The words "First Investors" in a box across the top of the page.
FIRST INVESTORS
U.S. GOVERNMENT PLUS FUND
ANNUAL REPORT
DECEMBER 31, 1998
First Investors Logo
The words "A MEMBER OF THE FIRST INVESTORS FINANCIAL NETWORK"
under the First Investors logo.
Portfolio Manager's Letter
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Dear Investor:
We are pleased to present the annual report for the First Investors U.S.
Government Plus Fund for the fiscal year ending December 31, 1998.
During 1998, the First Investors U.S. Government Plus Fund, 1st Fund and
2nd Fund, returned 11.5% and 5.4%, respectively, on a net asset value
basis. In 1998, dividends declared from net investment income for the 1st
Fund and 2nd Fund were 72.3 and 73.4 cents per share, respectively. In
addition the 1st Fund declared a capital gain distribution of 47.3 cents
per share. There is no separate report for the 3rd Fund, which matured
according to schedule and was dissolved on December 31, 1998.
The Funds' holdings were almost exclusively Treasury STRIPS, also known as
zero coupon bonds. During 1998, the Funds' performance was primarily the
result of the fact that these securities increased in price as interest
rates declined. In an environment of falling interest rates, Treasury
STRIPS generally perform well because they do not have the re-investment
risk normally associated with interest payments on the security. When
interest rates decline, the prices of zero coupon bonds rise sharply
because holders receive no income that needs to be re-invested at less
attractive rates. However, the investment performance of such securities is
tied to their relative maturities, with those having the earliest
maturities generating returns in-line with cash or investments in
commercial paper.
The yield on long-term Treasury bonds fell to 5.10% at the end of 1998,
down from 5.92% at the end of 1997. Most of the decline in yield can be
attributed to concerns about the economic difficulties in Asia and Latin
America. This uncertainty sparked a "flight to quality" as investors sought
the safety of U.S. Treasury securities, driving their prices up.
Investors who buy bond funds -- whether for income or total return --
should be aware that the value of their investment fluctuates as interest
rates change. For example, a 100 basis point (or 1%) increase in yield on a
10-year Treasury bond results in roughly a 71/2% decrease in that bond's
price. In each of the last five years, 10-year Treasury bond yields have
fluctuated by more than 1%.
Thank you for placing your trust in First Investors. As always we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Patricia D. Poitra
Patricia D. Poitra
Director of Equities
and Portfolio Manager
January 29, 1999
Cumulative Performance Information
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
Comparison of change in value of $10,000 investment in the First Investors
U.S. Government Plus Fund -- 1st Fund, the Lehman Brothers Intermediate
Treasury Index and the Lehman Brothers Long Term Treasury Index.
The following table is the source data for the line chart which appears at
this point in the printed document. This table is not part of the original
printed document and is shown for reference only. The same is also true for
this descriptive paragraph.
As of December 31, 1998
GOVT PLUS INTERMEDIATE LONG TERM
1st FUND INDEX INDEX
Jan-89 $9,200 $10,000 $10,000
Dec-89 10,371 11,269 11,892
Dec-90 12,533 12,334 12,643
Dec-91 12,665 14,073 14,982
Dec-92 15,526 15,049 16,176
Dec-93 16,519 16,287 18,967
Dec-94 19,731 16,000 17,517
Dec-95 17,581 18,306 22,894
Dec-96 22,680 19,034 22,694
Dec-97 22,125 20,498 26,117
Dec-98 24,139 22,265 29,648
[BOXED INFORMATION INSIDE GRAPH:]
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 11.47% 2.57%
Five Years 6.40% 4.65%
Ten Years 10.00% 9.09%
The graph compares a $10,000 investment in the First Investors U.S.
Government Plus Fund -- 1st Fund beginning 1/1/89 with theoretical
investments in the Lehman Brothers Intermediate Treasury Index and the
Lehman Brothers Long Term Treasury Index. The Lehman Brothers Intermediate
Treasury Index is made up of all public obligations of the U.S. Treasury
with maturities of less than 10 years. The Lehman Brothers Long Term
Treasury Index is made up of all public obligations of the U.S. Treasury
with maturities of 10 years or greater. 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 dividends and distributions were reinvested.
*Average Annual Total Return figures (for the period ended 12/31/98)
include the reinvestment of all dividends and distributions. "N.A.V. Only"
returns are calculated without sales charges. The "S.E.C. Standardized"
returns shown are calculated without sales charges. "S.E.C. Standardized"
returns shown are based on the maximum sales charge of 8.00%. Some
expenses of the Fund were waived or assumed. If such expenses had been paid
by the Fund, the "S.E.C. Standardized" Average Annual Total Return for One
Year, Five Years and Ten Years would have been 2.22%, 4.37% and 8.93%,
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 original cost. Lehman Brothers Intermediate Treasury Index and
Lehman Brothers Long Term Treasury Index figures from Lehman Brothers, Inc.
and all other figures from First Investors Management Company, Inc.
Cumulative Performance Information
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 2nd FUND
Comparison of change in value of $10,000 investment in the First Investors
U.S. Government Plus Fund -- 2nd Fund, the Lehman Brothers Intermediate
Treasury Index and the Lehman Brothers Long Term Treasury Index.
The following table is the source data for the line chart which appears at
this point in the printed document. This table is not part of the original
printed document and is shown for reference only. The same is also true for
this descriptive paragraph.
As of December 31, 1998
GOVT PLUS INTERMEDIATE LONG TERM
2nd FUND INDEX INDEX
Jan-89 $9,200 $10,000 $10,000
Dec-89 10,884 11,269 11,892
Dec-90 11,321 12,334 12,643
Dec-91 13,495 14,073 14,982
Dec-92 14,446 15,049 16,176
Dec-93 16,256 16,287 18,967
Dec-94 15,136 16,000 17,517
Dec-95 17,467 18,306 22,894
Dec-96 17,626 19,034 22,694
Dec-97 18,413 20,498 26,117
Dec-98 19,412 22,265 29,648
[BOXED INFORMATION INSIDE GRAPH:]
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 5.43% (3.04%)
Five Years 3.61% 1.90%
Ten Years 7.76% 6.86%
The graph compares a $10,000 investment in the First Investors U.S.
Government Plus Fund -- 2nd Fund beginning 1/1/89 with theoretical
investments in the Lehman Brothers Intermediate Treasury Index and the
Lehman Brothers Long Term Treasury Index. The Lehman Brothers Intermediate
Treasury Index is made up of all public obligations of the U.S. Treasury
with maturities of less than 10 years. The Lehman Brothers Long Term
Treasury Index is made up of all public obligations of the U.S. Treasury
with maturities of 10 years or greater. 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 dividends and distributions were reinvested.
*Average Annual Total Return figures (for the period ended 12/31/98)
include the reinvestment of all dividends and distributions. "N.A.V. Only"
returns are calculated without sales charges. The "S.E.C. Standardized"
returns shown are calculated without sales charges. "S.E.C. Standardized"
returns shown are based on the maximum sales charge of 8.00%. Some expenses
of the Fund were waived or assumed. If such expenses had been paid by the
Fund, the "S.E.C. Standardized" Average Annual Total Return for One Year,
Five Years and Ten Years would have been (3.31%), 1.81% and 6.81%,
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 original cost. Lehman Brothers Intermediate Treasury Index and
Lehman Brothers Long Term Treasury Index figures from Lehman Brothers, Inc.
and all other figures from First Investors Management Company, Inc.
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
December 31, 1998
- ----------------------------------------------------------------------------------------------------------
Principal 1st Fund 2nd Fund
Amount or ------------------- -------------------
Shares Security Value % Value %
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
U.S. GOVERNMENT SECURITIES
$1,600M Treasury STRIPS, due 11/15/2004 $1,216,495
1,825M Treasury STRIPS, due 11/15/1999 $1,755,139
- ----------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Securities
(cost $899,967 and $1,703,481, respectively) 1,216,495 98.5 1,755,139 99.5
- ----------------------------------------------------------------------------------------------------------
COMMON STOCKS
Consumer Cyclicals
400 Interface, Inc. 3,713 .3
- ----------------------------------------------------------------------------------------------------------
Healthcare
100 Jones Pharma, Incorporated 3,650
200 Jones Pharma, Incorporated 7,300
- ----------------------------------------------------------------------------------------------------------
3,650 .3 7,300 .4
- ----------------------------------------------------------------------------------------------------------
Technology
200 *Saville Systems PLC (ADR) 3,800
200 *Saville Systems PLC (ADR) 3,800
- ----------------------------------------------------------------------------------------------------------
3,800 .3 3,800 .2
- ----------------------------------------------------------------------------------------------------------
Total Value of Common Stocks
(cost $10,200 and $9,575, respectively) 11,163 .9 11,100 .6
- ----------------------------------------------------------------------------------------------------------
Total Value of Investments
(cost $910,167 and $1,713,056, respectively) 1,227,658 99.4 1,766,239 100.1
Other Assets, Less Liabilities 6,889 .6 (1,600) (.1)
- ----------------------------------------------------------------------------------------------------------
Net Assets $1,234,547 100.0 $1,764,639 100.0
==========================================================================================================
*Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
December 31, 1998
- ------------------------------------------------------------------------------------------------------------------
1st Fund 2nd Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments in securities:
At identified cost $ 910,167 $ 1,713,056
============== ==============
At value (Note 1A) $ 1,227,658 $ 1,766,239
Cash 20,908 12,447
Receivables:
Shares sold -- 4,065
Investment securities sold -- 1,800
Other assets 870 938
--------------- ---------------
Total Assets 1,249,436 1,785,489
--------------- ---------------
Liabilities
Payables:
Shares redeemed -- 8,948
Investment securities purchased 7,213 3,600
Dividends payable 3,020 5,753
Accrued expenses 4,039 1,662
Accrued advisory fees 617 887
--------------- ---------------
Total Liabilities 14,889 20,850
--------------- ---------------
Net Assets $ 1,234,547 $ 1,764,639
============== ===============
Net Assets Consist of:
Capital paid in $ 917,056 $ 1,718,964
Accumulated net realized loss on investments -- (7,508)
Net unrealized appreciation in value of investments 317,491 53,183
-------------- --------------
Total $ 1,234,547 $ 1,764,639
============== ==============
Shares of beneficial interest outstanding (Note 3) 120,676 166,385
======= =======
Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest outstanding) $10.23 $10.61
====== ======
Maximum Offering Price Per Share
(Net Asset Value /.92)* $11.12 $11.53
====== ======
*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
Year Ended December 31, 1998
- ------------------------------------------------------------------------------------------------------------------
1st Fund 2nd Fund
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Income:
Interest $ 91,850 $ 134,609
Dividends 14 30
-------------- --------------
Total income 91,864 134,639
-------------- --------------
Expenses (Notes 1 and 4):
Advisory fees 12,389 18,404
Professional fees 6,546 8,786
Shareholder servicing costs 3,047 6,777
Custodian fees 602 779
Reports and notices to shareholders 586 858
Other expenses 1,173 1,121
-------------- --------------
Total expenses 24,343 36,725
Less: Expenses waived or assumed (10,322) (15,965)
Custodian fees paid indirectly (427) (577)
-------------- --------------
Expenses-net 13,594 20,183
-------------- --------------
Net investment income 78,270 114,456
-------------- --------------
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain on investments 51,229 11,009
Net unrealized appreciation (depreciation) of investments 4,446 (28,802)
-------------- --------------
Net gain (loss) on investments 55,675 (17,793)
-------------- --------------
Net Increase in Net Assets Resulting from Operations $ 133,945 $ 96,663
============== ==============
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
----------------------- -----------------------
Year Ended December 31 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 78,270 $ 76,016 $ 114,456 $120,303
Net realized gain on investments 51,229 44,787 11,009 3,128
Net unrealized appreciation (depreciation)
of investments 4,446 (13,740) (28,802) (36,166)
-------- -------- -------- --------
Net increase in net assets resulting
from operations 133,945 107,063 96,663 87,265
-------- -------- -------- --------
Distributions to Shareholders
Net investment income (78,307) (76,047) (114,597) (120,316)
Net realized gains (51,230) (44,720) -- --
-------- -------- -------- --------
Total distributions (129,537) (120,767) (114,597) (120,316)
-------- -------- -------- --------
Trust Share Transactions(a)
Proceeds from shares sold 12,973 14,062 16,820 9,721
Reinvestment of distributions 126,517 118,080 108,843 115,340
Cost of shares redeemed (191,350) (195,312) (308,116) (294,547)
-------- -------- -------- --------
Net decrease from trust
share transactions (51,860) (63,170) (182,453) (169,486)
-------- -------- -------- --------
Net decrease in net assets (47,452) (76,874) (200,387) (202,537)
Net Assets
Beginning of year 1,281,999 1,358,873 1,965,026 2,167,563
--------- --------- --------- ---------
End of year $1,234,547 $1,281,999 $1,764,639 $1,965,026
========= ========= ========= =========
(a)Trust Shares Issued and Redeemed
Issued 1,196 1,358 1,489 884
Issued on distributions reinvested 12,368 11,520 10,259 10,719
Redeemed (17,910) (18,883) (27,962) (26,539)
-------- -------- -------- --------
Net decrease in trust
shares outstanding (4,346) (6,005) (16,214) (14,936)
======== ======== ======== ========
See notes to financial statements
</TABLE>
Notes to Financial Statements
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
1. Significant Accounting Policies -- First Investors U.S. Government Plus
Fund (the "Trust") 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 Trust operates as a
series fund, issuing shares of beneficial interest of the 1st and 2nd Funds
(each a "Fund") 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 or
market 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 closing 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 based upon quotes furnished by a market maker for 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
under the direction of the Trust's officers in a manner specifically
authorized by the Trustees of the Trust.
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.
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 capital 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
Trust 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. For the year ended
December 31, 1998, the Funds' custodian has provided credits in the amount of
$1,004 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:
<TABLE>
<CAPTION>
Year Ended December 31, 1998 1st Fund 2nd Fund
- ---------------------------- ----------- -----------
<S> <C> <C>
Securities
- ----------
Purchases $ 12,394 $ 16,157
=========== ===========
Proceeds of sales $ 11,355 $ 32,407
=========== ===========
Long-Term U.S. Government Obligations
- -------------------------------------
Purchases $ 91,843 $ 134,608
=========== ===========
Proceeds of sales $ 193,839 $ 298,903
=========== ===========
At December 31, 1998, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
1st Fund 2nd Fund
----------- -----------
Aggregate cost of investments $ 910,167 $ 1,713,056
=========== ===========
Gross unrealized appreciation $ 317,491 $ 53,183
Gross unrealized depreciation -- --
----------- -----------
Net unrealized appreciation $ 317,491 $ 53,183
=========== ===========
</TABLE>
3. Trust Shares -- The Declaration of Trust permits the Trust 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 Trust 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 Trust's Individual Retirement Accounts. Trustees of the
Trust who are not "interested persons" of the Trust as defined in the 1940
Act are remunerated by the Funds. For the year ended December 31, 1998, total
trustees fees accrued by the Funds amounted to $221.
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. Total advisory fees accrued to FIMCO for
the year ended December 31, 1998, were $30,793 of which $12,317 was waived.
In addition, expenses of $13,970 were assumed by FIMCO.
For the year ended December 31, 1998, shareholder servicing costs included
$5,992 in transfer agent fees paid to ADM and $2,660 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 year indicated.
- --------------------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
----------------------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
Net --------------------------------------- ----------------------------------- Net
Asset Value Net Realized Asset Value
----------- Net and Unrealized Total from Net Net -----------
Beginning Investment Gain (Loss) on Investment Investment Realized Capital Total End
of Year Income Investments Operations Income Gain Surplus Distributions of Year
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1st Fund
- --------
1994 $12.35 $.690 $(2.035) $(1.345) $.690 $.484 $.001 $1.175 $9.83
1995 9.83 .667 2.114 2.781 .667 .364 -- 1.031 11.58
1996 11.58 .648 (.863) (.215) .648 .347 -- .995 10.37
1997 10.37 .670 .274 .944 .670 .394 -- 1.064 10.25
1998 10.25 .723 .453 1.176 .723 .473 -- 1.196 10.23
2nd Fund
- --------
1994 $12.05 $.660 $(1.484) $(.824) $.660 $ -- $.006 $.666 $10.56
1995 10.56 .646 .970 1.616 .646 -- -- .646 11.53
1996 11.53 .675 (.560) .115 .675 -- -- .675 10.97
1997 10.97 .700 (.210) .490 .700 -- -- .700 10.76
1998 10.76 .733 (.149) .584 .734 -- -- .734 10.61
<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 year 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
Ratio to Average Assets Before Expenses
Net Assets++ Waived or Assumed
---------------------- ----------------------
Net Portfolio
Total Net Assets Investment Investment Turnover
Return+ End of Year Expenses Income Expenses Income Rate
(%) (in thousands) (%) (%) (%) (%) (%)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1st Fund
- --------
1994 (10.90) $1,330 1.60 5.73 1.78 5.55 8
1995 28.29 1,524 1.60 5.60 1.87 5.33 7
1996 (1.86) 1,359 1.60 5.70 1.98 5.32 7
1997 9.10 1,282 1.37 6.11 1.93 5.55 0
1998 11.47 1,235 1.10 6.35 1.93 5.52 1
2nd Fund
- --------
1994 (6.89) $2,360 1.78 5.48 -- -- 8
1995 15.30 2,475 1.93 5.35 -- -- 7
1996 1.00 2,168 1.85 5.50 -- -- 8
1997 4.47 1,965 1.56 5.93 1.92 5.57 1
1998 5.43 1,765 1.10 6.25 1.96 5.39 1
+Calculated without sales charges
++Net of expenses waived or assumed (Note 4).
See notes to financial statements
</TABLE>
Independent Auditors' 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 and 2nd Funds of First
Investors U.S. Government Plus Fund as of December 31, 1998, and the related
statement of operations for the year then ended, the statement of changes in
net assets for each of the two years in the period then ended and financial
highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1998, 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 and 2nd Funds of First Investors U.S. Government Plus Fund as of December
31, 1998, and the results of their operations for the year then ended,
changes in their net assets for each of the two years in the period then
ended and the financial highlights for each of the five years in the period
then ended, in conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 29, 1999
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Trustees
- --------------------------------
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
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
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Trust'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 Trust 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
Trust's prospectus.
