 8,652
- --------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
PREFERRED STOCKS--.4%
FINANCIAL
10,000 Pacific Telesis Financing I, 7.56% $ 253,750 $ 19
10,000 Pacific Telesis Financing II, 8.50% 262,500 19
--------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $500,000) 516,250 38
--------------------------------------------------------------------------------------
CORPORATE BONDS--3.6%
COMMUNICATION SERVICES--1.2%
$ 500M AT & T Corp., 7.50%, 2006 564,910 41
500M BellSouth Telecommunications, Inc., 6.375%, 2004 536,094 39
500M United Telephone Co. of Florida, 6.25%, 2003 524,220 38
--------------------------------------------------------------------------------------
1,625,224 118
--------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--2.4%
500M Baltimore Gas & Electric Co., 7.52%, 2000 518,684 38
500M Consolidated Edison, Inc., 6.625%, 2002 524,412 38
500M Duke Energy Corp., 5.875%, 2003 505,689 37
500M Idaho Power Co., 6.40%, 2003 528,612 39
700M Pennsylvania Power & Light Co., 6.875%, 2003 746,578 55
500M Union Electric Co., 6.75%, 2008 549,896 40
--------------------------------------------------------------------------------------
3,373,871 247
--------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $4,770,855) 4,999,095 365
--------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--8.7%
2,700M Avnet, Inc., 5.32%, 10/26/98 2,690,025 197
2,000M General Electric Capital Corp., 5.52%, 10/1/98 2,000,000 146
4,200M General Electric Capital Corp., 5.50%, 10/14/98 4,191,658 306
1,000M Illinois Tool Works, Inc., 5.23%, 11/10/98 994,189 73
2,000M Merrill Lynch & Co., 5.53%, 10/7/98 1,998,157 146
--------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost $11,874,029) 11,874,029 868
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $110,788,023) 99.2% 135,762,022 9,923
OTHER ASSETS, LESS LIABILITIES .8 1,058,605 77
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $136,820,627 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
33
<PAGE>
This page intentionally left blank.
34
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
Dear Investor:
We are pleased to present this annual report for the First Investors Mid-Cap
Opportunity Fund for the fiscal year ending September 30, 1998. As noted in the
Market Overview, this is a new fiscal year-end for the Fund.
For the reporting period, the Fund's return on a net asset value basis was
- -16.4% on Class A shares and -16.9% on Class B shares. The Fund underperformed
the Lipper Analytical Services' mid-cap peer group, which returned an average of
- -7.8%. During the period, the Fund declared a capital gain distribution of
$1.179 per share on Class A and Class B shares. The primary factors behind the
Fund's negative return were the deterioration of investor sentiment towards
stocks in general and mid-caps in particular (which is described in the Market
Overview). Industry allocations, as well as negative developments with respect
to certain stocks held by the Fund, hurt its performance relative to its peer
group.
Fund holdings in the consumer cyclical sector, which was harmed by abnormal
weather patterns and a slight decrease in consumer confidence, hampered
performance. Clothing manufacturers such as Jones Apparel, a maker of women's
wear and Warnaco, a manufacturer of intimate apparel, were particularly hard
hit. Retailers experienced setbacks too, as J. Baker's Casual Male Big & Tall
stores and Consolidated Stores, a closeout retailer, saw profits decline and
share prices follow.
Overseas economic turmoil triggered a "flight to safety," as investors sought
the relative stability of traditional defensive holdings, such as utilities
stocks. Many utilities benefited from this shift in investor sentiment and the
resulting decline in U.S. interest rates. This factor did not help performance,
as the Fund had limited exposure to utilities. One of the Fund's holdings, US
Filter, a provider of industrial and municipal water and waste water systems,
experienced a decline in share price due to concerns about continued revenue
growth given its exposure to Asia and the technology markets.
During the reporting period, a company in which the Fund had invested
experienced accounting discrepancies. Transcrypt International, a producer of
high-end communications equipment, announced "unresolved accounting principles"
relating to certain transactions in 1997. The event was unique and difficult to
foresee and had a negative impact on the Fund's performance.
The Fund's return was helped by technology investments such as EMC, Compuware,
Symbol Technologies and Rambus. EMC, a database management company, has
benefited from the accelerating demand for storage space that is required for
new applications such as the Internet, data warehousing and Year 2000 testing.
Compuware, a software manufacturer, delivers business-critical applications to
enterprises. Symbol
35
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
Technologies, a manufacturer of application-specific hand-held and wearable
computers, has benefited from the need for smaller, portable information
systems. Rambus has been successful developing and marketing a chip-to-chip
interface that enhances the performance of consumer electronic systems.
Another sector that outperformed for the Fund was consumer staples. Holdings in
media, broadcasting and telecommunications, such as Chancellor Media, Time
Warner and Tele-Communications Liberty Media, a provider of cable programming,
continued to benefit from consumers' desire for inexpensive entertainment. In
the food and beverage area, Whitman, a bottler and distributor of Pepsi, Flowers
Industries, a baking company located in the Southeast, and McCormick, a spice
distributor, all added to the Fund's performance.
Going forward, the Fund will continue to seek value in the mid-cap market.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Portfolio Manager
October 30, 1998
36
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
Comparison of change in value of $10,000 investment in the First Investors Mid-
Cap Opportunity Fund (Class A shares) and the Standard & Poor's 400 Midcap
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
MID-CAP S&P 400
<S> <C> <C>
Opportunity Fund Midcap Index
Aug-92 $9,375 $10,000
Oct-92 9,441 10,462
Oct-93 9,840 12,659
Oct-94 9,639 11,373
Oct-95 12,009 15,707
Oct-96 13,407 18,432
Oct-97 17,039 24,450
Sep-98 14,242 23,945
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year (20.24%) (25.24%)
Five Years 7.50% 6.11%
Since Inception (8/24/92) 7.10% 5.96%
Class B Shares
One Year (20.82%) (23.99%)
Since Inception (1/12/95) 9.50% 8.86%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS MID-CAP
OPPORTUNITY FUND (CLASS A SHARES) BEGINNING 8/24/92 (INCEPTION DATE) WITH A
THEORETICAL INVESTMENT IN THE STANDARD & POOR'S 400 MIDCAP INDEX. THE
STANDARD & POOR'S 400 MIDCAP INDEX IS AN UNMANAGED CAPITALIZATION-WEIGHTED
INDEX OF 400 STOCKS DESIGNED TO MEASURE PERFORMANCE OF THE MID-RANGE SECTOR
OF THE U.S. STOCK MARKET WHERE THE MEDIAN MARKET CAPITALIZATION IS
APPROXIMATELY $700 MILLION. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS
INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES.
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. CLASS B SHARES PERFORMANCE MAY BE GREATER THAN
OR LESS THAN THAT SHOWN IN THE LINE GRAPH ABOVE FOR CLASS A SHARES BASED ON
DIFFERENCES IN SALES LOADS AND FEES PAID BY SHAREHOLDERS INVESTING IN THE
DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25%. THE CLASS B "S.E.C.
STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE
(MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND
WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS
A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR, FIVE YEARS
AND SINCE INCEPTION WOULD HAVE BEEN (25.64%), 5.12% AND 5.24%, RESPECTIVELY.
THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND
SINCE INCEPTION WOULD HAVE BEEN (24.38%) AND 8.19%, RESPECTIVELY. 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. STANDARD & POOR'S 400 MIDCAP INDEX FIGURES FROM STANDARD & POOR'S AND
ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
37
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
September 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--80.0%
BASIC MATERIALS--2.5%
13,000 Allegheny Teledyne, Inc. $ 231,562 $ 67
8,900 Boise Cascade Corporation 225,281 65
20,000 Louisiana-Pacific Corporation 407,500 118
- -------------------------------------------------------------------------------------
864,343 250
- -------------------------------------------------------------------------------------
CAPITAL GOODS--6.4%
20,000 *Allied Waste Industries, Inc. 467,500 135
8,000 Avery Dennison Corporation 349,500 101
9,000 Crane Company 211,500 61
4,000 Johnson Controls, Inc. 186,000 54
15,000 Pall Corporation 332,812 96
15,000 Reynolds and Reynolds Company - Cl. "A" 267,187 77
14,500 *Sanmina Corporation 407,812 118
- -------------------------------------------------------------------------------------
2,222,311 642
- -------------------------------------------------------------------------------------
COMMUNICATION SERVICES--8.1%
7,500 *AirTouch Communications, Inc. 427,500 124
9,000 Century Telephone Enterprises, Inc. 425,250 123
11,000 Cincinnati Bell, Inc. 286,000 83
12,000 *Commonwealth Telephone Enterprises, Inc. 287,250 83
2,400 *Commonwealth Telephone Enterprises, Inc. -
Rights 6,900 2
19,500 *ICG Communications, Inc. 329,062 95
7,400 *MCI WorldCom, Inc. 361,675 105
14,000 *Qwest Communications International, Inc. 438,375 127
13,400 *Western Wireless Corporation - Cl. "A" 239,525 69
- -------------------------------------------------------------------------------------
2,801,537 811
- -------------------------------------------------------------------------------------
CONSUMER CYCLICALS--13.6%
14,000 *Bed Bath & Beyond, Inc. 327,250 95
25,000 *Children's Place Retail Stores, Inc. 250,000 72
7,600 E.W. Scripps Company - Cl. "A" 330,600 96
12,000 Ethan Allen Interiors, Inc. 435,000 126
4,800 *Fred Meyer, Inc. 186,600 54
55,000 J. Baker, Inc. 247,500 72
16,600 *Jones Apparel Group, Inc. 380,762 110
4,800 *Kohl's Corporation 187,200 54
8,600 Masco Corporation 211,775 61
12,000 Royal Caribbean Cruises, Ltd. 318,750 92
13,900 *Royal Group Technologies, Ltd. 232,825 67
16,400 *Saks, Inc. 367,975 107
- -------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
8,700 *Staples, Inc. $ 255,562 $ 74
8,000 *Tech Data Corporation 400,500 116
12,000 Warnaco Group, Inc. - Cl. "A" 277,500 80
10,000 Young & Rubicam, Inc. 283,750 82
- -------------------------------------------------------------------------------------
4,693,549 1,358
- -------------------------------------------------------------------------------------
CONSUMER STAPLES--14.6%
15,000 Beringer Wine Estates Holdings, Inc. - Cl. "B" 574,687 166
7,500 *Clear Channel Communications 356,250 103
16,000 Coca-Cola Enterprises, Inc. 404,000 117
6,400 Comcast Corporation - Spec. Cl. "A" 300,400 87
15,400 Earthgrains Company 476,438 138
20,000 Flowers Industries, Inc. 436,250 126
11,000 McCormick & Company, Inc. 319,688 93
8,500 Newell Company 391,531 113
22,000 Richfood Holdings, Inc. 338,250 98
11,100 *Suiza Foods Corporation 346,875 100
13,350 *Tele-Communications, Inc. Liberty Media Group -
Ser. "A" 489,778 142
5,000 Time Warner, Inc. 437,813 127
10,600 Whitman Corporation 168,938 49
- -------------------------------------------------------------------------------------
5,040,898 1,459
- -------------------------------------------------------------------------------------
ENERGY--1.0%
7,500 *Newfield Exploration Company 168,750 49
12,000 Snyder Oil Company 191,250 55
- -------------------------------------------------------------------------------------
360,000 104
- -------------------------------------------------------------------------------------
FINANCIAL--9.1%
7,000 American Financial Group, Inc. 231,000 67
3,500 Astoria Financial Corporation 147,438 43
26,500 Cash America International, Inc. 294,813 85
16,200 Charter One Financial, Inc. 402,975 117
4,054 Conseco, Inc. 123,900 36
13,000 Dime Bancorp, Inc. 329,063 95
6,200 Fannie Mae 398,350 115
20,000 Golden State Bancorp, Inc. 398,750 115
17,400 Innkeepers USA Trust 206,625 60
5,100 Provident Companies, Inc. 172,125 50
- -------------------------------------------------------------------------------------
</TABLE>
39
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS MID-CAP OPPORTUNITY FUND
September 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
10,100 Resource Bancshares Mortgage Group, Inc. $ 179,275 $ 52
3,000 Wachovia Corporation 255,750 74
- -------------------------------------------------------------------------------------
3,140,064 909
- -------------------------------------------------------------------------------------
HEALTHCARE--8.4%
7,500 *Agouron Pharmaceuticals, Inc. 258,281 75
7,100 *AmeriSource Health Corp. - Cl. "A" 386,506 112
8,400 *Centocor, Inc. 332,850 96
5,000 *Elan Corporation PLC (ADR) 360,313 104
5,800 *Genzyme Corporation 209,525 61
9,100 *HCR Manor Care, Inc. 266,744 77
15,000 *Health Management Associates, Inc. - Cl. "A" 273,750 79
11,300 Jones Pharma, Inc. 324,875 94
13,000 Teva Pharmaceutical Industries, Ltd. (ADR) 492,375 143
- -------------------------------------------------------------------------------------
2,905,219 841
- -------------------------------------------------------------------------------------
TECHNOLOGY--12.8%
2,000 *America Online, Inc. 222,500 64
6,600 *Cadence Design Systems, Inc. 168,713 49
6,500 *Cambridge Technology Partners, Inc. 145,031 42
3,150 *Cisco Systems, Inc. 194,709 56
12,000 Comdisco, Inc. 163,500 47
8,000 *Compuware Corporation 471,000 136
7,500 *Comverse Technology, Inc. 306,563 89
11,800 *EMC Corporation 674,813 195
8,800 *Flextronics International, Ltd. 311,850 90
3,000 Intel Corporation 257,250 74
4,500 Linear Technology Corporation 225,000 65
5,600 *Rambus, Inc. 358,400 104
11,400 *Sterling Commerce, Inc. 394,725 114
4,900 *Wind River Systems, Inc. 231,525 67
8,400 *Xilinx, Inc. 294,000 85
- -------------------------------------------------------------------------------------
4,419,579 1,277
- -------------------------------------------------------------------------------------
UTILITIES--3.5%
9,000 American Water Works Company, Inc. 282,375 82
13,000 Houston Industries, Inc. 404,625 117
6,000 K N Energy, Inc. 307,500 89
5,600 Sierra Pacific Resources 217,350 63
- -------------------------------------------------------------------------------------
1,211,850 351
- -------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $26,016,423) 27,659,350 8,002
- -------------------------------------------------------------------------------------
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--14.9%
$ 2,100M BellSouth Telecommunications, Inc., 5.49%,
10/6/98 $ 2,098,399 $ 607
750M Illinois Tool Works, 5.23%, 11/10/98 745,642 216
500M McCormick & Company, Inc., 5.50%, 10/13/98 499,006 144
900M Prudential Funding Corp., 5.50%, 10/8/98 899,021 260
400M Prudential Funding Corp., 5.48%, 10/20/98 398,856 115
500M Washington Gas Light Co., 5.52%, 10/9/98 499,387 145
- -------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost $5,140,311) 5,140,311 1,487
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $31,156,734) 94.9% 32,799,661 9,489
OTHER ASSETS, LESS LIABILITIES 5.1 1,766,568 511
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $34,566,229 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
41
<PAGE>
PORTFOLIO MANAGERS' LETTER
FIRST INVESTORS SPECIAL SITUATIONS FUND
Dear Investor:
We are pleased to present this annual report for the First Investors Special
Situations Fund for the fiscal year ending September 30, 1998. As noted in the
Market Overview, this is a new fiscal year-end for the Fund.
For the reporting period, the Fund's return on a net asset value basis was
- -19.6% on Class A shares and -20.1% on Class B shares, compared with Lipper
Analytical Services' small-cap funds group, which returned an average of -16.5%.
The primary factor that drove the Fund's negative performance during the period
was a "flight to quality" as described in the Market Overview, whereby many
concerned investors moved funds from equities into Treasury securities, bonds or
cash. Small-cap stocks were particularly hard hit by this phenomenon, due to
liquidity concerns and perceptions of higher risk. Industry allocations, as well
as unfavorable developments with respect to certain stocks held by the Fund,
hurt its performance relative to its peer group.
The Fund's return was hindered by the underperformance of a number of holdings,
including Oakwood Homes, a manufacturer of mobile homes and mortgage lender and
Imperial Credit, a diversified financial services company. These businesses were
negatively impacted by consumer refinancings and credit worries. Adaptec, a
technology firm that develops products that reduce information "bottlenecks,"
was hurt by the increased sophistication of computer hard drives.
During the reporting period, two companies in which the Fund had invested
experienced significant problems involving alleged fraudulent accounting.
Transcrypt International, a producer of high-end communications equipment,
announced "unresolved accounting principles" relating to certain transactions in
1997. Cendant, which had been a Wall Street darling, fell on hard times when it
was discovered the revenue numbers at CUC International, one of the companies
merged into Cendant, had been inflated. These events were unique and difficult
to foresee and had a negative impact on the Fund's performance.
A number of holdings helped the Fund's performance, especially long-term
holdings that were initially purchased at significantly lower prices. Several
investments in the technology sector aided returns, including EMC, a database
management company that benefited from the accelerating demand for storage space
that is necessary for new applications such as the Internet, data warehousing
and Year 2000 testing. Cisco System, the market leader in routers and LAN
switches, benefited from the increased need for bandwidth on all levels of
communication. The need for high performance communication routing and switching
equipment drove the stock to new highs during the period.
42
<PAGE>
In the communications sector, Tele-Communications Liberty Media, a leader in
cable programming with ownership interest in the Discovery Channel, QVC, Home
Shopping Network, Encore and Fox Sports, also performed well. Among retailers,
Rite Aid, a national drugstore chain, also had strong performance.
A number of the Fund's holdings benefited from merger and acquisition activity:
Brooks Fiber, which the Fund held at the beginning of year, was acquired by MCI
WorldCom; Jones Intercable, in whom Comcast increased its ownership stake; and
Eastern Environmental, which is merging with Waste Management.
Going forward, the Fund will continue to seek value in the small-cap market.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
David A. Hanover
Co-Portfolio Manager*
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Co-Portfolio Manager
* Mr. Hanover assumed the position of Co-Portfolio Manager of the Fund on
September 1, 1998.
October 30, 1998
43
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS SPECIAL SITUATIONS FUND
Comparison of change in value of $10,000 investment in the First Investors
Special Situations Fund (Class A shares) and the Russell 2000 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
SPECIAL SITUATIONS FUND RUSSELL 2000
<S> <C> <C>
Sep-90 $9,375 $10,000
Dec-90 9,741 10,754
Dec-91 14,657 16,214
Dec-92 17,186 17,853
Dec-93 20,714 20,776
Dec-94 19,955 20,624
Dec-95 24,730 27,106
Dec-96 27,588 31,107
Dec-97 32,042 37,969
Sep-98 25,758 31,875
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year (26.01%) (30.63%)
Five Years 4.95% 3.60%
Since Inception (9/18/90) 13.40% 12.49%
Class B Shares
One Year (26.54%) (29.48%)
Since Inception (1/12/95) 6.44% 5.75%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS SPECIAL
SITUATIONS FUND (CLASS A SHARES) BEGINNING 9/18/90 (INCEPTION DATE) WITH A
THEORETICAL INVESTMENT IN THE RUSSELL 2000 INDEX. THE RUSSELL 2000 INDEX
CONSISTS OF THE SMALLEST 2,000 COMPANIES IN THE RUSSELL 3000 INDEX (WHICH
REPRESENTS APPROXIMATELY 98% OF THE INVESTABLE U.S. EQUITY MARKET). THE
RUSSELL 2000 INDEX IS AN UNMANAGED INDEX GENERALLY CONSIDERED AS THE PREMIER
INDEX OF SMALL CAPITALIZATION STOCKS. IT IS NOT POSSIBLE TO INVEST DIRECTLY
IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND
EXPENSES. 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. CLASS B SHARES PERFORMANCE MAY BE GREATER
THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH ABOVE FOR CLASS A SHARES BASED
ON DIFFERENCES IN THE SALES LOADS AND FEES PAID BY SHAREHOLDERS INVESTING IN
THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25% (PRIOR TO 7/1/93, THE
MAXIMUM SALES CHARGE WAS 6.9%). THE CLASS B "S.E.C. STANDARDIZED" RETURNS ARE
ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE (MAXIMUM OF 4% IN THE FIRST
YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND WERE WAIVED OR ASSUMED. IF SUCH
EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS A "S.E.C. STANDARDIZED" AVERAGE
ANNUAL TOTAL RETURN FOR ONE YEAR, FIVE YEARS AND SINCE INCEPTION WOULD HAVE
BEEN (30.86%), 3.36% AND 12.03%, RESPECTIVELY. THE CLASS B "S.E.C.
STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE INCEPTION
WOULD HAVE BEEN (29.72%) AND 5.50%, RESPECTIVELY. 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. RUSSELL 2000
INDEX FIGURES FROM FRANK RUSSELL AND COMPANY AND ALL OTHER FIGURES FROM FIRST
INVESTORS MANAGEMENT COMPANY, INC.
44
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--85.3%
BASIC MATERIALS--2.6%
48,600 Boise Cascade Corporation $ 1,230,187 $ 70
60,300 *ChiRex, Inc. 719,831 41
34,300 Lilly Industries, Inc. - Cl. "A" 604,537 35
60,900 Louisiana-Pacific Corporation 1,240,837 71
17,100 Southdown, Inc. 769,500 44
--------------------------------------------------------------------------------------
4,564,892 261
--------------------------------------------------------------------------------------
CAPITAL GOODS--3.9%
40,700 *Eastern Environmental Services, Inc. 1,231,175 70
67,500 Gleason Corporation 1,084,219 62
32,100 *Ionics, Inc. 850,650 49
120,900 *Newpark Resources, Inc. 831,187 47
75,068 *Sanmina Corporation 2,111,287 121
37,400 *Tower Automotive, Inc. 738,650 42
--------------------------------------------------------------------------------------
6,847,168 391
--------------------------------------------------------------------------------------
COMMUNICATION SERVICES--5.8%
40,000 Cincinnati Bell, Inc. 1,040,000 59
61,200 *Commonwealth Telephone Enterprises, Inc. 1,464,975 84
10,740 *Commonwealth Telephone Enterprises, Inc. -
Rights 30,877 2
67,800 ECI Telecommunications, Ltd. (ADR) 1,661,100 95
73,700 *ICG Communications, Inc. 1,243,687 71
31,600 *IXC Communications, Inc. 940,100 54
54,760 *MCI WorldCom, Inc. 2,676,395 153
64,400 *Western Wireless Corporation - Cl. "A" 1,151,150 66
--------------------------------------------------------------------------------------
10,208,284 584
--------------------------------------------------------------------------------------
CONSUMER CYCLICALS--11.8%
103,000 *Eagle Hardware & Garden, Inc. 2,233,812 128
36,000 Ethan Allen Interiors, Inc. 1,305,000 75
43,650 *Fossil, Inc. 594,731 34
103,300 Interface, Inc. 1,239,600 71
81,500 *International Comfort Products Corporation 667,281 38
53,600 *Just For Feet, Inc. 683,400 39
50,200 Kellwood Company 1,349,125 77
43,350 *NCO Group, Inc. 1,205,672 69
32,500 Oakwood Homes Corporation 426,562 24
88,900 Ogden Corporation 2,528,094 144
78,500 *Royal Group Technologies, Ltd. 1,314,875 75
82,984 *Saks, Inc. 1,861,953 106
64,600 St. John Knits, Inc. 1,041,675 60
55,100 *StaffMark, Inc. 1,005,575 57
--------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS SPECIAL SITUATIONS FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
61,000 Talbots, Inc. $ 1,090,375 $ 62
64,700 *Travis Boats & Motors, Inc. 1,002,850 57
108,500 Wolverine World Wide, Inc. 1,179,937 67
--------------------------------------------------------------------------------------
20,730,517 1,183
--------------------------------------------------------------------------------------
CONSUMER STAPLES--14.1%
73,300 Beringer Wine Estates Holdings, Inc. - Cl. "B" 2,808,306 160
128,000 *Cinar Films, Inc. - Cl. "B" 2,296,000 131
93,500 *Citadel Communications Corporation 1,910,906 109
34,200 Comcast Corporation - Spec. Cl. "A" 1,605,262 92
61,400 Earthgrains Company 1,899,562 108
166,400 *Four Media Company 624,000 36
43,400 *Fresh America Corporation 553,350 32
54,300 *Jones Intercable, Inc. - Cl. "A" 1,350,712 77
84,500 Richfood Holdings, Inc. 1,299,188 74
93,900 Rite Aid Corporation 3,333,450 190
54,000 *Sinclair Broadcast Group, Inc. - Cl. "A" 877,500 50
28,450 *Steiner Leisure, Ltd. 444,531 25
56,600 *Suiza Foods Corporation 1,768,750 101
109,075 *Tele-Communications, Inc. Liberty Media Group -
Ser. "A" 4,001,689 228
--------------------------------------------------------------------------------------
24,773,206 1,413
--------------------------------------------------------------------------------------
ENERGY--1.8%
62,300 *Nabors Industries, Inc. 946,181 54
38,200 *Newfield Exploration Company 859,500 49
60,500 *Precision Drilling Corporation - Cl. "A" 760,031 43
49,800 *R&B Falcon Corporation 597,600 34
--------------------------------------------------------------------------------------
3,163,312 180
--------------------------------------------------------------------------------------
FINANCIAL--12.8%
17,000 Astoria Financial Corporation 716,125 41
142,500 Cash America International, Inc. 1,585,313 91
27,600 Centura Banks, Inc. 1,735,350 99
70,339 Charter One Financial, Inc. 1,749,683 100
66,700 Commercial Federal Corporation 1,571,619 90
34,060 Conseco, Inc. 1,040,959 59
54,900 Dime Bancorp, Inc. 1,389,656 79
34,800 *HealthCare Financial Partners, Inc. 1,461,600 83
65,100 Innkeepers USA Trust 773,063 44
67,700 Manufactured Home Communities, Inc. 1,722,119 98
45,462 Mercantile Bancorporation, Inc. 2,199,224 126
60,667 New Plan Excel Realty Trust 1,414,299 81
--------------------------------------------------------------------------------------
</TABLE>
46
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
40,800 Peoples Heritage Financial Group, Inc. $ 731,850 $ 42
70,075 Resource Bancshares Mortgage Group, Inc. 1,243,831 71
54,400 TCF Financial Corporation 1,081,200 62
30,250 Washington Federal, Inc. 756,250 43
69,100 Westfield America, Inc. 1,183,338 68
--------------------------------------------------------------------------------------
22,355,479 1,277
--------------------------------------------------------------------------------------
HEALTHCARE--11.9%
38,200 Agouron Pharmaceuticals, Inc. 1,315,513 75
149,500 American Oncology Resources, Inc. 1,513,688 86
37,000 *AmeriSource Health Corp. - Cl. "A" 2,014,188 115
67,200 *CardioVascular Dynamics, Inc. 260,400 15
23,900 *Centocor, Inc. 947,038 54
70,300 *Dura Pharmaceuticals, Inc. 768,906 44
56,000 *HCR Manor Care, Inc. 1,641,500 94
122,600 *IDEXX Laboratories, Inc. 2,927,075 167
26,700 *IMPATH, Inc. 794,325 45
69,500 Jones Pharma, Inc. 1,998,125 114
80,100 *Kensey Nash Corporation 650,813 37
60,500 *Medicis Pharmaceutical Corporation - Cl. "A" 2,397,313 137
155,700 *PharMerica, Inc. 846,619 48
34,950 *Renal Care Group, Inc. 895,594 51
47,500 Teva Pharmaceutical Industries, Ltd. (ADR) 1,799,063 103
--------------------------------------------------------------------------------------
20,770,160 1,185
--------------------------------------------------------------------------------------
TECHNOLOGY--20.2%
42,300 *Cisco Systems, Inc. 2,614,669 149
33,600 *Comverse Technology, Inc. 1,373,400 78
94,700 *Condor Technology Solutions, Inc. 970,675 55
69,600 *EMC Corporation 3,980,250 227
60,600 *Etec Systems, Inc. 1,579,388 90
44,900 *Flextronics International, Ltd. 1,591,144 91
55,050 *Information Management Resources, Inc. 1,362,488 78
69,400 *Level One Communications, Inc. 1,396,675 80
40,000 *Lycos, Inc. 1,352,500 77
54,760 National Data Corporation 1,690,715 97
35,600 *Network Appliance, Inc. 1,802,250 103
57,800 *NICE-Systems, Ltd. 852,550 49
79,800 *Orckit Communications, Ltd. 1,037,400 59
59,200 *Platinum Technology, Inc. 1,065,600 61
55,800 *PRI Automation, Inc. 697,500 40
27,200 *Rambus, Inc. 1,740,800 99
148,300 *Saville Systems Ireland PLC (ADR) 2,150,350 123
--------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS SPECIAL SITUATIONS FUND
September 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
62,200 *Software AG Systems, Inc. $ 1,057,400 $ 60
65,500 *Sterling Commerce, Inc. 2,267,938 129
28,600 *Synopsys, Inc. 952,738 54
100,000 *Verilink Corporation 443,750 25
40,000 *Wind River Systems, Inc. 1,890,000 108
44,400 *Xilinx, Inc. 1,554,000 89
--------------------------------------------------------------------------------------
35,424,180 2,021
--------------------------------------------------------------------------------------
TRANSPORTATION--.4%
167,000 *Transportacion Maritima Mexicana SA de C.V. -
Cl. "L" (ADR) 709,750 41
--------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $148,953,607) 149,546,948 8,536
--------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--14.3%
$ 2,000M Abbott Laboratories, 5.49%, 10/21/98 1,993,808 114
1,000M BellSouth Telecommunications, Inc., 5.51%,
10/6/98 999,232 57
1,300M Coca Cola Co., 5.46%, 10/9/98 1,298,423 74
3,000M Consolidated Natural Gas Co., Inc., 5.25%,
11/3/98 2,985,562 170
6,700M Eastman Kodak Co., 5.47%, 11/2/98 6,667,423 381
1,200M General Electric Credit Corp., 5.50%, 10/22/98 1,196,150 68
1,800M Illinois Tool Works, Inc., 5.51%, 10/20/98 1,794,766 103
700M Interstate Engine Co., 5.53%, 10/8/98 699,247 40
2,500M Motorola, Inc., 5.18%, 11/19/98 2,482,374 142
2,000M Prudential Funding Corp., 5.50%, 10/8/98 1,997,860 114
600M Prudential Funding Corp., 5.48%, 10/13/98 598,905 34
2,300M Prudential Funding Corp., 5.48%, 10/20/98 2,293,347 131
--------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost $25,007,097) 25,007,097 1,428
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $173,960,704) 99.6% 174,554,045 9,964
OTHER ASSETS, LESS LIABILITIES .4 632,435 36
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $175,186,480 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
48
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS GLOBAL FUND, INC.
Dear Investor:
We are pleased to present the annual report for the First Investors Global Fund
for the nine months ended September 30, 1998. As noted in the Market Overview,
this is a new fiscal year-end for the Fund.
For the reporting period, the Fund returned on a net asset value basis -1.3% on
Class A shares and -1.9% on Class B shares compared to a return of -2.6% for the
Lipper Global Average. The Morgan Stanley All Country World Free Index returned
0.7% while the Morgan Stanley World Index (which is composed of only developed
markets) returned 3.0%. This year we have added a comparison to the All Country
World Free Index since it is more representative of the Fund's current
investment universe.
Equity markets worldwide retrenched in the late summer after a strong first
half, as the Asian crises, which began in 1997, spread globally. Over the nine
months ended September 30, 1998, the returns of major markets were widely
disparate. Stock market returns in the major Continental European countries led
the way for the nine months ended September 30, 1998, with France, Germany,
Italy and Spain returning between 15.6% and 20.4% over this time period.
Peripheral European markets were mixed with Finland up 57.0%, while Norway
declined -32.1%. The United Kingdom was up 3.0% over this time period. The
Fund's large commitment to stocks of Continental European companies was
therefore a positive. The U.S. returned 7.2% during this period, while Canada
declined -18.4%. Developed Asian markets (excluding Japan) were down -24.1%
overall, while Japan declined -17.1% over the nine month period. Finally, other
emerging market countries (including Latin America) declined -36.7%. Overall,
the Global Fund's country allocation during the year was highly additive to
returns. In particular, the Fund's focus on Continental European countries was
favorable because those markets performed better than the U.S., U.K., and Japan,
as well as the markets of other less developed countries. However, the mix of
individual investments in Europe held Fund returns back. For example, the
strength of the British pound during the first half of the year adversely
affected foreign-currency exposed U.K. investments. Furthermore, a premature
move away from mega-cap European drug stocks also hurt relative returns.
Looking forward, we believe many of the world's major economies will see slower
growth in the early part of 1999, while recovery in Japan and emerging markets
will be a very gradual process. As a response to slower growth, we expect the
U.S. and U.K. to take the lead in responding with further interest rate cuts. We
believe we are also likely to see other economies adopt more stimulative
policies. While we see slower growth as we head into next year, the stimulative
policies should have the desired effect and result in stronger growth as 1999
wears on. As a result of these views, the Fund's investment strategy is as
follows:
- In a slow growth environment we have favored more defensive stocks.
However, the stimulative policies outlined above call for a gradual
increase in exposure to
49
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS GLOBAL FUND, INC.
more growth sensitive stocks. For example, recent Fund investments have
focused on some industrial and materials stocks in Australia and the U.K.,
where a weaker currency should benefit these companies.
- In the U.S., the Fund's strategy has been focused on very large-cap,
stable earners. But in a world where we see economic activity starting to
re-accelerate, we have started to trim high price/earnings multiple
stocks, such as Lucent, in favor of lower-multiple, higher-yielding stocks
with economic sensitivity, such as Alcoa and Dupont, providing a more
diversified exposure for the Fund. The Fund had 32% of its assets invested
in the U.S. as of September 30, 1998.
- In Continental Europe, where we see slightly stronger currencies, we
believe it makes sense to own a mix of investments that are more
defensive, such as utility sector stocks. The Fund also has investments in
long-term trends in the telecommunications and technology arena, such as
cellular phone stocks. The Fund has made a move away from financial stocks
as we see European financial companies having significant exposure to
emerging markets, where the debt workout will be gradual which, in turn,
will adversely affect the stocks. As of September 30, 1998, the Fund had
50% of its assets invested in Europe and, therefore, the U.S. and Europe
combined represented 82% of all of the Fund's assets.
- We have largely avoided emerging market investments and have
under-weighted Japan since we believe these areas have a long workout
process. Japan's recovery, in particular, will be gradual and we are
making only selective investments there until we see more serious efforts
at addressing the embedded economic and structural problems. The Fund had
a very low weighting in Japan (6% of assets) as of September 30, 1998.
In addition to the general risks associated with stocks and bonds, investing in
non-U.S. securities entails some special risks. These may include currency risks
as well as country-specific political and economic risks. While there is a fair
degree of diversification across markets and companies with this Fund,
diversification cannot totally protect from falling stock prices.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Trond Skramstad
Portfolio Manager
October 30, 1998
50
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS GLOBAL FUND, INC.
Comparison of change in value of $10,000 investment in the First Investors
Global Fund, Inc. (Class A shares), the Morgan Stanley Capital International
("MSCI") All Country World Free Index and the MSCI World Index.+
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1998
MSCI ALL COUNTRY MSCI
<S> <C> <C> <C>
Global Fund World Free Index World Index
Jan-89 $9,375 $10,000 $10,000
Dec-89 12,899 11,765 11,721
Dec-90 11,323 9,826 9,786
Dec-91 13,230 11,782 11,642
Dec-92 12,597 11,284 11,101
Dec-93 15,491 14,091 13,670
Dec-94 14,905 14,800 14,435
Dec-95 17,562 17,680 17,510
Dec-96 20,097 20,013 19,961
Dec-97 21,701 23,014 22,956
Sep-98 21,429 23,172 23,633
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year (7.78%) (13.56%)
Five Years 8.39% 6.99%
Ten Years 9.54% 8.84%
Class B Shares
One Year (8.46%) (12.13%)
Since Inception (1/12/95) 9.86% 9.23%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS GLOBAL FUND,
INC. (CLASS A SHARES) BEGINNING 1/1/89 WITH THEORETICAL INVESTMENTS IN THE
MSCI ALL COUNTRY WORLD FREE INDEX AND THE MSCI WORLD INDEX. THE MSCI ALL
COUNTRY WORLD FREE INDEX REPRESENTS BOTH THE DEVELOPED AND THE EMERGING
MARKETS. THE INDEX INCLUDES 48 MARKETS OF WHICH EMERGING MARKETS REPRESENT
APPROXIMATELY 5.6%. THE MSCI WORLD INDEX IS DESIGNED TO MEASURE THE
PERFORMANCE OF STOCK MARKETS IN THE UNITED STATES, EUROPE, CANADA, AUSTRALIA,
NEW ZEALAND AND THE FAR EAST. THE INDEX CONSISTS OF APPROXIMATELY 60% OF THE
AGGREGATE MARKET VALUE OF THE COVERED STOCK EXCHANGES. IT IS NOT POSSIBLE TO
INVEST DIRECTLY IN THESE INDICES. IN ADDITION, THE INDICES DO NOT TAKE INTO
ACCOUNT FEES AND EXPENSES. 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. CLASS B SHARES PERFORMANCE MAY
BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH ABOVE FOR CLASS A
SHARES BASED ON DIFFERENCES IN SALES LOADS AND FEES PAID BY SHAREHOLDERS
INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 9/30/98) INCLUDE THE
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "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). THE
CLASS B "S.E.C. STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED
SALES CHARGE (MAXIMUM OF 4% IN THE FIRST YEAR). 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. MSCI ALL
COUNTRY WORLD FREE INDEX AND MSCI WORLD INDEX FIGURES FROM MORGAN STANLEY &
CO., INC. AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
+ WE HAVE ADDED A COMPARISON TO THE MSCI ALL COUNTRY WORLD FREE INDEX THIS YEAR
BECAUSE THAT INDEX IS MORE REPRESENTATIVE OF THE FUND'S CURRENT INVESTMENT
UNIVERSE. AFTER THIS YEAR, WE WILL NOT SHOW A COMPARISON TO THE MSCI WORLD
INDEX BECAUSE IT REPRESENTS ONLY THE DEVELOPED MARKETS.
51
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GLOBAL FUND, INC.
September 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--92.4%
UNITED STATES--32.3%
50,500 Abbott Laboratories $ 2,193,594 $ 80
14,700 Alcoa 1,043,700 38
44,950 American Express Company 3,489,244 128
34,642 American International Group, Inc. 2,667,434 98
59,550 *Analog Devices, Inc. 956,522 35
26,400 Baxter International, Inc. 1,570,800 57
31,100 Chevron Corporation 2,614,344 96
55,250 *Cisco Systems, Inc. 3,415,141 125
9,350 Citicorp 868,966 32
49,150 CVS Corporation 2,153,384 79
17,300 Du Pont (E.I.) de Nemours & Company 970,962 36
24,950 Duke Energy Corporation 1,651,378 60
43,300 Exxon Corporation 3,039,119 111
45,700 Fannie Mae 2,936,225 107
28,200 First Data Corporation 662,700 24
37,700 Gannett Company, Inc. 2,019,306 74
2,700 General Electric Company 214,819 8
39,500 Gillette Company 1,510,875 55
28,200 Hertz Corporation - Cl. "A" 1,166,775 43
42,650 Hewlett-Packard Company 2,257,784 83
67,800 Home Depot, Inc. 2,678,100 98
22,440 Intel Corporation 1,924,230 70
15,700 International Business Machines Corporation 2,009,600 74
41,000 Johnson & Johnson 3,208,250 117
23,725 Kimberly-Clark Corporation 960,862 35
36,600 McDonald's Corporation 2,184,562 80
45,712 *MCI WorldCom, Inc. 2,234,174 82
30,300 *Microsoft Corporation 3,334,894 122
113,800 *Mirage Resorts, Inc. 1,906,150 70
34,400 *PeopleSoft, Inc. 1,122,300 41
15,400 Pfizer, Inc. 1,631,437 60
65,000 Pharmacia & Upjohn, Inc. 3,262,187 119
27,600 Philip Morris Companies, Inc. 1,271,325 47
30,180 Procter & Gamble Company 2,140,894 78
60,800 SBC Communications, Inc. 2,701,800 99
28,600 Schlumberger, Ltd. 1,438,937 53
42,700 ServiceMaster Company 934,062 34
94,825 Southwest Airlines Company 1,896,500 69
57,500 State Street Corporation 3,137,344 115
--------------------------------------------------------------------------------------
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
UNITED STATES (continued)
32,200 Travelers Group, Inc. $ 1,207,500 $ 44
44,400 US Bancorp 1,578,975 58
65,900 Wal-Mart Stores, Inc. 3,599,788 132
55,100 Walt Disney Company 1,394,719 51
39,500 Warner-Lambert Company 2,982,250 109
--------------------------------------------------------------------------------------
88,143,912 3,226
--------------------------------------------------------------------------------------
UNITED KINGDOM--13.6%
119,800 Allied Zurich PLC 1,225,590 45
44,390 BOC Group PLC 552,571 20
310,200 British American Tobacco PLC 2,310,246 85
208,346 British Petroleum PLC 3,186,569 117
850,700 British Steel PLC 1,536,024 56
71,400 British Telecommunications PLC 962,204 35
117,800 Cable & Wireless PLC 1,123,058 41
48,000 COLT Telecom Group PLC 404,184 15
280,800 Compass Group PLC 2,638,846 97
194,608 Diageo PLC 1,852,006 68
59,900 Glaxo Wellcome PLC 1,768,158 65
119,400 Great Universal Stores PLC 1,359,476 50
102,900 Imperial Chemical Industries PLC 810,512 30
155,400 National Westminster Bank PLC 2,086,276 76
347,100 Next PLC 2,477,392 91
156,900 Orange PLC 1,506,491 55
85,000 PowerGen PLC 1,263,924 46
105,100 Reckitt & Colman PLC 1,554,765 57
136,000 Scottish Power PLC 1,317,364 48
122,046 Smithkline Beecham PLC 1,341,908 49
241,100 Standard Chartered PLC 1,700,358 62
201,300 Vodafone Group PLC 2,336,469 85
193,500 WPP Group PLC 891,958 33
29,500 Zeneca Group PLC 1,042,751 38
--------------------------------------------------------------------------------------
37,249,100 1,364
--------------------------------------------------------------------------------------
FRANCE--8.9%
18,420 Alcatel Alsthom 1,636,659 60
21,876 Assurances Generales de France 1,206,050 44
18,130 Axa-Uap 1,659,414 61
63,560 Banque Nationale de Paris 3,402,081 124
--------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS GLOBAL FUND, INC.
September 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
FRANCE (continued)
1,160 Carrefour Supermarche SA $ 734,934 $ 27
11,590 Casino Guichard Perrachon 1,168,346 43
10,010 Compagnie de Saint Gobain 1,326,975 49
11,460 Paribas 617,491 23
41,362 Rhone-Poulenc SA - Ser. "A" 1,734,238 63
19,020 Societe Nationale Elf Aquitaine SA 2,344,921 86
21,000 STMicroelectronics NV-NY Shs. 943,687 35
25,487 Total SA - Cl. "B" 3,210,429 117
21,630 Vivendi 4,306,855 158
--------------------------------------------------------------------------------------
24,292,080 890
--------------------------------------------------------------------------------------
GERMANY--6.8%
48,050 Bayer AG 1,900,315 70
37,390 Deutsche Telekom AG 1,161,057 42
22,910 Dresdner Bank AG 870,422 32
76,330 Hoechst AG 3,128,362 114
7,190 Karstadt AG 3,420,010 125
26,030 Mannesmann AG 2,390,637 87
73,700 Siemens AG 4,025,958 147
2,360 Viag AG 1,542,641 56
--------------------------------------------------------------------------------------
18,439,402 673
--------------------------------------------------------------------------------------
JAPAN--5.5%
13,300 Advantest Corporation 566,705 21
50,000 Dai Nippon Printing Company, Ltd. 643,545 24
91,000 Eisai Company, Ltd. 1,107,079 40
37,000 Fuji Photo Film 1,277,547 47
106,000 Hitachi Company, Ltd. 467,227 17
20,000 Mabuchi Motor Company, Ltd. 1,256,244 46
27,200 Matsumotokiyoshi Company, Ltd. 891,211 33
20,700 Nichiei Company, Ltd. 1,400,579 51
173 Nippon Telegraph & Telephone Corporation 1,264,582 46
187 NTT Data Corporation 684,146 25
131,000 Olympus Optical Company, Ltd. 1,442,611 53
9,000 Rohm Company, Ltd. 859,535 31
24,200 Sony Corporation 1,687,171 62
229,000 Toshiba Corporation 826,026 30
17,000 Uni-Charm Corporation 665,662 24
--------------------------------------------------------------------------------------
15,039,870 550
--------------------------------------------------------------------------------------
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
NETHERLANDS--4.3%
17,400 Gucci Group NV-NY Reg. Shs. $ 628,575 $ 23
57,369 ING Groep NV 2,583,779 95
69,300 Koninklijke Ahold NV 2,069,721 76
34,500 Philips Electronics NV 1,857,615 68
20,200 Royal Dutch Petroleum Company 1,001,920 37
46,557 TNT Post Group NV 1,185,486 43
39,900 Unilever NV-CVA 2,510,312 92
--------------------------------------------------------------------------------------
11,837,408 434
--------------------------------------------------------------------------------------
ITALY--3.8%
239,300 Banca Commerciale Italiana 1,437,284 53
1,035,400 Banca di Roma 1,848,396 68
327,500 ENI SpA 2,005,675 73
269,000 Olivetti SpA 567,294 21
647,222 Telecom Italia SpA 4,455,282 163
--------------------------------------------------------------------------------------
10,313,931 378
--------------------------------------------------------------------------------------
AUSTRALIA--3.3%
222,671 *AMP, Ltd. 2,696,858 99
329,263 Australian & New Zealand Banking Group, Ltd. 1,758,363 64
191,485 News Corporation, Ltd. 1,233,853 45
1,193,829 Pasminco, Ltd. 876,629 32
71,740 Rio Tinto, Ltd. 867,602 32
309,014 Telstra Corporation, Ltd. I/R 865,085 32
245,145 WMC, Ltd. 737,100 27
--------------------------------------------------------------------------------------
9,035,490 331
--------------------------------------------------------------------------------------
SWEDEN--3.1%
36,760 Astra AB - Cl. "A" 628,732 23
7,400 Hennes & Mauritz AB - Cl. "B" 538,386 20
384,980 *Nordbanken Holding AB 2,211,248 81
66,280 Pharmacia & Upjohn (Swedish Dep. Shs.) 3,333,228 122
72,710 Volvo AB - Cl. "B" 1,781,889 65
--------------------------------------------------------------------------------------
8,493,483 311
--------------------------------------------------------------------------------------
SWITZERLAND--2.6%
1,570 Compagnie Financiere Richemont AG 2,007,423 73
1,060 Credit Suisse Group 117,156 4
950 Holderbank Financiere Glarus AG 974,491 36
--------------------------------------------------------------------------------------
</TABLE>
55
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS GLOBAL FUND, INC.
September 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
SWITZERLAND (continued)
1,086 Nestle AG Regd $ 2,160,527 $ 79
793 Novartis AG 1,272,295 47
600 Roche Holdings AG - Genusscheine 645,808 24
--------------------------------------------------------------------------------------
7,177,700 263
--------------------------------------------------------------------------------------
SPAIN--2.0%
60,600 Banco Santander SA 936,306 34
67,600 Endesa SA 1,522,676 56
47,800 Endesa SA (ADR) 1,051,600 38
18,000 Telefonica SA 656,318 24
12,172 Telefonica SA (ADR) 1,313,815 48
--------------------------------------------------------------------------------------
5,480,715 200
--------------------------------------------------------------------------------------
FINLAND--1.5%
112,690 Metsa-Serla OY - Cl. "B" 797,237 29
21,800 Nokia Corporation - Cl. "A" (ADR) 1,709,937 63
21,280 Nokia OYJ - Cl. "A" 1,689,479 62
--------------------------------------------------------------------------------------
4,196,653 154
--------------------------------------------------------------------------------------
IRELAND--1.4%
212,650 Allied Irish Banks PLC 3,157,172 116
353,689 Jefferson Smurfit Group PLC 543,938 20
--------------------------------------------------------------------------------------
3,701,110 136
--------------------------------------------------------------------------------------
DENMARK--.8%
29,860 Unidanmark A/S - Cl. "A" Regd 2,161,380 79
--------------------------------------------------------------------------------------
CANADA--.6%
39,000 Canadian National Railway Company 1,740,375 64
--------------------------------------------------------------------------------------
HONG KONG--.6%
302,000 Cheung Kong Holdings, Ltd. 1,399,196 51
35,000 Henderson Land Development 119,700 4
--------------------------------------------------------------------------------------
1,518,896 55
--------------------------------------------------------------------------------------
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES FOR EACH
OR $10,000 OF
WARRANTS SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
NEW ZEALAND--.5%
72,800 Telecom Corporation of New Zealand - I/R $ 129,344 $ 5
100,329 Telecom Corporation of New Zealand, Ltd. 384,140 14
27,450 Telecom Corporation of New Zealand, Ltd. (ADR) 826,931 30
--------------------------------------------------------------------------------------
1,340,415 49
--------------------------------------------------------------------------------------
TAIWAN--.5%
102,735 *Taiwan Semiconductor Manufacturing Co., Ltd.
(ADR) 1,258,504 46
--------------------------------------------------------------------------------------
CHINA--.3%
592,800 China Telecom, Ltd. 933,304 34
--------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $225,091,259) 252,353,728 9,237
--------------------------------------------------------------------------------------
PREFERRED STOCKS--1.5%
GERMANY--1.5%
19,410 Henkel KGAA 1,411,020 52
17,530 Hornbach Holdings AG 1,447,412 53
2,610 SAP AG 1,291,449 47
--------------------------------------------------------------------------------------
4,149,881 152
--------------------------------------------------------------------------------------
BRAZIL--.0%
23,000 Vale Do Rio Doce - Class "B" -- --
--------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $4,459,943) 4,149,881 152
--------------------------------------------------------------------------------------
WARRANTS--.0%
THAILAND
5,800 *Siam Commercial Bank (expiring 12/31/02) (cost
$0) -- --
- --------------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS GLOBAL FUND, INC.
September 30, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
REPURCHASE AGREEMENT--6.4%
$17,571M Paine Webber, Inc., 5.45%, 10/1/98
(collateralized by U.S. Treasury Bonds, due
8/15/05,
valued at $17,596,231)
(cost $17,571,000) $ 17,571,000 $ 643
--------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $247,122,202) 100.3% 274,074,609 10,032
EXCESS OF LIABILITIES OVER OTHER ASSETS (.3) (871,057) (32)
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $273,203,552 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
58
<PAGE>
PORTFOLIO OF INVESTMENTS (continued)
FIRST INVESTORS GLOBAL FUND, INC.
September 30, 1998
Sector diversification of the portfolio was as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------
PERCENTAGE
SECTOR OF NET ASSETS VALUE
- --------------------------------------------------------------------
<S> <C> <C>
Drugs.................................. 10.6% $ 28,986,998
Banks.................................. 10.2 27,889,218
Retail................................. 8.5 23,166,735
Telephone.............................. 7.0 19,011,094
Energy Sources......................... 6.4 17,402,977
Food/Beverage/Tobacco.................. 4.4 12,111,839
Media.................................. 4.0 10,997,819
Insurance.............................. 3.9 10,549,767
Electronics............................ 3.2 8,834,025
Travel & Leisure....................... 3.2 8,626,058
Communication Equipment................ 3.1 8,451,216
Electric Utilities..................... 3.1 8,349,583
Household Products..................... 3.0 8,244,078
Financial Services..................... 2.9 7,826,048
Metals & Minerals...................... 2.7 7,362,521
Software Services...................... 2.6 7,095,489
Business Services...................... 2.4 6,448,315
Electrical Equipment................... 2.0 5,497,021
Medical Products....................... 1.9 5,207,005
Computers & Office Equipment........... 1.9 5,093,410
Pipeline............................... 1.6 4,306,855
Entertainment Products................. 1.1 2,964,718
Machinery & Manufacturing.............. .9 2,390,637
Chemicals.............................. .8 2,334,045
Automotive............................. .6 1,781,889
Transportation......................... .6 1,740,375
Energy Services........................ .5 1,438,937
Paper/Forest Products.................. .5 1,341,175
Health Services........................ .3 934,062
Real Estate Companies.................. .0 119,700
Repurchase Agreement................... 6.4 17,571,000
- --------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS 100.3 274,074,609
EXCESS OF LIABILITIES OVER OTHER ASSETS (.3) (871,057)
- --------------------------------------------------------------------
NET ASSETS 100.0% $273,203,552
- --------------------------------------------------------------------
- --------------------------------------------------------------------
</TABLE>
See notes to financial statements
59
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS
September 30, 1998
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
TOTAL GROWTH &
RETURN INCOME
- ------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $70,820,041 $231,494,073
----------- ------------
----------- ------------
At value (Note 1A)................... $77,695,797 $300,645,867
Cash................................... 340,011 515,066
Receivables:
Investment securities sold........... 190,868 1,205,480
Dividends and interest............... 596,069 452,932
Shares sold.......................... 213,730 977,495
Forward currency contracts (Note
4)................................. -- --
Other assets........................... -- --
----------- ------------
Total Assets........................... 79,036,475 303,796,840
----------- ------------
LIABILITIES
Payables:
Investment securities purchased...... 2,121,019 2,414,575
Shares redeemed...................... 67,136 485,176
Accrued advisory fee................... 47,418 187,541
Accrued expenses....................... 40,928 91,312
----------- ------------
Total Liabilities...................... 2,276,501 3,178,604
----------- ------------
NET ASSETS............................. $76,759,974 $300,618,236
----------- ------------
----------- ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $62,863,805 $230,918,860
Undistributed net investment income
(deficit)............................ 585,322 499,957
Accumulated net realized gain (loss) on
investment transactions and foreign
currency transactions................ 6,435,091 47,625
Net unrealized appreciation of
investments and foreign currency
transactions......................... 6,875,756 69,151,794
----------- ------------
Total.................................. $76,759,974 $300,618,236
----------- ------------
----------- ------------
NET ASSETS:
Class A.............................. $72,647,957 $257,589,104
Class B.............................. $ 4,112,017 $ 43,029,132
SHARES OUTSTANDING (Note 5)
Class A.............................. 5,090,997 20,924,449
Class B.............................. 291,085 3,545,846
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 14.27 $ 12.31
----------- ------
----------- ------
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A
(Net asset value/.9375)*............. $ 15.22 $ 13.13
----------- ------
----------- ------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE -
CLASS B (Note 5)..................... $ 14.13 $ 12.14
----------- ------
----------- ------
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
60
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
UTILITIES MID-CAP SPECIAL
BLUE CHIP INCOME OPPORTUNITY SITUATIONS GLOBAL
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $326,105,545 $110,788,023 $31,156,734 $173,960,704 $247,122,202
------------ ------------ ----------- ---------- ------------
------------ ------------ ----------- ---------- ------------
At value (Note 1A)................... $411,235,199 $135,762,022 $32,799,661 $174,554,045 $274,074,609
Cash................................... 529,898 253,909 196,943 473,400 10,396
Receivables:
Investment securities sold........... 6,696,244 287,773 1,713,030 4,024,943 7,364,128
Dividends and interest............... 336,385 382,328 13,261 136,653 640,755
Shares sold.......................... 947,415 378,356 131,885 387,683 237,582
Forward currency contracts (Note
4)................................. -- -- -- -- 2,343
Other assets........................... -- -- -- -- 20,335
------------ ------------ ----------- ---------- ------------
Total Assets........................... 419,745,141 137,064,388 34,854,780 179,576,724 282,350,148
------------ ------------ ----------- ---------- ------------
LIABILITIES
Payables:
Investment securities purchased...... 4,007,257 -- 225,253 3,941,252 8,287,692
Shares redeemed...................... 423,428 104,990 10,943 236,704 380,622
Accrued advisory fee................... 260,850 82,389 21,617 110,662 231,689
Accrued expenses....................... 143,101 56,382 30,738 101,626 246,593
------------ ------------ ----------- ---------- ------------
Total Liabilities...................... 4,834,636 243,761 288,551 4,390,244 9,146,596
------------ ------------ ----------- ---------- ------------
NET ASSETS............................. $414,910,505 $136,820,627 $34,566,229 $175,186,480 $273,203,552
------------ ------------ ----------- ---------- ------------
------------ ------------ ----------- ---------- ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $315,652,013 $104,997,157 $36,774,448 $179,652,729 $242,947,384
Undistributed net investment income
(deficit)............................ 200,729 647,161 -- -- (22,880)
Accumulated net realized gain (loss) on
investment transactions and foreign
currency transactions................ 13,928,109 6,202,310 (3,851,146) (5,059,590) 3,302,484
Net unrealized appreciation of
investments and foreign currency
transactions......................... 85,129,654 24,973,999 1,642,927 593,341 26,976,564
------------ ------------ ----------- ---------- ------------
Total.................................. $414,910,505 $136,820,627 $34,566,229 $175,186,480 $273,203,552
------------ ------------ ----------- ---------- ------------
------------ ------------ ----------- ---------- ------------
NET ASSETS:
Class A.............................. $368,367,846 $122,610,358 $30,422,691 $159,888,997 $261,317,789
Class B.............................. $ 46,542,659 $ 14,210,269 $ 4,143,538 $15,297,483 $ 11,885,763
SHARES OUTSTANDING (Note 5)
Class A.............................. 16,403,817 16,091,339 2,093,414 8,965,475 41,296,763
Class B.............................. 2,101,468 1,887,944 292,391 882,081 1,920,340
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 22.46 $ 7.62 $ 14.53 $ 17.83 $ 6.33
------ ----- ----------- ---------- -----
------ ----- ----------- ---------- -----
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A
(Net asset value/.9375)*............. $ 23.96 $ 8.13 $ 15.50 $ 19.02 $ 6.75
------ ----- ----------- ---------- -----
------ ----- ----------- ---------- -----
NET ASSET VALUE AND OFFERING PRICE PER
SHARE -
CLASS B (Note 5)..................... $ 22.15 $ 7.53 $ 14.17 $ 17.34 $ 6.19
------ ----- ----------- ---------- -----
------ ----- ----------- ---------- -----
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
61
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS
<TABLE>
<CAPTION>
- -----------------------------------------------------------
TOTAL RETURN
------------------------
1/1/98 TO 1/1/97 TO
9/30/98 12/31/97
- -----------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends...................... $ 472,852 $ 566,856
Interest....................... 1,525,213 1,593,271
----------- -----------
Total income..................... 1,998,065 2,160,127
----------- -----------
Expenses (Notes 1 and 3):
Advisory fee................... 563,057 632,459
Shareholder servicing costs.... 159,486 203,221
Distribution plan
expenses - Class A........... 161,479 184,754
Distribution plan
expenses - Class B........... 24,799 16,619
Reports and notices to
shareholders................. 14,869 14,400
Professional fees.............. 9,437 19,423
Custodian fees and expenses.... 10,576 24,764
Amortization of organization
expenses..................... -- --
Other expenses................. 12,772 15,021
----------- -----------
Total expenses................... 956,475 1,110,661
Less: Expenses waived or
assumed........................ (140,764) (158,115)
Custodian fees paid
indirectly................ (8,769) (6,419)
----------- -----------
Net expenses..................... 806,942 946,127
----------- -----------
Net investment income............ 1,191,123 1,214,000
----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (Note 2):
Net realized gain on
investments.................... 6,468,239 5,053,532
Net unrealized appreciation
(depreciation) of
investments.................... (4,386,811) 3,974,842
----------- -----------
Net gain (loss) from
investments.................... 2,081,428 9,028,374
----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS..................... $ 3,272,551 $10,242,374
----------- -----------
----------- -----------
</TABLE>
62
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
GROWTH & INCOME BLUE CHIP UTILTIES INCOME
------------------------ ------------------------- ------------------------
11/1/97 TO 11/1/96 TO 1/1/98 TO 1/1/97 TO 11/1/97 TO 11/1/96 TO
9/30/98 10/31/97 9/30/98 12/31/97 9/30/98 10/31/97
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends...................... $ 3,546,990 $ 2,790,405 $ 3,825,268 $ 4,474,750 $ 3,610,439 $ 4,383,153
Interest....................... 1,227,850 564,574 1,363,752 1,341,840 546,204 491,571
----------- ----------- ------------ ----------- ----------- -----------
Total income..................... 4,774,840 3,354,979 5,189,020 5,816,590 4,156,643 4,874,724
----------- ----------- ------------ ----------- ----------- -----------
Expenses (Notes 1 and 3):
Advisory fee................... 1,931,302 1,301,867 2,822,114 3,268,373 886,819 836,278
Shareholder servicing costs.... 712,224 522,340 815,110 909,844 331,590 364,656
Distribution plan
expenses - Class A........... 668,814 462,388 875,895 899,594 321,409 309,426
Distribution plan
expenses - Class B........... 344,036 191,490 343,166 269,725 110,042 83,756
Reports and notices to
shareholders................. 45,541 40,301 61,086 68,960 21,664 25,568
Professional fees.............. 46,449 42,895 56,880 36,143 45,263 41,308
Custodian fees and expenses.... 28,078 23,361 38,738 39,183 19,134 15,701
Amortization of organization
expenses..................... 2,750 3,000 -- -- 1,250 3,000
Other expenses................. 45,253 24,514 58,555 48,990 31,214 24,620
----------- ----------- ------------ ----------- ----------- -----------
Total expenses................... 3,824,447 2,612,156 5,071,544 5,540,812 1,768,385 1,704,313
Less: Expenses waived or
assumed........................ -- (70,218) (375,000) (817,093) -- (83,835)
Custodian fees paid
indirectly................. (25,197) (2,629) (26,160) (39,183) (19,134) (15,701)
----------- ----------- ------------ ----------- ----------- -----------
Net expenses..................... 3,799,250 2,539,309 4,670,384 4,684,536 1,749,251 1,604,777
----------- ----------- ------------ ----------- ----------- -----------
Net investment income............ 975,590 815,670 518,636 1,132,054 2,407,392 3,269,947
----------- ----------- ------------ ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS (Note 2):
Net realized gain on
investments.................... 60,194 5,328,547 12,979,954 26,645,071 6,230,833 7,342,477
Net unrealized appreciation
(depreciation) of
investments.................... 15,489,708 31,106,647 (22,977,214) 44,536,413 9,091,432 2,774,850
----------- ----------- ------------ ----------- ----------- -----------
Net gain (loss) from
investments.................... 15,549,902 36,435,194 (9,997,260) 71,181,484 15,322,265 10,117,327
----------- ----------- ------------ ----------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS..................... $16,525,492 $37,250,864 $ (9,478,624) $72,313,538 $17,729,657 $13,387,274
----------- ----------- ------------ ----------- ----------- -----------
----------- ----------- ------------ ----------- ----------- -----------
</TABLE>
63
<PAGE>
STATEMENT OF OPERATIONS (continued)
FIRST INVESTORS
<TABLE>
<CAPTION>
- ----------------------------------------------------------
MID-CAP OPPORTUNITY
-----------------------
11/1/97 TO 11/1/96 TO
9/30/98 10/31/97
- ----------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends...................... $ 231,516 $ 170,765
Interest....................... 175,007 101,123
----------- ----------
Total income..................... 406,523 271,888
----------- ----------
Expenses (Notes 1 and 3):
Advisory fee................... 324,738 211,922
Shareholder servicing costs.... 135,522 92,828
Distribution plan
expenses - Class A........... 86,556 58,074
Distribution plan
expenses - Class B........... 36,000 17,899
Reports and notices to
shareholders................. 12,986 7,919
Professional fees.............. 24,686 27,307
Custodian fees and expenses.... 10,354 8,173
Other expenses................. 7,245 6,211
----------- ----------
Total expenses................... 638,087 430,333
Less: Expenses waived or
assumed........................ (116,184) (91,881)
Custodian fees paid
indirectly................ (10,354) (8,173)
----------- ----------
Net expenses..................... 511,549 330,279
----------- ----------
Net investment income (loss)..... (105,026) (58,391)
----------- ----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
(Note 2):
Net realized gain (loss) on
investments
and foreign currency
transactions................... (3,844,115) 1,997,140
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... (2,909,788) 3,087,322
----------- ----------
Net gain (loss) from investments
and foreign currencies......... (6,753,903) 5,084,462
----------- ----------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS..................... $(6,858,929) $5,026,071
----------- ----------
----------- ----------
</TABLE>
(a) Net of $130,260 foreign taxes witheld.
(b) Net of $204,776 foreign taxes witheld.
(c) Includes $22,875 of net realized loss on foreign currency transactions.
(d) Includes $147,880 of net realized loss on foreign currency transactions.
(e) Includes $35,523 of net unrealized appreciation on translation of assets in
foreign currencies.
(f) Includes $11,342 of net unrealized depreciation on translation of assets in
foreign currencies.
See notes to financial statements
64
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
SPECIAL SITUATIONS GLOBAL
------------------------- ------------------------------
1/1/98 TO 1/1/97 TO 1/1/98 TO 1/1/97 TO
9/30/98 12/31/97 9/30/98 12/31/97
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends...................... $ 900,517 $ 1,006,997 $ 3,891,835(a) $ 5,981,344(b)
Interest....................... 1,045,950 997,320 602,761 453,087
------------ ----------- ----------- -------------
Total income..................... 1,946,467 2,004,317 4,494,596 6,434,431
------------ ----------- ----------- -------------
Expenses (Notes 1 and 3):
Advisory fee................... 1,590,398 1,882,098 2,298,343 2,883,822
Shareholder servicing costs.... 637,490 756,777 720,720 950,417
Distribution plan
expenses - Class A........... 445,708 526,165 669,986 840,610
Distribution plan
expenses - Class B........... 134,841 128,214 90,899 81,788
Reports and notices to
shareholders................. 59,363 53,736 81,653 51,115
Professional fees.............. 25,707 27,660 42,800 53,813
Custodian fees and expenses.... 22,892 26,350 315,034 365,174
Other expenses................. 40,839 37,228 65,241 79,238
------------ ----------- ----------- -------------
Total expenses................... 2,957,238 3,438,228 4,284,676 5,305,977
Less: Expenses waived or
assumed........................ (375,000) (470,525) -- --
Custodian fees paid
indirectly................. (22,892) (26,350) -- --
------------ ----------- ----------- -------------
Net expenses..................... 2,559,346 2,941,353 4,284,676 5,305,977
------------ ----------- ----------- -------------
Net investment income (loss)..... (612,879) (937,036) 209,920 1,128,454
------------ ----------- ----------- -------------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
(Note 2):
Net realized gain (loss) on
investments
and foreign currency
transactions................... (5,056,550) 17,709,890 8,576,598(c) 21,938,853(d)
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... (37,274,025) 10,188,540 (11,823,004)(e) (1,723,731)(f)
------------ ----------- ----------- -------------
Net gain (loss) from
investments.................... (42,330,575) 27,898,430 (3,246,406) 20,215,122
------------ ----------- ----------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM
OPERATIONS..................... $(42,943,454) $26,961,394 $(3,036,486) $ 21,343,576
------------ ----------- ----------- -------------
------------ ----------- ----------- -------------
</TABLE>
(a) Net of $130,260 foreign taxes witheld.
(b) Net of $204,776 foreign taxes witheld.
(c) Includes $22,875 of net realized loss on foreign currency transactions.
(d) Includes $147,880 of net realized loss on foreign currency transactions.
(e) Includes $35,523 of net unrealized appreciation on translation of assets in
foreign currencies.
(f) Includes $11,342 of net unrealized depreciation on translation of assets in
foreign currencies.
See notes to financial statements
65
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
TOTAL RETURN
-------------------------------------
1/1/98 TO 1/1/97 TO 1/1/96 TO
9/30/98 12/31/97 12/31/96
- --------------------------------- ----------- ----------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income.......... $ 1,191,123 $ 1,214,000 $ 1,630,129
Net realized gain on
investments.................. 6,468,239 5,053,532 4,564,414
Net unrealized appreciation
(depreciation) of
investments.................. (4,386,811) 3,974,842 (470,679)
----------- ----------- -----------
Net increase (decrease) in
net assets resulting from
operations................. 3,272,551 10,242,374 5,723,864
----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class
A............................ (642,040) (1,227,991) (1,672,752)
Net investment income - Class
B............................ (18,789) (26,544) (20,249)
Net realized gains - Class A... -- (4,841,852) (4,504,684)
Net realized gains - Class B... -- (184,600) (82,687)
----------- ----------- -----------
Total distributions.......... (660,829) (6,280,987) (6,280,372)
----------- ----------- -----------
SHARE TRANSACTIONS *
Class A:
Proceeds from shares sold...... 10,008,749 9,720,765 5,275,595
Reinvestment of
distributions................ 636,265 6,023,569 6,135,139
Cost of shares redeemed........ (7,257,300) (9,501,874) (9,794,345)
----------- ----------- -----------
3,387,714 6,242,460 1,616,389
----------- ----------- -----------
Class B:
Proceeds from shares sold...... 1,905,526 1,430,563 746,950
Reinvestment of
distributions................ 18,442 207,161 102,924
Cost of shares redeemed........ (397,593) (169,088) (59,781)
----------- ----------- -----------
1,526,375 1,468,636 790,093
----------- ----------- -----------
Net increase from share
transactions................. 4,914,089 7,711,096 2,406,482
----------- ----------- -----------
Net increase in net assets... 7,525,811 11,672,483 1,849,974
NET ASSETS
Beginning of period............ 69,234,163 57,561,680 55,711,706
----------- ----------- -----------
End of period+................. $76,759,974 $69,234,163 $57,561,680
----------- ----------- -----------
----------- ----------- -----------
+Includes undistributed net
investment income of............ $ 585,322 $ 55,028 $ 101,523
----------- ----------- -----------
----------- ----------- -----------
*SHARES ISSUED AND REDEEMED
Class A:
Sold........................... 692,647 683,584 403,915
Issued for distributions
reinvested................... 42,650 437,106 476,189
Redeemed....................... (500,175) (680,904) (737,036)
----------- ----------- -----------
Net increase in Class A shares
outstanding.................. 235,122 439,786 143,068
----------- ----------- -----------
----------- ----------- -----------
Class B:
Sold........................... 132,731 100,991 56,645
Issued for distributions
reinvested................... 1,245 15,167 8,057
Redeemed....................... (27,765) (12,388) (4,468)
----------- ----------- -----------
Net increase in Class B shares
outstanding.................. 106,211 103,770 60,234
----------- ----------- -----------
----------- ----------- -----------
</TABLE>
66
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
GROWTH & INCOME BLUE CHIP
---------------------------------------- ----------------------------------------
11/1/97 TO 11/1/96 TO 11/1/95 TO 1/1/98 TO 1/1/97 TO 1/1/96 TO
9/30/98 10/31/97 10/31/96 9/30/98 12/31/97 12/31/96
- --------------------------------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income.......... $ 975,590 $ 815,670 $ 1,064,411 $ 518,636 $ 1,132,054 $ 1,571,720
Net realized gain on
investments.................. 60,194 5,328,547 2,338,223 12,979,954 26,645,071 13,853,283
Net unrealized appreciation
(depreciation) of
investments.................. 15,489,708 31,106,647 14,282,176 (22,977,214) 44,536,413 25,028,855
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations.................. 16,525,492 37,250,864 17,684,810 (9,478,624) 72,313,538 40,453,858
------------ ------------ ------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class
A............................ (474,191) (817,347) (1,124,492) (476,685) (1,008,850) (1,797,674)
Net investment income - Class
B............................ -- (14,650) (56,261) -- -- (32,262)
Net realized gains - Class A... (4,666,252) (2,000,523) -- -- (23,224,732) (12,932,431)
Net realized gains - Class B... (666,704) (234,403) -- -- (2,472,186) (920,852)
------------ ------------ ------------ ------------ ------------ ------------
Total distributions.......... (5,807,147) (3,066,923) (1,180,753) (476,685) (26,705,768) (15,683,219)
------------ ------------ ------------ ------------ ------------ ------------
SHARE TRANSACTIONS *
Class A:
Proceeds from shares sold...... 78,231,913 69,592,366 44,537,868 63,584,545 83,933,830 59,240,476
Reinvestment of
distributions................ 5,089,594 2,780,887 1,102,988 469,526 23,979,379 14,593,546
Cost of shares redeemed........ (29,473,440) (20,987,333) (12,479,680) (38,294,869) (39,561,111) (27,930,727)
------------ ------------ ------------ ------------ ------------ ------------
53,848,067 51,385,920 33,161,176 25,759,202 68,352,098 45,903,295
------------ ------------ ------------ ------------ ------------ ------------
Class B:
Proceeds from shares sold...... 18,528,954 12,978,761 7,730,826 16,422,338 17,001,914 10,411,903
Reinvestment of
distributions................ 662,444 246,352 54,999 -- 2,448,261 949,486
Cost of shares redeemed........ (3,893,425) (2,077,855) (509,452) (5,068,439) (2,520,555) (924,914)
------------ ------------ ------------ ------------ ------------ ------------
15,297,973 11,147,258 7,276,373 11,353,899 16,929,620 10,436,475
------------ ------------ ------------ ------------ ------------ ------------
Net increase from share
transactions................. 69,146,040 62,533,178 40,437,549 37,113,101 85,281,718 56,339,770
------------ ------------ ------------ ------------ ------------ ------------
Net increase in net assets... 79,864,385 96,717,119 56,941,606 27,157,792 130,889,488 81,110,409
NET ASSETS
Beginning of period............ 220,753,851 124,036,732 67,095,126 387,752,713 256,863,225 175,752,816
------------ ------------ ------------ ------------ ------------ ------------
End of period+................. $300,618,236 $220,753,851 $124,036,732 $414,910,505 $387,752,713 $256,863,225
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
+Includes undistributed net
investment income of........... $ 499,957 -- $ 11,885 $ 200,729 $ 158,778 $ 35,574
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold........................... 6,064,102 6,493,708 5,098,974 2,600,224 3,767,172 3,180,586
Issued for distributions
reinvested................... 419,923 283,146 125,569 18,220 1,051,211 752,243
Redeemed....................... (2,288,057) (1,962,857) (1,437,840) (1,570,204) (1,783,673) (1,501,552)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in Class A shares
outstanding.................. 4,195,968 4,813,997 3,786,703 1,048,240 3,034,710 2,431,277
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
Class B:
Sold........................... 1,449,761 1,213,405 891,261 674,423 764,680 559,282
Issued for distributions
reinvested................... 55,714 25,769 6,317 -- 108,187 49,071
Redeemed....................... (305,374) (195,408) (58,752) (209,618) (114,584) (49,439)
------------ ------------ ------------ ------------ ------------ ------------
Net increase in Class B shares
outstanding.................. 1,200,101 1,043,766 838,826 464,805 758,283 558,914
------------ ------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
67
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
FIRST INVESTORS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
UTILITIES INCOME
----------------------------------------
11/1/97 TO 11/1/96 TO 11/1/95 TO
9/30/98 10/31/97 10/31/96
- --------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss)... $ 2,407,392 $ 3,269,947 $ 3,539,164
Net realized gain (loss) on
investments.................. 6,230,833 7,342,477 3,348,109
Net unrealized appreciation
(depreciation) of
investments.................. 9,091,432 2,774,850 4,512,594
------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations................. 17,729,657 13,387,274 11,399,867
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class
A............................ (2,069,737) (2,954,931) (3,356,371)
Net investment income - Class
B............................ (153,775) (187,678) (175,052)
Net realized gains - Class A... (5,411,740) -- --
Net realized gains - Class B... (505,229) -- --
------------ ------------ ------------
Total distributions.......... (8,140,481) (3,142,609) (3,531,423)
------------ ------------ ------------
SHARE TRANSACTIONS *
Class A:
Proceeds from shares sold...... 18,892,681 13,294,852 28,533,238
Reinvestment of
distributions................ 7,290,097 2,837,444 3,227,282
Cost of shares redeemed........ (14,230,724) (27,788,751) (18,917,320)
------------ ------------ ------------
11,952,054 (11,656,455) 12,843,200
------------ ------------ ------------
Class B:
Proceeds from shares sold...... 4,565,543 2,798,462 4,829,402
Reinvestment of
distributions................ 654,659 182,590 168,900
Cost of shares redeemed........ (1,112,670) (2,096,554) (910,784)
------------ ------------ ------------
4,107,532 884,498 4,087,518
------------ ------------ ------------
Net increase (decrease) from
share transactions........... 16,059,586 (10,771,957) 16,930,718
------------ ------------ ------------
Net increase (decrease) in
net assets................. 25,648,762 (527,292) 24,799,162
NET ASSETS
Beginning of period............ 111,171,865 111,699,157 86,899,995
------------ ------------ ------------
End of period+................. $136,820,627 $111,171,865 $111,699,157
------------ ------------ ------------
------------ ------------ ------------
+Includes undistributed net
investment income of........... $ 647,161 $ 463,281 $ 332,943
------------ ------------ ------------
------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold........................... 2,495,558 1,993,525 4,588,232
Issued for distributions
reinvested................... 998,117 423,434 516,114
Redeemed....................... (1,889,537) (4,158,047) (3,050,042)
------------ ------------ ------------
Net increase (decrease) in
Class A shares outstanding... 1,604,138 (1,741,088) 2,054,304
------------ ------------ ------------
------------ ------------ ------------
Class B:
Sold........................... 605,451 422,620 781,947
Issued for distributions
reinvested................... 90,925 27,429 27,217
Redeemed....................... (149,886) (315,946) (148,928)
------------ ------------ ------------
Net increase in Class B shares
outstanding.................. 546,490 134,103 660,236
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
68
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
MID-CAP OPPORTUNITY SPECIAL SITUATIONS
------------------------------------- ----------------------------------------
11/1/97 TO 11/1/96 TO 11/1/95 TO 1/1/98 TO 1/1/97 TO 1/1/96 TO
9/30/98 10/31/97 10/31/96 9/30/98 12/31/97 12/31/96
- --------------------------------- ----------- ----------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income (loss)... $ (105,026) $ (58,391) $ 37,706 $ (612,879) $ (937,036) $ (248,261)
Net realized gain (loss) on
investments.................. (3,844,115) 1,997,140 704,468 (5,056,550) 17,709,890 9,162,648
Net unrealized appreciation
(depreciation) of
investments.................. (2,909,788) 3,087,322 492,864 (37,274,025) 10,188,540 7,926,160
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations.................. (6,858,929) 5,026,071 1,235,038 (42,943,454) 26,961,394 16,840,547
----------- ----------- ----------- ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class
A............................ -- (36,607) (34,589) -- -- --
Net investment income - Class
B............................ -- -- (1,319) -- -- --
Net realized gains - Class A... (1,720,339) (673,761) (500,576) -- (15,341,882) (8,473,398)
Net realized gains - Class B... (204,066) (52,869) (20,889) -- (1,322,522) (552,560)
----------- ----------- ----------- ------------ ------------ ------------
Total distributions.......... (1,924,405) (763,237) (557,373) -- (16,664,404) (9,025,958)
----------- ----------- ----------- ------------ ------------ ------------
SHARE TRANSACTIONS *
Class A:
Proceeds from shares sold...... 14,851,341 10,263,593 6,237,390 31,611,943 41,394,544 41,811,559
Reinvestment of
distributions................ 1,703,247 696,970 526,859 -- 14,688,933 8,052,244
Cost of shares redeemed........ (4,664,684) (3,053,623) (1,744,626) (26,829,523) (30,181,586) (24,410,399)
----------- ----------- ----------- ------------ ------------ ------------
11,889,904 7,906,940 5,019,623 4,782,420 25,901,891 25,453,404
----------- ----------- ----------- ------------ ------------ ------------
Class B:
Proceeds from shares sold...... 2,511,193 1,556,469 1,021,499 5,096,254 6,513,410 5,717,918
Reinvestment of
distributions................ 203,911 52,868 22,208 -- 1,315,908 551,266
Cost of shares redeemed........ (497,826) (183,075) (210,746) (2,440,295) (1,904,821) (865,479)
----------- ----------- ----------- ------------ ------------ ------------
2,217,278 1,426,262 832,961 2,655,959 5,924,497 5,403,705
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) from
share transactions........... 14,107,182 9,333,202 5,852,584 7,438,379 31,826,388 30,857,109
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in
net assets.................. 5,323,848 13,596,036 6,530,249 (35,505,075) 42,123,378 38,671,698
NET ASSETS
Beginning of period............ 29,242,381 15,646,345 9,116,096 210,691,555 168,568,177 129,896,479
----------- ----------- ----------- ------------ ------------ ------------
End of period+................. $34,566,229 $29,242,381 $15,646,345 $175,186,480 $210,691,555 $168,568,177
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
+Includes undistributed net
investment income of........... -- -- $ 37,394 -- -- --
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold........................... 845,064 610,878 424,011 1,427,349 1,821,611 2,056,926
Issued for distributions
reinvested................... 97,719 45,613 37,986 -- 662,260 388,434
Redeemed....................... (265,776) (187,193) (119,786) (1,215,191) (1,367,038) (1,193,114)
----------- ----------- ----------- ------------ ------------ ------------
Net increase (decrease) in
Class A shares outstanding... 677,007 469,298 342,211 212,158 1,116,833 1,252,246
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
Class B:
Sold........................... 147,503 92,935 69,762 234,967 287,155 282,350
Issued for distributions
reinvested................... 11,931 3,501 1,612 -- 60,669 26,957
Redeemed....................... (29,310) (11,554) (14,524) (113,798) (87,818) (42,387)
----------- ----------- ----------- ------------ ------------ ------------
Net increase in Class B shares
outstanding.................. 130,124 84,882 56,850 121,169 260,006 266,920
----------- ----------- ----------- ------------ ------------ ------------
----------- ----------- ----------- ------------ ------------ ------------
</TABLE>
69
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
FIRST INVESTORS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
GLOBAL
----------------------------------------
1/1/98 TO 1/1/97 TO 1/1/96 TO
9/30/98 12/31/97 12/31/96
- --------------------------------- ------------ ------------ ------------
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income.......... $ 209,920 $ 1,128,454 $ 1,218,304
Net realized gain on
investments and foreign
currency transactions........ 8,576,598 21,938,853 35,356,971
Net unrealized depreciation of
investments and foreign
currency transactions........ (11,823,004) (1,723,731) (2,639,850)
------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations................. (3,036,486) 21,343,576 33,935,425
------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class
A............................ -- (1,053,231) (1,513,003)
Net investment income - Class
B............................ -- -- (12,327)
Net realized gains - Class A... -- (26,486,799) (31,032,925)
Net realized gains - Class B... -- (1,019,942) (636,439)
------------ ------------ ------------
Total distributions.......... -- (28,559,972) (33,194,694)
------------ ------------ ------------
SHARE TRANSACTIONS *
Class A:
Proceeds from shares sold...... 25,307,313 35,195,348 36,352,940
Reinvestment of
distributions................ -- 27,005,495 31,943,902
Cost of shares redeemed........ (38,607,860) (41,510,319) (34,487,088)
------------ ------------ ------------
(13,300,547) 20,690,524 33,809,754
------------ ------------ ------------
Class B:
Proceeds from shares sold...... 3,446,279 5,760,337 4,040,306
Reinvestment of
distributions................ -- 1,014,030 645,589
Cost of shares redeemed........ (1,621,778) (964,600) (449,042)
------------ ------------ ------------
1,824,501 5,809,767 4,236,853
------------ ------------ ------------
Net increase (decrease) from
share transactions........... (11,476,046) 26,500,291 38,046,607
------------ ------------ ------------
Net increase (decrease) in
net assets................. (14,512,532) 19,283,895 38,787,338
NET ASSETS
Beginning of period............ 287,716,084 268,432,189 229,644,851
------------ ------------ ------------
End of period+................. $273,203,552 $287,716,084 $268,432,189
------------ ------------ ------------
------------ ------------ ------------
+Includes accumulated net
investment deficit of.......... $ (22,880) $ (92,005) $ (15,418)
------------ ------------ ------------
------------ ------------ ------------
*SHARES ISSUED AND REDEEMED
Class A:
Sold........................... 3,513,532 4,989,223 5,281,102
Issued for distributions
reinvested................... -- 4,213,026 4,847,330
Redeemed....................... (5,437,027) (5,897,153) (4,942,141)
------------ ------------ ------------
Net increase (decrease) in
Class A shares outstanding... (1,923,495) 3,305,096 5,186,291
------------ ------------ ------------
------------ ------------ ------------
Class B:
Sold........................... 492,513 820,925 585,922
Issued for distributions
reinvested................... -- 160,702 99,169
Redeemed....................... (236,454) (138,029) (64,422)
------------ ------------ ------------
Net increase in Class B shares
outstanding.................. 256,059 843,598 620,669
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
See notes to financial statements
70
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES--First Investors Total Return Fund, First
Investors Blue Chip Fund and First Investors Special Situations Fund, each a
series of of First Investors Series Fund ("Series Fund"), a Massachusetts
business trust; First Investors Growth & Income Fund, First Investors Utilities
Income Fund and First Investors Mid-Cap Opportunity Fund, each a series of First
Investors Series Fund II, Inc. ("Series Fund II"), a Maryland corporation; and
First Investors Global Fund, Inc. ("Global 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 two additional series which are not included in this report. The
objective of each Fund is as follows:
TOTAL RETURN FUND seeks to provide investors with high long-term total
investment return consistent with moderate investment risk.
GROWTH & INCOME FUND seeks long-term growth of capital and current income.
BLUE CHIP FUND seeks to provide investors with high total investment return
consistent with the preservation of capital.
UTILITIES INCOME FUND primarily seeks high current income. Long-term capital
appreciation is a secondary objective.
MID-CAP OPPORTUNITY FUND seeks long-term capital growth.
SPECIAL SITUATIONS FUND seeks long-term growth of capital.
GLOBAL FUND primarily seeks long-term capital growth and secondarily to earn a
reasonable level of current income.
On March 19, 1998, the Boards of Directors/Trustees of the Series Fund, Series
Fund II and Global 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 the Total Return Fund, Blue Chip Fund, Special Situations Fund
and Global Fund, and October 31 for the Growth & Income Fund, Utilities Income
Fund and Mid-Cap Opportunity Fund.
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
71
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 value. Short-term debt
securities which are purchased at a discount are valued at amortized cost if
their maturities are sixty days or less. Securities for which market quotations
are not readily available and other assets are valued on a consistent basis at
fair value as determined in good faith by or under the supervision of the Funds'
officers in a manner specifically authorized by the Boards of
Directors/Trustees. For valuation purposes, quotations of foreign securities in
foreign currency are translated to U.S. dollar equivalents using the foreign
exchange quotation in effect.
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, such taxes.
C. Distributions to Shareholders--Dividends from net investment income of Total
Return Fund, Growth & Income Fund, Blue Chip Fund and Utilities Income Fund are
declared and paid quarterly. Dividends from net investment income of Mid-Cap
Opportunity Fund, Special Situations Fund and Global Fund are declared and paid
annually. Distributions from net realized capital gains, if any, 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, deferral of wash sales,
amortization of deferred organization expenses, post-October capital losses, net
operating losses and foreign currency transactions.
D. Expense Allocation--Expenses directly charged or attributable to a Fund are
paid from the assets of that Fund. General expenses of Series Fund or Series
Fund II are allocated among and charged to the assets of each Fund in the Series
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.
E. Deferred Organization Expenses--Organization expenses of Series Fund II were
amortized over a five year period.
72
<PAGE>
F. Repurchase Agreements--Securities pledged as collateral for repurchase
agreements entered into by the Global Fund are held by the Fund's custodian
until maturity of the repurchase agreement. The agreements provide that Global
Fund will receive, as collateral, securities with a market value which will at
all times be at least equal to 100% of the amount invested by Global Fund.
G. 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.
H. Foreign Currency Translations--The accounting records of Global Fund are
maintained in U.S. dollars. Portfolio securities and other assets and
liabilities denominated in foreign currencies are translated into U.S. dollars
at the date of valuation. Purchases and sales of investment securities, dividend
income and certain expenses are translated to U.S. dollars at the rate of
exchange prevailing on the respective dates of such transactions.
Global Fund does not isolate that portion of gains and losses on investments
which is due to changes in foreign exchange rates from that which is due to
changes in market prices of the investments. Such fluctuations are included with
the net realized and unrealized gains and losses from investments.
Net realized and unrealized gains and losses on foreign currency transactions
includes gains and losses from the sales of foreign currency and gains and
losses on accrued foreign dividends and related withholding taxes.
I. 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. For the period ended September 30,
1998, the Bank of New York, custodian for the Series Fund and Series Fund II,
has provided total credits in the amount of $112,506 against custodian charges
based on the uninvested cash balances of these Funds.
2. PURCHASES AND SALES OF SECURITIES--For the period ended September 30, 1998,
purchases and sales of securities and long-term U.S. Government obligations
73
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
(excluding U.S. Treasury bills, repurchase agreements, short-term securities and
foreign currencies) were as follows:
<TABLE>
<CAPTION>
Long-Term U.S.
Securities Government Obligations
-------------------------- -----------------------
Cost of Proceeds Cost of Proceeds
Fund Purchases from Sales Purchases from Sales
- --------------------------------------- ------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
Total Return........................... $ 72,062,987 $ 67,405,811 $15,565,353 $9,428,437
Growth & Income........................ 128,331,737 92,664,803 -- --
Blue Chip.............................. 286,369,091 279,281,225 -- --
Utilities Income....................... 101,843,417 101,962,645 -- --
Mid-Cap Opportunity.................... 42,223,181 31,764,105 -- --
Special Situations..................... 135,372,642 130,246,874 -- --
Global................................. 239,539,544 251,450,078 -- --
</TABLE>
At September 30, 1998, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross
Aggregate Unrealized Unrealized Net Unrealized
Fund Cost Appreciation Depreciation Appreciation
- --------------------------------------- ------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
Total Return........................... $ 70,821,107 $ 9,122,245 $ 2,247,555 $ 6,874,690
Growth & Income........................ 231,494,073 74,458,461 5,306,667 69,151,794
Blue Chip.............................. 326,139,817 92,983,394 7,888,012 85,095,382
Utilities Income....................... 110,815,406 26,410,287 1,463,671 24,946,616
Mid-Cap Opportunity.................... 31,156,869 4,180,801 2,538,009 1,642,792
Special Situations..................... 173,961,447 25,830,990 25,238,392 592,598
Global................................. 247,138,561 46,031,871 19,095,823 26,936,048
</TABLE>
3. ADVISORY FEES AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
directors/trustees of the Funds are officers and directors of its 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 period ended September 30, 1998, total
directors/trustees fees accrued by the Funds amounted to $44,650.
74
<PAGE>
The Investment Advisory Agreements provide as compensation to FIMCO, an annual
fee, payable monthly, at the following rates:
TOTAL RETURN, BLUE CHIP, MID-CAP OPPORTUNITY AND SPECIAL SITUATIONS 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 voluntarily waived 25% of
the 1% annual fee on the first $200 million of each Fund's average daily net
assets for the period ended September 30, 1998.
GROWTH & INCOME AND UTILITIES INCOME FUNDS--.75% on the first $300 million of
each Fund's average daily net assets, .72% on the next $200 million, .69% on the
next $250 million and .66% on average daily net assets over $750 million.
GLOBAL FUND--1% on the first $250 million of the Fund's average daily net
assets, declining by .03% on each $250 million thereafter, down to .91% on
average daily net assets over $750 million.
For the period ended September 30, 1998, total advisory fees accrued to FIMCO by
the Funds were $10,416,771 of which $971,948 was waived. In addition, FIMCO
assumed $35,000 of Series Fund II's expenses.
For the period ended September 30, 1998, FIC, as underwriter, received
$9,523,753 in commissions from the sale of shares of the Funds, after allowing
$41,637 to other dealers. Shareholder servicing costs included $2,092,811 in
transfer agent fees accrued to ADM and $738,167 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 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 that Fund. For the
period ended September 30, 1998, total distribution plan fees accrued to FIC by
the Funds amounted to $4,313,630.
Wellington Management Company, LLP ("Wellington") serves as investment
subadviser to Global Fund. Prior to January 1, 1998, Wellington also served as
an investment subadviser to Growth & Income Fund. The subadviser is paid by
FIMCO and not by the Fund.
75
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
4. FORWARD CURRENCY CONTRACTS--A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future date.
When Global Fund purchases or sells foreign securities it customarily enters
into a forward currency contract to minimize foreign exchange risk between the
trade date and the settlement date of such transactions. The Fund could be
exposed to risk if counterparties to the contracts are unable to meet the terms
of their contracts. Global Fund had the following forward currency contracts
outstanding at September 30, 1998:
<TABLE>
<CAPTION>
Contracts to Buy Foreign Unrealized
Currency In Exchange for Settlement Date Gain (Loss)
- ---------------------------- --------------- --------------- -----------
<C> <S> <C> <C> <C>
528,818 British Pounds U.S. $898,128 10/1/98 U.S. $545
18,983 British Pounds 32,231 10/2/98 28
186,562,459 Japanese Yen 1,367,559 10/5/98 2,929
4,003,464 Hong Kong
Dollars 516,629 10/5/98 46
697,304 British Pounds 1,184,790 10/7/98 209
3,767,956 French Francs 673,096 10/30/98 (825)
--------------- -----------
$4,672,433 $2,932
--------------- -----------
</TABLE>
<TABLE>
<CAPTION>
Contracts to Sell Foreign Unrealized
Currency In Exchange for Settlement Date Gain (Loss)
- ---------------------------- --------------- --------------- -----------
<C> <S> <C> <C> <C>
72,858,864 Japanese Yen U.S. $536,003 10/1/98 U.S. $782
260,638 Swiss Francs 187,800 10/1/98 (480)
384,217 Deutsche Marks 229,823 10/2/98 (61)
882,952 Australian
Dollars 521,825 10/2/98 (1,103)
199,517 Swiss Francs 143,630 10/2/98 (497)
318,786 Swiss Francs 231,055 10/5/98 770
--------------- -----------
$1,850,136 $(589)
--------------- -----------
Unrealized Gain on Forward Currency Contracts $2,343
-----------
-----------
</TABLE>
5. 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
76
<PAGE>
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 and certain
other class expenses) are allocated daily to each class of shares based upon the
relative proportion of net assets of each class. The Series Fund has established
an unlimited number of shares of beneficial interest for both Class A and Class
B shares. Of the 100,000,000 shares originally designated to each Fund, Series
Fund II has classified 50,000,000 shares as Class A and 50,000,000 shares as
Class B for each Fund. Of the 100,000,000 Global Fund shares originally
authorized, the Fund has designated 65,000,000 shares as Class A and 35,000,000
shares as Class B.
6. 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 September 30, 1998, Total
Return Fund held one 144A security with a value of $740,000. The security
represents .96% of the Fund's net assets and is valued as set forth in Note 1A.
7. SUBSEQUENT EVENTS--The following Funds declared per share distributions of
net realized capital gains to shareholders of record as of October 30, 1998,
payable November 10, 1998: Total Return Fund $1.179, Growth & Income Fund
$0.002, Blue Chip Fund, $0.700, Utilities Income Fund $0.373 and Global Fund
$0.078. First Investors Blue Chip Fund also declared a distribution of $0.052
per share from net realized capital gains to shareholders of record as of
September 30, 1998, payable October 10, 1998.
77
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS
The following table sets forth the per share operating performance data for a
share outstanding, 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>
TOTAL RETURN FUND
CLASS A
1993........... $ 12.49 $ .26 $ .63 $ .89 $ .26 $ 1.24 $ 1.50
1994........... 11.88 .21 (.62) (.41) .19 .39 .58
1995........... 10.89 .39 2.50 2.89 .37 .44 .81
1996........... 12.97 .39 .97 1.36 .41 1.12 1.53
1997........... 12.80 .26 2.04 2.30 .28 1.08 1.36
1998(a)........ 13.74 .23 .43 .66 .13 -- .13
CLASS B
1995(b)........ 10.90 .25 2.54 2.79 .33 .44 .77
1996........... 12.92 .32 .94 1.26 .34 1.12 1.46
1997........... 12.72 .21 1.97 2.18 .19 1.08 1.27
1998(a)........ 13.63 .17 .41 .58 .08 -- .08
- ----------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUND
CLASS A
10/4/93* to
10/31/93..... $ 6.56 $ .01 $ -- $ .01 $ .01 $ -- $ .01
1994(d)........ 6.56 .13 .11 .24 .11 -- .11
1995(d)........ 6.69 .16 1.13 1.29 .17 -- .17
1996(d)........ 7.81 .10 1.60 1.70 .12 -- .12
1997(d)........ 9.39 .06 2.36 2.42 .06 .16 .22
1998(c)........ 11.59 .05 .97 1.02 .03 .27 .30
CLASS B
1995(e)........ 6.43 .08 1.38 1.46 .11 -- .11
1996(d)........ 7.78 .07 1.55 1.62 .07 -- .07
1997(d)........ 9.33 -- 2.32 2.32 .01 .16 .17
1998(c)........ 11.48 (.01) .94 .93 -- .27 .27
- ----------------------------------------------------------------------------------------------------------
</TABLE>
78
<PAGE>
The following table sets forth the per share operating performance data for a
share outstanding, 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>
TOTAL RETURN FUND
CLASS A
1993........... $ 11.88 7.18 $ 58 1.45 2.00 1.83 1.62 131
1994........... 10.89 (3.45) 51 1.63 1.91 1.88 1.66 124
1995........... 12.97 26.71 55 1.58 3.08 1.83 2.83 135
1996........... 12.80 10.62 57 1.53 2.93 1.78 2.68 146
1997........... 13.74 18.08 67 1.49 1.94 1.74 1.69 149
1998(a)........ 14.27 4.76 73 1.42+ 2.15+ 1.65+ 1.92+ 111
CLASS B
1995(b)........ 12.92 25.74 .3 2.41+ 2.24+ 2.67+ 1.98+ 135
1996........... 12.72 9.86 1 2.32 2.14 2.49 1.97 146
1997........... 13.63 17.24 3 2.19 1.24 2.44 .99 149
1998(a)........ 14.13 4.25 4 2.12+ 1.45+ 2.35+ 1.22+ 111
- ----------------------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUND
CLASS A
10/4/93* to
10/31/93..... $ 6.56 .99+ $ 3 -- 1.02+ 1.37+ (.35)+ 0
1994(d)........ 6.69 3.67 34 .67 2.26 1.83 1.11 6
1995(d)........ 7.81 19.51 63 .98 2.34 1.59 1.74 19
1996(d)........ 9.39 21.82 112 1.31 1.20 1.49 1.02 25
1997(d)........ 11.59 26.20 194 1.39 .55 1.43 .51 28
1998(c)........ 12.31 8.84 258 1.39+ .47+ N/A N/A 36
CLASS B
1995(e)........ 7.78 22.73 4 1.90+ 2.23+ 2.61+ 1.52+ 19
1996(d)........ 9.33 20.92 12 2.03 .48 2.19 .31 25
1997(d)........ 11.48 25.23 27 2.09 (.15) 2.13 (.19) 28
1998(c)........ 12.14 8.19 43 2.09+ (.23)+ N/A N/A 36
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
79
<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>
BLUE CHIP FUND
CLASS A
1993........... $ 15.29 $ .10 $ 1.08 $ 1.18 $ .10 $ .79 $ .89
1994........... 15.58 .11 (.58) (.47) .09 1.56 1.65
1995........... 13.46 .19 4.37 4.56 .20 .60 .80
1996........... 17.22 .14 3.39 3.53 .17 1.11 1.28
1997........... 19.47 .09 4.98 5.07 .08 1.62 1.70
1998(a)........ 22.84 .04 (.39) (.35) .03 -- .03
CLASS B
1995(b)........ 13.51 .10 4.31 4.41 .16 .60 .76
1996........... 17.16 .06 3.32 3.38 .06 1.11 1.17
1997........... 19.37 (.03) 4.91 4.88 -- 1.62 1.62
1998(a)........ 22.63 (.06) (.42) (.48) -- -- --
- ----------------------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to
10/31/93..... $ 5.59 $ .12 $ .32 $ .44 $ .11 $ -- $ .11
1994(d)........ 5.92 .24 (.84) (.60) .23 .01 .24
1995(d)........ 5.08 .23 .83 1.06 .24 -- .24
1996(d)........ 5.90 .21 .52 .73 .22 -- .22
1997(d)........ 6.41 .20 .61 .81 .19 -- .19
1998(c)........ 7.03 .14 .96 1.10 .14 .37 .51
CLASS B
1995(e)........ 4.95 .14 .93 1.07 .16 -- .16
1996(d)........ 5.86 .18 .49 .67 .18 -- .18
1997(d)........ 6.35 .15 .61 .76 .15 -- .15
1998(c)........ 6.96 .10 .94 1.04 .10 .37 .47
- ----------------------------------------------------------------------------------------------------------
</TABLE>
80
<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>
BLUE CHIP FUND
CLASS A
1993........... $ 15.58 7.77 $ 118 1.48 .66 1.73 .41 39
1994........... 13.46 (3.02) 124 1.54 .80 1.79 .55 82
1995........... 17.22 34.01 170 1.49 1.23 1.74 .98 25
1996........... 19.47 20.55 240 1.44 .78 1.67 .55 45
1997........... 22.84 26.05 351 1.39 .40 1.64 .15 63
1998(a)........ 22.46 (1.55) 368 1.37+ .23+ 1.47+ .13+ 71
CLASS B
1995(b)........ 17.16 32.76 5 2.20+ .52+ 2.46+ .26+ 25
1996........... 19.37 19.71 17 2.22 -- 2.37 (.16) 45
1997........... 22.63 25.19 37 2.09 (.30) 2.34 (.55) 63
1998(a)........ 22.15 (2.12) 47 2.07+ (.47)+ 2.17+ (.57)+ 71
- ----------------------------------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to
10/31/93..... $ 5.92 11.28+ $ 58 .35+ 3.84+ 1.80+ 2.39+ 17
1994(d)........ 5.08 (10.15) 63 .80 4.59 1.59 3.80 58
1995(d)........ 5.90 21.35 84 1.04 4.37 1.57 3.84 16
1996(d)........ 6.41 12.45 104 1.20 3.49 1.49 3.19 38
1997(d)........ 7.03 12.86 102 1.40 2.98 1.48 2.90 60
1998(c)........ 7.62 16.05 123 1.43+ 2.10+ N/A N/A 83
CLASS B
1995(e)........ 5.86 21.99 3 1.82+ 4.93+ 2.53+ 4.21+ 16
1996(d)........ 6.35 11.61 8 1.91 2.77 2.28 2.40 38
1997(d)........ 6.96 12.08 9 2.10 2.28 2.18 2.20 60
1998(c)........ 7.53 15.38 14 2.13+ 1.40+ N/A N/A 83
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
81
<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>
MID-CAP OPPORTUNITY FUND***
CLASS A
1993(d)........ $ 11.70 $ .12 $ .38 $ .50 $ .05 $ -- $ .05
1994(d)........ 12.15 .08 (.33) (.25) .12 -- .12
1995(d)........ 11.78 .08 2.80 2.88 .08 -- .08
1996(d)........ 14.58 .04 1.57 1.61 .06 .84 .90
1997(d)........ 15.29 (.03) 4.02 3.99 .04 .68 .72
1998(c)........ 18.56 (.03) (2.82) (2.85) -- 1.18 1.18
CLASS B
1995(e)........ 12.03 (.01) 2.49 2.48 -- -- --
1996(d)........ 14.51 .01 1.47 1.48 .05 .84 .89
1997(d)........ 15.10 (.08) 3.89 3.81 -- .68 .68
1998(c)........ 18.23 (.12) (2.76) (2.88) -- 1.18 1.18
- ----------------------------------------------------------------------------------------------------------
SPECIAL SITUATIONS FUND
CLASS A
1993........... $ 15.62 $ (.08) $ 3.29 $ 3.21 $ -- $ .83 $ .83
1994........... 18.00 (.04) (.62) (.66) -- .91 .91
1995........... 16.43 (.01) 3.94 3.93 -- .73 .73
1996........... 19.63 (.01) 2.28 2.27 -- 1.17 1.17
1997........... 20.73 (.09) 3.44 3.35 -- 1.90 1.90
1998(a)........ 22.18 (.05) (4.30) (4.35) -- -- --
CLASS B
1995(b)........ 16.40 (.01) 3.85 3.84 -- .73 .73
1996........... 19.51 (.14) 2.25 2.11 -- 1.17 1.17
1997........... 20.45 (.15) 3.29 3.14 -- 1.90 1.90
1998(a)........ 21.69 (.13) (4.22) (4.35) -- -- --
- ----------------------------------------------------------------------------------------------------------
</TABLE>
82
<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>
MID-CAP OPPORTUNITY FUND***
CLASS A
1993(d)........ $ 12.15 4.23 $ 16 .81 .96 2.03 (.26) 52
1994(d)........ 11.78 (2.05) 8 .90 .45 2.32 (.97) 29
1995(d)........ 14.58 24.59 9 1.34 .48 2.36 (.55) 106
1996(d)........ 15.29 11.64 14 1.57 .36 2.15 (.21) 118
1997(d)........ 18.56 27.09 26 1.50 (.21) 1.94 (.65) 90
1998(c)........ 14.53 (16.42) 30 1.50+ (.25)+ 1.89+ (.64)+ 102
CLASS B
1995(e)........ 14.51 20.62 .3 2.29+ (.03)+ 3.79+ (1.53)+ 106
1996(d)........ 15.10 10.80 1 2.30 (.37) 3.03 (1.10) 118
1997(d)........ 18.23 26.17 3 2.20 (.91) 2.64 (1.35) 90
1998(c)........ 14.17 (16.91) 4 2.20+ (.95)+ 2.59+ (1.34)+ 102
- ----------------------------------------------------------------------------------------------------------------------
SPECIAL SITUATIONS FUND
CLASS A
1993........... $ 18.00 20.52 $ 59 1.55 (.63) 1.89 (.96) 71
1994........... 16.43 (3.66) 90 1.65 (.26) 1.90 (.51) 53
1995........... 19.63 23.92 125 1.60 (.08) 1.85 (.33) 80
1996........... 20.73 11.56 158 1.59 (.13) 1.84 (.38) 99
1997........... 22.18 16.15 194 1.53 (.45) 1.78 (.70) 84
1998(a)........ 17.83 (19.61) 160 1.53+ (.32)+ 1.75+ (.54)+ 70
CLASS B
1995(b)........ 19.51 23.42 5 2.33+ (.81)+ 2.59+ (1.07)+ 80
1996........... 20.45 10.81 10 2.38 (.92) 2.55 (1.09) 99
1997........... 21.69 15.34 17 2.23 (1.15) 2.48 (1.40) 84
1998(a)........ 17.34 (20.06) 15 2.23+ (1.02)+ 2.45+ (1.24)+ 70
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
83
<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>
GLOBAL FUND
CLASS A
1993........... $ 5.11 $ .01 $ 1.16 $ 1.17 $ .01 $ -- $ .01
1994........... 6.27 .03 (.27) (.24) .03 .16 .19
1995........... 5.84 .03 1.01 1.04 .04 .27 .31
1996........... 6.57 .04 .91 .95 .04 .89 .93
1997........... 6.59 .03 .50 .53 .03 .68 .71
1998(a)........ 6.41 .01 (.09) (.08) -- -- --
CLASS B
1995(b)........ 5.76 .03 1.05 1.08 .03 .27 .30
1996........... 6.54 (.01) .88 .87 .02 .88 .90
1997........... 6.51 (.01) .49 .48 -- .68 .68
1998(a)........ 6.31 (.03) (.09) (.12) -- -- --
- ----------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized
++ Net of expenses waived or assumed by the investment adviser (Note 3)
* Commencement of operations of Class A shares.
** Calculated without sales charges
***Prior to February 15, 1996, known as Made In The U.S.A. Fund, and prior to
December 31, 1997, known as U.S.A. Mid-Cap Opportunity Fund.
(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 November 1, 1997 to September 30, 1998.
(d) For the fiscal year ended October 31.
(e) For the period January 12, 1995 (date Class B shares first offered) to
October 31, 1995.
See notes to financial statements
84
<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>
GLOBAL FUND
CLASS A
1993........... $ 6.27 22.97 $210 1.87 .27 N/A N/A 41
1994........... 5.84 (3.78) 214 1.84 .45 N/A N/A 56
1995........... 6.57 17.83 228 1.83 .55 N/A N/A 47
1996........... 6.59 14.43 263 1.83 .50 N/A N/A 73
1997........... 6.41 7.98 277 1.82 .41 N/A N/A 70
1998(a)........ 6.33 (1.25) 261 1.82+ .12+ N/A N/A 82
CLASS B
1995(b)........ 6.54 18.80 1 2.56+ (.19)+ N/A N/A 47
1996........... 6.51 13.33 5 2.54 (.21) N/A N/A 73
1997........... 6.31 7.36 10 2.52 (.29) N/A N/A 70
1998(a)........ 6.19 (1.90) 12 2.52+ (.58)+ N/A N/A 82
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized
++ Net of expenses waived or assumed by the investment adviser (Note 3)
* Commencement of operations of Class A shares.
** Calculated without sales charges
***Prior to February 15, 1996, known as Made In The U.S.A. Fund, and prior to
December 31, 1997, known as U.S.A. Mid-Cap Opportunity Fund.
(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 November 1, 1997 to September 30, 1998.
(d) For the fiscal year ended October 31.
(e) For the period January 12, 1995 (date Class B shares first offered) to
October 31, 1995.
See notes to financial statements
85
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Boards of Directors/Trustees of
First Investors Series Fund,
First Investors Series Fund II, Inc.
First Investors Global Fund, Inc.
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the First Investors Blue Chip Fund, Special
Situations Fund and Total Return Fund (each a series of First Investors Series
Fund), the Growth & Income Fund, Mid-Cap Opportunity Fund and Utilities Income
Fund (each a series of First Investors Series Fund II, Inc.), and First
Investors Global Fund, Inc. as of September 30, 1998, the related statement of
operations, 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
September 30, 1998, 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 Blue Chip Fund, Special Situations Fund, Total Return Fund,
Growth & Income Fund, Mid-Cap Opportunity Fund, Utilities Income Fund and Global
Fund at September 30, 1998, 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
October 30, 1998
86
<PAGE>
FIRST INVESTORS
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
PATRICIA D. POITRA
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
87
<PAGE>
FIRST INVESTORS
SHAREHOLDER INFORMATION
- ----------------------------------
INVESTMENT ADVISER
FIRST INVESTORS MANAGEMENT COMPANY, INC.
95 Wall Street
New York, NY 10005
SUBADVISER (Global Fund Only)
WELLINGTON MANAGEMENT COMPANY, LLP
75 State Street
Boston, MA 02109
UNDERWRITER
FIRST INVESTORS CORPORATION
95 Wall Street
New York, NY 10005
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
CUSTODIAN (Global Fund Only)
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
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.
88
<PAGE>
[LOGO] First Investors
95 WALL STREET
NEW YORK, NEW YORK 10005
