Portfolio Manager's Letter
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Dear Investor:
As 1996 began, most investors expected the U.S.
economy to continue to slow or even enter a
recession. Instead the economy accelerated
throughout the first half of the year. After
growing at an annualized rate of only .5% in the
fourth quarter of 1995, the economy expanded at a
2.2% pace during the first quarter of this year and
at an estimated 3.5%-4.0% during the second
quarter. Concern that faster growth would lead to
higher inflation contributed to a sharp rise in
interest rates with the yield on long-term U.S.
Treasury bonds increasing from 5.95% to 6.87%.
Despite higher interest rates the stock market
continued to rally with the broad stock market
averages hitting record highs during the second
quarter.
Signs of economic strength hurt the bond market,
as the increase in interest rates caused bond prices
to fall. The U.S. Treasury STRIPS, which
represent the majority of the invested assets in the
U.S. Government Plus Fund, were no exception.
Treasury STRIPS are zero coupon bonds, which
respond more than other bonds to interest rate
movements because they don't pay interest each
year. When rates rise, the price of zero coupon
bonds fall sharply because holders cannot reinvest
interest payments at newer, more attractive levels.
A small percentage of the assets in the Fund is
invested in small-cap stocks. In the first half of
1996, the nebulous economic outlook focused
investor sentiment on companies with visible and
consistent earnings patterns. Many large-cap
stocks were the beneficiaries of that sentiment,
allowing the large-cap indices to keep pace with
those of the smaller, growth oriented companies.
While the Russell 2000 Index, a good measure of
small-cap stock performance peaked in May and
ended the first half of the year up 10%, the S&P
500 Index, a large-cap stock barometer, continued
its steady climb finishing up 9% for the same
period. As investors became increasingly
concerned over the specter of rising interest rates,
many were unwilling to continue supporting the
valuations of some smaller, growth oriented stocks.
For the first half of 1996, First Investors U.S.
Government Plus Fund - 1st Series, 2nd Series,
and 3rd Series returned on a net asset value basis
- -6.8%, -2.1%, and -1.1%, respectively.
The recent bull market in stocks has lasted 69
months, the second longest bull market in the
history of the U.S. stock market. While investors
have enjoyed these gains, it is important to
remember that the stock market tends to be cyclical
with periods when stock prices generally rise and
periods when stock prices generally decline. As
well, certain sectors of the market, such as
technology stocks, can be more volatile than the
general market, creating greater opportunities but
also greater risks. The bond market can also be
volatile. For example, a 100 basis point (or 1%)
increase in yield on a ten year bond results in
roughly a 7% decrease in that bond's price. In
each of the last four years and the first half of
1996, ten year Treasury bond yields have moved
more than 100 basis points. In addition, the value
of a bond can fluctuate based on changes in its
credit quality. Investors should be aware of these
risks and recognize that successful investing
generally requires a long-term commitment to the
market.
Looking forward, inflation shows few signs of
accelerating, despite the market's concern. In
addition, the pace of economic growth is likely to
slow during the second half of the year. A
combination of stable inflation and moderate
growth should provide a comfortable environment
for investors throughout the remainder of 1996.
As always, we appreciate the opportunity to serve
your investment needs.
Sincerely,
Patricia D. Poitra
Director of Equities
and Portfolio Manager
July 8, 1996
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
June 30, 1996
- ------------------------------------------------------------------------------------------------------------------------------
Principal 1st SERIES 2nd SERIES 3rd SERIES
Amount or -------------------- -------------------- --------------------
Shares Security Value % Value % Value %
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
$2,275M Treasury STRIPS, due 11/15/2004 $ 1,301,755
2,775M Treasury STRIPS, due 11/15/1999 $ 2,246,085
1,075M Treasury STRIPS, due 11/15/1998 $ 929,660
- ------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Securities
(cost $1,000,854, $2,129,455 and $895,978,
respectively) 1,301,755 98.8 2,246,085 98.6 929,660 87.9
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
Consumer Durables
200 The Rival Company 4,600
400 The Rival Company 9,200
- ------------------------------------------------------------------------------------------------------------------------------
4,600 .2 9,200 .9
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables
300 Dreyers Grand Ice Cream, Inc. 9,450 .9
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Services
2,300 Chaus (Bernard), Inc. 7,475 .7
- ------------------------------------------------------------------------------------------------------------------------------
Financial
378 Southern National Corporation 12,002 1.1
- ------------------------------------------------------------------------------------------------------------------------------
Health Care/Miscellaneous
200 Fisher Scientific International 7,500
100 *VidaMed, Inc. 1,275
100 *VidaMed, Inc. 1,275
200 *VidaMed, Inc. 2,550
- ------------------------------------------------------------------------------------------------------------------------------
1,275 .1 1,275 .1 10,050 1.0
- ------------------------------------------------------------------------------------------------------------------------------
Technology
200 *Control Data Systems, Inc. 4,275
400 *Control Data Systems, Inc. 8,550
40 Motorola, Inc. 2,515
100 Motorola, Inc. 6,287
200 Motorola, Inc. 12,575
- ------------------------------------------------------------------------------------------------------------------------------
2,515 .2 10,562 .4 21,125 2.0
- ------------------------------------------------------------------------------------------------------------------------------
Telecommunications
700 *USCI, Inc. 4,550
1,300 *USCI, Inc. 8,450
- ------------------------------------------------------------------------------------------------------------------------------
4,550 .2 8,450 .8
- ------------------------------------------------------------------------------------------------------------------------------
Transportation
400 Interpool, Inc. 7,300
1,200 Transportacion Maritima Mexicana S.A. (ADR) 8,850
- ------------------------------------------------------------------------------------------------------------------------------
16,150 1.5
- ------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks
(cost $1,326, $17,914 and $82,822 respectively) 3,790 .3 20,987 .9 93,902 8.9
- ------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $1,002,180,
$2,147,369 and $978,800, respectively) 1,305,545 99.1 2,267,072 99.5 1,023,562 96.8
Other Assets, Less Liabilities 11,384 .9 10,367 .5 33,392 3.2
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 1,316,929 100.0 $ 2,277,439 100.0 $ 1,056,954 100.0
==============================================================================================================================
*Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
June 30, 1996
- --------------------------------------------------------------------------------------------------------------------------
1st Series 2nd Series 3rd Series
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost................................................ $ 1,002,180 $ 2,147,369 $ 978,800
============== ============== ==============
At value (Note 1A)................................................ $ 1,305,545 $ 2,267,072 $ 1,023,562
Cash................................................................ 17,816 17,354 35,723
Receivables......................................................... 3,096 12 66
Other assets........................................................ 867 932 876
--------------- --------------- ---------------
Total Assets........................................................ 1,327,324 2,285,370 1,060,227
--------------- --------------- ---------------
Liabilities
Payable for capital stock redeemed.................................. 5,229 --- ---
Accrued advisory fees............................................... 1,082 1,882 878
Accrued expenses.................................................... 4,084 6,049 2,395
--------------- --------------- ---------------
Total Liabilities................................................... 10,395 7,931 3,273
--------------- --------------- ---------------
Net Assets.......................................................... $ 1,316,929 $ 2,277,439 $ 1,056,954
============== =============== ===============
Net Assets Consist of:
Capital paid in..................................................... $ 940,474 $ 2,282,556 $ 1,012,776
Undistributed net investment income................................. 38,543 64,215 26,815
Accumulated net realized gain (loss) on investments................. 34,547 ( 189,035) ( 27,399)
Net unrealized appreciation in value of investments................. 303,365 119,703 44,762
-------------- -------------- --------------
Total............................................................... $ 1,316,929 $ 2,277,439 $ 1,056,954
============== ============== ==============
Shares of beneficial interest outstanding (Note 3).................. 122,042 201,720 89,469
======= ======= =======
Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest outstanding)... $10.79 $11.29 $11.81
===== ===== =====
Maximum Offering Price Per Share
(Net Asset Value /.92)* ............................................ $11.73 $12.27 $12.84
===== ===== =====
On purchases of $10,000 or more, the sales charge is reduced.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Six Months June 30, 1996
- --------------------------------------------------------------------------------------------------------------------------
1st Series 2nd Series 3rd Series
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Income:
Interest.......................................................... $ 49,607 $ 85,265 $ 35,490
Dividends......................................................... 28 52 445
-------------- -------------- --------------
Total income........................................................ 49,635 85,317 35,935
-------------- -------------- --------------
Expenses (Notes 1E and 4):
Advisory fees..................................................... 6,925 11,796 5,415
Professional fees................................................. 3,744 5,045 2,277
Shareholder servicing costs....................................... 1,345 3,404 927
Reports and notices to shareholders............................... 360 424 331
Custodian fees.................................................... 249 404 268
Other expenses.................................................... 564 385 170
-------------- -------------- --------------
Total expenses...................................................... 13,187 21,458 9,388
Less: Expenses assumed by investment adviser........................ ( 1,920) --- ---
Custodian fees paid indirectly................................ ( 175) ( 356) ( 268)
-------------- -------------- --------------
Expenses-net........................................................ 11,092 21,102 9,120
-------------- -------------- --------------
Net investment income............................................... 38,543 64,215 26,815
-------------- -------------- --------------
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain on investments.................................... 34,547 26,036 13,247
Net unrealized depreciation of investments.......................... ( 174,625) ( 133,653) ( 48,971)
-------------- -------------- --------------
Net loss on investments............................................. ( 140,078) ( 107,617) ( 35,724)
-------------- -------------- --------------
Net Decrease in Net Assets Resulting from Operations................ $ ( 101,535) $ ( 43,402) $ ( 8,909)
============== ============== ==============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
- ------------------------------------------------------------------------------------------------------------------------------
1st Series 2nd Series 3rd Series
---------------------- ---------------------- ----------------------
1/1/96 to 1/1/96 to 1/1/96 to
6/30/96 1995 6/30/96 1995 6/30/96 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income........................... $ 38,543 $ 80,629 $ 64,215 $ 131,883 $ 26,815 $ 51,866
Net realized gain on investments................ 34,547 44,088 26,036 15,932 13,247 16,394
Net unrealized appreciation
(depreciation) of investments................ ( 174,625) 232,496 ( 133,653) 196,513 ( 48,971) 73,053
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations............... ( 101,535) 357,213 ( 43,402) 344,328 ( 8,909) 141,313
-------- -------- -------- -------- -------- --------
Distributions to Shareholders from:
Net investment income.......................... --- ( 80,629) --- ( 131,883) --- ( 51,866)
Net realized gain from security transactions... --- ( 44,088) --- --- --- ---
Capital surplus................................ --- ( 64) --- --- --- ---
-------- -------- -------- -------- -------- --------
Total distributions....................... --- ( 124,781) --- ( 131,883) --- ( 51,866)
-------- -------- -------- -------- -------- --------
Trust Share Transactions(a)
Proceeds from shares sold...................... 1,120 20,233 3,634 3,236 561 3,575
Value of distributions reinvested.............. --- 123,340 --- 128,586 --- 50,051
Cost of shares redeemed........................ ( 107,149) ( 181,639) ( 158,163) ( 228,681) ( 64,354) ( 45,684)
-------- -------- -------- -------- -------- --------
Net increase (decrease) from
trust share transactions................ ( 106,029) ( 38,066) ( 154,529) ( 96,859) ( 63,793) 7,942
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net assets............ ( 207,564) 194,366 ( 197,931) 115,586 ( 72,702) 97,389
Net Assets
Beginning of period............................ 1,524,493 1,330,127 2,475,370 2,359,784 1,129,656 1,032,267
--------- --------- --------- --------- --------- ---------
End of period+................................. $ 1,316,929 $ 1,524,493 $ 2,277,439 $ 2,475,370 $ 1,056,954 $ 1,129,656
========= ========= ========= ========= ========= =========
+Includes undistributed net investment income of $ 38,543 --- $ 64,215 --- $ 26,815 ---
========= ========= ========= ========= ========= =========
(a)Trust Shares Issued and Redeemed
Issued......................................... 31 1,712 841 300 47 292
Issued on distributions reinvested............. --- 10,654 --- 10,618 --- 4,014
Redeemed....................................... ( 9,672) ( 16,034) ( 13,892) ( 19,716) ( 5,210) ( 3,865)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in
trust shares outstanding................ ( 9,641) ( 3,668) ( 13,051) ( 8,798) ( 5,163) 441
======== ======== ======== ======== ======== ========
See notes to financial statements
</TABLE>
Notes to Financial Statements
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
1. Significant Accounting Policies - The Fund is organized as a
Massachusetts business trust and is registered under the Investment
Company Act of 1940 (the "1940 Act") as a diversified open-end management
investment company. The Fund operates as a series fund, issuing shares
of beneficial interest of the 1st, 2nd and 3rd Series and accounts
separately for the assets, liabilities and operations of each Series.
The Funds' objective is first to generate income, and, to a lesser
extent, achieve long-term capital appreciation.
A. Security Valuation - A security listed or traded on an exchange or
the NASDAQ National Market System is valued at its last sale price on
the exchange or the system where the security is primarily traded.
Securities which have no sales on a particular day and securities
traded in the over-the-counter market are valued at the mean between
the last bid and asked prices. The Treasury STRIPS in which each Series
invests are traded primarily in the over-the-counter market. Such securities
are valued at the mean between the last bid and asked prices on that
day as furnished by any dealer who makes a market in such securities.
Securities for which market quotations are not readily available are
valued on a consistent basis at fair value as determined in good faith
by methods approved by the trustees of the Fund.
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
Series 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 each Series from all, or
substantially all, federal income taxes. At June 30, 1996, the following
Series had capital loss carryovers expiring as follows:
Year of Expiration 2nd SERIES 3rd SERIES
------------------ ---------- ----------
1996 $ 86,500 $ --
1997 98,768 --
1998 29,803 24,741
2001 -- 15,904
---------- ----------
$ 215,071 $ 40,645
========== ==========
C. Distributions to Shareholders - Distributions to shareholders are
declared and paid annually. Income dividends and capital gain
distributions are determined in accordance with income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing treatments for capital loss
carryforwards and post October losses.
D. Expense Allocation - Direct expenses attributable to a Series are
charged to and paid from the assets of that Series. Indirect or general
expenses of the Fund are allocated among and charged to the assets of
each Series on a fair and equitable basis, which may be based on the
relative assets of each Series or the nature of the services performed
and relative applicability to each Series.
E. Security Transactions and Investment Income - Security transactions
are accounted for on the date the securities are purchased or sold. Cost
is determined, and gains and losses are based, on the identified cost basis
for common stocks and the amortized cost basis for Treasury STRIPS for both
financial statement and federal income tax purposes. Dividend income is
recorded on the ex-dividend date. Interest income (consisting of amortized
discount) and estimated expenses are accrued daily. The Fund's custodian
has provided credits in the amount of $799 against custodian charges based
on the uninvested cash balances of the Fund.
2. Security Transactions - Purchases and sales of securities and long-term
U.S. Government Obligations, excluding short-term notes, were as follows:
<TABLE>
<CAPTION>
Six Months Ended June 30, 1996 1st SERIES 2nd SERIES 3rd SERIES
- ------------------------------ ----------- ----------- -----------
<S> <C> <C> <C>
Securities
- ----------
Purchases............................... $ --- $ 15,552 $ 43,915
=========== =========== ===========
Proceeds of sales....................... $ 6,602 $ 17,888 $ 11,721
=========== =========== ===========
Long-Term U.S. Government Obligations
- -------------------------------------
Purchases............................... $ 49,607 $ 85,266 $ 35,490
=========== =========== ===========
Proceeds of sales....................... $ 114,976 $ 181,491 $ 106,603
=========== =========== ===========
At June 30, 1996, aggregate cost and net unrealized appreciation of securities
for federal income tax purposes were as follows:
1st SERIES 2nd SERIES 3rd SERIES
----------- ----------- -----------
Aggregate cost of investments........... $ 1,002,180 $ 2,147,369 $ 978,800
=========== =========== ===========
Unrealized appreciation................. $ 303,365 $ 121,830 $ 52,662
Unrealized depreciation................. -- 2,127 7,900
----------- ----------- -----------
Net unrealized appreciation............. $ 303,365 $ 119,703 $ 44,762
=========== =========== ===========
</TABLE>
3. Trust Shares - The Declaration of Trust permits the Fund to issue an
unlimited number of shares of beneficial interest, of one or more Series.
4. Advisory Fee and Other Transactions With Affiliates - Certain officers and
trustees of the Fund 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 Fund's Individual Retirement Accounts. Officers
and trustees of the Fund received no remuneration from the Fund for serving
in such capacities. Their remuneration (together with certain other expenses
of the Fund) is paid by FIMCO or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO, an
annual fee, payable monthly, at the rate of 1% of the first $200 million
of each Series' 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. Expenses of the 1st Series in the amount
of $1,920 were assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse a
Series if and to the extent that such Series' aggregate operating expenses,
including the advisory fee but generally excluding interest, taxes, brokerage
commissions and extraordinary expenses, exceed any limitation on expenses
applicable to the Series in those states (unless waivers of such limitations
have been obtained). The amount of any such reimbursement is limited to
the yearly advisory fee for such Series . For the six months ended June 30,
1996, no reimbursement was required pursuant to these provisions.
For the six months ended June 30, 1996, shareholder servicing costs included
$3,691 in fees paid to ADM and $1,985 in custodian fees paid to FFS.
<TABLE>
<CAPTION>
Financial Highlights
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
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.
- -----------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-----------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
Net --------------------------------------- ---------------------------------------
Asset Value Net Realized
----------- Net and Unrealized Total from Net Net
Beginning Investment Gain (Loss) on Investment Investment Realized Capital
of Period Income Investments Operations Income Gains Surplus
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st SERIES
- ----------
1991 $10.43 $.686 $ 1.670 $ 2.356 $.686 $.270 $ ---
1992 11.83 .715 .042 .757 .715 .532 ---
1993 11.34 .670 1.535 2.205 .670 .525 ---
1994 12.35 .690 (2.035) (1.345) .690 .484 .001
1995 9.83 .667 2.114 2.781 .667 .364 ---
1/1/96 to 6/30/96 11.58 .316 (1.106) (.790) --- --- ---
2nd SERIES
- ----------
1991 9.91 .663 1.240 1.903 .663 --- ---
1992 11.15 .656 .130 .786 .656 --- ---
1993 11.28 .643 .770 1.413 .643 --- ---
1994 12.05 .660 (1.484) (.824) .660 --- .006
1995 10.56 .646 .970 1.616 .646 --- ---
1/1/96 to 6/30/96 11.53 .318 (.558) (.240) --- --- ---
3rd SERIES
- ----------
1991 9.84 .676 1.211 1.887 .676 --- .001
1992 11.05 .576 .120 .696 .576 --- ---
1993 11.17 .544 1.110 1.654 .544 --- ---
1994 12.28 .610 (1.307) (.697) .610 --- .013
1995 10.96 .568 .980 1.548 .568 --- ---
1/1/96 to 6/30/96 11.94 .300 (.430) (.130) --- --- ---
<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 Assets
Net -----------------------------
Asset Value Net Portfolio
----------- Total Net Assets Investment Turnover
Total End Return++ End of Period Expenses Income Rate
Distributions of Period (%) (in thousands) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1st SERIES
- ----------
1991 $ .956 $11.83 22.59 $1,758 1.86 5.95 8
1992 1.247 11.34 6.40 1,599 1.75 5.62 8
1993 1.195 12.35 19.44 1,732 1.59* 4.94* 7
1994 1.175 9.83 (10.90) 1,330 1.60* 5.73* 8
1995 1.031 11.58 28.29 1,524 1.60* 5.60* 7
1/1/96 to 6/30/96 --- 10.79 (6.82) 1,317 1.60*+ 5.57*+ 4
2nd SERIES
- ----------
1991 .663 11.15 19.20 2,946 1.91 5.87 8
1992 .656 11.28 7.05 2,784 1.77 5.46 7
1993 .643 12.05 12.53 2,756 1.70 4.93 7
1994 .666 10.56 (6.89) 2,360 1.78 5.48 8
1995 .646 11.53 15.30 2,475 1.93 5.35 7
1/1/96 to 6/30/96 --- 11.29 (2.08) 2,277 1.82+ 5.44+ 4
3rd SERIES
- ----------
1991 .677 11.05 19.18 1,355 1.83 5.17 11
1992 .576 11.17 6.30 1,185 1.88 4.61 8
1993 .544 12.28 14.81 1,258 1.68 4.27 11
1994 .623 10.96 (5.78) 1,032 1.74 4.77 10
1995 .568 11.94 14.12 1,130 1.89 4.68 8
1/1/96 to 6/30/96 --- 11.81 (1.09) 1,057 1.73+ 4.95+ 8
+ Annualized
++ Calculated without sales charges
* For the years 1993, 1994, 1995 and the six months ended June 30, 1996, the investment adviser assumed
expenses of the 1st Series of $2,744, $2,594, $3,588 and $1,920, respectively. The ratios of expenses and net
investment income to average net assets before the assumption of these expenses were as follows:
<CAPTION>
1/1/96 to
1993 1994 1995 6/30/96
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Expenses 1.75% 1.78% 1.87% 1.90%*
Net investment income 4.79% 5.56% 5.35% 5.29%*
See notes to financial statements
</TABLE>
Independent Auditor's Report
To the Shareholders and Trustees of
First Investors U.S. Government Plus Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the 1st, 2nd and 3rd Series
of First Investors U.S. Government Plus Fund as of June 30, 1996, and the
related statement of operations for the six months then ended, the
statement of changes in net assets for the six months ended June 30,
1996 and the year ended December 31, 1995 and financial highlights for
each of the periods presented. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 1996, by correspondence with the custodian.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of the 1st, 2nd and 3rd Series of First Investors U.S. Government Plus
Fund as of June 30, 1996, and the results of their operations, changes
In their net assets and the financial highlights for each of the respective
periods presented, in conformity with generally accepted accounting
principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
July 31, 1996
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Trustees Shareholder Information
- -------------------------------- ------------------------------
James J. Coy Investment Adviser
First Investors
Roger L. Grayson Management Company, Inc.
95 Wall Street
Glenn O. Head New York, NY 10005
Kathryn S. Head Underwriter
First Investors Corporation
Rex R. Reed 95 Wall Street
New York, NY 10005
Herbert Rubinstein
Custodian
James M. Srygley The Bank of New York
48 Wall Street
John T. Sullivan New York, NY 10286
Robert F. Wentworth Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Officers
- -------------------------------- Legal Counsel
Glenn O. Head Kirkpatrick & Lockhart LLP
President 1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Concetta Durso
Vice President and Secretary Auditors
Tait, Weller & Baker
Patricia D. Poitra Two Penn Center Plaza
Vice President Philadelphia, PA 19102
Joseph I. Benedek It is the Fund's practice to mail
Treasurer only one copy of its annual and
semi-annual reports to any address at
Carol Lerner Brown which more than one shareholder with
Assistant Secretary the same last name has indicated that
mail is to be delivered. Additional
Gregory R. Kingston copies of the reports will be mailed
Assistant Treasurer if requested by any shareholder in
writing or by calling 800-423-4026.
Mark S. Spencer The Fund will ensure that separate
Assistant Treasurer reports are sent to any shareholder
who subsequently changes his or her
mailing address.
This report is authorized for
distribution only to existing
shareholders, and, if given to
prospective shareholders, must be
accompanied or preceded by the Fund's
prospectus.
