FIRST INVESTORS
FIRST INVESTORS
U.S. GOVERNMENT PLUS FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1997
The following appears at the bottom left of the first page:
First Investors Logo
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
FI6146
Portfolio Manager's Letter
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Dear Investor:
We are pleased to present the semi-annual report for First Investors U.S.
Government Plus Fund for the six months ended June 30, 1997. For the period,
First Investors U.S. Government Plus Fund 1st Fund, 2nd Fund and 3rd Fund
returned on a net asset value basis 1.2%, 1.3% and (.1%), respectively.
At the beginning of the year, many market strategists were calling for a
dramatic slowdown in the economy. However, the economy, as measured by the
gross domestic product, expanded at an annual rate of 4.9% in the first
quarter with few signs of inflation contained in the economic indicators and
statistics. Although the Federal Reserve raised interest rates slightly in
March, the outlook on inflation will probably hold the Federal Reserve from
taking any further action over the next few months. As the main beneficiaries
of the continued solid economic performance, U.S. companies posted sound
earnings and profit growth. On the other hand, bonds fared less well,
reflecting concerns regarding the strength of the economy. The yield on long-
term U.S. Treasury bonds rose to 6.79% from 6.64% at the beginning of the
year, after reaching as high as 7.14% in May.
The increase in the yield on long-term U.S. Treasury bonds had a significant
impact on the Funds, since their portfolios are comprised almost entirely of
U.S. Treasury STRIPS, which are zero coupon bonds. The values of all bonds
fluctuate with changes in interest rates. Because zero coupon bonds do not
pay interest, their performance is more sensitive to interest rate movements
than other types of bonds. When interest rates rise, as they did on the heels
of the Federal Reserve tightening in March, the price of zero coupon bonds
falls sharply as the holders do not have interest payments that can be
reinvested at the newer, more attractive levels.
As far as the equity components of the Funds are concerned, the current
equity bull market is in its seventh year and valuations, as determined by
price to earnings multiples, are at historic highs. In addition, the
possibility of an external, unanticipated "shock" causing a market downturn
is always a real risk. Investors should be aware of these risks and recognize
that a diversified portfolio provides the best insurance against unexpected
changes in the financial markets.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
Patricia D. Poitra
Director of Equities
and Portfolio Manager
July 28, 1997
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
June 30, 1997
- ------------------------------------------------------------------------------------------------------------------------------
Principal 1st Fund 2nd Fund 3rd Fund
Amount or ------------------- ------------------- -------------------
Shares Security Value % Value % Value %
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
$1,925M Treasury STRIPS, due 11/15/2004 $ 1,196,089
2,300M Treasury STRIPS, due 11/15/1999 $ 1,990,758
875M Treasury STRIPS, due 11/15/1998 $ 807,673
- ------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Securities
(cost $933,558, $1,910,505 and $787,464,
respectively) 1,196,089 99.5 1,990,758 98.8 807,673 88.4
- ------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS
Communication Services
100 *USCI, Inc. 400
1,000 *USCI, Inc. 4,000
1,800 *USCI, Inc. 7,200
- ------------------------------------------------------------------------------------------------------------------------------
400 .0 4,000 .2 7,200 .8
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Cyclicals
300 *Scientific Games Holdings Corporation 6,187
500 *Scientific Games Holdings Corporation 10,313
800 *Travis Boats & Motors, Inc. 10,500
- ------------------------------------------------------------------------------------------------------------------------------
6,187 .3 20,813 2.3
- ------------------------------------------------------------------------------------------------------------------------------
Consumer Staples
200 The Rival Company 2,950
400 The Rival Company 5,900
- ------------------------------------------------------------------------------------------------------------------------------
2,950 .1 5,900 .6
- ------------------------------------------------------------------------------------------------------------------------------
Healthcare
100 *VidaMed, Inc. 506
200 *VidaMed, Inc. 1,013
1,200 *VidaMed, Inc. 6,075
- ------------------------------------------------------------------------------------------------------------------------------
506 .1 1,013 .1 6,075 .7
- ------------------------------------------------------------------------------------------------------------------------------
Technology
40 Motorola, Inc. 3,040
100 Motorola, Inc. 7,600
200 Motorola, Inc. 15,200
500 *SystemsSoft Corporation 5,375
1,000 *SystemsSoft Corporation 10,750
- ------------------------------------------------------------------------------------------------------------------------------
3,040 .3 12,975 .6 25,950 2.8
- ------------------------------------------------------------------------------------------------------------------------------
Transportation
600 Interpool, Inc. 8,850
1,200 Transportacion Maritima Mexicana SA (ADR) 7,425
- ------------------------------------------------------------------------------------------------------------------------------
16,275 1.8
- ------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks
(cost $1,876, $27,568 and $84,879, respectively) 3,946 .4 27,125 1.3 82,213 9.0
- ------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $935,434,
$1,938,073 and $872,343, respectively) 1,200,035 99.9 2,017,883 100.1 889,886 97.4
Other Assets, Less Liabilities 1,677 .1 ( 1,883) ( .1) 23,503 2.6
- ------------------------------------------------------------------------------------------------------------------------------
Net Assets $ 1,201,712 100.0 $ 2,016,000 100.0 $ 913,389 100.0
==============================================================================================================================
*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, 1997
- ---------------------------------------------------------------------------------------------------------------------------
1st Fund 2nd Fund 3rd Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost................................................ $ 935,434 $ 1,938,073 $ 872,343
============== ============== ==============
At value (Note 1A)................................................ $ 1,200,035 $ 2,017,883 $ 889,886
Cash................................................................ 6,223 21,831 31,738
Other assets........................................................ 872 944 924
--------------- --------------- ---------------
Total Assets........................................................ 1,207,130 2,040,658 922,548
--------------- --------------- ---------------
Liabilities
Payable for capital stock redeemed.................................. 2 18,778 5,693
Accrued expenses.................................................... 4,406 4,182 2,701
Accrued advisory fees............................................... 1,010 1,698 765
--------------- --------------- ---------------
Total Liabilities................................................... 5,418 24,658 9,159
--------------- --------------- ---------------
Net Assets.......................................................... $ 1,201,712 $ 2,016,000 $ 913,389
============== =============== ===============
Net Assets Consist of:
Capital paid in..................................................... $ 862,627 $ 2,001,674 $ 900,855
Undistributed net investment income................................. 37,109 57,140 22,846
Accumulated net realized gain (loss) on investments................. 37,375 ( 122,624) ( 27,855)
Net unrealized appreciation in value of investments................. 264,601 79,810 17,543
-------------- -------------- --------------
Total............................................................... $ 1,201,712 $ 2,016,000 $ 913,389
============== ============== ==============
Shares of beneficial interest outstanding (Note 3).................. 114,582 181,500 79,790
======= ======= =======
Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest outstanding)... $10.49 $11.11 $11.45
===== ===== =====
Maximum Offering Price Per Share
(Net Asset Value /.92)* ............................................ $11.40 $12.08 $12.45
===== ===== =====
*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 Ended June 30, 1997
- ---------------------------------------------------------------------------------------------------------------------------
1st Fund 2nd Fund 3rd Fund
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Income:
Interest.......................................................... $ 47,051 $ 77,245 $ 32,085
Dividends......................................................... 9 48 147
-------------- -------------- --------------
Total income........................................................ 47,060 77,293 32,232
-------------- -------------- --------------
Expenses (Notes 1 and 4):
Advisory fees..................................................... 6,218 10,370 4,815
Professional fees................................................. 3,372 4,093 3,150
Shareholder servicing costs....................................... 1,677 4,081 1,244
Custodian fees.................................................... 237 437 284
Reports and notices to shareholders............................... 182 545 177
Other expenses.................................................... 944 943 ---
-------------- -------------- --------------
Total expenses...................................................... 12,630 20,469 9,670
Less: Expenses assumed by investment adviser........................ ( 2,600) --- ---
Custodian fees paid indirectly................................ ( 79) ( 316) ( 284)
-------------- -------------- --------------
Expenses-net........................................................ 9,951 20,153 9,386
-------------- -------------- --------------
Net investment income............................................... 37,109 57,140 22,846
-------------- -------------- --------------
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain (loss) on investments............................. 37,478 5,947 ( 6,176)
Net unrealized depreciation of investments.......................... ( 62,184) ( 38,341) ( 18,259)
-------------- -------------- --------------
Net loss on investments............................................. ( 24,706) ( 32,394) ( 24,435)
-------------- -------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... $ 12,403 $ 24,746 $ ( 1,589)
============== ============== ==============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
- --------------------------------------------------------------------------------------------------------------------------------
1st Fund 2nd Fund 3rd Fund
---------------------- ---------------------- ----------------------
1/1/97 to 1/1/97 to 1/1/97 to
6/30/97 1996 6/30/97 1996 6/30/97 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income............................ $ 37,109 $ 77,618 $ 57,140 $ 125,838 $ 22,846 $ 50,583
Net realized gain (loss) on investments.......... 37,478 41,339 5,947 35,135 ( 6,176) 18,966
Net unrealized depreciation
of investments................................ ( 62,184) ( 151,205) ( 38,341) ( 135,205) ( 18,259) ( 57,931)
-------- -------- -------- -------- -------- --------
Net increase (decrease) in net assets
resulting from operations................ 12,403 ( 32,248) 24,746 25,768 ( 1,589) 11,618
-------- -------- -------- -------- -------- --------
Distributions to Shareholders:
Net investment income........................... --- ( 77,618) --- ( 125,838) --- ( 50,583)
Net realized gain from security transactions.... --- ( 41,442) --- --- --- ---
-------- -------- -------- -------- -------- --------
Total distributions........................ --- ( 119,060) --- ( 125,838) --- ( 50,583)
-------- -------- -------- -------- -------- --------
Trust Share Transactions(a)
Proceeds from shares sold....................... 14,062 1,514 9,721 7,270 --- 562
Value of distributions reinvested............... --- 117,893 --- 121,862 --- 47,849
Cost of shares redeemed......................... ( 183,626) ( 133,719) ( 186,030) ( 336,869) ( 110,060) ( 114,064)
-------- -------- -------- -------- -------- --------
Net decrease from trust
share transactions....................... ( 169,564) ( 14,312) ( 176,309) ( 207,737) ( 110,060) ( 65,653)
-------- -------- -------- -------- -------- --------
Net decrease in net assets........................ ( 157,161) ( 165,620) ( 151,563) ( 307,807) ( 111,649) ( 104,618)
Net Assets
Beginning of period............................. 1,358,873 1,524,493 2,167,563 2,475,370 1,025,038 1,129,656
--------- --------- --------- --------- --------- ---------
End of period+.................................. $ 1,201,712 $ 1,358,873 $ 2,016,000 $ 2,167,563 $ 913,389 $ 1,025,038
========= ========= ========= ========= ========= =========
+Includes undistributed net investment income of... $ 37,109 $ --- $ 57,140 $ --- $ 22,846 $ ---
========= ========= ========= ========= ========= =========
(a)Trust Shares Issued and Redeemed
Issued.......................................... 1,358 67 884 1,159 --- 47
Issued on distributions reinvested.............. --- 11,369 --- 11,109 --- 4,176
Redeemed........................................ ( 17,803) ( 12,092) ( 16,919) ( 29,504) ( 9,686) ( 9,379)
-------- -------- -------- -------- -------- --------
Net decrease in trust
shares outstanding....................... ( 16,445) ( 656) ( 16,035) ( 17,236) ( 9,686) ( 5,156)
======== ======== ======== ======== ======== ========
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 Funds and accounts separately for the
assets, liabilities and operations of each Fund. 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 Stock Market is valued at its last sale price on the exchange where
the security is principally 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 Fund 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 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 each Fund from all, or substantially all, federal income taxes. At
June 30, 1997, the following Funds had capital loss carryovers expiring as
follows:
Year of Expiration 2nd Fund 3rd Fund
------------------ ---------- ----------
1997 $ 98,768 $ --
1998 29,803 5,775
1999 -- 15,904
---------- ----------
$ 128,571 $ 21,679
========== ==========
C. Distributions to Shareholders -- Distributions to shareholders are
generally declared and paid annually. Income dividends and capital gain
distributions are determined in accordance with income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing treatments for capital loss carryforwards and
post October losses.
D. Expense Allocation -- Direct expenses attributable to a Fund are charged
to and paid from the assets of that Fund. Indirect or general expenses of the
Fund are allocated among and charged to the assets of each Fund on a fair and
equitable basis, which may be based on the relative assets of each Fund or
the nature of the services performed and relative applicability to each Fund.
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 accreted
discount) and estimated expenses are accrued daily. The Funds' custodian has
provided credits in the amount of $679 against custodian charges based on the
uninvested cash balances of the Funds.
F. 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.
2. Security Transactions -- Purchases and sales of securities and long-term
U.S. Government Obligations, excluding short-term notes, were as follows:
Six Months Ended June 30, 1997 1st Fund 2nd Fund 3rd Fund
- ------------------------------ ----------- ----------- -----------
Securities
- ----------
Purchases....................... $ -- $ 5,725 $ 28,350
=========== =========== ===========
Proceeds of sales............... $ -- $ 3,175 $ 16,463
=========== =========== ===========
Long-Term U.S. Government Obligations
- -------------------------------------
Purchases....................... $ -- $ -- $ --
=========== =========== ===========
Proceeds of sales............... $ 178,945 $ 190,313 $ 135,769
=========== =========== ===========
At June 30, 1997, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
1st Fund 2nd Fund 3rd Fund
----------- ----------- -----------
Aggregate cost of investments... $ 935,434 $ 1,938,073 $ 872,343
=========== =========== ===========
Gross unrealized appreciation....$ 265,121 $ 86,804 $ 36,097
Gross unrealized depreciation.... 520 6,994 18,554
----------- ----------- -----------
Net unrealized appreciation......$ 264,601 $ 79,810 $ 17,543
=========== =========== ===========
3. Trust Shares -- The Declaration of Trust permits the Fund to issue an
unlimited number of shares of beneficial interest, of one or more Funds.
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 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. Expenses of the 1st Fund in the amount of
$2,600 were assumed by FIMCO.
For the six months ended June 30, 1997, shareholder servicing costs included
$4,765 in transfer agent fees paid to ADM and $1,698 in IRA 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 Total
of Period Income Investments Operations Income Gain Surplus Distributions
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1st Fund
----------
1992 $11.83 $.715 $ .042 $ .757 $.715 $.532 $ --- $1.247
1993 11.34 .670 1.535 2.205 .670 .525 --- 1.195
1994 12.35 .690 (2.035) (1.345) .690 .484 .001 1.175
1995 9.83 .667 2.114 2.781 .667 .364 --- 1.031
1996 11.58 .648 (.863) (.215) .648 .347 --- .995
1/1/97 to 6/30/97 10.37 .324 (.204) .120 --- --- --- ---
2nd Fund
----------
1992 11.15 .656 .130 .786 .656 --- --- .656
1993 11.28 .643 .770 1.413 .643 --- --- .643
1994 12.05 .660 (1.484) (.824) .660 --- .006 .666
1995 10.56 .646 .970 1.616 .646 --- --- .646
1996 11.53 .675 (.560) .115 .675 --- --- .675
1/1/97 to 6/30/97 10.97 .315 (.175) .140 --- --- --- ---
3rd Fund
----------
1992 11.05 .576 .120 .696 .576 --- --- .576
1993 11.17 .544 1.110 1.654 .544 --- --- .544
1994 12.28 .610 (1.307) (.697) .610 --- .013 .623
1995 10.96 .568 .980 1.548 .568 --- --- .568
1996 11.94 .593 (.480) .113 .593 --- --- .593
1/1/97 to 6/30/97 11.46 .286 (.296) (.010) --- --- --- ---
<CAPTION>
Financial Highlights (continued)
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.
----------------------------------------------------------------------------------------------
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
End Return++ End of Period Expenses Income Rate
of Period (%) (in thousands) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Fund
----------
1992 $11.34 6.40 $1,599 1.75 5.62 8
1993 12.35 19.44 1,732 1.60* 4.94* 7
1994 9.83 (10.90) 1,330 1.60* 5.73* 8
1995 11.58 28.29 1,524 1.60* 5.60* 7
1996 10.37 (1.86) 1,359 1.60* 5.70* 7
1/1/97 to 6/30/97 10.49 1.16 1,202 1.60*+ 5.97*+ 0
2nd Fund
----------
1992 11.28 7.05 2,784 1.77 5.46 7
1993 12.05 12.53 2,756 1.70 4.93 7
1994 10.56 (6.89) 2,360 1.78 5.48 8
1995 11.53 15.30 2,475 1.93 5.35 7
1996 10.97 1.00 2,168 1.85 5.50 8
1/1/97 to 6/30/97 11.11 1.28 2,016 1.97+ 5.51+ 0
3rd Fund
----------
1992 11.17 6.30 1,185 1.88 4.61 8
1993 12.28 14.81 1,258 1.68 4.27 11
1994 10.96 (5.78) 1,032 1.74 4.77 10
1995 11.94 14.12 1,130 1.89 4.68 8
1996 11.46 .95 1,025 1.95 4.77 12
1/1/97 to 6/30/97 11.45 (.09) 913 2.01+ 4.74+ 3
+Annualized
++Calculated without sales charges
*For the years 1993, 1994, 1995, 1996 and the six months ended June 30, 1997, the investment adviser assumed expenses of the
1st Fund of $2,744, $2,594, $3,588, &4,770 and $2,600, respectively. The ratios of expenses and net investment income to
average net assets before the assumption of these expenses were as follows:
<CAPTION>
1/1/97 to
1993 1994 1995 1996 6/30/97
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Expenses 1.75% 1.78% 1.87% 1.98% 2.03%+
Net investment income 4.79% 5.56% 5.32% 5.35% 5.54%+
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 Funds of
First Investors U.S. Government Plus Fund as of June 30, 1997, and the
related statement of operations for the six months then ended, the statement
of changes in net assets for the six months ended June 30, 1997 and the year
ended December 31, 1996, and financial highlights for each of the periods
indicated thereon. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 1997, by correspondence with the custodian.
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 Funds of First Investors U.S. Government Plus Fund as of
June 30, 1997, 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, 1997
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Trustees
- ---------------------------------------
James J. Coy (Emeritus)
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
Nancy S. Schaenen
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- ---------------------------------------
Glenn O. Head
President
Concetta Durso
Vice President and Secretary
Patricia D. Poitra
Vice President
Joseph I. Benedek
Treasurer
Carol Lerner Brown
Assistant Secretary
Gregory R. Kingston
Assistant Treasurer
Mark S. Spencer
Assistant Treasurer
Shareholder Information
- ---------------------------------------
Investment Adviser
First Investors
Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data
Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by
calling 800-423-4026. The Fund will ensure that separate reports are sent to
any shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders,
and, if given to prospective shareholders, must be accompanied or preceded
by the Fund's prospectus.
