As filed with the Securities and Exchange Commission on October 2, 1995.
Registration No. 2-98409
811-4325
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 17 [X]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940
Amendment No. 16 [X]
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FIRST INVESTORS LIFE SERIES FUND
(Exact name of Registrant as specified in charter)
Mr. Larry R. Lavoie
Secretary and General Counsel
First Investors Corporation
95 Wall Street
New York, New York 10005
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of this Registration Statement
It is proposed that this filing will become effective on October 13, 1995
pursuant to paragraph (b) of Rule 485.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of beneficial
interest, no par value, under the Securities Act of 1933. Registrant will filed
a Rule 24f-2 Notice for its fiscal year ending December 31, 1994 on February 21,
1995.
<PAGE>
FIRST INVESTORS LIFE SERIES FUND
CROSS-REFERENCE SHEET
<TABLE>
<CAPTION>
N-1A Item No. Location
- ------------- --------
PART A: PROSPECTUS
<S> <C>
1. Cover Page.................................................................. Cover Page
2. Synopsis.................................................................... Not Applicable
3. Condensed Financial Information............................................. Financial Highlights
4. General Description of Registrant........................................... Investment Objectives and
Policies; General
Information
5. Management of the Fund...................................................... Management
5A. Management's Discussion of
Fund Performance..........................................................
6. Capital Stock and Other Securities.......................................... Dividends and Other
Distributions; Taxes;
Determination of Net
Asset Value
7. Purchase of Securities Being Offered........................................ How to Buy Shares
8. Redemption or Repurchase.................................................... How to Redeem Shares
9. Pending Legal Proceedings................................................... Management
PART B: STATEMENT OF ADDITIONAL INFORMATION
10. Cover Page.................................................................. Cover Page
11. Table of Contents........................................................... Table of Contents
12. General Information and History............................................. General Information
13. Investment Objectives and Policies.......................................... Investment Policies;
Investment Restrictions
14. Management of the Fund...................................................... Trustees and Officers
15. Control Persons and Principal
Holders of Securities....................................................... Not Applicable
16. Investment Advisory and Other Services...................................... Management
17. Brokerage Allocation........................................................ Allocation of Portfolio
Brokerage
18. Capital Stock and Other Securities.......................................... Determination of Net
Asset Value
19. Purchase, Redemption and Pricing
of Securities Being Offered................................................. Determination of Net
Asset Value
20. Tax Status.................................................................. Taxes
21. Underwriters................................................................ Not Applicable
22. Performance Data............................................................ Performance Information
23. Financial Statements........................................................ Financial Statements;
Report of Independent
Accountants
PART C: OTHER INFORMATION
Information required to be included in Part C is set forth under the appropriate
item so numbered, in Part C hereof.
</TABLE>
<PAGE>
First Investors Life Series Fund
95 Wall Street, New York, New York 10005/(212) 858-8200
This is a Prospectus for First Investors Life Series Fund ("Life Series
Fund"), an open-end, diversified management investment company. The Fund offers
ten separate investment series, each of which has different investment
objectives and policies: Blue Chip Fund, Cash Management Fund, Discovery Fund,
Government Fund, Growth Fund, High Yield Fund, International Securities Fund,
Investment Grade Fund, Target Maturity 2007 Fund and Utilities Income Fund
(each, a Fund, and collectively, "Funds"). Each Fund's investment objectives are
listed on the inside cover.
Investments in a Fund are made through purchases of the Level Premium
Variable Life Insurance Policies ("Policies") or the Individual Variable Annuity
Contracts ("Contracts") offered by First Investors Life Insurance Company
("First Investors Life"). Policy premiums, net of certain expenses, are paid
into a unit investment trust, First Investors Life Insurance Company Separate
Account B ("Separate Account B"). Purchase payments for the Contracts, net of
certain expenses, are also paid into a unit investment trust, First Investors
Life Variable Annuity Fund C ("Separate Account C"). Separate Account B and
Separate Account C ("Separate Accounts") pool these proceeds to purchase shares
of a Fund designated by purchasers of the Policies or Contracts. Investments in
the Fund are used to fund benefits under the Policies and Contracts. Target
Maturity 2007 Fund is only offered to Contractowners of Separate Account C.
An investment in Life Series Fund, including Cash Management Fund, is
neither insured nor guaranteed by the U.S. Government. There can be no assurance
that the Cash Management Fund will be able to maintain a stable net asset value
of $1.00 per share. Investments by the High Yield Fund in high-yield, high risk
securities, commonly referred to as "junk bonds," may entail risks that are
different or more pronounced than those that would result from investment in
higher-rated securities. See "High Yield Securities--Risk Factors."
This Prospectus sets forth concisely the information about the Funds
that a prospective investor should know before investing and should be retained
for future reference. First Investors Management Company, Inc. ("FIMCO" or
"Adviser") serves as investment adviser to the Funds. A Statement of Additional
Information ("SAI"), dated October 13, 1995 (which is incorporated by reference
herein), has been filed with the Securities and Exchange Commission. The SAI is
available at no charge upon request to the Funds at the address or telephone
number indicated above.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
An investment in these securities is not a deposit or obligation of, or
guaranteed or endorsed by, any bank and is not federally insured or protected by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other governmental agency.
The date of this Prospectus is October 13, 1995
<PAGE>
The investment objectives of each Fund of Life Series Fund offered by
this Prospectus are as follows:
Blue Chip Fund. The investment objective of the Fund is to seek high
total investment return consistent with the preservation of capital. This goal
will be sought by investing, under normal market conditions, primarily in equity
securities of larger, well-capitalized companies with high potential earnings
growth that have shown a history of dividend payments, commonly known as "Blue
Chip" companies.
Cash Management Fund. The objective of the Fund is to seek to earn a
high rate of current income consistent with the preservation of capital and
maintenance of liquidity. The Cash Management Fund will invest in money market
obligations, including high quality securities issued or guaranteed by the U.S.
Government or its agencies and instrumentalities, bank obligations and high
grade corporate instruments.
Discovery Fund. The investment objective of the Fund is to seek
long-term capital appreciation, without regard to dividend or interest income,
through investment in the common stock of companies with small to medium market
capitalization that the Adviser considers to be undervalued or less well known
in the current marketplace and to have the potential for capital growth.
Government Fund. The investment objective of the Fund is to seek to
achieve a significant level of current income which is consistent with security
and liquidity of principal by investing, under normal market conditions,
primarily in obligations issued or guaranteed as to principal and interest by
the U.S. Government, its agencies or instrumentalities, including
mortgage-related securities.
Growth Fund. The investment objective of the Fund is to seek long-term
capital appreciation. This goal will be sought by investing, under normal market
conditions, primarily in common stocks of companies and industries selected for
their growth potential.
High Yield Fund. The primary objective of the Fund is to seek to earn a
high level of current income. The Fund actively seeks to achieve its secondary
objective of capital appreciation to the extent consistent with its primary
objective. The Fund seeks to attain its objectives primarily through investments
in lower-grade, high-yielding, high risk debt securities, commonly referred to
as "junk bonds" ("High Yield Securities").
International Securities Fund. The primary objective of the Fund is to
seek long-term capital growth. As a secondary objective, the Fund seeks to earn
a reasonable level of current income. These objectives are sought, under normal
market conditions, through investment in common stocks, rights and warrants,
preferred stocks, bonds and other debt obligations issued by companies or
governments of any nation, subject to certain restrictions with respect to
concentration and diversification.
Investment Grade Fund. The investment objective of the Fund is to seek
a maximum level of income consistent with investment in investment grade debt
securities.
Target Maturity 2007 Fund. The investment objective of the Fund is to
seek a predictable compounded investment return for investors who hold their
Fund shares until the Fund's maturity, consistent with preservation of capital.
The Fund will seek its objective by investing, under normal market conditions,
at least 65% of its total assets in zero coupon securities which are issued by
the U.S. Government, its agencies or instrumentalities or created by third
parties using securities issued by the U.S. Government, its agencies or
instrumentalities. The Fund intends to terminate in the year 2007. As a result
2
<PAGE>
of the volatile nature of the market for zero coupon securities, the value of
Fund shares prior to the Fund's maturity may fluctuate significantly in price.
Thus, to achieve a predictable return, investors should hold their investments
in the Fund until the Fund liquidates since the Fund's value changes daily with
market conditions. Accordingly, any investor who redeems his or her shares prior
to the Fund's maturity is likely to achieve a different investment result than
the return that was predicted on the date the investment was made, and may even
suffer a significant loss.
Utilities Income Fund. The primary investment objective of Utilities
Income Fund is to seek high current income. Long-term capital appreciation is a
secondary objective. These objectives are sought, under normal market
conditions, through investment in equity and debt securities issued by companies
primarily engaged in the public utilities industry.
There can be no assurance that any Fund will achieve its investment
objectives. See "Investment Objectives and Policies" for a detailed description
of each Fund's investment objectives and policies.
3
<PAGE>
FINANCIAL HIGHLIGHTS
The following table sets forth the per share operating performance data
for a share of beneficial interest outstanding, total return, ratios to average
net assets and other supplemental data for each period indicated. The table
below has been derived from financial statements which have been examined by
Tait, Weller & Baker, independent certified public accountants, whose report
thereon appears in the Statement of Additional Information ("SAI"). This
information should be read in conjunction with the Financial Statements and
Notes thereto, which also appear in the SAI, available at no charge upon request
to the Funds.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
-------------------------------------- -----------------------
Net Realized
Net Asset Value Net and Unrealized Total from Net Net
Beginning of Investment Gain(Loss) Investment Investment Realized Total Net Asset Value
Period Income on Investments Operations Income Gains Distributions End of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Blue Chip
- ---------
3/8/90* to 12/31/90 ..... $ 10.00 $ .07 $ (.02) $ .05 $ -- $ -- $ -- $ 10.05
1991 .................... 10.05 .12 2.50 2.62 .05 -- .05 12.62
1992 .................... 12.62 .16 .67 .83 .21 -- .21 13.24
1993 .................... 13.24 .15 .97 1.12 .15 -- .15 14.21
1994 .................... 14.21 .18 (.39) (.21) .08 .17 .25 13.75
1/1/95 to 6/30/95 ....... 13.75 .13 2.20 2.33 .19 .95 1.14 14.94
Cash Management
- ---------------
1990 .................... 1.00 .072 -- .072 .072 -- .072 1.00
1991 .................... 1.00 .054 -- .054 .054 -- .054 1.00
1992 .................... 1.00 .029 -- .029 .029 -- .029 1.00
1993 .................... 1.00 .027 -- .027 .027 -- .027 1.00
1994 .................... 1.00 .037 -- .037 .037 -- .037 1.00
1/1/95 to 6/30/95 ....... 1.00 .027 -- .027 .027 -- .027 1.00
Discovery
- ---------
1990 .................... 12.40 .14 (.78) (.64) .15 .90 1.05 10.71
1991 .................... 10.71 .07 5.42 5.49 .18 -- .18 16.02
1992 .................... 16.02 -- 2.51 2.51 .03 .15 .18 18.35
1993 .................... 18.35 -- 3.92 3.92 -- .91 .91 21.36
1994 .................... 21.36 .06 (.62) (.56) -- .94 .94 19.86
1/1/95 to 6/30/95 ....... 19.86 .05 2.78 2.83 .06 1.26 1.32 21.37
Government
- ----------
1/7/92* to 12/31/92 ..... 10.00 .47 .51 .98 .33 -- .33 10.65
1993 .................... 10.65 .64 (.02) .66 .70 .19 .89 10.42
1994 .................... 10.42 .79 (1.21) (.42) .25 .05 .30 9.70
1/1/95 to 6/30/95 ....... 9.70 .32 .57 .89 .62 -- .62 9.97
</TABLE>
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* Commencement of operations
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through June 30, 1995.
++ The effect of fees and charges incurred at the separate account level are
not reflected in these performance figures.
(a) Annualized
4
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets
Ratio to Average Net Assets+ Before Expenses Waived or Assumed
Net Assets ---------------------------- --------------------------------- Portfolio
Total End of Period Net Investment Net Investment Turnover
Return++(%) (in thousands) Expenses+(%) Income(%) Expenses(%) Income(%) Rate(%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Blue Chip
- ---------
3/8/90* to 12/31/90 ..... .61(a) $ 3,656 -- 2.95(a) 1.92(a) 1.03(a) 15
1991 .................... 26.17 13,142 1.00 1.88 1.55 1.34 21
1992 .................... 6.67 23,765 .79 1.66 .86 1.60 40
1993 .................... 8.51 34,030 .88 1.27 N/A N/A 37
1994 .................... (1.45) 41,424 .88 1.49 N/A N/A 82
1/1/95 to 6/30/95 ....... 17.90 52,232 .85(a) 2.10(a) N/A N/A 10
Cash Management
- ---------------
1990 .................... 7.49 8,203 .39 6.90 1.15 6.15 N/A
1991 .................... 5.71 9,719 .57 5.39 .93 5.03 N/A
1992 .................... 3.02 8,341 .79 2.99 .98 2.81 N/A
1993 .................... 2.70 4,243 .60 2.67 1.05 2.22 N/A
1994 .................... 3.77 3,929 .60 3.69 1.04 3.25 N/A
1/1/95 to 6/30/95 ....... 2.73 4,082 .59(a) 5.40(a) 1.04(a) 4.95(a) N/A
Discovery
- ---------
1990 .................... (5.47) 960 -- 2.97 2.68 .28 104
1991 .................... 51.73 4,661 .70 .48 1.49 (.31) 93
1992 .................... 15.74 10,527 .91 .02 1.05 (.12) 91
1993 .................... 22.20 21,221 .87 (.03) N/A N/A 69
1994 .................... (2.53) 30,244 .88 .36 N/A N/A 53
1/1/95 to 6/30/95 ....... 15.01 39,099 .85(a) .62(a) N/A N/A 31
Government
- ----------
1/7/92* to 12/31/92 ..... 9.95(a) 5,064 .03(a) 6.64(a) .89(a) 5.79(a) 301
1993 .................... 6.35 8,234 .35 6.60 .84 6.11 525
1994 .................... (4.10) 7,878 .35 6.74 .90 6.19 457
1/1/95 to 6/30/95 ....... 9.58 9,121 .35(a) 6.98(a) .91(a) 6.42(a) 106
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
-----------------------------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
--------------------------------- -----------------------
Net Realized
Net Asset Value Net and Unrealized Total from Net Net
Beginning of Investment Gain(Loss) Investment Investment Realized Total Asset Value
Period Income on Investments Operations Income Gains Distributions End of Period
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Growth
- ------
1990...................... $13.02 $.16 $(.55) $(.39) $.06 $ -- $ .06 $12.57
1991...................... 12.57 .17 4.15 4.32 .18 -- .18 16.71
1992...................... 16.71 .08 1.41 1.49 .18 1.38 1.56 16.64
1993...................... 16.64 .07 .93 1.00 .09 .10 .19 17.45
1994...................... 17.45 .09 (.60) (.51) -- .21 .21 16.73
1/1/95 to 6/30/95......... 16.73 .09 2.45 2.54 .09 .29 .38 18.89
High Yield
- ----------
1990...................... 10.71 1.08 (1.79) (.71) .83 -- .83 9.17
1991...................... 9.17 1.16 1.66 2.82 1.18 -- 1.18 10.81
1992...................... 10.81 1.11 .21 1.32 1.69 -- 1.69 10.44
1993...................... 10.44 .96 .88 1.84 1.12 -- 1.12 11.16
1994...................... 11.16 .87 (1.14) (.27) .31 -- .31 10.58
1/1/95 to 6/30/95......... 10.58 .50 .64 1.14 .96 -- .96 10.76
International Securities
- ------------------------
4/16/90* to 12/31/90...... 10.00 .03 .34 .37 -- -- -- 10.37
1991...................... 10.37 .09 1.49 1.58 .03 .05 .08 11.87
1992...................... 11.87 .15 (.28) (.13) .15 .22 .37 11.37
1993...................... 11.37 .10 2.41 2.51 .14 -- .14 13.74
1994...................... 13.74 .14 (.32) (.18) .05 -- .05 13.51
1/1/95 to 6/30/95......... 13.51 .14 .88 1.02 .12 .25 .37 14.16
Investment Grade
- ----------------
1/7/92* to 12/31/92....... 10.00 .43 .44 .87 .34 -- .34 10.53
1993...................... 10.53 .65 .49 1.14 .71 .01 .72 10.95
1994...................... 10.95 .67 (1.06) (.39) .16 .09 .25 10.31
1/1/95 to 6/30/95......... 10.31 .34 .86 1.20 .53 -- .53 10.98
Utilities Income
- ----------------
11/15/93* to 12/31/93..... 10.00 .01 (.07) (.06) -- -- -- 9.94
1994...................... 9.94 .24 (.96) (.72) .03 -- .03 9.19
1/1/95 to 6/30/95......... 9.19 .14 0.89 1.03 .19 -- .19 10.03
</TABLE>
- ----------------
* Commencement of operations
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through June 30, 1995.
++ The effect of fees and charges incurred at the separate account level are
not reflected in these performance figures.
(a) Annualized
6
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------------------------------------------------
Ratio to Average Net Assets
Ratio to Average Net Assets+ Before Expenses Waived or Assumed
Net Assets ---------------------------- --------------------------------- Portfolio
Total End of Period Net Investment Net Investment Turnover
Return++(%) (in thousands) Expenses+(%) Income(%) Expenses(%) Income(%) Rate(%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth
- ------
1990...................... (2.99) 2,366 -- 3.03 1.64 1.40 28
1991...................... 34.68 7,743 .69 1.21 1.34 .55 148
1992...................... 9.78 16,385 .76 .75 1.20 .30 45
1993...................... 6.00 25,658 .91 .43 N/A N/A 51
1994...................... (2.87) 32,797 .90 .60 N/A N/A 40
1/1/95 to 6/30/95......... 15.46 41,232 .89(a) 1.09(a) N/A N/A 30
High Yield
- ----------
1990...................... (5.77) 18,331 -- 13.21 .91 12.30 35
1991...................... 33.96 23,634 .53 11.95 .89 11.60 40
1992...................... 13.15 24,540 .91 10.48 .96 10.43 84
1993...................... 18.16 30,593 .91 9.49 N/A N/A 96
1994...................... (1.56) 32,285 .88 9.43 N/A N/A 50
1/1/95 to 6/30/95......... 11.44 37,132 .85(a) 10.12(a) N/A N/A 34
International Securities
- ------------------------
4/16/90* to 12/31/90...... 5.21(a) 3,946 -- .99(a) 3.43(a) (2.43)(a) 29
1991...................... 15.24 8,653 1.70 .75 2.27 .18 70
1992...................... (1.13) 12,246 1.03 1.55 1.38 1.20 36
1993...................... 22.17 21,009 1.14 .97 N/A N/A 37
1994...................... (1.29) 31,308 1.03 1.22 N/A N/A 36
1/1/95 to 6/30/95......... 7.88 34,358 1.01(a) 2.09(a) N/A N/A 20
Investment Grade
- ----------------
1/7/92* to 12/31/92....... 8.91(a) 4,707 .23(a) 6.16(a) .93(a) 5.46(a) 72
1993...................... 10.93 10,210 .35 6.32 .85 5.82 64
1994...................... (3.53) 11,602 .37 6.61 .92 6.06 15
1/1/95 to 6/30/95......... 12.04 13,543 .50(a) 6.78(a) .90(a) 6.38(a) 19
Utilities Income
- ----------------
11/15/93* to 12/31/93..... (4.66)(a) 494 -- 1.46(a) 3.99(a) (2.52)(a) 0
1994...................... (7.24) 4,720 .17 4.13 .95 3.35 31
1/1/95 to 6/30/95......... 11.29 8,647 .34(a) 4.50(a) .85(a) 3.99(a) 9
</TABLE>
7
<PAGE>
Target Maturity 2007 Fund
April 25, 1995 to August 31, 1995
(Unaudited)
Per Share Data
Net Asset Value, Beginning of Period ........................ $ 10.00
---------
Income from Investment Operations
Net investment income ................................... .09
Net realized and unrealized gain on investments ......... .92
---------
Total from Investment Operations ..................... 1.01
---------
Net Asset Value, End of Period .............................. $ 11.01
=========
Total Return++ .............................................. 28.80%(a)
Ratio/Supplemental Data
Net Assets, End of Period (in thousands) .................... $ 5,467
Ratios to Average Net Assets:
Expenses ................................................ --
Net Investment Income ................................... 5.39(a)
Ratio to Average Net Assets Before
Expenses Waived
Expenses ................................................ .75%(a)
Net Investment Income ................................... 4.64%(a)
Portfolio Turnover Rate ..................................... 5%
+ All expenses have been waived or assumed by the investment adviser from
commencement of operations through August 31, 1995.
++ The effect of fees and charges incurred at the separate account level are
not reflected in these performance figures.
(a) Annualized
8
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
Blue Chip Fund
Blue Chip Fund seeks to provide investors with high total investment
return consistent with the preservation of capital. The Fund seeks to achieve
its objective by investing, under normal market conditions, at least 65% of its
total assets in securities of "Blue Chip" companies, including common and
preferred stocks and securities convertible into common stock, that the Adviser
believes have potential earnings growth that is greater than the average company
included in the Standard & Poor's 500 Composite Stock Price Index ("S&P 500").
The Fund also may invest up to 35% of its total assets in the equity securities
of non-Blue Chip companies that the Adviser believes have significant potential
for growth of capital or future income consistent with the preservation of
capital. When market conditions warrant, or when the Adviser believes it is
necessary to achieve the Fund's objective, the Fund may invest up to 25% of its
total assets in fixed income securities.
The Fund defines Blue Chip companies as those companies that have a market
capitalization of at least $300 million, are dividend paying and are included in
the S&P 500. Market capitalization is the total market value of a company's
outstanding common stock. Blue Chip companies are considered to be of relatively
high quality and generally exhibit superior fundamental characteristics, which
may include: potential for consistent earnings growth, a history of
profitability and payment of dividends, leadership position in their industries
and markets, proprietary products or services, experienced management, high
return on equity and a strong balance sheet. Blue Chip companies usually exhibit
less investment risk and share price volatility than smaller, less established
companies. Examples of Blue Chip companies are American Telephone & Telegraph,
General Electric, Pepsico Inc. and Bristol-Myers Squibb.
The fixed income securities in which the Fund may invest include money
market instruments (including prime commercial paper, certificates of deposit of
domestic branches of U.S. banks and bankers' acceptances), obligations issued or
guaranteed as to principal and interest by the U.S. Government, its agencies or
instrumentalities ("U.S. Government Obligations"), including mortgage-backed
securities, and corporate debt securities. However, no more than 5% of the
Fund's net assets may be invested in corporate debt securities rated below Baa
by Moody's Investors Service, Inc. ("Moody's") or BBB by Standard & Poor's
("S&P"). The Fund may borrow money for temporary or emergency purposes in
amounts not exceeding 5% of its total assets. The Fund may also invest up to 5%
of its net assets in American Depository Receipts ("ADRs"), enter into
repurchase agreements and make loans of portfolio securities. See "Description
of Certain Securities, Other Investment Policies and Risk Factors," below, and
the SAI for additional information concerning these securities.
Cash Management Fund
Cash Management Fund seeks to earn a high rate of current income
consistent with the preservation of capital and maintenance of liquidity. The
Fund generally can invest only in securities that mature within 397 days from
the date of purchase. In addition, the Fund maintains a dollar-weighted average
portfolio maturity of 90 days or less.
Cash Management Fund invests primarily in (1) high quality marketable
securities issued or guaranteed as to principal and interest by the U.S.
Government, its agencies or instrumentalities, (2) bank certificates of deposit,
bankers' acceptances, time deposits and other short-term obligations issued by
9
<PAGE>
banks and (3) prime commercial paper and high quality, U.S. dollar denominated
short-term corporate bonds and notes. The U.S. Government securities in which
the Fund may invest include a variety of U.S. Treasury securities that differ in
their interest rates, maturities and dates of issue. Securities issued or
guaranteed by agencies or instrumentalities of the U.S. Government may be
supported by the full faith and credit of the United States or by the right of
the issuer to borrow from the U.S. Treasury. See the SAI for additional
information on U.S. Government securities. The Fund may invest in domestic bank
certificates of deposit (insured up to $100,000) and bankers' acceptances (not
insured) issued by domestic banks and savings institutions which are insured by
the Federal Deposit Insurance Corporation ("FDIC") and that have total assets
exceeding $500 million. The Fund also may invest in certificates of deposit
issued by London branches of domestic or foreign banks ("Eurodollar CDs"). The
Fund may invest in time deposits and other short-term obligations, including
uninsured, direct obligations bearing fixed, floating or variable interest
rates, issued by domestic banks, foreign branches of domestic banks, foreign
subsidiaries of domestic banks and domestic and foreign branches of foreign
banks. See Appendix A to the SAI for a description of commercial paper ratings
and Appendix B to the SAI for a description of municipal note ratings. The Fund
also may invest in repurchase agreements with banks that are members of the
Federal Reserve System or securities dealers that are members of a national
securities exchange or are market makers in U.S. Government securities, and, in
either case, only where the debt instrument subject to the repurchase agreement
is a U.S. Treasury or agency obligation.
Cash Management Fund also may purchase high quality, U.S. dollar
denominated short-term bonds and notes, including variable rate and master
demand notes issued by domestic and foreign corporations (including banks).
Floating and variable rate demand notes and bonds permit the Fund, as the
holder, to demand payment of principal at any time, or at specified intervals
not exceeding 397 days, in each case upon not more than 30 days' notice. The
Fund may borrow money for temporary or emergency purposes in amounts not
exceeding 5% of its total assets and make loans of portfolio securities. See
"Description of Certain Securities, Other Investment Policies and Risk Factors"
for additional information concerning these securities.
Cash Management Fund may purchase only obligations that (1) the Adviser
determines present minimal credit risks based on procedures adopted by Life
Series Fund's Board of Trustees, and (2) are either (a) rated in one of the top
two rating categories by at least two nationally recognized statistical ratings
organizations ("NRSROs") (or one, if only one rated the security) or (b) unrated
securities that the Adviser determines are of comparable quality. Securities
qualify as being in the top rating category ("First Tier Securities") if at
least two NRSROs (or one, if only one rated the security) have given it the
highest rating. If only one NRSRO has rated a security, or it is unrated, the
acquisition of that security must be approved or ratified by Life Series Fund's
Board of Trustees. The Fund's purchases of commercial paper are limited to First
Tier Securities. The Fund may not invest more than 5% of its total assets in
securities rated in the second highest rating category ("Second Tier
Securities"). Investments in Second Tier Securities of any one issuer are
limited to the greater of 1% of the Fund's total assets or $1 million. The Fund
generally may invest no more than 5% of its total assets in the securities of a
single issuer (other than securities issued by the U.S. Government, its agencies
or instrumentalities).
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Discovery Fund
Discovery Fund seeks long-term capital appreciation, without regard to
dividend or interest income. The Fund seeks to achieve its objective by
investing in the common stock of companies with small to medium market
capitalization that the Adviser considers to be undervalued or less well known
in the current marketplace and to have potential for capital growth.
The Fund seeks to invest in the common stock of companies that are
undervalued in the current market in relation to fundamental economic values
such as earnings, sales, cash flow and tangible book value; that are early in
their corporate development (i.e., before they become widely recognized and well
known and while their reputations and track records are still emerging); or that
offer the possibility of greater earnings because of revitalized management, new
products or structural changes in the economy. Such companies primarily are
those with small to medium market capitalization, which the Adviser currently
considers to be market capitalization of up to $1.5 billion, but which could be
higher under certain market conditions. The Adviser believes that, over time,
these securities are more likely to appreciate in price than securities whose
market prices have already reached their perceived economic value. In addition,
the Fund intends to diversify its holdings among as many companies and
industries as the Adviser deems appropriate.
Companies that are early in their corporate development may be dependent
on relatively few products or services, may lack adequate capital reserves, may
be dependent on one or two management individuals and may have less of a track
record or historical pattern of performance. In addition, there may be less
information available as to the issuers and their securities may not be well
known to the general public and may not yet have wide institutional ownership.
Thus, the investment risk is higher than that normally associated with larger,
older or better-known companies.
Investments in securities of companies with small to medium market
capitalization are generally considered to offer greater opportunity for
appreciation and to involve greater risk of depreciation than securities of
companies with larger market capitalization. Because the securities of most
companies with small to medium market capitalization are not as broadly traded
as those of companies with larger market capitalization, these securities are
often subject to wider and more abrupt fluctuations in market price. In the
past, there have been prolonged periods when these securities have substantially
underperformed or outperformed the securities of larger capitalization
companies. In addition, smaller capitalization companies generally have fewer
assets available to cushion an unforeseen adverse occurrence and thus such an
occurrence may have a disproportionately negative impact on these companies.
The Fund may invest up to 10% of its total assets in common stocks issued
by foreign companies which are traded on a recognized domestic or foreign
securities exchange. In addition to the fundamental analysis of companies and
their industries which it performs for U.S. issuers, the Adviser evaluates the
economic and political climate of the country in which the company is located
and the principal securities markets in which such securities are traded.
Although the foreign stocks in which the Fund invests are primarily denominated
in foreign currencies, the Fund also may invest in ADRs. The Adviser does not
attempt to time actively either short-term market trends or short-term currency
trends in any market. See "Foreign Securities--Risk Factors" and "American
Depository Receipts and Global Depository Receipts."
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The Fund may borrow money for temporary or emergency purposes in amounts
not exceeding 5% of its total assets. The Fund also may enter into repurchase
agreements and may make loans of portfolio securities. For temporary defensive
purposes, the Fund may invest all of its assets in U.S. Government Obligations,
prime commercial paper, certificates of deposit and bankers' acceptances. See
the SAI for more information regarding these securities.
Government Fund
Government Fund seeks to achieve a significant level of current income
which is consistent with security and liquidity of principal by investing, under
normal market conditions, at least 65% of its assets in U.S. Government
Obligations, including mortgage-backed securities. Securities issued or
guaranteed as to principal and interest by the U.S. Government include a variety
of Treasury securities, which differ only in their interest rates, maturities
and times of issuance. Although the payment of interest and principal on a
portfolio security may be guaranteed by the U.S. Government or one of its
agencies or instrumentalities, shares of the Fund are not insured or guaranteed
by the U.S. Government or any agency or instrumentality. The net asset value of
shares of the Fund generally will fluctuate in response to interest rate levels.
When interest rates rise, prices of fixed income securities generally decline;
when interest rates decline, prices of fixed income securities generally rise.
See "U.S. Government Obligations" and "Debt Securities-Risk Factors," below.
The Fund may invest in mortgage-backed securities, including those
involving Government National Mortgage Association ("GNMA") certificates,
Federal National Mortgage Association ("FNMA") certificates and Federal Home
Loan Mortgage Corporation ("FHLMC") certificates. The Fund also may invest in
securities issued or guaranteed by other U.S. Government agencies or
instrumentalities, including: the Federal Farm Credit System and the Federal
Home Loan Bank (each of which may not borrow from the U.S. Treasury and the
securities of which are not guaranteed by the U.S. Government); the Tennessee
Valley Authority, and the U.S. Postal Service (each of which may borrow from the
U.S. Treasury to meet its obligations); the Farmers Home Administration and the
Export-Import Bank (the securities of which are backed by the full faith and
credit of the United States). The Fund normally reinvests principal payments
(whether regular or pre-paid) in additional mortgage-backed securities. See
"Mortgage-Backed Securities," below.
The Fund may invest up to 35% of its assets in securities other than U.S.
Government Obligations and mortgage-backed securities. These may include: prime
commercial paper, certificates of deposit of domestic branches of U.S. banks,
bankers' acceptances, repurchase agreements (applicable to U.S. Government
Obligations), insured certificates of deposit and certificates representing
accrual on U.S. Treasury securities. The Fund also may make loans of portfolio
securities and invest in zero coupon securities. The Fund may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.
See the SAI for a further discussion of these securities.
For temporary defensive purposes, the Fund may invest all of its assets in
cash, cash equivalents and money market instruments, including bank certificates
of deposit, bankers' acceptances and commercial paper issued by domestic
corporations, short-term fixed income securities or U.S. Government Obligations.
See the SAI for a description of these securities.
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Growth Fund
The investment objective of Growth Fund is long-term capital appreciation.
Current income through the receipt of interest or dividends from investments
will merely be incidental to the Fund's efforts in pursuing its goal. It is the
policy of the Fund to invest, under normal market conditions, primarily in
common stocks and it is anticipated that the Fund will usually be so invested.
It also may invest to a limited degree in convertible securities and preferred
stocks. At least 75% of the value of the Fund's total assets (excluding
securities held for defensive purposes) shall be invested in securities of
companies in industries in which the Adviser, or the Fund's investment
subadviser, Wellington Management Company ("Subadviser" or "WMC"), believes
opportunities for capital growth exist. The Fund does not intend to concentrate
its investments in a particular industry, but it may invest up to 25% of the
value of its assets in a particular industry. The Fund may also invest in ADRs
and Global Depository Receipts ("GDRs"), purchase securities on a when-issued or
delayed delivery basis and make loans of portfolio securities. The Fund may
borrow money for temporary or emergency purposes in amounts not exceeding 5% of
its total assets. For temporary defensive purposes, the Fund may invest all of
its assets in U.S. Government Obligations, investment grade bonds, prime
commercial paper, certificates of deposit, bankers' acceptances, repurchase
agreements and participation interests. See the SAI for a description of these
securities.
High Yield Fund
High Yield Fund primarily seeks high current income and secondarily seeks
growth of capital. The Fund actively seeks to achieve its secondary objective to
the extent consistent with its primary objective. The Fund seeks to achieve its
objectives by investing, under normal market conditions, at least 65% of its
total assets in high risk, high yield securities, commonly referred to as "junk
bonds" ("High Yield Securities"). High Yield Securities include the following
instruments: fixed, variable or floating rate debt obligations (including bonds,
debentures and notes) which are rated below Baa by Moody's or below BBB by S&P,
or, if unrated, are deemed to be of comparable quality by the Adviser; preferred
stocks and dividend-paying common stocks that have yields comparable to those of
high yielding debt securities; any of the foregoing securities of companies that
are financially troubled, in default or undergoing bankruptcy or reorganization
("Deep Discount Securities"); and any securities convertible into any of the
foregoing. See "High Yield Securities--Risk Factors" and "Deep Discount
Securities."
The Fund may invest up to 5% of its total assets in debt securities issued
by foreign governments and companies located outside the United States and
denominated in foreign currency. The Fund may borrow money for temporary or
emergency purposes in amounts not exceeding 5% of its total assets, make loans
of portfolio securities, enter into repurchase agreements and invest in zero
coupon and pay-in-kind securities. The Fund may also invest in securities on a
"when issued" or delayed delivery basis. See "Description of Certain Securities,
Other Investment Policies and Risk Factors," below, and the SAI for more
information concerning these securities.
The Fund may invest up to 35% of its total assets in securities other than
High Yield Securities, including: dividend-paying common stocks; securities
convertible into, or exchangeable for, common stock; debt obligations of all
types (including bonds, debentures and notes) rated A or better by Moody's or
S&P; U.S. Government Obligations; warrants and money market instruments
consisting of prime commercial paper, certificates of deposit of domestic
branches of U.S. banks, bankers' acceptances and repurchase agreements.
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In any period of market weakness or of uncertain market or economic
conditions, the Fund may establish a temporary defensive position to preserve
capital by having all or part of its assets invested in investment grade debt
securities or retained in cash or cash equivalents, including bank certificates
of deposit, bankers' acceptances, U.S. Government Obligations and commercial
paper issued by domestic corporations. See "Description of Certain Securities,
Other Investment Policies and Risk Factors," below.
The medium- to lower-rated, and certain of the unrated securities in which
the Fund invests tend to offer higher yields than higher-rated securities with
the same maturities because the historical financial condition of the issuers of
such securities may not be as strong as that of other issuers. Debt obligations
rated lower than Baa or BBB by Moody's or S&P, respectively, are speculative and
generally involve more risk of loss of principal and income than higher-rated
securities. Also, their yields and market value tend to fluctuate more than
higher quality securities. The greater risks and fluctuations in yield and value
occur because investors generally perceive issuers of lower-rated and unrated
securities to be less creditworthy. These risks cannot be eliminated, but may be
reduced by diversifying holdings to minimize the portfolio impact of any single
investment. In addition, fluctuations in market value does not affect the cash
income from the securities, but are reflected in the Fund's net asset value.
When interest rates rise, the net asset value of the Fund tends to decrease.
When interest rates decline, the net asset value of the Fund tends to increase.
Variable or floating rate debt obligations in which the Fund may invest
periodically adjust their interest rates to reflect changing economic
conditions. Thus, changing economic conditions specified by the terms of the
security would serve to change the interest rate and the return offered to the
investor. This reduces the effect of changing market conditions on the
security's underlying market value.
A High Yield Security may itself be convertible into or exchangeable for
equity securities, or may carry with it the right to acquire equity securities
evidenced by warrants attached to the security or acquired as part of a unit
with the security. Although the Fund invests primarily in High Yield Securities,
securities received upon conversion or exercise of warrants and securities
remaining upon the break-up of units or detachment of warrants may be retained
to permit orderly disposition, to establish a long-term holding basis for
Federal income tax purposes or to seek capital appreciation.
Because of the greater number of investment considerations involved in
investing in High Yield Securities, the achievement of the Fund's investment
objectives depends more on the Adviser's research abilities than would be the
case if the Fund were investing primarily in securities in the higher rated
categories. Because medium- to lower-rated securities generally involve greater
risks of loss of income and principal than higher-rated securities, investors
should consider carefully the relative risks associated with investments in
securities that carry medium to lower ratings or, if unrated, deemed to be of
comparable quality by the Adviser. See "High Yield Securities--Risk Factors" and
Appendix A for a description of corporate bond ratings.
The dollar weighted average of credit ratings of all bonds held by the
Fund during the 1994 fiscal year, computed on a monthly basis, is set forth
below. This information reflects the average composition of the Fund's assets
during the 1994 fiscal year and is not necessarily representative of the Fund as
of the end of its 1994 fiscal year, the current fiscal year or at any other time
in the future.
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Comparable Quality of
Unrated Securities to
Rated by Moody's Bonds Rated by Moody's
---------------- ----------------------
Baa 1.07% 0%
Ba 12.74 1.72
B 67.88 2.31
Caa 4.82 0.98
Ca 0.10 0
----- ----
Total 86.61% 5.01%
International Securities Fund
International Securities Fund primarily seeks long-term capital growth and
secondarily seeks to earn a reasonable level of current income. The Fund may
invest in all types of securities issued by companies and government
instrumentalities of any nation approved by the Trustees, subject only to
industry concentration and issuer diversification restrictions described below
and in the SAI. This investment flexibility permits the Fund to react to rapidly
changing economic conditions among countries which cause the relative
attractiveness of investments within national markets to be subject to frequent
reappraisal. It is a fundamental policy of the Fund that no more than 35% of its
total assets will be invested in securities issued by U.S. companies and U.S.
Government Obligations or cash and cash equivalents denominated in U.S.
currency. In addition, the Fund presently does not intend to invest more than
35% of its total assets in any one particular country. Further, except for
temporary defensive purposes, the Fund's assets will be invested in securities
of at least three different countries outside the United States. See "Foreign
Securities--Risk Factors". For defensive purposes, the Fund may temporarily
invest in securities issued by U.S. companies and the U.S. Government and its
agencies and instrumentalities, or cash equivalents denominated in U.S.
currency, without limitation as to amount.
The Fund may purchase securities traded on any foreign stock exchange. The
Fund may also purchase ADRs and GDRs. See "American Depository Receipts and
Global Depository Receipts," below. The Fund also may invest up to 25% of its
total assets in unlisted securities of foreign issuers; provided, however, that
no more than 15% of the value of its net assets may be invested in unlisted
securities with a limited trading market and other illiquid investments. The
investment standards for the selection of unlisted securities are the same as
those used in the purchase of securities traded on a stock exchange.
The Fund may invest in warrants, which may or may not be listed on a
recognized United States or foreign exchange. The Fund also may enter into
repurchase agreements, purchase securities on a when-issued or delayed delivery
basis and make loans of portfolio securities. The Fund also may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.
See the SAI for further information concerning these securities.
Investment Grade Fund
Investment Grade Fund seeks to generate a maximum level of income
consistent with investment in investment grade debt securities. The Fund seeks
to achieve its objective by investing, under normal market conditions, at least
65% of its total assets in debt securities of U.S. issuers that are rated in the
four highest rated categories by Moody's or S&P, or in unrated securities that
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are deemed to be of comparable quality by the Adviser ("investment grade
securities"). The Fund may invest up to 35% of its total assets in U.S.
Government Obligations, including mortgage-related securities, dividend-paying
common and preferred stocks, obligations convertible into common stocks,
repurchase agreements, debt securities rated below investment grade and money
market instruments. The Fund may invest up to 5% of its net assets in corporate
or government debt securities of foreign issuers which are U.S. dollar
denominated and traded in U.S. markets. The Fund may also borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its total assets.
The Fund may purchase securities on a when-issued basis, make loans of portfolio
securities and invest in zero coupon or pay-in-kind securities. See "Description
of Certain Securities, Other Investment Policies and Risk Factors," below, and
the SAI for additional information concerning these securities.
The published reports of rating services are considered by the Adviser in
selecting rated securities for the Fund's portfolio. The Adviser also relies,
among other things, on its own credit analysis, which includes a study of the
existing debt's capital structure, the issuer's ability to service debt (or to
pay dividends, if investing in common or preferred stock) and the current trend
of earnings for the issuer. Although up to 100% of the Fund's total assets can
be invested in debt securities rated at least Baa by Moody's or at least BBB by
S&P, or unrated debt securities deemed to be of comparable quality by the
Adviser, no more than 5% of the Fund's net assets may be invested in debt
securities rated lower than Baa by Moody's or BBB by S&P (including securities
that have been downgraded), or, if unrated, deemed to be of comparable quality
by the Adviser, or in any equity securities of any issuer if a majority of the
debt securities of such issuer are rated lower than Baa by Moody's or BBB by
S&P. Securities rated BBB or Baa by S&P or Moody's, respectively, are considered
to be speculative with respect to the issuer's ability to make principal and
interest payments. The Adviser continually monitors the investments in the
Fund's portfolio and carefully evaluates on a case-by-case basis whether to
dispose of or retain a debt security which has been downgraded to a rating lower
than investment grade. See "Debt Securities--Risk Factors" and Appendix A for a
description of corporate bond ratings.
For temporary defensive purposes, the Fund may invest all of its assets in
money market instruments, short-term fixed income securities or U.S. Government
Obligations. See "Description of Certain Securities, Other Investment Policies
and Risk Factors," below, and the SAI.
Target Maturity 2007 Fund
Target Maturity 2007 Fund seeks to provide a predictable compounded
investment for investors who hold their Fund shares until the Fund's maturity,
consistent with preservation of capital. The Fund will seek its objective by
investing, under normal market conditions, at least 65% of its total assets in
zero coupon securities which are issued by the U.S. Government and its agencies
and instrumentalities or created by third parties using securities issued by the
U.S. Government and its agencies and instrumentalities. These investments will
mature no later than December 31, 2007 (the "Maturity Date"). On the Maturity
Date, the Fund will be converted to cash and distributed or reinvested in
another Fund of Life Series Fund at the investor's choice.
The Fund seeks to provide investors with a positive total return at the
Maturity Date which, together with the reinvestment of all dividends and
distributions, exceeds their original investment in the Fund by a relatively
predictable amount. While the risk of fluctuation in the values of zero coupon
securities is greater when the period to maturity is longer, that risk tends to
diminish as the Maturity Date approaches. Although an investor can redeem shares
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at the current net asset value at any time, any investor who redeems his or her
shares prior to the Maturity Date is likely to achieve a different investment
result than the return that was predicted on the date the investment was made,
and may even suffer a significant loss.
Zero coupon securities are debt obligations that do not entitle the holder
to any periodic payment of interest prior to maturity or a specified date when
the securities begin paying current interest. They are issued and traded at a
discount from their face amount or par value, which discount varies depending on
the time remaining until maturity, prevailing interest rates, liquidity of the
security and the perceived credit quality of the issuer. When held to maturity,
their entire return, which consists of the accretion of the discount, comes from
the difference between their issue price and their maturity value. This
difference is known at the time of purchase, so investors holding zero coupon
securities until maturity know the amount of their investment return at the time
of their investment. The market values are subject to greater market
fluctuations from changing interest rates prior to maturity than the values of
debt obligations of comparable maturities that bear interest currently.
See "Zero Coupon Securities-Risk Factors."
A portion of the total realized return from conventional interest-paying
bonds comes from the reinvestment of periodic interest. Since the rate to be
earned on these reinvestments may be higher or lower than the rate quoted on the
interest-paying bonds at the time of the original purchase, the total return of
interest-paying bonds is uncertain even for investors holding the security to
its maturity. This uncertainty is commonly referred to as reinvestment risk and
can have a significant impact on total realized investment return. With zero
coupon securities, however, there are no cash distributions to reinvest, so
investors bear no reinvestment risk if they hold the zero coupon securities to
maturity.
The Fund primarily will purchase three types of zero coupon securities:
(1) U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal
Securities), which are created when the coupon payments and the principal
payment are stripped from an outstanding Treasury security by the Federal
Reserve Bank. Bonds issued by the Resolution Funding Corporation (REFCORP) can
also be stripped in this fashion. (2) STRIPS which are created when a dealer
deposits a Treasury security or a Federal agency security with a custodian for
safekeeping and then sells the coupon payments and principal payment that will
be generated by this security. Bonds issued by the Financing Corporation (FICO)
can be stripped in this fashion. (3) Zero coupon securities of federal agencies
and instrumentalities either issued directly by an agency in the form of a zero
coupon bond or created by stripping an outstanding bond.
The Fund may invest up to 35% of its total assets in the following
instruments: interest-bearing obligations issued by the U.S. Government and its
agencies and instrumentalities (see "U.S. Government Obligations"), including
zero coupon securities maturing beyond 2007; corporate debt securities,
including corporate zero coupon securities; repurchase agreements; and money
market instruments consisting of prime commercial paper, certificates of deposit
of domestic branches of U.S. banks and bankers' acceptances. The Fund may only
invest in debt securities rated A or better by Moody's or S&P or in unrated
securities that are deemed to be of comparable quality by the Adviser. Debt
obligations rated A or better by Moody's or S&P comprise what are known as
high-grade bonds and are regarded as having a strong capacity to pay principal
and interest. See Appendix A for a description of corporate bond ratings. The
Fund may also invest in restricted and illiquid securities, make loans of
17
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portfolio securities and purchase securities on a when-issued basis. See the SAI
for more information regarding these types of investments.
Utilities Income Fund
The primary investment objective of Utilities Income Fund is to seek high
current income. Long-term capital appreciation is a secondary objective. The
Fund seeks its objectives by investing, under normal market conditions, at least
65% of its total assets in equity and debt securities issued by companies
primarily engaged in the public utilities industry. Equity securities in which
the Fund may invest include common stocks, preferred stocks, securities
convertible into common stocks or preferred stocks, and warrants to purchase
common or preferred stocks. Debt securities in which the Fund may invest will be
rated at the time of investment at least A by Moody's or S&P or, if unrated,
will be deemed to be of comparable quality as determined by the Adviser. Debt
securities rated A or higher by Moody's or S&P or, if unrated, deemed to be of
comparable quality by the Adviser, are regarded as having a strong capacity to
pay principal and interest. The Fund's policy is to attempt to sell, within a
reasonable time period, a debt security in its portfolio which has been
downgraded below A, provided that such disposition is in the best interests of
the Fund and its shareholders. See Appendix A for a description of corporate
bond ratings. The portion of the Fund's assets invested in equity securities and
in debt securities will vary from time to time due to changes in interest rates
and economic and other factors.
The utility companies in which the Fund will invest include companies
primarily engaged in the ownership or operation of facilities used to provide
electricity, gas, water or telecommunications (including telephone, telegraph
and satellite, but not companies engaged in public broadcasting or cable
television). For these purposes, "primarily engaged" means that (1) more than
50% of the company's assets are devoted to the ownership or operation of one or
more facilities as described above, or (2) more than 50% of the company's
operating revenues are derived from the business or combination of any of the
businesses described above. It should be noted that based on this definition,
the Fund may invest in companies which are also involved to a significant degree
in non-public utilities activities.
Utility stocks generally offer dividend yields that exceed those of
industrial companies and their prices tend to be less volatile than stocks of
industrial companies. However, utility stocks can still be affected by the risks
of the stock of industrial companies. Because the Fund concentrates its
investments in public utilities companies, the value of its shares will be
especially affected by factors peculiar to the utilities industry, and may
fluctuate more widely than the value of shares of a fund that invests in a
broader range of industries. See "Utilities Industries--Risk Factors."
The Fund may invest up to 35% of its total assets in the following
instruments: debt securities (rated at least A by Moody's or S&P) and common and
preferred stocks of non-utility companies; U.S. Government Obligations;
mortgage-backed securities; cash; and money market instruments consisting of
prime commercial paper, bankers' acceptances, certificates of deposit and
repurchase agreements. The Fund may invest in securities on a "when-issued" or
delayed delivery basis and make loans of portfolio securities. The Fund may
invest up to 5% of its net assets in ADRs. The Fund may borrow money for
temporary or emergency purposes in amounts not exceeding 5% of its net assets.
The Fund also may invest in zero coupon and pay-in-kind securities. In addition,
in any period of market weakness or of uncertain market or economic conditions,
the Fund may establish a temporary defensive position to preserve capital by
having all of its assets invested in short-term fixed income securities or
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retained in cash or cash equivalents. See the SAI for a description of these
securities.
General. Each Fund's net asset value fluctuates based mainly upon changes
in the value of its portfolio securities. Each Fund's investment objectives and
certain investment limitations set forth in the SAI are fundamental policies
that may not be changed without shareholder approval. There can be no assurance
that any Fund will achieve its investment objectives.
Description of Certain Securities, Other Investment Policies and Risk Factors
American Depository Receipts and Global Depository Receipts. International
Securities Fund, Growth Fund, Utilities Income Fund and Discovery Fund may
invest in sponsored and unsponsored ADRs. ADRs are receipts typically issued by
a U.S. bank or trust company evidencing ownership of the underlying securities
of foreign issuers, and other forms of depository receipts for securities of
foreign issuers. Generally, ADRs, in registered form, are denominated in U.S.
dollars and are designed for use in the U.S. securities markets. Thus, these
securities are not denominated in the same currency as the securities into which
they may be converted. In addition, the issuers of the securities underlying
unsponsored ADRs are not obligated to disclose material information in the
United States and, therefore, there may be less information available regarding
such issuers and there may not be a correlation between such information and the
market value to the ADRs. International Securities Fund and Growth Fund may also
invest in sponsored and unsponsored GDRs. GDRs are issued globally and evidence
a similar ownership arrangement. Generally, GDRs are designed for trading in
non-U.S. securities markets. ADRs and GDRs are considered to be foreign
securities by International Securities Fund, Growth Fund, Utilities Income Fund
and Discovery Fund, as appropriate. See "Foreign Securities--Risk Factors."
Bankers' Acceptances. Each Fund may invest in bankers' acceptances.
Bankers' acceptances are short-term credit instruments used to finance
commercial transactions. Generally, an acceptance is a time draft drawn on a
bank by an exporter or importer to obtain a stated amount of funds to pay for
specific merchandise. The draft is then "accepted" by a bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an asset
or it may be sold in the secondary market at the going rate of interest for a
specific maturity. Although maturities for acceptances can be as long as 270
days, most acceptances have maturities of six months or less.
Certificates of Deposit. Each Fund may invest in bank certificates of
deposit ("CDs"). The FDIC is an agency of the U.S. Government which insures the
deposits of certain banks and savings and loan associations up to $100,000 per
deposit. The interest on such deposits may not be insured if this limit is
exceeded. Current Federal regulations also permit such institutions to issue
insured negotiable CDs in amounts of $100,000 or more, without regard to the
interest rate ceilings on other deposits. To remain fully insured, these
investments currently must be limited to $100,000 per insured bank or savings
and loan association.
Commercial Paper. Commercial paper is a promissory note issued by a
corporation to finance short-term credit needs which may either be unsecured or
backed by a letter of credit. Commercial paper includes notes, drafts or similar
instruments payable on demand or having a maturity at the time of issuance not
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exceeding nine months, exclusive of days of grace or any renewal thereof. See
Appendix A to the SAI for a description of commercial paper ratings.
Convertible Securities. A convertible security is a bond, debenture, note,
preferred stock or other security that may be converted into or exchanged for a
prescribed amount of common stock of the same or a different issuer within a
particular period of time at a specified price or formula. A convertible
security entitles the holder to receive interest paid or accrued on debt or
dividends paid on preferred stock until the convertible security matures or is
redeemed, converted or exchanged. Convertible securities have unique investment
characteristics in that they generally (1) have higher yields than common
stocks, but lower yields than comparable non-convertible securities, (2) are
less subject to fluctuation in value than the underlying stock because they have
fixed income characteristics, and (3) provide the potential for capital
appreciation if the market price of the underlying common stock increases. See
the SAI for more information on convertible securities.
Debt Securities--Risk Factors. The market value of debt securities is
influenced primarily by changes in the level of interest rates. Generally, as
interest rates rise, the market value of debt securities decreases. Conversely,
as interest rates fall, the market value of debt securities increases. Factors
which could result in a rise in interest rates, and a decrease in the market
value of debt securities, include an increase in inflation or inflation
expectations, an increase in the rate of U.S. economic growth, an expansion in
the Federal budget deficit or an increase in the price of commodities such as
oil. In addition, the market value of debt securities is influenced by
perceptions of the credit risks associated with such securities. Sale of debt
securities prior to maturity may result in a loss and the inability to replace
the sold securities with debt securities with a similar yield. Debt obligations
rated lower than Baa by Moody's or BBB by S&P, commonly referred to as "junk
bonds," are speculative and generally involve a higher risk of loss of principal
and income than higher-rated securities. See "High Yield Securities--Risk
Factors" and Appendix A for a description of corporate bond ratings.
Deep Discount Securities. High Yield Fund may invest up to 15% of its
total assets in securities of companies that are financially troubled, in
default or undergoing bankruptcy or reorganization. Such securities are usually
available at a deep discount from the face value of the instrument. The Fund
will invest in Deep Discount Securities when the Adviser believes that there
exist factors that are likely to restore the company to a healthy financial
condition. Such factors include a restructuring of debt, management changes,
existence of adequate assets or other unusual circumstances. Debt instruments
purchased at deep discounts may pay very high effective yields. In addition, if
the financial condition of the issuer improves, the underlying value of the
security may increase, resulting in a capital gain. If the company defaults on
its obligations or remains in default, or if the plan of reorganization is
insufficient for debtholders, the Deep Discount Securities may stop paying
interest and lose value or become worthless. The Adviser will balance the
benefits of Deep Discount Securities with their risks. While a diversified
portfolio may reduce the overall impact of a Deep Discount Security that is in
default or loses its value, the risk cannot be eliminated. See "High Yield
Securities--Risk Factors."
Eurodollar Certificates of Deposit. Cash Management Fund may invest in
Eurodollar CDs, which are issued by London branches of domestic or foreign
banks. Such securities involve risks that differ from certificates of deposit
issued by domestic branches of U.S. banks. These risks include future political
and economic developments, the possible imposition of United Kingdom withholding
taxes on interest income payable on the securities, the possible establishment
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of exchange controls, the possible seizure or nationalization of foreign
deposits or the adoption of other foreign governmental restrictions that might
adversely affect the payment of principal and interest on such securities.
Foreign Securities--Risk Factors. International Securities Fund, Growth
Fund and Discovery Fund may sell a security denominated in a foreign currency
and retain the proceeds in that foreign currency to use at a future date (to
purchase other securities denominated in that currency) or a Fund may buy
foreign currency outright to purchase securities denominated in that foreign
currency at a future date. Because a Fund does not intend to hedge their foreign
investments, the Fund will be affected by changes in exchange control
regulations and fluctuations in the relative rates of exchange between the
currencies of different nations, as well as by economic and political
developments. Other risks involved in foreign securities include the following:
there may be less publicly available information about foreign companies
comparable to the reports and ratings that are published about companies in the
United States; foreign companies are not generally subject to uniform
accounting, auditing and financial reporting standards and requirements
comparable to those applicable to U.S. companies; some foreign stock markets
have substantially less volume than U.S. markets, and securities of some foreign
companies are less liquid and more volatile than securities of comparable U.S.
companies; there may be less government supervision and regulation of foreign
stock exchanges, brokers and listed companies than exist in the United States;
and there may be the possibility of expropriation or confiscatory taxation,
political or social instability or diplomatic developments which could affect
assets of a Fund held in foreign countries.
International Securities Fund's and Discovery Fund's investments in
emerging markets include investments in countries whose economies or securities
markets are not yet highly developed. Special considerations associated with
these investments (in addition to the considerations regarding foreign
investments generally) may include, among others, greater political
uncertainties, an economy's dependence on revenues from particular commodities
or on international aid or development assistance, currency transfer
restrictions, a limited number of potential buyers for such securities and
delays and disruptions in securities settlement procedures.
High Yield Securities--Risk Factors. High Yield Securities are subject to
certain risks that may not be present with investments in higher grade
securities.
Effect of Interest Rate and Economic Changes. High Yield Securities
rated lower than Baa by Moody's or BBB by S&P, commonly referred to as "junk
bonds" are speculative and generally involve a higher risk or loss of principal
and income than higher-rated securities. The prices of High Yield Securities
tend to be less sensitive to interest rate changes than higher-rated
investments, but may be more sensitive to adverse economic changes or individual
corporate developments. Periods of economic uncertainty and changes generally
result in increased volatility in the market prices and yields of High Yield
Securities and thus in a Fund's net asset value. A strong economic downturn or a
substantial period of rising interest rates could severely affect the market for
High Yield Securities. In these circumstances, highly leveraged companies might
have greater difficulty in making principal and interest payments, meeting
projected business goals, and obtaining additional financing. Thus, there could
be a higher incidence of default. This would affect the value of such securities
and thus a Fund's net asset value. Further, if the issuer of a security owned by
a Fund defaults, that Fund might incur additional expenses to seek recovery.
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Generally, when interest rates rise, the value of fixed rate debt
obligations, including High Yield Securities, tends to decrease; when interest
rates fall, the value of fixed rate debt obligations tends to increase. If an
issuer of a High Yield Security containing a redemption or call provision
exercises either provision in a declining interest rate market, a Fund would
have to replace the security, which could result in a decreased return for
shareholders. Conversely, if a Fund experiences unexpected net redemptions in a
rising interest rate market, it might be forced to sell certain securities,
regardless of investment merit. This could result in decreasing the assets to
which Fund expenses could be allocated and in a reduced rate of return for that
Fund. While it is impossible to protect entirely against this risk,
diversification of a Fund's portfolio and the Adviser's careful analysis of
prospective portfolio securities should minimize the impact of a decrease in
value of a particular security or group of securities in a Fund's portfolio.
The High Yield Securities Market. The market for below investment
grade bonds expanded rapidly in the 1980's, and its growth paralleled a long
economic expansion. During that period, the yields on below investment grade
bonds were very high. Such higher yields did not reflect the value of the income
stream that holders of such bonds expected, but rather the risk that holders of
such bonds could lose a substantial portion of their value as a result of the
issuers' financial restructuring or default. In fact, from 1989 to 1991 during a
period of economic recession, the percentage of lower quality securities that
defaulted rose significantly, although the default rate decreased in subsequent
years. There can be no assurance that such declines in the below investment
grade market will not reoccur. The market for below investment grade bonds
generally is thinner and less active than that for higher quality bonds, which
may limit a Fund's ability to sell such securities at fair value in response to
changes in the economy or the financial markets. Adverse publicity and investor
perceptions, whether or not based on fundamental analysis, may also decrease the
values and liquidity of lower rated securities, especially in a thinly traded
market.
Credit Ratings. The credit ratings issued by credit rating services
may not fully reflect the true risks of an investment. For example, credit
ratings typically evaluate the safety of principal and interest payments, not
market value risk, of High Yield Securities. Also, credit rating agencies may
fail to change on a timely basis a credit rating to reflect changes in economic
or company conditions that affect a security's market value. Although the
Adviser considers ratings of recognized rating services such as Moody's and S&P,
the Adviser primarily relies on its own credit analysis, which includes a study
of existing debt, capital structure, ability to service debt and to pay
dividends, the issuer's sensitivity to economic conditions, its operating
history and the current trend of earnings. High Yield Fund may invest in
securities rated D by S&P or C by Moody's or, if unrated, deemed to be of
comparable quality by the Adviser. Debt obligations with these ratings either
have defaulted or are in great danger of defaulting and are considered to be
highly speculative. See "Deep Discount Securities." The Adviser continually
monitors the investments in a Fund's portfolio and carefully evaluates whether
to dispose of or retain High Yield Securities whose credit ratings have changed.
See Appendix A for a description of corporate bond ratings.
Liquidity and Valuation.Lower-rated bonds are typically traded among a
smaller number of broker-dealers than in a broad secondary market. Purchasers of
High Yield Securities tend to be institutions, rather than individuals, which is
a factor that further limits the secondary market. To the extent that no
established retail secondary market exists, many High Yield Securities may not
be as liquid as higher-grade bonds. A less active and thinner market for High
Yield Securities than that available for higher quality securities may result in
more volatile valuations of a Fund's holdings and more difficulty in executing
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trades at favorable prices during unsettled market conditions.
The ability of a Fund to value or sell High Yield Securities will be
adversely affected to the extent that such securities are thinly traded or
illiquid. During such periods, there may be less reliable objective information
available and thus the responsibility of Life Series Fund's Board of Trustees to
value High Yield Securities becomes more difficult, with judgment playing a
greater role. Further, adverse publicity about the economy or a particular
issuer may adversely affect the public's perception of the value, and thus
liquidity, of a High Yield Security, whether or not such perceptions are based
on a fundamental analysis.
Legislation. Provisions of the Revenue Reconciliation Act of 1989
limit a corporate issuer's deduction for a portion of the original issue
discount on "high yield discount" obligations (including certain pay-in-kind
securities). This limitation could have a materially adverse impact on the
market for certain High Yield Securities. From time to time, legislators and
regulators have proposed other legislation that would limit the use of high
yield debt securities in leveraged buyouts, mergers and acquisitions. It is not
certain whether such proposals, which also could adversely affect High Yield
Securities, will be enacted into law.
Mortgage-Backed Securities
Mortgage loans made by banks, savings and loan institutions and other
lenders are often assembled into pools, the interests in which are issued and
guaranteed by an agency or instrumentality of the U.S. Government, though not
necessarily by the U.S. Government itself. Interests in such pools are referred
to herein as "mortgage-backed securities." The market value of these securities
will fluctuate as interest rates and market conditions change. In addition,
prepayment of principal by the mortgagees, which often occurs with
mortgage-backed securities when interest rates decline, can significantly change
the realized yield of these securities.
GNMA certificates are backed as to the timely payment of principal
and interest by the full faith and credit of the U.S. Government. Payments of
principal and interest on FNMA certificates are guaranteed only by FNMA itself,
not by the full faith and credit of the U.S. Government. FHLMC certificates
represent mortgages for which FHLMC has guaranteed the timely payment of
principal and interest but, like a FNMA certificate, they are not guaranteed by
the full faith and credit of the U.S. Government.
Collateralized Mortgage Obligations and Multiclass Pass-Through
Securities. Collateralized mortgage obligations ("CMOs") are debt obligations
collateralized by mortgage loans or mortgage pass-through securities. Typically,
CMOs are collateralized by GNMA certificates or other government mortgage-backed
securities (such collateral collectively hereinafter referred to as "Mortgage
Assets"). Multiclass pass-through securities are interests in trusts that are
comprised of Mortgage Assets. Unless the context indicates otherwise, references
herein to CMOs include Multiclass pass-through securities. Payments of principal
of, and interest on, the Mortgage Assets, and any reinvestment income thereon,
provide the funds to pay debt service on the CMOs or to make scheduled
distributions on the multiclass pass-through securities. CMOs in which
Government Fund may invest are issued or guaranteed by U.S. Government agencies
or instrumentalities, such as FNMA and FHLMC. See the SAI for more information
on CMOs.
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Stripped Mortgage-Backed Securities. Government Fund and Target
Maturity 2007 Fund may invest in stripped mortgage-backed securities ("SMBS"),
which are derivative multiclass mortgage securities. SMBS are usually structured
with two classes that receive different proportions of the interest and
principal distributions from a pool of mortgage assets. A common type of SMBS
will have one class receiving most of the interest and the remainder of the
principal. In the most extreme case, one class will receive all of the interest
while the other class will receive all of the principal. If the underlying
mortgage assets experience greater than anticipated prepayments of principal,
the Fund may fail to fully recoup its initial investment in these securities.
The market value of the class consisting primarily or entirely of principal
payments generally is unusually volatile in response to changes in interest
rates.
Risks of Mortgage-Backed Securities. Investments in mortgage-backed
securities entail both market and prepayment risk. Fixed-rate mortgage-backed
securities are priced to reflect, among other things, current and perceived
interest rate conditions. As conditions change, market values will fluctuate. In
addition, the mortgages underlying mortgage-backed securities generally may be
prepaid in whole or in part at the option of the individual buyer. Prepayments
of the underlying mortgages can affect the yield to maturity on mortgage-backed
securities and, if interest rates decline, the prepayment may only be invested
at the then prevailing lower interest rate. Changes in market conditions,
particularly during periods of rapid or unanticipated changes in market interest
rates, may result in volatility and reduced liquidity of the market value of
certain mortgage-backed securities. CMOs and SMBS involve similar risks,
although they may be more volatile. In addition, because SMBS were only recently
introduced, established trading markets for these securities have not yet
developed, although the securities are traded among institutional investors and
investment banking firms.
Preferred Stock. A preferred stock is a blend of the characteristics of a
bond and common stock. It can offer the higher yield of a bond and has priority
over common stock in equity ownership, but does not have the seniority of a bond
and, unlike common stock, its participation in the issuer's growth may be
limited. Preferred stock has preference over common stock in the receipt of
dividends and in any residual assets after payment to creditors should the
issuer be dissolved. Although the dividend is set at a fixed annual rate, in
some circumstances it can be changed or omitted by the issuer.
Restricted and Illiquid Securities. Each Fund, other than Cash Management
Fund, may invest up to 15% of its net assets in illiquid securities. Cash
Management Fund may invest up to 10% of its net assets in illiquid securities.
These securities include (1) securities that are illiquid due to the absence of
a readily available market or due to legal or contractual restrictions on resale
and (2) repurchase agreements maturing in more than seven days. However,
illiquid securities for purposes of this limitation do not include securities
eligible for resale to qualified institutional buyers pursuant to Rule 144A
under the Securities Act of 1933, as amended, which Life Series Fund's Board of
Trustees or the Adviser or the Subadviser has determined are liquid under
Board-approved guidelines. See the SAI for more information regarding restricted
and illiquid securities.
Under current guidelines of the staff of the SEC, interest-only and
principal-only classes of fixed-rate mortgage-backed securities in which
Government Fund may invest are considered illiquid. However, such securities
issued by the U.S. Government or one of its agencies or instrumentalities will
not be considered illiquid if the Adviser has determined that they are liquid
pursuant to guidelines established by Life Series Fund's Board of Trustees.
Government Fund may not be able to sell illiquid securities when the Adviser
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considers it desirable to do so or may have to sell such securities at a price
lower than could be obtained if they were more liquid. Also the sale of illiquid
securities may require more time and may result in higher dealer discounts and
other selling expenses than does the sale of securities that are not illiquid.
Illiquid securities may be more difficult to value due to the unavailability of
reliable market quotations for such securities, and investment in illiquid
securities may have an adverse impact on net asset value.
Time Deposits. Cash Management Fund may invest in time deposits. Time
deposits are non-negotiable deposits maintained in a banking institution for a
specified period of time at a stated interest rate. For the most part, time
deposits which may be held by the Fund would not benefit from insurance from the
Bank Insurance Fund or the Savings Association Insurance Fund administered by
the FDIC.
U.S. Government Obligations. Securities issued or guaranteed as to
principal and interest by the U.S. Government include (1) U.S. Treasury
obligations which differ only in their interest rates, maturities and times of
issuance as follows: U.S. Treasury bills (maturities of one year or less), U.S.
Treasury notes (maturities of one to ten years), and U.S. Treasury bonds
(generally maturities of greater than ten years); and (2) obligations issued or
guaranteed by U.S. Government agencies and instrumentalities that are backed by
the full faith and credit of the United States, such as securities issued by the
Federal Housing Administration, GNMA, the Department of Housing and Urban
Development, the Export-Import Bank, the General Services Administration and the
Maritime Administration and certain securities issued by the Farmers Home
Administration and the Small Business Administration. The range of maturities of
U.S. Government Obligations is usually three months to thirty years.
Utilities Industry-Risk Factors. Stocks of utilities companies generally
offer dividend yields that exceed those of industrial companies and their prices
tend to be less volatile than stocks of industrial companies. However, utility
stocks can still be affected by the risks of the stock market in general, as
well as factors specific to public utilities companies.
Many utility companies, especially electric and gas and other
energy-related utility companies, have historically been subject to the risk of
increases in fuel and other operating costs, changes in interest rates on
borrowing for capital improvement programs, changes in applicable laws and
regulations, and costs and operating constraints associated with compliance with
environmental regulations. In particular, regulatory changes with respect to
nuclear and conventionally-fueled power generating facilities could increase
costs or impair the ability of utility companies to operate such facilities or
obtain adequate return on invested capital.
Certain utilities, especially gas and telephone utilities, have in recent
years been affected by increased competition, which could adversely affect the
profitability of such utility companies. In addition, expansion by companies
engaged in telephone communication services of their non-regulated activities
into other businesses (such as cellular telephone services, data processing,
equipment retailing, computer services and financial services) has provided the
opportunity for increases in earnings and dividends at faster rates than have
been allowed in traditional regulated businesses. However, technological
innovations and other structural changes also could adversely affect the
profitability of such companies in competition with utilities companies.
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Because securities issued by utility companies are particularly sensitive
to movements in interest rates, the equity securities of such companies are more
affected by movements in interest rates than are the equity securities of other
companies.
Each of these risks could adversely affect the ability and inclination of
public utilities companies to declare or pay dividends and the ability of
holders of common stock, such as the Utilities Income Fund, to realize any value
from the assets of the company upon liquidation or bankruptcy.
Variable Rate and Floating Rate Notes. Cash Management Fund may invest in
variable rate and floating rate notes. Issuers of such notes include
corporations, banks, broker-dealers and finance companies. Variable rate notes
include master demand notes which are obligations permitting the holder to
invest fluctuating amounts, which may change daily without penalty, pursuant to
direct arrangements between the Fund, as lender, and the borrower. The interest
rates on these notes fluctuate from time to time. The issuer of such obligations
normally has a corresponding right, after a given period, to prepay in its
discretion the outstanding principal amount of the obligations plus accrued
interest upon a specified number of days' notice to the holders of such
obligations. See the SAI for more information on these securities.
Zero Coupon and Pay-In-Kind Securities. Zero coupon securities are debt
obligations that do not entitle the holder to any periodic payment of interest
prior to maturity or a specified date when the securities begin paying current
interest. They are issued and traded at a discount from their face amount or par
value, which discount varies depending on the time remaining until cash payments
begin, prevailing interest rates, liquidity of the security and the perceived
credit quality of the issuer. Pay-in-kind securities are those that pay interest
through the issuance of additional securities. The market prices of zero coupon
and pay-in-kind securities generally are more volatile than the prices of
securities that pay interest periodically and in cash and are likely to respond
to changes in interest rates to a greater degree than do other types of debt
securities having similar maturities and credit quality. Original issue discount
earned on zero coupon securities and the "interest" on pay-in-kind securities
must be included in a Fund's income. Thus, to continue to qualify for tax
treatment as a regulated investment company and to avoid a certain excise tax on
undistributed income, a Fund may be required to distribute as a dividend an
amount that is greater than the total amount of cash it actually receives. See
"Taxes" in the SAI. These distributions must be made from a Fund's cash assets
or, if necessary, from the proceeds of sales of portfolio securities. A Fund
will not be able to purchase additional income-producing securities with cash
used to make such distributions, and its current income ultimately could be
reduced as a result.
Zero Coupon Securities-Risk Factors. Zero coupon securities are debt
securities and thus are subject to the same risk factors as all debt securities.
See "Debt Securities-Risk Factors." The market prices of zero coupon securities,
however, generally are more volatile than the prices of securities that pay
interest periodically and in cash and are likely to respond to changes in
interest rates to a greater degree than do other types of debt securities having
similar maturities and credit quality. As a result, the net asset value of
shares of the Target Maturity 2007 Fund may fluctuate over a greater range than
shares of the other Funds or mutual funds that invest in debt obligations having
similar maturities but that make current distributions of interest.
Zero coupon securities can be sold prior to their due date in the
secondary market at their then prevailing market value, which depends primarily
on the time remaining to maturity, prevailing levels of interest rates and the
perceived credit quality of the issuer. The prevailing market value may be more
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or less than the securities' value at the time of purchase. While the objective
of the Target Maturity 2007 Fund is to seek a predictable compounded investment
return for investors who hold their Fund shares until the Fund's maturity, the
Fund cannot assure that it will be able to achieve a certain level of return due
to the possible necessity of having to sell certain zero coupon securities to
pay expenses, dividends or meet redemptions at times and at prices that might be
disadvantageous or, alternatively, the need to invest assets received from new
purchases at prevailing interest rates, which would expose the Fund to
reinvestment risk. In addition, no assurance can be given as to the liquidity of
the market for certain of these securities. Determination as to the liquidity of
such securities will be made in accordance with guidelines established by Life
Series Fund's Board of Trustees. In accordance with such guidelines, the Adviser
will monitor the Fund's investments in such securities with particular regard to
trading activity, availability of reliable price information and other relevant
information.
Portfolio Turnover. The decline in interest rates in 1993 and 1994 had an
impact on the mortgage-backed securities market, where a large volume of
prepayments of mortgages occurred. As a result of these prepayments, among other
things, Government Fund liquidated many of its positions in premium
mortgage-backed securities. This resulted in a portfolio turnover rate for the
fiscal years ended 1993 and 1994 of 525% and 457%, respectively. A high rate of
portfolio turnover generally leads to increased transaction costs and may result
in a greater number of taxable transactions. See "Allocation of Portfolio
Brokerage" in the SAI. The Target Maturity 2007 Fund currently does not expect
its annual rate of portfolio turnover to exceed 100%. See the SAI for the other
Funds' portfolio turnover rate and for more information on portfolio turnover.
HOW TO BUY SHARES
Investments in a Fund are made through purchases of the Policies or the
Contracts offered by First Investors Life. Policy premiums, net of certain
expenses, are paid into a unit investment trust, Separate Account B. Purchase
payments for the Contracts, net of certain expenses, are also paid into a unit
investment trust, Separate Account C. The Separate Accounts pool these proceeds
to purchase shares of a Fund designated by purchasers of the Policies or
Contracts. Orders for the purchase of Fund shares received prior to the close of
regular trading on the New York Stock Exchange ("NYSE"), generally 4:00 P.M.
(New York City time), on any business day the NYSE is open for trading, will be
processed and shares will be purchased at the net asset value determined at the
close of regular trading on the NYSE on that day. Orders received after the
close of regular trading on the NYSE will be processed at the net asset value
determined at the close of regular trading on the NYSE on the next trading day.
See "Determination of Net Asset Value."
HOW TO REDEEM SHARES
Shares of a Fund may be redeemed at the direction of Policyowners or
Contractowners, in accordance with the terms of the Policies or Contracts.
Redemptions will be made at the next determined net asset value of the
respective Fund upon receipt of a proper request for redemption or repurchase.
Payment will be made by check as soon as possible but within seven days after
presentation. However, Life Series Fund's Board of Trustees may suspend the
right of redemption or postpone the date of payment during any period when (a)
trading on the NYSE is restricted as determined by the Securities and Exchange
Commission ("SEC") or the NYSE is closed for other than weekends and holidays,
(b) the SEC has by order permitted such suspension, or (c) an emergency, as
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defined by rules of the SEC, exists during which time the sale or valuation of
portfolio securities held by a Fund is not reasonably practicable.
MANAGEMENT
Board of Trustees. Life Series Fund's Board of Trustees, as part of its
overall management responsibility, oversees various organizations responsible
for each Fund's day-to-day management.
Adviser. First Investors Management Company, Inc. supervises and manages
each Fund's investments, supervises all aspects of each Fund's operations and,
except for International Securities Fund and Growth Fund, determines each Fund's
portfolio transactions. The Adviser is a New York corporation located at 95 Wall
Street, New York, NY 10005. First Investors Consolidated Corporation ("FICC")
owns all of the voting common stock of the Adviser and all of the outstanding
stock of First Investors Corporation and the Transfer Agent. Mr. Glenn O. Head
(or members of his family) and Mrs. Julie W. Grayson (as executrix of the estate
of her deceased husband, David D. Grayson) each control more than 25% of the
voting stock of FICC and, therefore, jointly control the Adviser.
As compensation for its services, the Adviser receives an annual fee from
each Fund, which is payable monthly. For the fiscal year ended December 31,
1994, the advisory fees were 0.75% of average daily net assets for each of Blue
Chip Fund, Discovery Fund, Growth Fund, High Yield Fund and International
Securities Fund, 0.35% of average daily net assets, net of waiver, for each of
Government Fund and Investment Grade Fund, 0.31% of average daily net assets,
net of waiver, for Cash Management Fund and 0.17% average daily net assets, net
of waiver, for Utilities Income Fund. As compensation for its services, the
Adviser receives a fee from Target Maturity 2007 Fund at the rate of 0.75% of
the average daily net assets of that Fund.
Each Fund bears all expenses of its operations other than those incurred
by the Adviser under the terms of its advisory agreement. Fund expenses include,
but are not limited to: the advisory fee; shareholder servicing fees and
expenses; custodian fees and expenses; legal and auditing fees; expenses of
communicating to existing shareholders, including preparing, printing and
mailing prospectuses and shareholder reports to such shareholders; and proxy and
shareholder meeting expenses.
Subadviser. Wellington Management Company has been retained by the Adviser
and Life Series Fund, on behalf of International Securities Fund and Growth
Fund, as each of those Fund's investment subadviser. The Adviser has delegated
discretionary trading authority to WMC with respect to all the assets of
International Securities Fund and Growth Fund, subject to the continuing
oversight and supervision of the Adviser and the Board of Trustees. As
compensation for its services, WMC is paid by the Adviser, and not by either
Fund, a fee which is computed daily and paid monthly.
WMC, located at 75 State Street, Boston, MA 02109, is a Massachusetts
general partnership of which Robert W. Doran, Duncan M. McFarland and John B.
Neff are Managing Partners. WMC is a professional investment counseling firm
which provides investment services to investment companies, employee benefit
plans, endowment funds, foundations and other institutions and individuals. As
of June 30, 1995, WMC held investment management authority with respect to
approximately $96.0 billion of assets. Of that amount, WMC acted as investment
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adviser or subadviser to approximately 110 registered investment companies or
series of such companies, with net assets of approximately $67.2 billion as of
June 30, 1995. WMC is not affiliated with the Adviser or any of its affiliates.
Portfolio Managers. Patricia D. Poitra, Director of Equities, has been
primarily responsible for the day-to-day management of the Blue Chip Fund since
October 1994 and Discovery Fund since 1988. Ms. Poitra is assisted by a team of
portfolio analysts. Ms. Poitra has been responsible for the management of the
Special Situations Series, the Blue Chip Fund and the small capitalization
equity portion of Total Return Series, all series of First Investors Series
Fund. Ms. Poitra also is responsible for the management of the Blue Chip Fund of
Executive Investors Trust and the Made In The U.S.A. Fund of First Investors
Series Fund II, Inc. Ms. Poitra joined FIMCO in 1985 as a Senior Equity Analyst.
George V. Ganter has been Portfolio Manager for High Yield Fund since
1989. Mr. Ganter joined FIMCO in 1985 as a Senior Analyst. In 1986, he became
Portfolio Manager for First Investors Special Bond Fund, Inc. In 1989, he became
Portfolio Manager for First Investors High Yield Fund, Inc. and Executive
Investors High Yield Fund.
Margaret R. Haggerty is Portfolio Manager for Utilities Income Fund. Ms.
Haggerty joined FIMCO in 1990 as an analyst for several First Investors equity
funds. In addition, she monitored the management of several First Investors
funds for which WMC was the subadviser. In early 1993, she became Portfolio
Manager for First Investors Utilities Income Fund of First Investors Series Fund
II, Inc.
Nancy Jones has been Portfolio Manager for Investment Grade Fund since its
inception in 1992 and Cash Management Fund since 1989. Ms. Jones joined FIMCO in
1983 as Director of Research in the High Yield Department. In 1989, she became
Portfolio Manager for First Investors Fund For Income, Inc. Ms. Jones has been
Portfolio Manager for Investment Grade Fund of First Investors Series Fund since
its inception in 1991 and has managed the fixed income corporate securities
portion of Total Return Series of First Investors Series Fund since 1992.
Since August 1995, WMC's Growth Investment Team, a group of equity
portfolio managers and senior investment professionals, has assumed
responsibility for managing the Growth Fund.
Since April 1995, John Tomasulo has been primarily responsible for the
day-to-day management of the Government Fund and the Target Maturity 2007 Fund.
Mr. Tomasulo is also responsible for the management of the First Investors
Government Fund, Inc. and for the U.S. Government and mortgage-backed securities
portion of the Total Return Series of First Investors Series Fund. Prior to
joining FIMCO, Mr. Tomasulo was affiliated with Seligman & Co. since 1987 where
he assisted in the management of a U.S. government fund and individual accounts
and had primary responsibility for three money market funds.
Since April 1, 1994, International Securities Fund is managed by WMC's
Global Equity Strategy Group, a group of global portfolio managers and senior
investment professionals headed by Trond Skramstead. Prior to joining WMC as a
portfolio manager in 1993, Mr. Skramstead was a global portfolio manager at
Scudder, Stevens & Clark since 1990.
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DETERMINATION OF NET ASSET VALUE
The net asset value of shares of each Fund is determined as of the close
of regular trading on the NYSE (generally 4:00 P.M., New York City time) on each
day the NYSE is open for trading, and at such other times as Life Series Fund's
Board of Trustees deems necessary by dividing the value of the securities held
by a Fund, plus any cash and other assets, less all liabilities, by the number
of shares outstanding. If there is no available market value, securities will be
valued at their fair value as determined in good faith pursuant to procedures
adopted by the Board of Trustees. The NYSE currently observes the following
holidays: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.
The investments in Cash Management Fund, when purchased at a discount, are
valued at amortized cost and when purchased at face value, are valued at cost
plus accrued interest.
DIVIDENDS AND OTHER DISTRIBUTIONS
For the purposes of determining dividends, the net investment income of
each Fund, other than Cash Management Fund, consists of interest and dividends,
earned discount and other income earned on portfolio securities less expenses.
Net investment income of Cash Management Fund consists of (i) accrued interest,
plus or minus (ii) all realized and unrealized gains and losses on the Fund's
securities, less (iii) accrued expenses. Dividends from net investment income
are generally declared and paid annually by each Fund, other than Cash
Management Fund. Dividends from net investment income are generally declared
daily and paid monthly by Cash Management Fund. Distributions of a Fund's net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), if any, after deducting any available capital loss carryovers,
are declared and paid annually by each Fund, other than Cash Management Fund,
which does not anticipate realizing any such gain. International Securities Fund
and High Yield Fund also distribute any net realized gains from foreign currency
transactions with their annual distribution. All dividends and other
distributions are paid in shares of the distributing Fund at net asset value
(without sales charge), generally determined as of the close of business on the
business day immediately following the record date of such distribution.
TAXES
Each Fund has qualified, or intends to qualify, for treatment as a
regulated investment company ("RIC") under Subchapter M of the Internal Revenue
Code of 1986, as amended ("Code"), so that it will be relieved of Federal income
tax on that part of its investment company taxable income (consisting generally
of net investment income, net short-term capital gain and, for International
Securities Fund and High Yield Fund, net gains from certain foreign currency
transactions) and net capital gain that is distributed to its shareholders.
Shares of the Funds are offered only to the Separate Accounts, which are
insurance company separate accounts that fund variable annuity and variable life
insurance contracts. Under the Code, no tax is imposed on an insurance company
with respect to income of a qualifying separate account that is properly
allocable to the value of eligible variable annuity (or variable life insurance)
contracts. Please refer to "Federal Income Tax Status" in the Prospectuses of
Separate Accounts B and C for information as to the tax status of those accounts
and the holders of the Contracts or Policies.
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Each Fund intends to comply with the diversification requirements imposed
by section 817(h) of the Code and the regulations thereunder. These
requirements, which are in addition to the diversification requirements imposed
on the Fund by the Investment Company Act of 1940, as amended, and Subchapter M
of the Code, place certain limitations on the assets of Separate Accounts B and
C -- and of a Fund, because section 817(h) and those regulations treat the
assets of a Fund as assets of Separate Accounts B and C -- that may be invested
in securities of a single issuer. Specifically, the regulations provide that,
except as permitted by the "safe harbor" described below, as of the end of each
calendar quarter (or within 30 days thereafter) no more than 55% of a Fund's
total assets may be represented by any one investment, no more than 70% by any
two investments, no more than 80% by any three investments and no more than 90%
by any four investments. For this purpose, all securities of the same issuer are
considered a single investment, and while each U.S. Government agency and
instrumentality is considered a separate issuer, a particular foreign government
and its agencies, instrumentalities and political subdivisions are considered
the same issuer. Section 817(h) provides, as a safe harbor, that a separate
account will be treated as being adequately diversified if the diversification
requirements under Subchapter M are satisfied and no more than 55% of the value
of the account's total assets are cash and cash items, government securities and
securities of other RICs. Failure of a Fund to satisfy the section 817(h)
requirements would result in taxation of First Investors Life and treatment of
the Contract holders and Policyowners other than as described in the
Prospectuses of Separate Accounts B and C.
The foregoing is only a summary of some of the important Federal income
tax considerations generally affecting each Fund and its shareholders; see the
SAI for a more detailed discussion.
Shareholders are urged to consult their tax advisers.
GENERAL INFORMATION
Organization. Life Series Fund is a Massachusetts business trust organized
on June 12, 1985. The Board of Trustees of Life Series Fund has authority to
issue an unlimited number of shares of beneficial interest of separate series,
no par value, of Life Series Fund. The shares of beneficial interest of Life
Series Fund are presently divided into ten separate and distinct series. Life
Series Fund does not hold annual shareholder meetings. If requested to do so by
the holders of at least 10% of Life Series Fund's outstanding shares, the Board
of Trustees will call a special meeting of shareholders for any purpose,
including the removal of Trustees.
Custodian. The Bank of New York, 48 Wall Street, New York, NY 10286, is
custodian of the securities and cash of each Fund, except the International
Securities Fund. Brown Brothers Harriman & Co., 40 Water Street, Boston, MA
02109, is custodian of the securities and cash of the International Securities
Fund and employs foreign sub-custodians to provide custody of the Fund's foreign
assets.
Transfer Agent. Administrative Data Management Corp., 581 Main Street,
Woodbridge, NJ 07095-1198, an affiliate of FIMCO and FIC, acts as transfer agent
for each Fund and as redemption agent for regular redemptions.
Performance. Performance information is contained in Life Series Fund's
Annual Report which may be obtained without charge by contacting First Investors
Life at 212-858-8200.
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<PAGE>
Shareholder Inquiries. Shareholder inquiries can be made by calling First
Investors Life at 212-858-8200.
Annual and Semi-Annual Reports to Shareholders. It is Life Series 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 in writing or by telephone by any shareholder. Life Series Fund will
ensure that an additional copy of such reports are sent to any shareholder who
subsequently changes his or her mailing address.
APPENDIX A
DESCRIPTION OF CORPORATE BOND RATINGS
STANDARD & POOR'S
The ratings are based on current information furnished by the issuer or
obtained by S&P from other sources it considers reliable. S&P does not perform
any audit in connection with any rating and may, on occasion, rely on unaudited
financial information. The ratings may be changed, suspended, or withdrawn as a
result of changes in, or unavailability of, such information, or based on other
circumstances.
The ratings are based, in varying degrees, on the following
considerations:
1. Likelihood of default-capacity and willingness of the obligor
as to the timely payment of interest and repayment of
principal in accordance with the terms of the obligation;
2. Nature of and provisions of the obligation;
3. Protection afforded by, and relative position of, the obligation
in the event of bankruptcy, reorganization, or other arrangement
under the laws of bankruptcy and other laws affecting creditors'
rights.
AAA Debt rated "AAA" has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.
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<PAGE>
BB, B, CCC, CC, C Debt rated "BB," "B," "CCC," "CC" and "C" is regarded,
on balance, as predominantly speculative with respect to capacity to pay
interest and repay principal. "BB" indicates the least degree of speculation and
"C" the highest. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB Debt rated "BB" has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to
inadequate capacity to meet timely interest and principal payments. The "BB"
rating category is also used for debt subordinated to senior debt that is
assigned an actual or implied "BBB-" rating.
B Debt rated "B" has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal. The "B" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"BB" or "BB-" rating.
CCC Debt rated "CCC" has a currently identifiable vulnerability to default
and is dependent upon favorable business, financial, and economic conditions to
meet timely payment of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, it is not likely to have the
capacity to pay interest and repay principal. The "CCC" rating category is also
used for debt subordinated to senior debt that is assigned an actual or implied
"B" or "B-" rating.
CC The rating "CC" typically is applied to debt subordinated to senior
debt that is assigned an actual or implied "CCC" rating.
C The rating "C" typically is applied to debt subordinated to senior debt
which is assigned an actual or implied "CCC-" debt rating. The "C" rating may be
used to cover a situation where a bankruptcy petition has been filed, but debt
service payments are continued.
CI The rating "CI" is reserved for income bonds on which no interest is
being paid.
D Debt rated "D" is in payment default. The "D" rating category is used
when interest payments or principal payments are not made on the date due even
if the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The "D" rating also will be used
upon the filing of a bankruptcy petition if debt service payments are
jeopardized.
Plus (+) or Minus (-): The ratings from "AA" to "CCC" may be modified by
the addition of a plus or minus sign to show relative standing within the major
categories.
MOODY'S INVESTORS SERVICE, INC.
Aaa Bonds which are rated "Aaa" are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or exceptionally stable
margin and principal is secure. While the various protective elements are likely
to
33
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change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa Bonds which are rated "Aa" are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risk appear somewhat greater than the Aaa securities.
A Bonds which are rated "A" possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment some time in the future.
Baa Bonds which are rated "Baa" are considered as medium-grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest payments
and principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
Ba Bonds which are rated "Ba" are judged to have speculative elements;
their future cannot be considered as well-assured. Often the protection of
interest and principal payments may be very moderate, and thereby not well
safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.
B Bonds which are rated "B" generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa Bonds which are rated "Caa" are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca Bonds which are rated "Ca" represent obligations which are speculative
in a high degree. Such issues are often in default or have other marked
shortcomings.
C Bonds which are rated "C" are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of its generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
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TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Financial Highlights ...................................................... 4
Investment Objectives and Policies ........................................ 9
How to Buy Shares ......................................................... 27
How to Redeem Shares ...................................................... 27
Management ................................................................ 28
Determination of Net Asset Value .......................................... 30
Dividends and Other Distributions ......................................... 30
Taxes ..................................................................... 30
General Information ....................................................... 31
Appendix A ................................................................ 32
Investment Adviser Custodians
First Investors Management The Bank of New York
Company, Inc. 48 Wall Street
95 Wall Street New York, NY 10286
New York, NY 10005
Brown Brothers
Subadviser Harriman & Co.
Wellington Management 40 Water Street
Company Boston, MA 02109
75 State Street
Boston, MA 02109 Auditors
Tait, Weller & Baker
Transfer Agent Two Penn Center Plaza
Administrative Data Philadelphia, PA 19102-1707
Management Corp.
581 Main Street Legal Counsel
Woodbridge, NJ 07095-1198 Kirkpatrick & Lockhart LLP
1800 M Street, N.W.
Washington, D.C. 20036
No dealer, salesman or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus or the Statement of Additional Information, and if given or made,
such information and representation must not be relied upon as having been
authorized by the Fund or any affiliate thereof. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby in any state to any person to whom it is unlawful to make
such offer in such state.
<PAGE>
First Investors
Life Series Fund
- ---------------------------
Blue Chip Fund
Cash Management Fund
Discovery Fund
Government Fund
Growth Fund
High Yield Fund
International Securities Fund
Investment Grade Fund
Target Maturity 2007 Fund
Utilities Income Fund
- ---------------------------
Prospectus
- ----------------------------
October 13, 1995
First Investors Logo
Logo is described as follows: the arabic numeral one separated into seven
vertical segments followed by the words "First Investors."
Verticle line from top to bottom in center of page about 1/2 inch in thickness
The following language appears to the left of the above language in the printed
piece:
The following language appears on the lefthand side:
FIRST LIFE SERIES FUND
95 WALL STREET
NEW YORK, NY 10005
First Investors Logo (as described above)
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
LIFE325
<PAGE>
FIRST INVESTORS LIFE SERIES FUND
95 Wall Street (212) 858-8200
New York, New York 10005
Statement of Additional Information
dated October 13, 1995
This is a Statement of Additional Information for First Investors Life
Series Fund ("Life Series Fund") an open-end, diversified management investment
company consisting of ten separate investment portfolios (each, a "Fund," and
collectively, the "Funds"). The objectives of each of the Funds is set forth in
the Prospectus. There can be no assurance that any Fund will achieve its
investment objective. Investments in the Funds are made through purchases of the
Level Premium Variable Life Insurance Policies ("Policies") or the Individual
Variable Annuity Contracts ("Contracts") offered by First Investors Life
Insurance Company ("First Investors Life"). Policy premiums net of certain
expenses are paid into a unit investment trust, First Investors Life Insurance
Company Separate Account B ("Separate Account B"). Purchase payments for the
Contracts net of certain expenses also are paid into a unit investment trust,
First Investors Life Variable Annuity Fund C ("Separate Account C"). Separate
Account B and Separate Account C pool these proceeds to purchase shares of the
Fund designated by purchasers of the Policies or Contracts. Target Maturity 2007
Fund is only offered to Contractowners of Separate Account C.
This Statement of Additional Information is not a prospectus. It should
be read in connection with Life Series Fund's Prospectus dated October 13, 1995,
which may be obtained free of cost from the Funds at the address or telephone
number noted above.
TABLE OF CONTENTS
-----------------
Page
----
Investment Policies ....................................................... 2
Hedging and Option Income Strategies ...................................... 6
Investment Restrictions ................................................... 15
Trustees and Officers ..................................................... 17
Management ................................................................ 19
Determination of Net Asset Value .......................................... 21
Allocation of Portfolio Brokerage ......................................... 22
Taxes ..................................................................... 23
General Information ....................................................... 25
Appendix A ................................................................ 26
Appendix B ................................................................ 27
Financial Statements ...................................................... 28
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INVESTMENT POLICIES
Certificates of Accrual on U.S. Treasury Securities. Government Fund
may purchase certificates, not issued by the U.S. Treasury, which evidence
ownership of future interest, principal or interest and principal payments on
obligations issued by the U.S. Treasury. The actual U.S. Treasury securities
will be held by a custodian on behalf of the certificate holder. These
certificates are purchased with original issue discount and are subject to
greater fluctuations in market value, based upon changes in market interest
rates, than income-producing securities.
Commercial Paper. Commercial paper is a promissory note issued by a
corporation to finance short-term credit needs which may either be unsecured or
backed by a letter of credit. Commercial paper includes notes, drafts or similar
instruments payable on demand or having a maturity at the time of issuance not
exceeding nine months, exclusive of days of grace or any renewal thereof. See
Appendix B for a description of commercial paper ratings.
Convertible Securities. Each Fund, other than Cash Management Fund and
Target Maturity 2007 Fund, may invest in convertible securities. While no
securities investment is without some risk, investments in convertible
securities generally entail less risk than the issuer's common stock, although
the extent to which such risk is reduced depends in large measure upon the
degree to which the convertible security sells above its value as a fixed income
security. The Funds investment adviser, First Investors Management Company, Inc.
("Adviser" or "FIMCO"), or, for Growth Fund and International Securities Fund,
their subadviser, Wellington Management Company ("Subadviser" or "WMC") will
decide to invest based upon a fundamental analysis of the long-term
attractiveness of the issuer and the underlying common stock, the evaluation of
the relative attractiveness of the current price of the underlying common stock
and the judgment of the value of the convertible security relative to the common
stock at current prices.
Loans of Portfolio Securities. Each Fund may loan securities to
qualified broker-dealers or other institutional investors provided: the borrower
pledges to a Fund and agrees to maintain at all times with that Fund collateral
equal to not less than 100% of the value of the securities loaned (plus accrued
interest or dividend, if any); the loan is terminable at will by a Fund; a Fund
pays only reasonable custodian fees in connection with the loan; and the Adviser
or the Subadviser monitors the creditworthiness of the borrower throughout the
life of the loan. Such loans may be terminated by a Fund at any time and a Fund
may vote the proxies if a material event affecting the investment is to occur.
The market risk applicable to any security loaned remains a risk of a Fund. The
borrower must add to the collateral whenever the market value of the securities
rises above the level of such collateral. A Fund could incur a loss if the
borrower should fail financially at a time when the value of the loaned
securities is greater than the collateral. Each Fund may make loans, together
with illiquid securities, not in excess of 10% of its total assets.
Mortgage-Backed Securities. Government Fund may invest in
mortgage-backed securities, including those representing an undivided ownership
interest in a pool of mortgage loans. Each of the certificates described below
is characterized by monthly payments to the security holder, reflecting the
monthly payments made by the mortgagees of the underlying mortgage loans. The
payments to the security holders (such as the Fund), like the payments on the
underlying loans, represent both principal and interest. Although the underlying
mortgage loans are for specified periods of time, such as twenty to thirty
years, the borrowers can, and typically do, repay them sooner. Thus, the
security holders frequently receive prepayments of principal, in addition to the
principal which is part of the regular monthly payments. A borrower is more
likely to prepay a mortgage which bears a relatively high rate of interest.
Thus, in times of declining interest rates, some higher yielding mortgages might
2
<PAGE>
be repaid resulting in larger cash payments to the Fund, and the Fund will be
forced to accept lower interest rates when that cash is used to purchase
additional securities.
Interest rate fluctuations may significantly alter the average maturity
of mortgage-backed securities, due to the level of refinancing by homeowners.
When interest rates rise, prepayments often drop, which should increase the
average maturity of the mortgage-backed security. Conversely, when interest
rates fall, prepayments often rise, which should decrease the average maturity
of the mortgage-backed security.
GNMA Certificates. Government National Mortgage Association
("GNMA") certificates ("GNMA Certificates") are mortgage-backed securities,
which evidence an undivided interest in a pool of mortgage loans. GNMA
Certificates differ from bonds in that principal is paid back monthly by the
borrower over the term of the loan rather than returned in a lump sum at
maturity. GNMA Certificates that the Fund purchases are the "modified
pass-through" type. "Modified pass-through" GNMA Certificates entitle the holder
to receive a share of all interest and principal payments paid and owed on the
mortgage pool net of fees paid to the "issuer" and GNMA, regardless of whether
or not the mortgagor actually makes the payment.
GNMA Guarantee. The National Housing Act authorizes GNMA to
guarantee the timely payment of principal and interest on securities backed by a
pool of mortgages insured by the Federal Housing Administration ("FHA") or the
Farmers' Home Administration ("FMHA"), or guaranteed by the Department of
Veteran Affairs ("VA"). The GNMA guarantee is backed by the full faith and
credit of the U.S. Government. GNMA also is empowered to borrow without
limitation from the U.S. Treasury if necessary to make any payments required
under its guarantee.
Life of GNMA Certificates. The average life of a GNMA
Certificate is likely to be substantially less than the original maturity of the
mortgage pools underlying the securities. Prepayments of principal by mortgagors
and mortgage foreclosures will usually result in the return of the greater part
of principal investment long before maturity of the mortgages in the pool. The
Fund normally will not distribute principal payments (whether regular or
prepaid) to its shareholders. Rather, it will invest such payments in additional
mortgage-backed securities of the types described above. Interest received by
the Fund will, however, be distributed to shareholders. Foreclosures impose no
risk to principal investment because of the GNMA guarantee. As prepayment rates
of the individual mortgage pools vary widely, it is not possible to predict
accurately the average life of a particular issue of GNMA Certificates.
Yield Characteristics of GNMA Certificates. The coupon rate of
interest on GNMA Certificates is lower than the interest rate paid on the
VA-guaranteed or FHA-insured mortgages underlying the Certificates by the amount
of the fees paid to GNMA and the issuer. The coupon rate by itself, however,
does not indicate the yield which will be earned on GNMA Certificates. First,
Certificates may trade in the secondary market at a premium or discount. Second,
interest is earned monthly, rather than semi-annually as with traditional bonds;
monthly compounding raises the effective yield earned. Finally, the actual yield
of a GNMA Certificate is influenced by the prepayment experience of the mortgage
pool underlying it. For example, if the higher-yielding mortgages from the pool
are prepaid, the yield on the remaining pool will be reduced.
FHLMC Securities. The Federal Home Loan Mortgage Corporation
("FHLMC") issues two types of mortgage pass-through securities, mortgage
participation certificates ("PCs") and guaranteed mortgage certificates
("GMCs"). PCs resemble GNMA Certificates in that each PC represents a pro rata
share of all interest and principal payments made and owed on the underlying
pool.
3
<PAGE>
FNMA Securities. The Federal National Mortgage Association
("FNMA") issues guaranteed mortgage pass-through certificates ("FNMA
Certificates"). FNMA Certificates resemble GNMA Certificates in that each FNMA
Certificate represents a pro rata share of all interest and principal payments
made and owed on the underlying pool. FNMA guarantees timely payment of interest
on FNMA Certificates and the full return of principal.
Risk of foreclosure of the underlying mortgages is greater with FHLMC
and FNMA securities because, unlike GNMA Certificates, FHLMC and FNMA securities
are not guaranteed by the full faith and credit of the U.S. Government.
Participation Interests. Participation interests which may be held by
Government Fund are pro rata interests in securities held either by banks which
are members of the Federal Reserve System or securities dealers who are members
of a national securities exchange or are market makers in government securities,
which are represented by an agreement in writing between the Fund and the entity
in whose name the security is issued, rather than possession by the Fund. The
Fund will purchase participation interests only in securities otherwise
permitted to be purchased by the Fund, and only when they are evidenced by
deposit, safekeeping receipts, or book-entry transfer, indicating the creation
of a security interest in favor of the Fund in the underlying security. However,
the issuer of the participation interests to the Fund will agree in writing,
among other things: to promptly remit all payments of principal, interest and
premium, if any, to the Fund once received by the issuer; to repurchase the
participation interest upon seven days' notice; and to otherwise service the
investment physically held by the issuer, a portion of which has been sold to
the Fund.
Repurchase Agreements. Each Fund may enter into repurchase agreements
with banks which are members of the Federal Reserve System or securities dealers
who are members of a national securities exchange or are market makers in
government securities. Government Fund may enter into repurchase agreements only
where the debt instrument subject to the repurchase agreement is a U.S.
Government Obligation (as defined in the Prospectus). The period of these
repurchase agreements will usually be short, from overnight to one week, and at
no time will a Fund invest in repurchase agreements with more than one year in
time to maturity. The securities which are subject to repurchase agreements,
however, may have maturity dates in excess of one year from the effective date
of the repurchase agreement. Each Fund will always receive, as collateral,
securities whose market value, including accrued interest, which will at all
times be at least equal to 100% of the dollar amount invested by a Fund in each
agreement, and the Fund will make payment for such securities only upon physical
delivery or evidence of book entry transfer to the account of the custodian. If
the seller defaults, a Fund might incur a loss if the value of the collateral
securing the repurchase agreement declines, and might incur disposition costs in
connection with liquidating the collateral. In addition, if bankruptcy or
similar proceedings are commenced with respect to the seller of the security,
realization upon the collateral by a Fund may be delayed or limited. Repurchase
agreements maturing in greater than seven days are considered illiquid.
Restricted and Illiquid Securities. No Fund, other than Cash Management
Fund, will purchase or otherwise acquire any security if, as a result, more than
15% of its net assets (taken at current value) would be invested in securities
that are illiquid by virtue of the absence of a readily available market or
legal or contractual restrictions on resale. Cash Management Fund may invest up
to 10% of its net assets in illiquid securities. This policy includes foreign
issuers' unlisted securities with a limited trading market and repurchase
agreements maturing in more than seven days. This policy does not include
restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, as amended ("1933 Act"), which Life Series Fund's Board
of Trustees or the Adviser or Subadviser has determined under Board-approved
guidelines are liquid.
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Restricted securities which are illiquid may be sold only in privately
negotiated transactions or in public offerings with respect to which a
registration statement is in effect under the 1933 Act. Such securities include
those that are subject to restrictions contained in the securities laws of other
countries. Securities that are freely marketable in the country where they are
principally traded, but would not be freely marketable in the United States,
will not be subject to each Fund's limitation on illiquid securities. Where
registration is required a Fund may be obligated to pay all or part of the
registration expenses and a considerable period may elapse between the time of
the decision to sell and the time a Fund may be permitted to sell a security
under an effective registration statement. If, during such a period, adverse
market conditions were to develop, a Fund might obtain a less favorable price
than prevailed when it decided to sell.
In recent years, a large institutional market has developed for certain
securities that are not registered under the 1933 Act, including private
placements, repurchase agreements, commercial paper, foreign securities and
corporate bonds and notes. These instruments are often restricted securities
because the securities are either themselves exempt from registration or sold in
transactions not requiring registration. Institutional investors generally will
not seek to sell these instruments to the general public, but instead will often
depend on an efficient institutional market in which such unregistered
securities can be readily resold or on an issuer's ability to honor a demand for
repayment. Therefore, the fact that there are contractual or legal restrictions
on resale to the general public or certain institutions is not dispositive of
the liquidity of such investments.
Rule 144A under the 1933 Act establishes a "safe harbor" from the
registration requirements of the 1933 Act for resales of certain securities to
qualified institutional buyers. Institutional markets for restricted securities
that might develop as a result of Rule 144A could provide both readily
ascertainable values for restricted securities and the ability to liquidate an
investment in order to satisfy share redemption orders. An insufficient number
of qualified institutional buyers interested in purchasing Rule 144A-eligible
securities held by a Fund, however, could affect adversely the marketability of
such portfolio securities and the Fund might be unable to dispose of such
securities promptly or at reasonable prices.
Stripped U.S. Treasury Securities. Government Fund may invest in
separated or divided U.S. Treasury securities. These instruments represent a
single interest, or principal, payment on a U.S. Treasury bond which has been
separated from all the other interest payments as well as the bond itself. When
the Fund purchases such an instrument, it purchases the right to receive a
single payment of a set sum at a known date in the future. The interest rate on
such an instrument is determined by the price the Fund pays for the instrument
when it purchases the instrument at a discount under what the instrument
entitles the Fund to receive when the instrument matures. The amount of the
discount the Fund will receive will depend upon the length of time to maturity
of the separated U.S. Treasury security and prevailing market interest rates
when the separated U.S. Treasury security is purchased. Separated U.S. Treasury
securities can be considered a zero coupon investment because no payment is made
to the Fund until maturity. The market values of these securities are much more
susceptible to change in market interest rates than income-producing securities.
These securities are purchased with original issue discount and such discount is
includable as gross income to a Fund shareholder over the life of the security.
Warrants. International Securities Fund may purchase warrants, which
are instruments that permit the Fund to acquire, by subscription, the capital
stock of a corporation at a set price, regardless of the market price for such
stock. Warrants may be either perpetual or of limited duration. There is a
greater risk that warrants might drop in value at a faster rate than the
underlying stock. The Fund may invest up to 15% of its total assets in warrants.
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When-Issued Securities. Growth Fund, High Yield Fund, International
Securities Fund, Investment Grade Fund, Target Maturity 2007 Fund and Utilities
Income Fund may each invest up to 5% of their net assets in securities issued on
a when-issued or delayed delivery basis. A Fund generally would not pay for such
securities or start earning interest on them until they are issued or received.
However, when a Fund purchases debt obligations on a when-issued basis, it
assumes the risks of ownership, including the risk of price fluctuation, at the
time of purchase, not at the time of receipt. Failure of the issuer to deliver a
security purchased by a Fund on a when-issued basis may result in such Fund
incurring a loss or missing an opportunity to make an alternative investment.
When a Fund enters into a commitment to purchase securities on a when-issued
basis, it establishes a separate account with its custodian consisting of cash
or liquid high-grade debt securities equal to the amount of the Fund's
commitment, which are valued at their fair market value. If on any day the
market value of this segregated account falls below the value of a Fund's
commitment, the Fund will be required to deposit additional cash or qualified
securities into the account until equal to the value of the Fund's commitment.
When the securities to be purchased are issued, a Fund will pay for the
securities from available cash, the sale of securities in the segregated
account, sales of other securities and, if necessary, from sale of the
when-issued securities themselves although this is not ordinarily expected.
Securities purchased on a when-issued basis are subject to the risk that yields
available in the market, when delivery takes place, may be higher than the rate
to be received on the securities a Fund is committed to purchase. Sale of
securities in the segregated account or other securities owned by a Fund and
when-issued securities may cause the realization of a capital gain or loss.
Portfolio Turnover. Although each Fund generally will not invest for
short-term trading purposes, portfolio securities may be sold from time to time
without regard to the length of time they have been held when, in the opinion of
the Adviser or the Subadviser investment considerations warrant such action.
Portfolio turnover rate is calculated by dividing (1) the lesser of purchases or
sales of portfolio securities for the fiscal year by (2) the monthly average of
the value of portfolio securities owned during the fiscal year. A 100% turnover
rate would occur if all the securities in a Fund's portfolio, with the exception
of securities whose maturities at the time of acquisition were one year or less,
were sold and either repurchased or replaced within one year. A high rate of
portfolio turnover generally leads to transaction costs and may result in a
greater number of taxable transactions. See "Portfolio Transactions." The rate
of portfolio turnover for the fiscal year ended December 31, 1993 for the Blue
Chip Fund, Discovery Fund, Growth Fund, High Yield Fund, International
Securities Fund and Investment Grade Fund was 37%, 69%, 51%, 96%, 37% and 64%,
respectively. The rate of portfolio turnover for the fiscal year ended December
31, 1994 for the Blue Chip Fund, Discovery Fund, Growth Fund, High Yield Fund,
International Securities Fund, Investment Grade Fund and Utilities Income Fund
was 82%, 53%, 40%, 50%, 36%, 15% and 31%, respectively. See the Prospectus for
the portfolio turnover rate for the Government Fund and the expected portfolio
turnover rate for Target Maturity 2007 Series.
HEDGING AND OPTION INCOME STRATEGIES
The Subadviser may engage in certain options and futures strategies to
hedge International Securities Fund's portfolio and in other circumstances
permitted by the Commodities Futures Trading Commission ("CFTC") and may engage
in certain options strategies to enhance income. The instruments described below
are sometimes referred to collectively as "Hedging Instruments." Certain special
characteristics of and risks associated with using Hedging Instruments are
discussed below. In addition to the non-fundamental investment guidelines
(described below) adopted by Life Series Fund's Board of Trustees to govern the
Fund's investments in Hedging Instruments, use of these instruments is subject
to the applicable regulations of the Securities and Exchange Commission ("SEC"),
the several options and futures exchanges upon which options and futures
contracts are traded, the CFTC and various state regulatory authorities. In
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addition, the Fund's ability to use Hedging Instruments will be limited by tax
considerations. See "Taxes."
International Securities Fund may buy and sell put and call options on
stock indices, domestic or foreign securities and foreign currencies that are
traded on national securities exchanges or in the over-the-counter ("OTC")
market to enhance income or to hedge the Fund's portfolio. International
Securities Fund also may write put and covered call options to generate
additional income through the receipt of premiums, purchase put options in an
effort to protect the value of a security that it owns against a decline in
market value and purchase call options in an effort to protect against an
increase in the price of securities (or currencies) it intends to purchase.
International Securities Fund also may purchase put and call options to offset
previously written put and call options of the same series. International
Securities Fund also may write put and call options to offset previously
purchased put and call options of the same series. Other than to offset closing
transactions, International Securities Fund will write only covered call
options, including options on futures contracts.
International Securities Fund may buy and sell financial futures
contracts and options thereon that are traded on a commodities exchange or board
of trade for hedging purposes. These futures contracts and related options may
be on stock indices, financial indices, debt securities or foreign currencies.
International Securities Fund also may enter into forward currency contracts.
Participation in the options or futures markets involves investment
risks and transaction costs to which International Securities Fund would not be
subject absent the use of these strategies. If the Subadviser's prediction of
movements in the direction of the securities and interest rate markets are
inaccurate, the adverse consequences to the Fund may leave the Fund in a worse
position than if such strategies were not used. The Fund might not employ any of
the strategies described below, and there can be no assurance that any strategy
will succeed. The use of these strategies involve certain special risks,
including (1) dependence on the Subadviser's ability to predict correctly
movements in the direction of interest rates and securities prices, (2)
imperfect correlation between the price of options, futures contracts and
options thereon and movements in the prices of the securities being hedged, (3)
the fact that skills needed to use these strategies are different from those
needed to select portfolio securities, (4) the possible absence of a liquid
secondary market for any particular instrument at any time, and (5) the possible
need to defer closing out certain hedged positions to avoid adverse tax
consequences.
Cover for Hedging and Option Income Strategies. The Fund will not use
leverage in its hedging and option income strategies. In the case of each
transaction entered into as a hedge, the Fund will hold securities, currencies
or other options or futures positions whose values are expected to offset
("cover") its obligations hereunder. The Fund will not enter into a hedging or
option income strategy that exposes the Fund to an obligation to another party
unless it owns either (1) an offsetting ("covered") position in securities,
currencies or other options or futures contracts or (2) cash, receivables and
short-term debt securities with a value sufficient at all times to cover its
potential obligations. The Fund will comply with guidelines established by the
SEC with respect to coverage of hedging and option income strategies by mutual
funds and, if required, will set aside cash and/or liquid, high-grade debt
securities in a segregated account with its custodian in the prescribed amount.
Securities, currencies or other options or futures positions used for cover and
securities held in a segregated account cannot be sold or closed out while the
hedging or option income strategy is outstanding unless they are replaced with
similar assets. As a result, there is a possibility that the use of cover or
segregation involving a large percentage of the Fund's assets could impede
portfolio management or the Fund's ability to meet redemption requests or other
current obligations.
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Options Strategies. International Securities Fund may purchase call
options on securities that the Subadviser intends to include in the Fund's
portfolio in order to fix the cost of a future purchase. Call options also may
be used as a means of participating in an anticipated price increase of a
security. In the event of a decline in the price of the underlying security, use
of this strategy would serve to limit the Fund's potential loss on the option
strategy to the option premium paid; conversely, if the market price of the
underlying security increases above the exercise price and the Fund either sells
or exercises the option, any profit eventually realized will be reduced by the
premium. The Fund may purchase put options in order to hedge against a decline
in the market value of securities held in its portfolio. The put option enables
the Fund to sell the underlying security at the predetermined exercise price;
thus the potential for loss to the Fund below the exercise price is limited to
the option premium paid. If the market price of the underlying security is
higher than the exercise price of the put option, any profit the Fund realizes
on the sale of the security will be reduced by the premium paid for the put
option less any amount for which the put option may be sold.
International Securities Fund may write covered call options on
securities to increase income in the form of premiums received from the
purchasers of the options. Because it can be expected that a call option will be
exercised if the market value of the underlying security increases to a level
greater than the exercise price, the Fund will write covered call options on
securities generally when the Subadviser believes that the premium received by
the Fund, plus anticipated appreciation in the market price of the underlying
security up to the exercise price of the option, will be greater than the total
appreciation in the price of the security. The strategy may be used to provide
limited protection against a decrease in the market price of the security in an
amount equal to the premium received for writing the call option less any
transaction costs. Thus, if the market price of the underlying security held by
the Fund declines, the amount of such decline will be offset wholly or in part
by the amount of the premium received by the Fund. If, however, there is an
increase in the market price of the underlying security and the option is
exercised, the Fund will be obligated to sell the security at less than its
market value. The Fund gives up the ability to sell the portfolio securities
used to cover the call option while the call option is outstanding. Such
securities may also be considered illiquid in the case of OTC options written by
the Fund, and therefore subject to the Fund's limitation on investments in
illiquid securities. See "Restricted and Illiquid Securities." In addition, the
Fund could lose the ability to participate in an increase in the value of such
securities above the exercise price of the call option because such an increase
would likely be offset by an increase in the cost of closing out the call option
(or could be negated if the buyer chose to exercise the call option at an
exercise price below the securities' current market value).
International Securities Fund may purchase put and call options and
write covered call options on stock indices in much the same manner as the more
traditional equity and debt options discussed above, except that stock index
options may serve as a hedge against overall fluctuations in the securities
markets (or a market sector) rather than anticipated increases or decreases in
the value of a particular security. A stock index assigns relative values to the
stock included in the index and fluctuates with changes in such values. Stock
index options operate in the same way as the more traditional equity options,
except that settlements of stock index options are effected with cash payments
and do not involve delivery of securities. Thus, upon settlement of a stock
index option, the purchaser will realize, and the writer will pay, an amount
based on the difference between the exercise price and the closing price of the
stock index. The effectiveness of hedging techniques using stock index options
will depend on the extent to which price movements in the stock index selected
correlate with price movements of the securities in which the Fund invests.
International Securities Fund may write put options. A put option gives
the purchaser of the option the right to sell, and the writer (seller) the
obligation to buy, the underlying security at the exercise price during the
option period. So long as the obligation of the writer continues, the writer may
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be assigned an exercise notice by the broker-dealer through which such option
was sold, requiring it to make payment of the exercise price against delivery of
the underlying security. The operation of put options in other respects,
including their related risks and rewards, is substantially identical to that of
call options. The Fund may write covered put options in circumstances when the
Subadviser believes that the market price of the securities will not decline
below the exercise price less the premiums received. If the put option is not
exercised, the Fund will realize income in the amount of the premium received.
This technique could be used to enhance current return during periods of market
uncertainty. The risk in such a transaction would be that the market price of
the underlying security would decline below the exercise price less the premiums
received, in which case the Fund would expect to suffer a loss.
Currently, many options on equity securities and options on currencies
are exchange-traded, whereas options on debt securities are primarily traded on
the OTC market. Although many options on currencies are exchange-traded, the
majority of such options are traded on the OTC market. Exchange- traded options
in the U.S. are issued by a clearing organization affiliated with the exchange
on which the option is listed which, in effect, guarantees completion of every
exchange-traded option transaction. In contrast, OTC options are contracts
between the Fund and the opposite party with no clearing organization guarantee.
Thus, when the Fund purchases an OTC option, it relies on the dealer from which
it has purchased the OTC option to make or take delivery of the securities
underlying the option. Failure by the dealer to do so would result in the loss
of the premium paid by the Fund as well as the loss of the expected benefit of
the transaction.
Foreign Currency Options and Related Risks. International Securities
Fund may take positions in options on foreign currencies in order to hedge
against the risk of foreign exchange rate fluctuations on foreign securities the
Fund holds in its portfolio or intends to purchase. For example, if the Fund
enters into a contract to purchase securities denominated in a foreign currency,
it could effectively fix the maximum U.S. dollar cost of the securities by
purchasing call options on that foreign currency. Similarly, if the Fund held
securities denominated in a foreign currency, and anticipated a decline in the
value of that currency against the U.S. dollar, the Fund could hedge against
such a decline by purchasing a put option on the currency involved. The Fund's
ability to establish and close out positions in such options is subject to the
maintenance of a liquid secondary market. Although the Fund will not purchase or
write such options unless and until, in the Subadviser's opinion, the market for
them has developed sufficiently to ensure that the risks in connection with such
options are not greater than the risks in connection with the underlying
currency, there can be no assurance that a liquid secondary market will exist
for a particular option at any specific time. In addition, options on foreign
currencies are affected by all of those factors that influence foreign exchange
rates and investments generally.
The value of a foreign currency option depends upon the value of the
underlying currency relative to the U.S. dollar. As a result, the price of the
option position may vary with changes in the value of either or both currencies
and may have no relationship to the investment merits of a foreign security.
Because foreign currency transactions occurring in the interbank market involve
substantially larger amounts than those that may be involved in the use of
foreign currency options, investors may be disadvantaged by having to deal in an
odd lot market for the underlying foreign currencies at prices that are less
favorable than for round lots.
There is no systematic reporting of last sale information for foreign
currencies or any regulatory requirement that quotations available through
dealers or other market sources be firm or revised on a timely basis. Quotation
information available is generally representative of very large transactions in
the interbank market and thus may not reflect relatively smaller transactions
where rates may be less favorable. The interbank market in foreign currencies is
a global, around-the-clock market. To the extent that the U.S. options markets
are closed while the markets for the underlying currencies remain open,
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significantprice and rate movements may take place in the underlying markets
that cannot be reflected in the options markets until they reopen.
Options Guidelines. In view of the risks involved in using options,
Life Series Fund's Board of Trustees has adopted non-fundamental investment
guidelines to govern the Fund's use of options that may be modified by the Board
without shareholder vote: (1) options will be purchased or written only when the
Subadviser believes that there exists a liquid secondary market in such options;
and (2) the Fund may not purchase a put or call option if the value of the
option's premium, when aggregated with the premiums on all other options held by
the Fund, exceeds 5% of the Fund's total assets.
Special Characteristics and Risks of Options Trading. International
Securities Fund may effectively terminate its right or obligation under an
option by entering into a closing transaction. If the Fund wishes to terminate
its obligation to sell securities or currencies under a call option it has
written, the Fund may purchase a call option of the same series (that is, a call
option identical in its terms to the call option previously written); this is
known as a closing purchase transaction. Conversely, in order to terminate its
right to purchase or sell specified securities or currencies under a call or put
option it has purchased, the Fund may write an option of the same series, as the
option held; this is known as a closing sale transaction. Closing transactions
essentially permit the Fund to realize profits or limit losses on its options
positions prior to the exercise or expiration of the option. Whether a profit or
loss is realized from a closing transaction depends on the price movement of the
underlying index, security or currency and the market value of the option.
The value of an option position will reflect, among other things, the
current market price of the underlying security, stock index or currency, the
time remaining until expiration, the relationship of the exercise price to the
market price, the historical price volatility of the underlying security, stock
index or currency and general market conditions. For this reason, the successful
use of options depends upon the Subadviser's ability to forecast the direction
of price fluctuations in the underlying securities or currency markets or, in
the case of stock index options, fluctuations in the market sector represented
by the index selected.
Options normally have expiration dates of up to nine months. Unless an
option purchased by the Fund is exercised or unless a closing transaction is
effected with respect to that position, a loss will be realized in the amount of
the premium paid and any transaction costs.
A position in an exchange-listed option may be closed out only on an
exchange that provides a secondary market for identical options. The ability to
establish and close out positions on the exchanges is subject to the maintenance
of a liquid secondary market. Although the Fund intends to purchase or write
only those exchange-traded options for which there appears to be a liquid
secondary market, there is no assurance that a liquid secondary market will
exist for any particular option at any particular time. Closing transactions may
be effected with respect to options traded in the OTC markets (currently the
primary markets for options on debt securities) only by negotiating directly
with the other party to the option contract or in a secondary market for the
option if such market exists. Although the Fund will enter into OTC options only
with dealers that agree to enter into, and that are expected to be capable of
entering into, closing transactions with the Fund, there is no assurance that
the Fund will be able to liquidate an OTC option at a favorable price at any
time prior to expiration. In the event of insolvency of the opposite party, the
Fund may be unable to liquidate an OTC option. Accordingly, it may not be
possible to effect closing transactions with respect to certain options, with
the result that the Fund would have to exercise those options that it has
purchased in order to realize any profit. With respect to options written by the
Fund, the inability to enter into a closing transaction may result in material
losses to the Fund. For example, because the Fund must maintain a covered
position with respect to any call option it writes, the Fund may not sell the
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underlying assets used to cover an option during the period it is obligated
under the option. This requirement may impair the Fund's ability to sell a
portfolio security or make an investment at a time when such a sale or
investment might be advantageous.
Stock index options are settled exclusively in cash. If the Fund
purchases an option on a stock index, the option is settled based on the closing
value of the index on the exercise date. Thus, a holder of a stock index option
who exercises it before the closing index value for that day is available runs
the risk that the level of the underlying index may subsequently change. For
example, in the case of a call option, if such a change causes the closing index
value to fall below the exercise price of the option on the index, the
exercising holder will be required to pay the difference between the closing
index value and the exercise price of the option.
The Fund's activities in the options markets may result in a higher
portfolio turnover rate and additional brokerage costs; however, the Fund also
may save on commissions by using options as a hedge rather than buying or
selling individual securities in anticipation or as a result of market
movements.
Futures Strategies. International Securities Fund may engage in futures
strategies to attempt to reduce the overall investment risk that would normally
be expected to be associated with ownership of the securities in which it
invests. The Fund may sell foreign currency futures contracts to hedge against
possible variations in the exchange rate of the foreign currency in relation to
the U.S. dollar. In addition, the Fund may sell foreign currency futures
contracts when the Subadviser anticipates a general weakening of foreign
currency exchange rates that could adversely affect the market value of the
Fund's foreign securities holdings. In this case, the sale of futures contracts
on the underlying currency may reduce the risk to the Fund of a reduction in
market value caused by foreign currency variations and, by so doing, provide an
alternative to the liquidation of securities positions and resulting transaction
costs. When the Subadviser anticipates a significant foreign exchange rate
increase while intending to invest in a security denominated in that currency,
the Fund may purchase a foreign currency futures contract to hedge against that
increase pending completion of the anticipated transaction. Such a purchase
would serve as a temporary measure to protect the Fund against any rise in the
foreign exchange rate that may add additional costs to acquiring the foreign
security position. The Fund also may purchase call or put options on foreign
currency futures contracts to obtain a fixed foreign exchange rate at limited
risk. The Fund may purchase a call option on a foreign currency futures contract
to hedge against a rise in the foreign exchange rate while intending to invest
in a security denominated in that currency. The Fund may purchase put options or
write call options on foreign currency futures contracts as a partial hedge
against a decline in the foreign exchange rates or the value of its foreign
portfolio securities.
International Securities Fund may sell stock index futures contracts in
anticipation of a general market or market sector decline that could adversely
affect the market value of the Fund's portfolio. To the extent that a portion of
the Fund's portfolio correlates with a given stock index, the sale of futures
contracts on that index could reduce the risks associated with a market decline
and thus provide an alternative to the liquidation of securities positions. The
Fund may purchase a stock index futures contract if a significant market or
market sector advance is anticipated. Such a purchase would serve as a temporary
substitute for the purchase of individual stocks, which stocks may then be
purchased in an orderly fashion. This strategy may minimize the effect of all or
part of an increase in the market price of securities that the Fund intends to
purchase. A rise in the price of the securities should be partially or wholly
offset by gains in the futures position.
International Securities Fund may purchase a call option on a stock
index future to hedge against a market advance in equity securities that the
Fund plans to purchase at a future date. The Fund may write covered call options
on stock index futures as a partial hedge against a decline in the prices of
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stocks held in the Fund's portfolio. The Fund also may purchase put options on
stock index futures contracts.
International Securities Fund may use interest rate futures contracts
and options thereon to hedge the debt portion of its portfolio against changes
in the general level of interest rates. The Fund may purchase an interest rate
futures contract when it intends to purchase debt securities but has not yet
done so. This strategy may minimize the effect of all or part of an increase in
the market price of those securities because a rise in the price of the
securities prior to their purchase may either be offset by an increase in the
value of the futures contract purchased by the Fund or avoided by taking
delivery of the debt securities under the futures contract. Conversely, a fall
in the market price of the underlying debt securities may result in a
corresponding decrease in the value of the futures position. The Fund may sell
an interest rate futures contract in order to continue to receive the income
from a debt security, while endeavoring to avoid part or all of the decline in
the market value of that security that would accompany an increase in interest
rates.
International Securities Fund may purchase a call option on an interest
rate futures contract to hedge against a market advance in debt securities that
the Fund plans to acquire at a future date. The Fund also may write covered call
options on interest rate futures contracts as a partial hedge against a decline
in the price of debt securities held in the Fund's portfolio or purchase put
options on interest rate futures contracts in order to hedge against a decline
in the value of debt securities held in the Fund's portfolio.
Special Risks Related to Foreign Currency Futures Contracts and Related
Options. Buyers and sellers of foreign currency futures contracts are subject to
the same risks that apply to the use of futures generally. In addition, there
are risks associated with foreign currency futures contracts and their use as a
hedging device similar to those associated with options on foreign currencies
described above. Further, settlement of a foreign currency futures contract must
occur within the country issuing the underlying currency. Thus, International
Securities Fund must accept or make delivery of the underlying foreign currency
in accordance with any U.S. or foreign restrictions or regulations regarding the
maintenance of foreign banking arrangements by U.S. residents and may be
required to pay any fees, taxes or charges associated with such delivery that
are assessed in the issuing country.
Options on foreign currency futures contracts may involve certain
additional risks. Trading of such options is relatively new. The ability to
establish and close out positions on such options is subject to the maintenance
of a liquid secondary market. To reduce this risk, International Securities Fund
will not purchase or write options on foreign currency futures contracts unless
and until, in the Subadviser's opinion, the market for such options has
developed sufficiently that the risks in connection with such options are not
greater than the risks in connection with transactions in the underlying futures
contracts. Compared to the purchase or sale of foreign currency futures
contracts, the purchase of call or put options thereon involves less potential
risk to International Securities Fund because the maximum amount at risk is the
premium paid for the options (plus transaction costs). However, there may be
circumstances when the purchase of a call or put option on a foreign currency
futures contract would result in a loss, such as when there is no movement in
the price of the underlying currency or futures contract.
Futures Guidelines. In view of the risks involved in using futures
strategies described below, Life Series Fund's Board of Trustees has adopted
non-fundamental investment guidelines to govern the Fund's use of such
investments that may be modified by the Board without shareholder vote. Foreign
currency options traded on a commodities exchange are included and governed by
these guidelines. The Fund will not purchase or sell futures contracts or
related options if, immediately thereafter, the sum of the amount of initial
margin deposits on the Fund's existing futures positions and margin and premiums
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paid for related options would exceed 5% of the market value of the Fund's total
assets. The value of all futures sold will not exceed the total market value of
the Fund's portfolio.
Special Characteristics and Risks of Futures Trading. No price is paid
upon entering into futures contracts. Instead, upon entering into a futures
contract, International Securities Fund is required to deposit with its
custodian in a segregated account in the name of the futures broker through
which the transaction is effected an amount of cash, U.S. Government securities
or other liquid, high-grade debt instruments generally equal to 3%-5% or less of
the contract value. This amount is known as "initial margin." When writing a
call or put option on a futures contract, margin also must be deposited in
accordance with applicable exchange rules. Initial margin on futures contracts
is in the nature of a performance bond or good-faith deposit that is returned to
the Fund upon termination of the transaction, assuming all obligations have been
satisfied. Under certain circumstances, such as periods of high volatility, the
Fund may be required by an exchange to increase the level of its initial margin
payment. Additionally, initial margin requirements may be increased generally in
the future by regulatory action. Subsequent payments, called "variation margin,"
to and from the broker, are made on a daily basis as the value of the futures
position varies, a process known as "marking to market." Variation margin does
not involve borrowing to finance the futures transactions, but rather represents
a daily settlement of the Fund's obligation to or from a clearing organization.
Holders and writers of futures positions and options thereon can enter
into offsetting closing transactions, similar to closing transactions on options
on securities, by selling or purchasing, respectively, a futures position or
options position with the same terms as the position or option held or written.
Positions in futures contracts and options thereon may be closed only on an
exchange or board of trade providing a secondary market for such futures or
options.
Under certain circumstances, futures exchanges may establish daily
limits on the amount that the price of a futures contract or related option may
vary either up or down from the previous day's settlement price. Once the daily
limit has been reached in a particular contract, no trades may be made that day
at a price beyond that limit. The daily limit governs only price movements
during a particular trading day and therefore does not limit potential losses
because prices could move to the daily limit for several consecutive trading
days with little or no trading and thereby prevent prompt liquidation of
unfavorable positions. In such event, it may not be possible for the Fund to
close a position and, in the event of adverse price movements the Fund would
have to make daily cash payments of variation margin (except in the case of
purchased options). However, in the event futures contracts have been used to
hedge portfolio securities, such securities will not be sold until the contracts
can be terminated. In such circumstances, an increase in the price of the
securities, if any, may partially or completely offset losses on the futures
contract. However, there is no guarantee that the price of the securities will,
in fact, correlate with the price movements in the contracts and thus provide an
offset to losses on the contracts.
Successful use by International Securities Fund of futures contracts
and related options will depend upon the Subadviser's ability to predict
movements in the direction of the overall securities, currency and interest rate
markets, which requires different skills and techniques than predicting changes
in the prices of individual securities. Moreover, futures contracts relate not
to the current price level of the underlying instrument but to the anticipated
levels at some point in the future. There is, in addition, the risk that the
movements in the price of the futures contract or related option will not
correlate with the movements in prices of the securities or currencies being
hedged. In addition, if the Fund has insufficient cash, it may have to sell
assets from its portfolio to meet daily variation margin requirements. Any such
sale of assets may or may not be made at prices that reflect the rising market.
Consequently, the Fund may need to sell assets at a time when such sales are
disadvantageous to the Fund. If the price of the futures contract or related
option moves more than the price of the underlying securities or currencies, the
13
<PAGE>
Fund will experience either a loss or a gain on the futures contract or related
option that may or may not be completely offset by movements in the price of the
securities or currencies that are the subject of the hedge.
In addition to the possibility that there may be an imperfect
correlation, or no correlation at all, between price movements in the futures or
related option position and the securities or currencies being hedged, movements
in the prices of futures contracts and related options may not correlate
perfectly with movements in the prices of the hedged securities or currencies
because of price distortions in the futures market. As a result, a correct
forecast of general market trends may not result in successful hedging through
the use of futures contracts and related options over the short term.
Positions in futures contracts and related options may be closed out
only on an exchange or board of trade that provides a secondary market for such
futures contracts or related options. Although the Fund intends to purchase or
sell futures contracts and related options only on exchanges or boards of trade
where there appears to be a liquid secondary market, there is no assurance that
such a market will exist for any particular contract or option at any particular
time. In such event, it may not be possible to close a futures or option
position and, in the event of adverse price movements, the Fund would continue
to be required to make variation margin payments.
Like options on securities and currencies, options on futures contracts
have a limited life. The ability to establish and close out options on futures
will be subject to the development and maintenance of liquid secondary markets
on the relevant exchanges or boards of trade. There can be no certainty that
liquid secondary markets for all options on futures contracts will develop.
Purchasers of options on futures contracts pay a premium in cash at the
time of purchase. This amount and the transaction costs are all that is at risk.
Sellers of options on a futures contract, however, must post initial margin and
are subject to additional margin calls that could be substantial in the event of
adverse price movements. In addition, although the maximum amount at risk when
the Fund purchases an option is the premium paid for the option and the
transaction costs, there may be circumstances when the purchase of an option on
a futures contract would result in a loss to the Fund when the use of a futures
contract would not, such as when there is no movement in the level of the
underlying stock index or the value of the securities or currencies being
hedged.
The Fund's activities in the futures and related options markets may
result in a higher portfolio turnover rate and additional transaction costs in
the form of added brokerage commissions; however, the Fund also may save on
commissions by using futures and related options as a hedge rather than buying
or selling individual securities or currencies in anticipation or as a result of
market movements.
Forward Currency Contracts. International Securities Fund may use
forward currency contracts to protect against uncertainty in the level of future
exchange rates. The Fund will not speculate with forward currency contracts or
foreign currency exchange rates.
International Securities Fund may enter into forward currency contracts
with respect to specific transactions. For example, when the Fund enters into a
contract for the purchase or sale of a security denominated in a foreign
currency, or when the Fund anticipates the receipt in a foreign currency of
dividend or interest payments on a security that it holds, the Fund may desire
to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent
of such payment, as the case may be, by entering into a forward contract for the
purchase or sale, for a fixed amount of U.S. dollars or foreign currency, of the
amount of foreign currency involved in the underlying transaction. The Fund will
thereby be able to protect itself against a possible loss resulting from an
adverse change in the relationship between the currency exchange rates during
14
<PAGE>
the period between the date on which the security is purchased or sold, or on
which the payment is declared, and the date of which such payments are made or
received.
International Securities Fund also may use forward currency contracts
in connection with portfolio positions to lock in the U.S. dollar value of those
positions, to increase the Fund's exposure to foreign currencies that its
Subadviser believes may rise in value relative to the U.S. dollar or to shift
the Fund's exposure to foreign currency fluctuations from one country to
another. This investment practice generally is referred to as "cross-hedging"
when another foreign currency is used.
The precise matching of the forward contract amounts and the value of
the securities involved will not generally be possible because the future value
of such securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date the forward contract
is entered into and the date it matures. Accordingly, it may be necessary for
the Fund to purchase additional foreign currency on the spot (i.e., cash) market
and bear the expense of such purchase if the market value of the security is
less than the amount of foreign currency the Fund is obligated to deliver and if
a decision is made to sell the security and make delivery of the foreign
currency. Conversely, it may be necessary to sell on the spot market some of the
foreign currency received upon the sale of the portfolio security if its market
value exceeds the amount of foreign currency the Fund is obligated to deliver.
The projection of short-term currency market movements is extremely difficult,
and the successful execution of a short-term hedging strategy is highly
uncertain. Forward contracts involve the risk that anticipated currency
movements will not be accurately predicted, causing the Fund to sustain losses
on these contracts and transactions costs. The Fund may enter into formal
contracts or maintain a net exposure to such contracts only if the Fund
maintains cash, U.S. Government securities or liquid, high-grade debt securities
in a segregated account in an amount not less than the value of the Fund's total
assets committed to the consummation of the contract, as marked to market daily.
At or before the maturity date of a forward contract requiring
International Securities Fund to sell a currency, the Fund may either sell a
portfolio security and use the sale proceeds to make delivery of the currency or
retain the security and offset its contractual obligation to deliver the
currency by purchasing a second contract pursuant to which the Fund will obtain,
on the same maturity date, the same amount of the currency that it is obligated
to deliver. Similarly, the Fund may close out a forward contract requiring it to
purchase a specified currency by entering into a second contract entitling it to
sell the same amount of the same currency on the maturity date of the first
contract. The Fund would realize a gain or loss as a result of entering into an
offsetting forward currency contract under either circumstance to the extent the
exchange rate or rates between the currencies involved moved between the
execution dates of the first contract and the offsetting contract. There can be
no assurance that new forward contracts or offsets always will be available for
the Fund. Forward currency contracts also involve a risk that the other party to
the contract may fail to deliver currency when due, which could result in
substantial losses to the Fund. The cost to the Fund of engaging in forward
currency contracts varies with factors such as the currencies involved, the
length of the contract period and the market conditions then prevailing. Because
forward currency contracts are usually entered into on a principal basis, no
fees or commissions are involved.
INVESTMENT RESTRICTIONS
Life Series Fund has adopted the investment restrictions set forth
below, which cannot be changed without the approval of a vote of a majority of
the outstanding shares of Life Series Fund. As provided in the Investment
Company Act of 1940, as amended ("1940 Act"), a "vote of a majority of the
outstanding shares of the Fund" means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of the Fund or (ii) 67% or more of
15
<PAGE>
the shares present at a meeting if more than 50% of the outstanding shares are
represented at the meeting in person or by proxy. The investment restrictions
provide that each Fund of Life Series Fund will not:
(1) Borrow money, except as a temporary or emergency measure
in an amount not to exceed 5% of the value of its total assets.
(2) Pledge assets, except that a Fund may pledge its assets to
secure borrowings made in accordance with paragraph (1) above, provided the Fund
maintains asset coverage of at least 300% for pledged assets; provided, however,
this limitation will not prohibit escrow, collateral or margin arrangements in
connection with the International Securities Fund's use of options, futures
contracts or options on futures contracts.
(3) Make loans, except by purchase of debt obligations and
through repurchase agreements. However, Life Series Fund's Board of Trustees
may, on the request of broker-dealers or other unaffiliated institutional
investors which they deem qualified, authorize a Fund to loan securities to
cover the borrower's short position; provided, however, the borrower pledges to
the Fund and agrees to maintain at all times with the Fund cash collateral equal
to not less than 100% of the value of the securities loaned, the loan is
terminable at will by the Fund, the Fund receives interest on the loan as well
as any distributions upon the securities loaned, the Fund retains voting rights
associated with the securities, the Fund pays only reasonable custodian fees in
connection with the loan, and the Adviser or Subadviser monitors the
creditworthiness of the borrower throughout the life of the loan; provided
further, that such loans will not be made if the value of all loans, repurchase
agreements with more than seven days to maturity, and other illiquid assets is
greater than an amount equal to 10% of the Fund's total assets; provided,
however, securities that have legal or contractual restrictions as to resale but
have a readily available market are not deemed illiquid for purposes of this
limitation.
(4) Purchase, with respect to only 75% of a Fund's assets, the
securities of any issuer (other than the U.S. Government) if, as a result
thereof, (a) more than 5% of the Fund's total assets (taken at current value)
would be invested in the securities of such issuer; provided, however, that such
restrictions shall apply to 100% of the assets of the Cash Management Fund; or
(b) the Fund would hold more than 10% of any class of securities (including any
class of voting securities) of such issuer (for this purpose, all debt
obligations of an issuer maturing in less than one year are treated as a single
class of securities).
(5) Purchase securities on margin (but a Fund may obtain such
credits as may be necessary for the clearance of purchases and sales of
securities); provided, however, that International Securities Fund may make
margin deposits in connection with the use of options, futures contracts and
options on futures contracts.
(6) Make short sales of securities.
(7) Buy or sell puts, calls, straddles or spreads, except, as
to International Securities Fund, with respect to options on securities,
securities indices and foreign currencies or on futures contracts.
(8) Purchase the securities of other investment companies or
investment trusts, except as they may be acquired as part of a merger,
consolidation or acquisition of assets.
16
<PAGE>
(9) Underwrite securities issued by other persons except to
the extent that, in connection with the disposition of its portfolio
investments, it may be deemed to be an underwriter under Federal securities
laws.
(10) Buy or sell real estate, commodities, or commodity
contracts (unless acquired as a result of ownership of securities) or interests
in oil, gas or mineral explorations; provided, however, a Fund may invest in
securities secured by real estate or interests in real estate, and International
Securities Fund may purchase or sell options on securities, securities indices
and foreign currencies, stock index futures, interest rate futures and foreign
currency futures, as well as options on such futures contracts.
(11) Purchase the securities of an issuer if such purchase, at
the time thereof, would cause more than 5% of the value of a Fund's total assets
to be invested in securities of issuers which, including predecessors, have a
record of less than three years' continuous operation.
The following investment restrictions are not fundamental and can be
changed without prior shareholder approval:
1. A Fund will not invest in any securities of any issuer if, to the
knowledge of the Fund, any officer, director or trustee of Life Series Fund or
of the Adviser owns more than 1/2 of 1% of the outstanding securities of such
issuer, and such officers, directors or trustees who own more than 1/2 of 1% own
in the aggregate more than 5% of the outstanding securities of such issuer.
2. A Fund will not purchase any security if, as a result, more than 15%
(10% for Cash Management Fund) of its net assets would be invested in illiquid
securities, including repurchase agreements not entitling the holder to payment
of principal and interest within seven days and any securities that are illiquid
by virtue of legal or contractual restrictions on resale or the absence of a
readily available market. The Trustees, or the Funds' investment adviser acting
pursuant to authority delegated by the Trustees, may determine that a readily
available market exists for securities eligible for resale pursuant to Rule 144A
under the Securities Act of 1933, as amended, or any other applicable rule, and
therefore that such securities are not subject to the foregoing limitation.
TRUSTEES AND OFFICERS
The following table lists the Trustees and executive officers of Life
Series Fund, their age, business address and principal occupations during the
past five years. Unless otherwise noted, an individual's business address is 95
Wall Street, New York, New York 10005.
Glenn O. Head*+ (70), President and Trustee. Chairman of the Board, Director and
Treasurer, Administrative Data Management Corp. ("ADM"); Chairman of the Board
and Director, FIMCO, Executive Investors Management Company, Inc. ("EIMCO"),
First Investors Corporation ("FIC"), Executive Investors Corporation ("EIC") and
First Investors Consolidated Corporation ("FICC").
James J. Coy (81), Trustee, 90 Buell Lane, East Hampton, NY 11937. Retired;
formerly Senior Vice President, James Talcott, Inc. (financial institution).
Roger L. Grayson* (39), Trustee. Director, FIC and FICC; President and Director,
First Investors Resources, Inc.; Commodities Portfolio Manager.
17
<PAGE>
Kathryn S. Head*+ (39), Trustee, 581 Main Street, Woodbridge, NJ 07095.
President, FICC and FIMCO; Vice President, Chief Financial Officer and Director,
FIC and EIC; President and Director, First Financial Savings Bank, S.L.A.; Chief
Financial Officer, ADM.
Rex R. Reed (73), Trustee, 76 Keats Way, Morristown, NJ 07960. Retired; formerly
Senior Vice President, American Telephone & Telegraph Company.
Herbert Rubinstein (74), Trustee, 145 Elm Drive, Roslyn, NY 11576. Retired;
formerly President, Belvac International Industries, Ltd.; President, Central
Dental Supply.
James M. Srygley (64), Director, 33 Hampton Road, Chatham, NJ 07982. Principal,
Hampton Properties, Inc., property investment company.
John T. Sullivan* (63), Trustee and Chairman of the Board; Director, FIMCO, FIC,
FICC and ADM; Of Counsel, Hawkins, Delafield & Wood, Attorneys.
Robert F. Wentworth (66), Trustee, RR1, Box 2554, Upland Downs Road, Manchester
Center, VT 05255. Retired; formerly financial and planning executive with
American Telephone & Telegraph Company.
Joseph I. Benedek (38), Treasurer, 581 Main Street, Woodbridge, NJ 07095.
Treasurer, FIC, FIMCO, EIMCO and EIC.
Concetta Durso (62), Vice President and Secretary. Vice President, FIMCO, EIMCO
and ADM; Assistant Vice President and Assistant Secretary, FIC.
Carol Lerner Brown (41), Assistant Secretary. Secretary, FIMCO, EIMCO, EIC and
ADM; Assistant Secretary, FIC.
- ----------
* These Trustees may be deemed to be "interested persons," as defined in the
1940 Act.
+ Mr. Glenn O. Head and Ms. Kathryn S. Head are father and daughter.
All of the officers and Trustees hold identical or similar positions
with Executive Investors Trust and 13 other registered investment companies in
the First Investors family of funds. Mr. Head is also an officer and/or Director
of First Investors Asset Management Company, Inc., First Investors Credit
Funding Corporation, First Investors Leverage Corporation, First Investors
Realty Company, Inc., First Investors Resources, Inc., N.A.K. Realty
Corporation, Real Property Development Corporation, Route 33 Realty Corporation,
First Investors Life Insurance Company, First Financial Savings Bank, S.L.A.,
First Investors Credit Corporation and School Financial Management Services,
Inc. Ms. Head is also an officer and/or Director of First Investors Life
Insurance Company, First Investors Credit Corporation and School Financial
Management Services, Inc.
The following table lists compensation paid to the Trustees by Life
Series Fund for the fiscal year ended December 31, 1994.
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<PAGE>
<TABLE>
<CAPTION>
Total
Pension or Estimated Compensation
Aggregate Retirement Benefits Annual Benefits From Fund and
Compensation Accrued as Part of Upon Fund Complex
Trustee From Fund Fund Expenses Retirement Paid to Directors
- ------- ------------- -------------------- ----------------- -----------------
<S> <C> <C> <C> <C>
James J. Coy $-0- $-0- $-0- $-0-
Roger L. Grayson -0- -0- -0- -0-
Glenn O. Head -0- -0- -0- -0-
Kathryn S. Head -0- -0- -0- -0-
F. William Ortman -0- -0- -0- -0-
Rex R. Reed -0- -0- -0- -0-
Herbert Rubinstein -0- -0- -0- -0-
James M. Srygley -0- -0- -0- -0-
John T. Sullivan -0- -0- -0- -0-
Robert F. Wentworth -0- -0- -0- -0-
</TABLE>
Compensation to officers and interested Trustees of Life Series Fund is
paid by the Adviser and not by Life Series Fund. In addition, compensation to
non-interested Trustees of Life Series Fund is currently voluntarily paid by the
Adviser.
MANAGEMENT
Adviser. Investment advisory services to the Funds are provided by
First Investors Management Company, Inc. pursuant to an Investment Advisory
Agreement ("Advisory Agreement") dated June 13, 1994. The Advisory Agreement was
approved by the Board of Trustees of Life Series Fund, including a majority of
the Trustees who are not parties to the Advisory Agreement or "interested
persons" (as defined in the 1940 Act) of any such party ("Independent
Trustees"), in person at a meeting called for such purpose and by a majority of
the shareholders of each Fund.
Pursuant to the Advisory Agreement, FIMCO shall supervise and manage
each Fund's investments, determine each Fund's portfolio transactions and
supervise all aspects of each Fund's operations, subject to review by the
Trustees. The Advisory Agreement also provides that FIMCO shall provide Life
Series Fund and each Fund with certain executive, administrative and clerical
personnel, office facilities and supplies, conduct the business and details of
the operation of Life Series Fund and each Fund and assume certain expenses
thereof, other than obligations or liabilities of the Funds. The Advisory
Agreement may be terminated at any time without penalty by the Trustees or by a
majority of the outstanding voting securities of the applicable Fund, or by
FIMCO, in each instance on not less than 60 days' written notice, and shall
automatically terminate in the event of its assignment (as defined in the 1940
Act). The Advisory Agreement also provides that it will continue in effect, with
respect to a Fund, for a period of over two years only if such continuance is
approved annually either by the Trustees or by a majority of the outstanding
voting securities of that Fund, and, in either case, by a vote of a majority of
the Independent Trustees voting in person at a meeting called for the purpose of
voting on such approval.
Under the Advisory Agreement, each Fund pays the Adviser an annual fee,
paid monthly, according to the following schedules:
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Annual
Average Daily Net Assets Rate
- ------------------------ ----
Up to $250 million .............................................. 0.75%
In excess of $250 million up to $500 million .................... 0.72
In excess of $500 million up to $750 million .................... 0.69
Over $750 million ............................................... 0.66
The SEC staff takes the position that fees of 0.75% or greater are higher than
those paid by most investment companies.
The Adviser has an Investment Committee composed of George V. Ganter,
Margaret Haggerty, Glenn O. Head, Nancy W. Jones, Patricia D. Poitra, Richard
Guinnessey, Clark D. Wagner and John Tomasulo. The Committee usually meets
weekly to discuss the composition of the portfolio of each Fund and to review
additions to and deletions from the portfolios.
For the fiscal year ended December 31, 1992, Blue Chip Fund's advisory
fees were $125,405, net of a waiver of $12,612; Cash Management Fund's advisory
fees were $48,818, net of a waiver of $15,708; Discovery Fund's advisory fees
were $44,528, net of a waiver of $10,204; Growth Fund' advisory fees were
$35,843, net of a waiver of $51,341; High Yield Fund's advisory fees were
$176,602, net of a waiver of $12,251; and International Securities Fund's
advisory fees were $42,380, net of a waiver of $37,083. For the period January
7, 1992 (commencement of operations) through December 31, 1992, Government
Fund's advisory fees were $900, net of a waiver of $19,140 and Investment Grade
Fund's advisory fees were $5,595, net of a waiver of $12,379.
For the fiscal year ended December 31, 1993, Blue Chip Fund's advisory
fees were $214,369, Cash Management Fund's advisory fees were $19,805, net of a
waiver of $29,519, Discovery Fund's advisory fees were $114,996, Government
Fund's advisory fees were $24,232, net of a waiver of $27,694, Growth Fund's
advisory fees were $154,256, High Yield Fund's advisory fees were $205,249,
International Securities Fund's advisory fees were $112,984 and Investment Grade
Fund's advisory fees were $25,954, net of a waiver of $29,662. For the period
November 15, 1993 (commencement of operations) through December 31, 1993,
Utilities Income Fund's advisory fees in the amount of $205 were waived in their
entirety.
For the fiscal year ended December 31, 1994, Blue Chip Fund's advisory
fees were $286,413, Cash Management Fund's advisory fees were $12,024, net of a
waiver of $17,258, Discovery Fund's advisory fees were $194,546, Government
Fund's advisory fees were $27,509, net of a waiver of $31,440, Growth Fund's
advisory fees were $218, 813, High Yield Fund's advisory fees were $236,209,
International Securities Fund's advisory fees were $202,739, Investment Grade
Fund's advisory fees were $38,655, net of a waiver of $44,177 and Utilities
Income Fund's advisory fees were $4,772, net of a waiver of $16,163.
Subadviser. Wellington Management Company has been retained by the
Adviser and Life Series Fund as the investment subadviser to International
Securities Fund and Growth Fund under a subadvisory agreement dated June 13,
1994 ("Subadvisory Agreement"). The Subadvisory Agreement was approved by the
Board of Trustees of Life Series Fund, including a majority of Independent
Trustees in person at a meeting called for such purpose and by a majority of the
shareholders of International Securities Fund and Growth Fund.
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<PAGE>
The Subadvisory Agreement provides that it will continue, with respect
to a Fund, for a period of more than two years from the date of execution only
so long as such continuance is approved annually by either the Board of Trustees
or a majority of the outstanding voting securities of that Fund and, in either
case, by a vote of a majority of the Independent Trustees voting in person at a
meeting called for the purpose of voting on such approval. The Subadvisory
Agreement provides that it will terminate automatically, with respect to a Fund,
if assigned or upon the termination of the Advisory Agreement, and that it may
be terminated without penalty by the Board of Trustees or a vote of a majority
of the outstanding voting securities of that Fund, upon not more than 60 days'
written notice, or by the Adviser or Subadviser on not more than 30 days'
written notice. The Subadvisory Agreement provides that WMC will not be liable
for any error of judgment or for any loss suffered by a Fund or the Adviser in
connection with the matters to which the Subadvisory Agreement relates, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation or from willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Under the Subadvisory Agreement, the Adviser will pay to the Subadviser
a fee at an annual rate of 0.400% of the average daily net assets of each Fund
up to and including $50 million; 0.275% of the average daily net assets in
excess of $50 million up to and including $150 million, 0.225% of the average
daily net assets in excess of $150 million up to and including $500 million; and
0.200% of the average daily net assets in excess of $500 million. This fee is
calculated separately for each of the Fund.
For the fiscal year ended December 31, 1992, the Subadviser received
$30,188 for its services with respect to the International Securities Fund and
$46,484 for its services with respect to the Growth Fund. For the fiscal year
ended December 31, 1993, the Subadviser received $60,245 for its services with
respect to the International Securities Fund and $82,270 for its services with
respect to the Growth Fund. For the fiscal year ended December 31, 1994, the
Subadviser received $108,127 for its services with respect to the International
Securities Fund and $116,700 for its services with respect to the Growth Fund.
DETERMINATION OF NET ASSET VALUE
Except as provided herein, 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 market system where the security is primarily traded, and lacking
any sales on a particular day, the security is valued at the mean between the
closing bid and asked prices on that day. Each security traded in the OTC market
(including securities listed on exchanges whose primary market is believed to be
OTC) is valued at the mean between the closing bid and asked prices based upon
quotes furnished by a market maker for such securities. The U.S. Government
securities in which the Funds invest are traded primarily in the OTC markets. In
the absence of market quotations, a Fund will determine the value of bonds based
upon quotes furnished by market makers, if available, or in accordance with the
procedures described herein. In that connection, the Board of Trustees has
determined that a Fund may use an outside pricing service. The pricing service
uses quotations obtained from investment dealers or brokers for the particular
securities being evaluated, information with respect to market transactions in
comparable securities and other available information in determining value.
Short-term debt securities that mature in 60 days or less are valued at
amortized cost if their original term to maturity from the date of purchase was
60 days or less, or by amortizing their value on the 61st day prior to maturity
if their term to maturity from the date of purchase exceeded 60 days, unless the
Board of Trustees determines that such valuation does not represent fair value.
Securities for which market quotations are not readily available are valued at
fair value as determined in good faith by the Board of Trustees.
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<PAGE>
"When-issued securities" are reflected in the assets of a Fund as of
the date the securities are purchased. Such investments are valued thereafter at
the mean between the most recent bid and asked prices obtained from recognized
dealers in such securities. For valuation purposes, quotations of foreign
securities in foreign currencies are converted into U.S. dollar equivalents
using the foreign exchange equivalents in effect. The investments in Cash
Management Fund when purchased at a discount, are valued at amortized cost and
when purchased at face value, are valued at cost plus accrued interest.
ALLOCATION OF PORTFOLIO BROKERAGE
Purchases and sales of portfolio securities by Target Maturity 2007
Fund, Investment Grade Fund, Government Fund and High Yield Fund generally are
principal transactions. In principal transactions, portfolio securities are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There will usually be no brokerage commissions paid by
a Fund for such purchases. Purchases from underwriters will include the
underwriter's commission or concession and purchases from dealers serving as
market makers will include the spread between the bid and asked price. Certain
money market instruments may be purchased directly from an issuer, in which no
commissions or discounts are paid. Fixed income securities are generally
purchased on a "net" basis with dealers acting as principal for their own
accounts without a stated commission, although the price of the security usually
includes a profit to the dealer.
A Fund may deal in securities which are not listed on a national
securities exchange or the NASDAQ national market system but are traded in the
OTC market. A Fund also may purchase listed securities through the "third
market." When transactions are executed in the OTC market, a Fund seeks to deal
with the primary market makers, but when advantageous it utilizes the services
of brokers.
In effecting portfolio transactions, the Adviser or the Subadviser
seeks best execution of trades either (1) at the most favorable and competitive
rate of commission charged by any broker or member of an exchange, or (2) with
respect to agency transactions, at a higher rate of commission if reasonable in
relation to brokerage and research services provided to a Fund or the Adviser or
the Subadviser by such member or broker. Such services may include, but are not
limited to, any one or more of the following: information as to the availability
of securities for purchase or sale, statistical or factual information or
opinions pertaining to investments. The Adviser or the Subadviser may use
research and services provided to it by brokers in servicing all the funds in
the First Investors Group of Funds; however, not all such services may be used
by the Adviser or the Subadviser in connection with a Fund. No portfolio orders
are placed with an affiliated broker, nor does any affiliated broker participate
in these commissions.
The Adviser or the Subadviser may combine transaction orders placed on
behalf of any of the Funds, any other fund in the First Investors Group of
Funds, and any Fund of Executive Investors Trust and First Investors Life, for
the purpose of negotiating brokerage commissions or obtaining a more favorable
transaction price; and where appropriate, securities purchased or sold may be
allocated, in terms of price and amount, to a Fund according to the proportion
that the size of the transaction order actually placed by a Fund bears to the
aggregate size of the transaction orders simultaneously made by other
participants in the transaction.
For the fiscal year ended December 31, 1992, International Securities
Fund paid $31,403 in brokerage commissions. For the fiscal year ended December
31, 1992, Blue Chip Fund paid $48,072 in brokerage commissions. Of that amount,
$1,125 was paid in brokerage commissions to brokers who furnished research
services on portfolio transactions in the amount of $511,787. For the fiscal
year ended December 31, 1992, Discovery Fund paid $21,498 in brokerage
commissions. Of that amount, $19,250 was paid in brokerage commissions to
brokers who furnished research services on portfolio transactions in the amount
22
<PAGE>
of $4,749,709. For the fiscal year ended December 31, 1992, Growth Fund paid
$15,436 in brokerage commissions. Of that amount, $512 was paid in brokerage
commissions to brokers who furnished research services on portfolio transactions
in the amount of $489,693. For the same periods, all other Fund of the Fund did
not pay brokerage commissions.
Brokerage commissions for the fiscal year ended December 31, 1993 are
as follows: Blue Chip Fund paid $43,811 in brokerage commissions. Of that
amount, $l,040 was paid in brokerage commissions to brokers who furnished
research services on portfolio transactions in the amount of $659,709.
International Securities Fund paid $40,600 in brokerage commissions. Of that
amount, $354 was paid in brokerage commissions to brokers who furnished research
services on portfolio transactions in the amount of $158,358. Discovery Fund
paid $21,875 in brokerage commissions. Of that amount, $8,062 was paid in
brokerage commissions to brokers who furnished research services on portfolio
transactions in the amount of $2,203,374. Growth Fund paid $27,301 in brokerage
commissions. Of that amount, $11,318 was paid in brokerage commissions to
brokers who furnished research services on portfolio transactions in the amount
of $7,444,277. High Yield Fund paid brokerage commissions of $268. Of that
amount, $176 was paid in brokerage commissions to brokers who furnished research
services on portfolio transactions in the amount of $42,600. For the same
period, all other Fund of the Fund did not pay brokerage commissions. For the
period November 15 through December 31, 1993, Utilities Income Fund paid $1,284.
Brokerage commissions for the fiscal year ended December 31, 1994 are
as follows: Blue Chip Fund, International Securities Fund, Discovery Fund and
Utilities Income Fund paid $96,570, $69,494, $34,423 and $14,811, respectively,
in brokerage commissions. Growth Fund paid $37,740 in brokerage commissions. Of
that amount $7,571 was paid in brokerage commissions to brokers who furnished
research services on portfolio transactions in the amount of $4,437,997. High
Yield Fund paid $586 in brokerage commissions, all of which was paid to brokers
who furnished research services on portfolio transactions in the amount of
$16,600. For the same period, all other series of Life Series Fund did not pay
brokerage commissions.
TAXES
In order to qualify for treatment as a regulated investment company
("RIC") under the Internal Revenue Code of 1986, as amended ("Code"), a Fund --
each Fund being treated as a separate entity for these purposes -- must
distribute to its shareholders for each taxable year at least 90% of its
investment company taxable income (consisting generally of net investment
income, net short-term capital gain and, for International Securities Fund and
High Yield Fund, net gains from certain foreign currency transactions)
("Distribution Requirement") and must meet several additional requirements. For
each Fund these requirements include the following: (1) the Fund must derive at
least 90% of its gross income each taxable year from dividends, interest,
payments with respect to securities loans and gains from the sale or other
disposition of securities or, for International Securities Fund and High Yield
Fund, foreign currencies, or other income (including, for International
Securities Fund, gains from options, futures or forward contracts) derived with
respect to its business of investing in securities or, for International
Securities Fund and High Yield Fund, those currencies ("Income Requirement");
(2) the Fund must derive less than 30% of its gross income each taxable year
from the sale or other disposition of securities, or any of the following, that
were held for less than three months -- options, futures or forward contracts
(other than those on foreign currencies), or, for International Securities Fund
and High Yield Fund, foreign currencies (or options, futures or forward
contracts thereon) that are not directly related to the Fund's principal
business of investing in securities (or, for International Securities Fund,
options and futures with respect thereto) ("Short-Short Limitation"); (3) at the
close of each quarter of the Fund's taxable year, at least 50% of the value of
23
<PAGE>
its total assets must be represented by cash and cash items, U.S. Government
securities, securities of other RICs and other securities, with those other
securities limited, in respect of any one issuer, to an amount that does not
exceed 5% of the value of the Fund's total assets and that does not represent
more than 10% of the issuer's outstanding voting securities; and (4) at the
close of each quarter of the Fund's taxable year, not more than 25% of the value
of its total assets may be invested in securities (other than U.S. Government
securities or the securities of other RICs) of any one issuer.
Dividends and interest received by International Securities Fund,
Utilities Income Fund, High Yield Fund and Discovery Fund may be subject to
income, withholding or other taxes imposed by foreign countries that would
reduce the yield on its securities. Tax conventions between certain countries
and the United States may reduce or eliminate these foreign taxes, however, and
many foreign countries do not impose taxes on capital gains in respect of
investments by foreign investors.
International Securities Fund and Discovery Fund each may invest in the
stock of "passive foreign investment companies" ("PFICs"). A PFIC is a foreign
corporation that, in general, meets either of the following tests: (1) at least
75% of its gross income is passive or (2) an average of at least 50% of its
assets produce, or are held for the production of, passive income. Under certain
circumstances, such a Fund that holds stock of a PFIC will be subject to Federal
income tax on a portion of any "excess distribution" received on the stock or of
any gain on disposition of the stock (collectively "PFIC income"), plus interest
thereon, even if the Fund distributes the PFIC income as a taxable dividend to
its shareholders. The balance of the PFIC income will be included in the Fund's
investment company taxable income and, accordingly, will not be taxable to it to
the extent that income is distributed to its shareholders.
If International Securities Fund or Discovery Fund invests in a PFIC
and elects to treat the PFIC as a "qualified electing fund," then in lieu of the
foregoing tax and interest obligation, the Fund would be required to include in
income each year its pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) -- which would have to be distributed to
satisfy the Distribution Requirement -- even if those earnings and gain were not
received by the Fund. In most instances it will be very difficult, if not
impossible, to make this election because of certain requirements thereof.
Proposed regulations have been published pursuant to which open-end
RICs, such as International Securities Fund and Discovery Fund, would be
entitled to elect to "mark-to-market" their stock in certain PFICs.
"Marking-to-market," in this context, means recognizing as gain for each taxable
year the excess, as of the end of that year, of the fair market value of such a
PFIC's stock over the adjusted basis in that stock (including mark-to-market
gain for each prior year for which an election was in effect).
The use of hedging strategies, such as selling and purchasing options
and futures contracts and entering into forward contracts, involves complex
rules that will determine for income tax purposes the character and timing of
recognition of the gains and losses International Securities Fund realizes in
connection therewith. For International Securities Fund and High Yield Fund,
income from foreign currencies (except certain gains therefrom that may be
excluded by future regulations), and income from transactions in options,
futures and forward contracts derived by such Fund with respect to its business
of investing in securities or foreign currencies, will qualify as permissible
income under the Income Requirement. However, income from the Fund's disposition
of options and futures contracts (other than those on foreign currencies) will
be subject to the Short-Short Limitation if they are held for less than three
months. Income from the Fund's disposition of foreign currencies and options,
futures and forward contracts that are not directly related to its principal
business of investing in securities (or options and futures with respect to
24
<PAGE>
securities) also will be subject to the Short-Short Limitation if they are held
for less than three months.
If International Securities Fund satisfies certain requirements, then
any increase in value of a position that is part of a "designated hedge" will be
offset by any decrease in value (whether realized or not) of the offsetting
hedging position during the period of the hedge for purposes of determining
whether the Fund satisfies the Short-Short Limitation. Thus, only the net gain
(if any) from the designated hedge will be included in gross income for purposes
of that limitation. The Fund intends that, when it engages in hedging
strategies, they will qualify for this treatment, but at the present time it is
not clear whether this treatment will be available for all of the Fund's hedging
transactions. To the extent this treatment is not available, the Fund may be
forced to defer the closing out of certain options, futures or forward contracts
beyond the time when it otherwise would be advantageous to do so, in order for
the Fund to continue to qualify as a RIC.
High Yield Fund, Government Fund, Investment Grade Fund, Target
Maturity 2007 Fund and Utilities Income Fund may acquire zero coupon securities
issued with original issue discount. As a holder of those securities, each such
Fund must include in its income the original issue discount that accrues on the
securities for the taxable year, even if the Fund receives no corresponding
payment on the securities during the year. Similarly, each such Fund must
include in its gross income securities it receives as "interest" on pay-in-kind
securities. Because each Fund annually must distribute substantially all of its
investment company taxable income, including any original issue discount and
other non-cash income, in order to satisfy the Distribution Requirement, each
Fund may be required in a particular year to distribute as a dividend an amount
that is greater than the total amount of cash it actually receives. Those
distributions will be made from a Fund's cash assets or from the proceeds of
sales of portfolio securities, if necessary. A Fund may realize capital gains or
losses from those sales, which would increase or decrease its investment company
taxable income and/or net capital gain (the excess of net long-term capital gain
over net short-term capital loss). In addition, any such gains may be realized
on the disposition of securities held for less than three months. Because of the
Short-Short Limitation, any such gains would reduce the Fund's ability to sell
other securities, or options futures or certain forward contracts, held for less
than three months that it might wish to sell in the ordinary course of its
portfolio management.
GENERAL INFORMATION
Audits and Reports. The accounts of the Fund are audited twice a year
by Tait, Weller & Baker, independent certified public accountants. Shareholders
receive semi-annual and annual reports of the Fund, including audited financial
statements, and a list of securities owned.
Shareholder Liability. Life Series Fund is organized as an entity known
as a "Massachusetts business trust." Under Massachusetts law, shareholders of
such a trust may, under certain circumstances, be held personally liable for the
obligations of Life Series Fund. The Declaration of Trust however, contains, an
express disclaimer of shareholder liability for acts or obligations of Life
Series Fund and requires that notice of such disclaimer be given in each
agreement, obligation or instrument entered into or executed by Life Series Fund
or the Trustees. The Declaration of Trust provides for indemnification out of
the property of Life Series Fund of any shareholder held personally liable for
the obligations of Life Series Fund. The Declaration of Trust also provides that
Life Series Fund shall, upon request, assume the defense of any claim made
against any shareholder for any act or obligation of Life Series Fund and
satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to circumstances
in which Life Series Fund itself would be unable to meet its obligations. The
25
<PAGE>
Adviser believes that, in view of the above, the risk of personal liability to
shareholders is immaterial and extremely remote. The Declaration of Trust
further provides that the Trustees will not be liable for errors of judgment or
mistakes of fact or law, but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office. Life Series Fund may have an
obligation to indemnify Trustees and officers with respect to litigation.
APPENDIX A
DESCRIPTION OF COMMERCIAL PAPER RATINGS
STANDARD & POOR'S
Standard & Poor's Rating Group ("S&P") commercial paper rating is a
current assessment of the likelihood of timely payment of debt considered
short-term in the relevant market. Ratings are graded into several categories,
ranging from "A-1" for the highest quality obligations to "D" for the lowest.
A-1 This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) designation.
MOODY'S INVESTORS SERVICE, INC.
Moody's Investors Service, Inc. ("Moody's") short-term debt ratings are
opinions of the ability of issuers to repay punctually senior debt obligations
which have an original maturity not exceeding one year. Obligations relying upon
support mechanisms such as letters-of-credit and bonds of indemnity are excluded
unless explicitly rated.
Prime-1 Issuers (or supporting institutions) rated Prime-1 (P-1) have a
superior ability for repayment of senior short-term debt obligations. P-1
repayment ability will often be evidenced by many of the following
characteristics:
- Leading market positions in well-established industries.
- High rates of return on funds employed.
- Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
- Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
- Well-established access to a range of financial markets and
assured sources of alternate liquidity.
26
<PAGE>
APPENDIX B
DESCRIPTION OF MUNICIPAL NOTE RATINGS
STANDARD & POOR'S
S&P's note rating reflects the liquidity concerns and market access
risks unique to notes. Notes due in 3 years or less will likely receive a note
rating. Notes maturing beyond 3 years will most likely receive a long-term debt
rating. The following criteria will be used in making that assessment.
- Amortization schedule (the larger the final maturity relative to
other maturities the more likely it will be treated as a note).
- Source of Payment (the more dependent the issue is on the market for
its refinancing, the more likely it will be treated as a note).
Note rating symbols are as follows:
SP-1 Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
MOODY'S INVESTORS SERVICE, INC.
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). This distinction is in
recognition of the difference between short-term credit risk and long-term risk.
MIG-1. Loans bearing this designation are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.
27
<PAGE>
Financial Statements as of December 31, 1994
28
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--87.6%
Basic Industry--1.5%
8,550 Monsanto Co. $ 602,775 $ 146
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Goods--9.2%
4,200 Boeing Co. 196,350 47
400 Browning Ferris Industries, Inc. 11,350 3
5,200 Deere & Co. 344,500 83
8,500 Dover Corp. 438,812 106
2,100 Eaton Corp. 103,950 25
2,800 Emerson Electric Co. 175,000 42
21,200 General Electric Co. 1,081,200 261
3,500 Grainger (W.W.), Inc. 202,125 49
8,800 Ingersoll-Rand Co. 277,200 67
3,600 ITT Corp. 319,050 77
900 McDonnell Douglas Corp. 127,800 31
10,400 *Varity Corp. 377,000 91
6,000 WMX Technologies Inc. 157,500 38
- ------------------------------------------------------------------------------------------------------------------------------------
3,811,837 920
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Durables--2.5%
3,450 Chrysler Corp. 169,050 41
11,100 Ford Motor Co. 310,800 75
9,000 General Motors Corp. 380,250 92
1,500 Goodyear Tire & Rubber Co. 50,437 12
4,950 Masco Corp. 111,994 27
- ------------------------------------------------------------------------------------------------------------------------------------
1,022,531 247
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--18.7%
10,100 Abbott Laboratories 329,512 80
3,800 American Home Products Corp. 238,450 58
5,300 Anheuser Busch Companies, Inc. 269,637 65
6,300 Bristol-Myers Squibb Co. 364,612 88
15,950 Coca Cola Co. 821,425 198
1,400 Colgate-Palmolive Co. 88,725 21
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Non-Durables (continued)
4,700 CPC International, Inc. $ 250,275 $ 60
4,550 Eastman Kodak Co. 217,262 52
2,700 Gillette Co. 201,825 49
8,000 Johnson & Johnson 438,000 106
4,200 Kellogg Co. 244,125 59
9,550 Kimberly-Clark Corp. 482,275 116
3,600 Lilly (Eli) & Co. 236,250 57
15,200 Merck & Co., Inc. 579,500 140
9,900 Pepsico Inc. 358,875 87
4,600 Pet, Inc. 90,850 22
3,750 Pfizer Inc. 289,688 70
14,400 Philip Morris Cos., Inc. 828,000 200
8,600 Procter & Gamble Co. 533,200 129
4,700 *Ralcorp Holdings Inc. 104,575 25
10,000 Sara Lee Corp. 252,500 61
2,400 Schering-Plough Corp. 177,600 43
10,700 Stride Rite Corp. 119,038 29
2,000 Unilever PLC 233,000 56
- ------------------------------------------------------------------------------------------------------------------------------------
7,749,199 1,871
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Services--7.9%
5,400 Albertson's, Inc. 156,600 38
2,800 Dayton-Hudson Corp. 198,100 48
6,300 Disney (Walt) Company 290,587 70
6,000 GAP, Inc. (The) 183,000 44
5,200 Home Depot Inc. (The) 239,200 58
4,400 *Kroger Co. 106,150 26
5,300 Mattel Inc. 133,163 32
4,400 May Department Stores Co. 148,500 36
9,100 McDonald's Corp. 266,175 64
5,200 Nordstrom Inc 218,400 53
3,150 *Officemax Inc. 83,475 20
4,300 Rite Aid Corp. 100,513 24
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Services (continued)
4,450 Sears, Roebuck & Co. $ 204,700 $ 49
4,800 Time Warner Inc. 168,600 41
4,400 *Toys "R" Us, Inc. 134,200 32
3,400 *Viacom Inc. Class "B" 138,125 33
24,150 Wal-Mart Stores, Inc. 513,188 124
- ------------------------------------------------------------------------------------------------------------------------------------
3,282,676 792
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--16.5%
11,300 Alcan Aluminum Ltd. 286,737 69
6,000 Amoco Corp. 354,750 86
3,000 Atlantic Richfield Co. 305,250 74
2,400 Burlington Resources, Inc. 84,000 20
7,800 Chevron Corp. 348,075 84
4,250 Dow Chemical Co. 285,812 69
8,800 Du Pont (E.I.) De Nemours & Co. 495,000 119
9,000 Enron Corp. 274,500 66
14,500 Exxon Corp. 880,875 213
4,900 Halliburton Co. 162,313 39
4,200 *Inland Steel Industries, Inc. 147,525 36
2,200 Kerr-Mcgee Corp. 101,200 24
5,500 Minnesota Mining & Manufacturing Co. 293,563 71
4,700 Mobil Corp. 395,975 96
11,700 NICOR, Inc. 266,175 64
6,200 Nucor Corp. 344,100 83
4,500 Pacific Enterprises 95,625 23
3,150 Phillips Petroleum Co. 103,163 25
5,225 Royal Dutch Petroleum Co. 561,687 136
3,800 Schlumberger, Ltd. 191,425 46
6,400 Scott Paper Co. 442,400 107
3,200 Texaco Inc. 191,600 46
7,800 Unocal Corp. 212,550 51
- ------------------------------------------------------------------------------------------------------------------------------------
6,824,300 1,647
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Financial--8.0%
5,250 American Express Co. $ 154,875 $ 37
4,000 American International Group, Inc. 392,000 95
14,000 Banc One Corp. 355,250 86
9,700 BankAmerica Corp. 383,150 92
5,100 Chase Manhattan Corp. 175,312 42
4,800 Chemical Banking Corp. 172,200 42
5,600 Citicorp 231,700 56
5,600 Federal National Mortgage Assn 408,100 99
4,150 First Fidelity Bancorp 186,231 45
13,600 MGIC Investment Corp. 450,500 109
9,300 NationsBank Corp. 419,663 101
- ------------------------------------------------------------------------------------------------------------------------------------
3,328,981 804
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care/Miscellaneous--2.0%
5,400 Columbia/HCA Healthcare Corp. 197,100 48
11,250 U.S. Healthcare, Inc. 464,063 111
2,400 Warner-Lambert Co. 184,800 45
- ------------------------------------------------------------------------------------------------------------------------------------
845,963 204
- ------------------------------------------------------------------------------------------------------------------------------------
Retail Trade--.1%
2,500 *Price/Costco, Inc. 32,188 8
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--8.9%
8,000 *Airtouch Communications Inc. 233,000 56
1,700 Autodesk, Inc. 67,362 16
2,600 Automatic Data Processing, Inc. 152,100 37
3,500 *Cisco Systems, Inc. 122,937 30
2,600 *Compaq Computers Corp. 102,700 25
3,500 Hewlett-Packard Co. 349,563 84
5,200 Intel Corp. 332,150 80
7,050 International Business Machines Corp. 518,175 125
13,800 MCI Communications Corp. 253,575 61
8,100 *Microsoft Corp. 495,113 120
10,700 Motorola, Inc. 619,263 149
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Technology (continued)
6,500 *National Semiconductor Corp. $ 126,750 $ 31
6,900 *Oracle Systems Corp. 304,462 73
- ------------------------------------------------------------------------------------------------------------------------------------
3,677,150 887
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--1.1%
3,600 *AMR Corp. 191,700 46
11,000 *Southern Pacific Rail Corp 199,375 48
4,200 Southwest Airlines Co. 70,350 17
- ------------------------------------------------------------------------------------------------------------------------------------
461,425 111
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities--11.2%
17,750 A T & T Corp. 891,938 215
6,800 Ameritech Corp. 274,550 66
5,400 Bell Atlantic Corp. 268,650 65
7,100 BellSouth Corp. 384,287 93
7,700 Carolina Power & Light Co. 205,012 49
13,600 Cinergy Corp. 317,900 77
7,800 Duke Power Co. 297,375 72
9,400 FPL Group, Inc. 330,175 80
11,700 GTE Corp. 355,387 86
5,500 Nynex Corp. 202,125 49
5,400 Pacific Telesis Group 153,900 37
8,800 Pacificorp 159,500 39
7,400 SBC Communications Inc. 298,775 72
9,200 Texas Utilities Co. 294,400 71
5,500 U.S. West Inc. 195,938 47
- ------------------------------------------------------------------------------------------------------------------------------------
4,629,912 1,118
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $35,818,111) 36,268,937 8,755
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONVERTIBLE BONDS--.7%
Leisure Time
$ 500M Bellsport Corp. 4.25%, 11/15/00 (cost $418,903) $ 321,875 $ 78
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--8.9%
500M Ford Motor Credit Co., 5.92%, 1/23/95 498,191 120
900M General Electric Credit Corp., 6.05%, 1/17/95 897,580 217
300M Oklahoma Gas & Electric Co., 5.90%, 1/11/95 299,508 72
2,000M Prudential Funding Corp., 5.98%, 1/17/95 1,994,685 482
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $3,689,964) 3,689,964 891
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $39,926,978) 97.2% 40,280,776 9,724
Other Assets, Less Liabilities 2.8 1,143,525 276
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $41,424,301 $10,000
====================================================================================================================================
</TABLE>
* Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--CASH MANAGEMENT SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Annualized $10,000 of
Amount Security Yield* Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM CORPORATE NOTES--92.1%
$ 150M Ameritech Corp., 1/9/95 5.95% $ 149,801 $ 381
175M A T & T Corp., 1/23/95 5.56 174,405 444
175M Bay States Gas Co., 1/25/95 5.90 174,312 444
175M Central Louisiana Electric Co., 1/10/95 6.00 174,737 445
175M CPC International Inc., 2/1/95 5.48 174,174 443
100M Florida Power & Light Co., 1/5/95 5.90 99,935 254
180M Ford Motor Credit, 1/24/95 6.05 179,304 456
175M General Electric Credit Corp., 2/21/95 5.93 173,530 442
150M Hartford Steam Boiler Inspection & Insurance, 1/17/95 5.50 149,633 381
175M Laclede Gas Co., 1/19/95 5.76 174,496 444
175M Metlife Funding Inc., 1/20/95 5.53 174,489 444
150M Motorola, Inc., 1/11/95 5.95 149,753 381
175M McGraw-Hill Inc., 2/7/95 5.93 173,934 443
150M Pepsico Inc., Floating Rate Note, 4/13/95 3.76 151,794 386
150M Pitney-Bowes, Inc., 2/13/95 5.92 148,940 379
175M Prudential Funding Corp., 1/26/95 5.88 174,286 444
150M Rockwell International Corp., 1/9/95 5.97 149,801 381
175M Southern California Gas Co., 2/6/95 5.77 173,990 443
175M The Stanley Works, 1/20/95 5.48 174,494 444
175M Tampa Electric Co., 1/30/95 5.96 174,160 443
175M Wisconsin Gas Co., 2/21/95 5.82 173,557 442
175M Wisconsin Power & Light Co., 1/13/95 5.67 174,669 446
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $3,618,194) 3,618,194 9,210
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--8.2%
150M Federal Farm Credit Bank, 3/13/94 6.12 148,190 378
175M Federal National Mortgage Association, 1/30/95 5.85 174,175 443
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Obligations (cost $322,365) 322,365 821
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $3,940,559) 100.3% 3,940,559 10,031
Excess of Liabilities Over Other Assets (.3) (12,004) (31)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $ 3,928,555 $ 10,000
====================================================================================================================================
</TABLE>
* The annualized yield shown is the effective rate at the time of purchase.
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--89.6%
Commercial Service--3.1%
9,400 Equifax, Inc. $ 247,925 $ 82
7,600 *Insurance Auto Auctions, Inc. 232,275 77
39,700 *International Post Ltd. 188,575 62
18,500 *Interpool Inc. 275,188 91
- ------------------------------------------------------------------------------------------------------------------------------------
943,963 312
- ------------------------------------------------------------------------------------------------------------------------------------
Computers/Software/Business Equipment--13.4%
14,200 *Adaptec, Inc. 335,475 110
5,400 *Altera Corp. 226,125 75
7,400 *Bysis Group, Inc. 163,725 54
12,000 *Convex Computer Corp. 94,500 31
4,100 *Cornerstone Imaging Inc. 62,525 21
17,500 *Data General Corp. 175,000 58
17,000 ECI Telecommunications Limited Designs (ADR) 231,625 77
6,400 *EMC Corp. 138,400 46
6,400 *FileNet Corp. 172,800 57
18,900 Fourth Shift Corp. 51,975 17
24,400 *Fulcrum Technologies, Inc. 289,750 96
26,000 *Integrated Micro Products PLC (ADR) 188,500 62
13,500 *Lasermaster Technologies, Inc. 94,500 31
3,900 *Lotus Development Corp. 159,900 53
12,100 *Metatec Corp. 116,463 39
3,800 *Microsoft Corp. 232,275 77
8,900 *Oracle Systems Corp. 392,713 129
11,400 *Perceptron Inc. 262,200 87
6,200 *Phoenix Technologies Ltd. 46,500 15
11,400 *Pyxis Corp. 216,600 72
11,600 Reynolds & Reynolds Co. 290,000 96
5,400 *Robotic Vision Systems, Inc. 33,750 11
5,600 *Sybron Chemicals, Inc. 86,800 29
- ------------------------------------------------------------------------------------------------------------------------------------
4,062,101 1,343
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Products--3.3%
8,200 *CUC International, Inc. $ 274,700 $ 91
16,900 Dixie Yarns, Inc. 118,300 39
9,200 Falcon Products, Inc. 108,100 36
7,300 *Harvey Entertainment 104,025 34
21,800 *National R.V. Holdings, Inc. 164,863 55
6,200 Oakwood Homes Corp. 151,125 50
5,400 *Shuler Homes, Inc. 76,950 25
- ------------------------------------------------------------------------------------------------------------------------------------
998,063 330
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics/Instruments/Components--2.5%
7,100 General Electric Co. 362,100 120
4,100 *Nokia Corp. (ADR) 307,500 102
3,900 *Recoton Corp. 73,125 24
- ------------------------------------------------------------------------------------------------------------------------------------
742,725 246
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics/Semiconductors--7.8%
12,700 *Actel Corp. 104,775 35
3,050 *Alliance Semiconductor Corp. 95,313 32
4,100 *Applied Materials, Inc. 173,225 57
10,000 *Asyst Technologies, Inc. 235,000 78
5,500 *Electroglas, Inc. 183,563 61
13,600 *Integrated Device Technology, Inc. 401,200 132
8,800 *Megatest Corp. 56,925 19
6,000 Motorola, Inc. 347,250 114
15,600 *National Semiconductor Corp. 304,200 100
25,000 *Tower Semiconductor Ltd. 275,000 91
3,200 *Xilinx Inc. 189,600 63
- ------------------------------------------------------------------------------------------------------------------------------------
2,366,051 782
- ------------------------------------------------------------------------------------------------------------------------------------
Environmental Services--.2%
11,400 *Encon Systems, Inc. 52,725 17
- ------------------------------------------------------------------------------------------------------------------------------------
Financial/Miscellaneous--6.7%
9,800 *American Travellers Corp. 160,475 53
24,300 *Amvestors Financial Corp. 230,850 76
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Financial/Miscellaneous (continued
18,000 *Credit Acceptance Corp. $ 319,500 $ 106
11,100 First USA, Inc. 364,913 121
15,050 Grupo Financiero Bancomer S.A. de C.V. (ADR) (Note 5) 178,458 59
22,500 Independent Bank Corp. 118,125 39
600 *Medaphis Corp. 27,900 9
5,550 NAC Re Corp. 185,925 61
10,700 Presidential Life Corp. 56,175 19
16,350 Reliance Group Holdings, Inc. 83,794 28
7,182 Southern National Corp. 137,356 45
4,400 Sunamerica Inc. 159,500 53
- ------------------------------------------------------------------------------------------------------------------------------------
2,022,971 669
- ------------------------------------------------------------------------------------------------------------------------------------
Foods--3.7%
6,800 *Canadaigua Wine Co. Class "A" 258,400 85
9,500 Dreyers Grand Ice Cream, Inc. 235,125 78
14,500 *Grist Mill Co. 135,938 45
15,300 *Ralcorp Holdings, Inc. 340,425 113
16,000 *Taco Cabana Class "A" 146,000 48
- ------------------------------------------------------------------------------------------------------------------------------------
1,115,888 369
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--2.4%
12,500 *GTECH Holdings Corp. 254,688 84
18,400 *Monarch Casino & Resort, Inc. 101,200 33
8,300 *Players International, Inc. 186,750 62
16,100 *Rio Hotel and Casino, Inc. 195,213 65
- ------------------------------------------------------------------------------------------------------------------------------------
737,851 244
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care/Miscellaneous--23.8%
6,400 *Advocat, Inc. 84,800 28
12,400 *American Medical Response, Inc. 358,050 118
26,500 *Applied Bioscience International, Inc. 145,750 48
3,700 *Arbor Health Care Co. 75,850 25
18,700 *Beverly Enterprises 268,813 89
9,000 *Boston Scientific Corp. 156,375 52
3,750 *Cellpro, Inc. 37,031 12
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Health Care/Miscellaneous (continued)
8,200 *Clinicom, Inc. $ 91,225 $ 30
9,400 Dentsply International, Inc. 296,100 98
26,300 *Ethical Holdings PLC (ADR) 170,950 57
13,000 Fisher Scientific International 321,750 106
19,400 *Future Healthcare, Inc. 400,125 132
10,050 *GMIS, Inc. 195,975 65
9,200 Health Care & Retirement Corp. 277,150 92
10,975 *Healthcare Compare Corp. 374,522 124
5,400 *I-Stat Corp. 102,600 34
11,765 Ivax Corp. 223,726 64
12,300 *Living Centers of America, Inc. 410,513 136
3,800 *Medcath Inc. 54,150 18
19,200 Mid Atlantic Medical Services, Inc. 439,200 145
15,100 *North American Vaccine, Inc. 126,463 42
8,000 *Noven Pharmaceuticals, Inc. 99,000 33
10,900 *Pacific Physicians Services, Inc. 182,575 60
7,800 *Penederm, Inc. 48,750 16
7,700 *Pharmaceutical Resources, Inc. 71,225 24
1,200 *Physician Reliance Network, Inc. 23,100 8
58,800 *Plasma-Therm, Inc. (Note 5) 404,250 134
25,300 *Protocol Systems, Inc. 227,700 75
16,000 *Quantum Health Resources, Inc. 460,000 152
17,600 Rite Aid Corp. 411,400 136
19,200 Teva Pharmaceutical Industries Ltd. (ADR) 464,400 153
7,200 *Watson Pharmaceuticals, Inc. 189,000 62
- ------------------------------------------------------------------------------------------------------------------------------------
7,192,318 2,378
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Services--.6%
7,600 *SPS Technologies, Inc. 192,850 64
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery/Diversified--4.9%
13,650 AGCO Corp. 414,619 137
4,200 Breed Technologies, Inc. 119,175 39
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Machinery/Diversified (continued)
14,200 Case Corp. $ 305,300 $ 101
4,900 *Clark Equipment Co. 265,825 88
8,200 Federal-Mogul Corp. 165,025 55
21,600 Owosso Corp. 216,000 71
- ------------------------------------------------------------------------------------------------------------------------------------
1,485,944 491
- ------------------------------------------------------------------------------------------------------------------------------------
Manufacturing/Diversified--.6%
4,800 *Dovatron International, Inc. 123,600 41
8,450 *Figgie International, Inc. 51,756 17
- ------------------------------------------------------------------------------------------------------------------------------------
175,356 58
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--1.9%
4,400 Chesapeake Corp. 145,200 48
6,700 Pope & Talbot, Inc. 106,363 35
6,600 Willamette Industries, Inc. 313,500 104
- ------------------------------------------------------------------------------------------------------------------------------------
565,063 187
- ------------------------------------------------------------------------------------------------------------------------------------
Retail Trade--4.4%
8,600 *Designs, Inc. 60,200 20
5,700 Haverty Furniture Co., Inc. 66,975 22
15,900 *Hi-Lo Automotive, Inc. 155,025 51
14,500 *Meyer (Fred), Inc. 445,875 148
11,000 *REX Stores Corp. 178,750 59
7,000 Talbots, Inc. 218,750 72
8,900 *The Men's Wearhouse, Inc. 200,250 66
- ------------------------------------------------------------------------------------------------------------------------------------
1,325,825 438
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--6.2%
4,400 A T & T Capital Corp. 221,100 73
10,100 *Boston Technology, Inc. 145,188 48
3,700 Ericsson (L.M.) Telephone Co. (ADR) 203,963 67
11,900 MCI Communications Corp. 218,663 72
10,700 *Nextel Communications, Inc. 153,813 51
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Telecommunications (continued)
12,700 *Octel Communications Corp. $ 263,525 $ 87
10,700 *Porta Systems Corp. 54,838 18
5,600 *Rogers Cantel Mobile Communications Class "B" 163,275 54
11,100 *Viacom Inc. Class "B" 450,938 150
- ------------------------------------------------------------------------------------------------------------------------------------
1,875,303 620
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--4.1%
13,500 London & Overseas Freighters Limited 192,375 64
11,000 MK Rail Corp. 116,875 39
6,500 *Rural/Metro Corp. 121,875 40
7,900 Sea Container Ltd. Class "A" 104,675 35
17,400 *Southern Pacific Rail Corp. 315,375 104
31,000 Transportacion Maritima Mexicana S.A. (ADR) 236,375 78
7,200 *ValuJet Airlines, Inc. 153,000 51
- ------------------------------------------------------------------------------------------------------------------------------------
1,240,550 411
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $26,088,653) 27,095,547 8,959
- ------------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS--.4%
$ 150M Pacific Physicians Services, Inc., 5 1/2%, 2003 (cost $150,000) 116,250 38
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--20.1%
1,400M Lubrizol Corp., 6%, 1/6/95 1,398,834 463
1,800M Oklahoma Gas & Electric Co., 5.90%, 1/11/95 1,797,050 594
1,400M Prudential Funding Corp., 5.98%, 1/17/95 1,396,279 462
1,500M Temple-Inland Inc., 5.85%, 1/3/95 1,499,512 496
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $6,091,675) 6,091,675 2,015
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $32,330,328) 110.1% 33,303,472 11,012
Excess of Liabilities Over Other Assets (10.1) (3,059,858) (1,012)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $30,243,614 $10,000
====================================================================================================================================
</TABLE>
*Non income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GOVERNMENT SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--51.9%
$ 1,100M Federal Farm Credit 8.65%, 10/1/99 $1,126,239 $ 1,430
1,000M Federal Home Loan Bank, 7.36%, 7/1/04 952,889 1,209
656M Federal Home Loan Mortgage Corp., 9.00%, 4/1/22 660,197 838
349M Federal Home Loan Mortgage Corp., 9.00%, 9/1/21 350,811 445
991M Federal National Mortgage Association, 9.00%, 10/1/20 996,254 1,265
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Obligations (cost $4,327,023) 4,086,390 5,187
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED CERTIFICATES--16.2%
1,300M Government National Mortgage Association,
8.50%, 12/15/2025 (cost $1,280,094) 1,277,250 1,621
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--30.1%
2,385M U.S. Treasury Bill, 5.25%, 2/9/95 (cost $2,372,469) 2,372,469 3,012
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $7,979,586) 98.2% 7,736,109 9,820
Other Assets, Less Liabilities 1.8 141,854 180
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $7,877,963 $10,000
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GROWTH SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--93.5%
Beverages/Soft Drinks--2.2%
20,000 Pepsico Inc. $ 725,000 $ 221
- ------------------------------------------------------------------------------------------------------------------------------------
Broadcast Media--3.5%
32,000 Comcast Corp. Special Shares Class "A" 502,000 153
27,000 Home Shopping Network 270,000 82
13,000 Multimedia Inc. 370,500 113
- ------------------------------------------------------------------------------------------------------------------------------------
1,142,500 348
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals/Diversified--2.6%
29,700 Engelhard Corp. 660,825 201
3,800 Loctite Corp. 176,700 54
- ------------------------------------------------------------------------------------------------------------------------------------
837,525 255
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial Services--1.2%
18,800 *Fiserv Inc. 404,200 123
- ------------------------------------------------------------------------------------------------------------------------------------
Computers/Software/Business Equipment--4.7%
40,700 Albemarle Corp. 564,712 172
15,700 *Cisco Systems Inc. 551,462 168
7,000 *Microsoft Corp. 427,875 130
- ------------------------------------------------------------------------------------------------------------------------------------
1,544,049 470
- -----------------------------------------------------------------------------------------------------------------------------------
Computer Software/Services--4.2%
8,000 Automatic Data Processing Inc. 468,000 143
10,000 *Computer Sciences Corporation 510,000 156
8,500 First Data Corporation 402,688 123
- ------------------------------------------------------------------------------------------------------------------------------------
1,380,688 422
- -----------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--1.7%
22,600 Sara Lee Corp. 570,650 174
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Services--2.8%
20,000 Circuit City Stores Inc. $ 445,000 $ 136
11,000 Walgreen Co. 481,250 147
- ------------------------------------------------------------------------------------------------------------------------------------
926,250 283
- ------------------------------------------------------------------------------------------------------------------------------------
Drugs--3.9%
25,000 *Perrigo Company 312,500 95
4,600 Pfizer Inc. 355,350 108
15,000 Zeneca Group PLC Inc. 616,875 188
- ------------------------------------------------------------------------------------------------------------------------------------
1,284,725 391
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--3.2%
7,200 AMP Inc. 523,800 160
18,000 *General Instrument Corp. 540,000 165
- ------------------------------------------------------------------------------------------------------------------------------------
1,063,800 325
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics/Instruments/Components--4.9%
6,000 Hewlett-Packard Co. 599,250 183
10,625 Molex Inc. 366,563 112
10,800 Motorola Inc. 625,050 191
- ------------------------------------------------------------------------------------------------------------------------------------
1,590,863 486
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--2.8%
12,000 Burlington Resources Inc. 420,000 128
10,500 Kerr-Mcgee Corp. 483,000 147
- ------------------------------------------------------------------------------------------------------------------------------------
903,000 275
- ------------------------------------------------------------------------------------------------------------------------------------
Financial/Miscellaneous--1.8%
8,320 Federal National Mortgage Association 606,320 185
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--1.2%
26,000 International Game Technology 403,000 123
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GROWTH SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Health Care/Miscellaneous--3.4%
18,000 Abbott Laboratories $ 587,250 $ 179
5,100 *Biogen Inc. 212,925 65
9,000 Genetics Institute Inc. 324,000 99
- ------------------------------------------------------------------------------------------------------------------------------------
1,124,175 343
- ------------------------------------------------------------------------------------------------------------------------------------
Health Technology--1.3%
25,000 Boston Scientific Corp. 434,375 132
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--6.8%
24,000 Ace Ltd. 561,000 171
5,450 American International Group 534,100 163
16,700 American Re Corporation 538,575 164
15,000 First Colony Corporation 335,625 102
12,700 Physician Corp. of America 260,350 79
- ------------------------------------------------------------------------------------------------------------------------------------
2,229,650 679
- ------------------------------------------------------------------------------------------------------------------------------------
Iron/Steel--1.1%
22,000 *LTV Corp. 357,500 109
- ------------------------------------------------------------------------------------------------------------------------------------
Machine Tools--2.1%
15,700 Illinois Tool Works Inc. 686,875 209
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery/Diversified--1.0%
11,000 Foster Wheeler Corp. 327,250 100
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Supplies--1.9%
30,000 Hafslund Nycomed--Class "B" (ADR) 618,750 189
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous--6.0%
26,400 Duriron Company 468,600 143
5,300 Omnicom Group 274,275 84
14,600 Republic New York Corp. 660,650 201
15,000 York International 553,125 169
- ------------------------------------------------------------------------------------------------------------------------------------
1,956,650 597
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Money Center Banks--1.7%
10,000 J.P. Morgan & Co. $ 560,000 $ 171
- ------------------------------------------------------------------------------------------------------------------------------------
Oil/Domestic--4.3%
10,000 Amoco Corp. 591,250 180
30,000 Unocal Corp. 817,500 249
- ------------------------------------------------------------------------------------------------------------------------------------
1,408,750 429
- ------------------------------------------------------------------------------------------------------------------------------------
Oil Service--1.0%
6,600 Schlumberger Ltd. 332,475 101
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--3.1%
4,800 International Paper Co. 361,800 110
13,000 Kimberly-Clark Corp. 656,500 200
- ------------------------------------------------------------------------------------------------------------------------------------
1,018,300 310
- ------------------------------------------------------------------------------------------------------------------------------------
Publishing/News--2.9%
17,500 EW Scripps Co. 529,375 161
1,700 Washington Post Class "B" 412,250 126
- ------------------------------------------------------------------------------------------------------------------------------------
941,625 287
- ------------------------------------------------------------------------------------------------------------------------------------
Publishing/Printing--3.9%
12,000 Dun & Bradstreet, Inc. 660,000 202
11,850 *Scholastic Corp. 604,350 184
- ------------------------------------------------------------------------------------------------------------------------------------
1,264,350 386
- ------------------------------------------------------------------------------------------------------------------------------------
Retail Stores--2.3%
9,100 May Department Stores Inc. 307,125 94
20,600 Wal-Mart Stores Inc. 437,750 133
- ------------------------------------------------------------------------------------------------------------------------------------
744,875 227
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--7.5%
10,000 A T & T Corp. 502,500 153
12,500 Ericsson (L.M.) Telephone Co. (ADR) Class "B" 689,063 210
24,200 MCI Communications Corp. 444,675 136
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GROWTH SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Telecommunications (continued)
15,000 *Nextel Communications Inc. 215,625 66
18,000 Vodafone Group PLC (ADR) 605,250 185
- ------------------------------------------------------------------------------------------------------------------------------------
2,457,113 750
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone/Utilities--1.1%
8,500 Telefonos De Mexico S.A. (ADR) 348,500 106
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--1.4%
20,000 Werner Enterprises Inc. 475,000 145
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $29,460,341) 30,668,783 9,351
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.8%
3,600 Nokia Corporation (ADR) (cost $145,350) 270,000 82
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--5.4%
$1,761M Shearson Lehman Brothers Inc., 5.85%, 1/3/95,(collateralized
by U.S. Treasury Bond, 8 1/2%, 2/15/20) (cost $1,761,000) 1,761,000 537
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $31,366,691) 99.7% 32,699,783 9,970
Other Assets, Less Liabilities .3 97,409 30
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $32,797,192 $10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--HIGH YIELD SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--86.9%
Aerospace/Defense--2.9%
$ 700M Allison Engine Co., Inc., 10%, 2003 $ 721,000 $ 223
230M Dyncorp, PIK, 16%, 2003 217,265 67
- ------------------------------------------------------------------------------------------------------------------------------------
938,265 290
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive--2.5%
800M SPX Corp., 11 3/4%, 2002 799,000 247
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--7.3%
700M Buckeye Cellulose, Inc., 10 1/4%, 2001 658,000 204
1,000M Harris Chemical North America, Inc., 0%-10 1/4%, 2001 830,000 257
600M Rexene Corp., 11 3/4%, 2004 616,500 191
300M Synthetic Industries, Inc., 12 3/4%, 2002 265,500 82
- ------------------------------------------------------------------------------------------------------------------------------------
2,370,000 734
- ------------------------------------------------------------------------------------------------------------------------------------
Conglomerates--2.5%
1,250M Eagle Industries, Inc., 0%-10 1/2%, 2003 806,250 250
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--2.0%
650M Calmar, Inc., 12%, 1997 653,250 202
- ------------------------------------------------------------------------------------------------------------------------------------
Containers--3.2%
1,000M Container Corp., 11 1/4%, 2004 1,025,000 317
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--4.2%
700M Essex Group, Inc., 10%, 2003 654,500 203
700M IMO Industries, Inc., 12%, 2001 703,500 219
- ------------------------------------------------------------------------------------------------------------------------------------
1,358,000 422
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Services--7.2%
1,000M Clark R & M Holdings, Inc., 0%, 2000 568,750 176
405M Clark Oil & Refining Corp., 10 1/2%, 2001 412,087 128
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--HIGH YIELD SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Energy Services (continued)
800M Giant Industries, Inc., 9 3/4%, 2003 $ 716,000 $ 222
111M Synergy Group, Inc., 9 1/2%, 2000 88,800 28
500M Transco Energy Co., 11 1/4%, 1999 533,750 165
- ------------------------------------------------------------------------------------------------------------------------------------
2,319,387 719
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services--3.7%
660M Lomas Mortgage, USA, 10 1/4%, 2002 561,000 175
700M Olympic Financial, Ltd., 11 3/4%, 2000 644,000 199
- ------------------------------------------------------------------------------------------------------------------------------------
1,205,000 374
- ------------------------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--2.2%
700M Fleming Co., Inc., 10 5/8%, 2001 703,500 218
- ------------------------------------------------------------------------------------------------------------------------------------
Food Services--2.1%
750M Americold Corp., 11 1/2%, 2005 676,875 210
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--3.5%
650M GB Property Funding, Inc., 10 7/8%, 2004 529,750 164
700M Showboat, Inc., 9 1/4%, 2008 589,750 183
- ------------------------------------------------------------------------------------------------------------------------------------
1,119,500 347
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare--3.5%
750M Abbey Healthcare Group, Inc., 9 1/2%, 2002 675,000 209
500M Mediq/PRN Life Support Services, Inc., 11 1/8%, 1999 452,500 140
- ------------------------------------------------------------------------------------------------------------------------------------
1,127,500 349
- ------------------------------------------------------------------------------------------------------------------------------------
Information Technology/Office Equipment--1.5%
500M Bell & Howell Co., 10 3/4%, 2002 478,750 148
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--2.1%
700M American Life Holding Co., 11 1/4%, 2004 682,500 211
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Media/Cable Television--7.9%
$ 1,000M Affiliated Newspaper Investments, 0%-13 1/4%, 2006 $ 520,000 $ 161
300M Cablevision Industries, Inc., 10 3/4%, 2002 298,500 92
750M Outdoor Systems, Inc., 10 3/4%, 2003 678,750 210
500M Rogers Cablesystems, Ltd., 9 5/8%, 2002 491,250 152
600M World Color Press, Inc., 9 1/8%, 2003 556,500 173
- ------------------------------------------------------------------------------------------------------------------------------------
2,545,000 788
- ------------------------------------------------------------------------------------------------------------------------------------
Mining/Metals--6.9%
600M Geneva Steel Co., Inc., 9 1/2%, 2004 506,250 157
900M WCI Steel, Inc., 10 1/2%, 2002 866,250 268
1,000M Wheeling-Pittsburgh Steel Corp., 9 3/8%, 2003 855,000 265
- ------------------------------------------------------------------------------------------------------------------------------------
2,227,500 690
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous--1.0%
800M +Acme Holdings, Inc., 11 3/4%, 2000 336,000 104
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--7.3%
800M Rainy River Forest Products Co., Inc., 10 3/4%, 2001 798,000 247
600M S. D. Warren Co., Inc., 12%, 2004 (Note 5) 615,000 190
1,000M Stone Container Corp., 9 7/8%, 2001 950,000 295
- ------------------------------------------------------------------------------------------------------------------------------------
2,363,000 732
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate/Construction--2.2%
800M Oriole Homes, Inc., 12 1/2%, 2003 716,000 222
- ------------------------------------------------------------------------------------------------------------------------------------
Retail-Food/Drug--3.1%
1,000M P&C Food Markets, Inc., 11 1/2%, 2001 1,015,000 314
- ------------------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--2.0%
1M Barry's Jewelers, Inc., 12 5/8%, 1996 495 --
750M General Host Co., Inc., 11 1/2%, 2002 660,000 205
- ------------------------------------------------------------------------------------------------------------------------------------
660,495 205
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--HIGH YIELD SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Principal Invested
Amount, For Each
Units $10,000 of
or Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Telecommunications--4.6%
$ 550M Paging Network, Inc., 11 3/4%, 2002 $ 548,625 $ 170
400M PanAmSat Capital Corp., 0%-11 3/8%, 2003 250,000 77
700M PanAmSat Capital Corp., 9 3/4%, 2000 668,500 207
- ------------------------------------------------------------------------------------------------------------------------------------
1,467,125 454
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--1.5%
500M Trism, Inc., 10 3/4%, 2000 472,500 146
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $29,813,297) 28,065,397 ` 8,693
- ------------------------------------------------------------------------------------------------------------------------------------
BOND UNITS--2.3%
Telecommunications
1,400 Echostar Communications Corp., 0%-12 7/8%, 2004(a)(cost $809,449) 731,500 227
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--.1%
Gaming/Lodging--.0%
1,620 *Divi Hotels, Inc. (Note 4) 122 --
2,000 *Goldriver Hotel & Casino Corp., Series "B" 3,000 1
- ------------------------------------------------------------------------------------------------------------------------------------
3,122 1
- ------------------------------------------------------------------------------------------------------------------------------------
Media/Cable Television--.1%
1,000 *Affiliated Newspaper Investments 25,000 8
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $66,096) 28,122 9
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--5.2%
Financial Services
7,000 California Federal Bank, 10 5/8%, Series "B" 700,000 216
10,000 First Nationwide Bank, 11 1/2% 980,000 304
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Preferred Stocks (cost $1,700,000) 1,680,000 520
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Warrants Invested
or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
WARRANTS--.1%
Financial Services--.0%
4,000 *Olympic Financial, Ltd. (expiring 9/1/99) (Note 5) $ 7,000 $ 2
18 *Reliance Group Holdings, Inc. (expiring 1/28/97) 23 --
- ------------------------------------------------------------------------------------------------------------------------------------
7,023 2
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--.1%
200 *Goldriver Finance Corp., Liquidating Trust 3,000 1
4,200 *Presidential Riverboat Casinos, Inc. (expiring 9/15/96) (Note 5) 16,800 5
- ------------------------------------------------------------------------------------------------------------------------------------
19,800 6
- ------------------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--.0%
100 *Payless Cashways, Inc. (expiring 11/1/96) 150 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $5,375) 26,973 8
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.3%
$750M Raytheon, 5.95%, 1/9/95 (cost $749,008) 749,008 232
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $33,143,225) 96.9% 31,281,000 9,689
Other Assets, Less Liabilities 3.1 1,003,746 311
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $32,284,746 $10,000
============================================================================================================================-=======
</TABLE>
* Non-income producing
+ In default as to principal and/or interest (Note 8)
(a) Each unit consists of a $1,000 principal amount 12 7/8% senior secured
discount note due 6/1/04 and warrants to purchase six shares of
Class "A" common stock.
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--90.9%
Japan--18.8%
50,000 Chichibu Onoda Cement Corp. $ 284,650 $ 91
18,000 Fujisawa Pharmaceutical Co. 194,846 62
30,000 Hitachi Co., Ltd. 297,381 95
2,000 Ito Yokado Co., Ltd. 106,846 34
30,000 Kajima Corp. 256,788 82
20,000 Kawasaki Heavy Industries 90,206 29
12,000 Kokusai Electric Co., Ltd. 230,930 74
4,000 Kyocera Corp. 296,281 95
1,000 Kyoritsu Air Tech., Inc. 24,456 8
2,000 Mabuchi Motor 150,346 48
40,000 Minebea Co., Ltd. 336,772 108
28,000 Mitsui Petrochemical Industries 246,966 79
4,500 Murata Mfg. Co., Ltd. 173,649 55
1,000 Nihon Jumbo Co., Ltd. 41,094 13
25 Nippon Telephone & Telegraph Corp. 220,758 71
92,000 *NKK Corp 254,500 81
10,000 Nomura Securities, Ltd. 207,477 66
6,000 Orix Corp. 221,309 71
2,000 Riso Kagaku Corp. 173,198 55
10,000 Sankyo Co., Ltd. 248,571 79
2,500 Sanyo Shinpan Finance Co., Ltd. 240,804 77
2,000 Secom Co., Ltd. 124,286 40
4,000 Shimamura Corp. 200,461 64
30,000 Showa Corp. 291,669 93
6,000 Sony Corp. 339,781 109
35,000 Sumitomo Realty & Development 206,973 66
8,000 Sumitomo Trust &Banking 112,258 36
4,000 TDK Corp. 193,645 62
10,000 Tokio Marine & Fire Insurance Co., Ltd. 122,281 39
- ------------------------------------------------------------------------------------------------------------------------------------
5,889,182 1,882
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
United States--16.6%
3,750 American International Group, Inc. $ 367,500 $ 117
6,500 *American Re Corp. 209,625 67
6,500 A T & T Corp. 326,625 104
4,000 *AMR Corp 213,000 68
2,000 Capital Cities ABC Inc. 170,500 54
5,000 Chrysler Corp. 245,000 78
2,500 Dow Chemical Co. 168,125 54
5,000 Exxon Corp. 303,750 97
2,500 Federal National Mortgage Association 182,188 58
5,000 General Electric Co. 255,000 81
2,500 Gillette Co. 186,875 60
2,000 Hewlett-Packard Co 199,750 64
2,500 International Paper Co. 188,438 60
4,000 J.C. Penney Co. 178,500 57
6,000 Johnson & Johnson 328,500 105
5,000 Kimberly Clark Corp. 252,500 81
10,000 MCI Communications 183,750 59
2,000 Minnesota Mining & Manufacturing Co. 106,750 34
5,000 Pepsico, Inc. 181,250 58
15,000 Unocal Corp. 408,750 131
696 *Viacom Inc. Class "A" 28,971 9
5,273 *Viacom Inc. Class "B" 214,216 68
8,300 York International Corp. 306,063 99
- ------------------------------------------------------------------------------------------------------------------------------------
5,205,626 1,663
- ------------------------------------------------------------------------------------------------------------------------------------
United Kingdom--8.8%
14,000 Abbey National PLC 94,291 30
45,000 Bass PLC 362,218 116
212,000 BET PLC 336,635 108
15,000 British Telecommunications PLC 88,588 28
35,000 Cadbury Schwepps PLC 236,001 75
50,000 General Electric PLC 215,115 69
15,500 Kwik Save Group PLC 133,373 43
49,200 Redland PLC 354,078 113
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
United Kingdom (continued)
35,000 Royal Insurance Holdings PLC $ 152,771 $ 49
34,000 Smith (W.H.) & Son Group "A" PLC 254,793 81
72,000 Tomkins PLC 247,817 79
20,000 Zeneca Group PLC 275,038 88
- ------------------------------------------------------------------------------------------------------------------------------------
2,750,718 879
- ------------------------------------------------------------------------------------------------------------------------------------
France--6.0%
3,044 Compagnie De Saint Gobain 350,214 112
1,528 Euro Rscg Worldwide S.A. 157,473 50
1,000 Groupe Danone 140,347 45
7,600 *Renault S.A. 251,349 80
3,600 Societe Generale Paris 378,430 121
4,200 *Technip SA 191,947 61
5,000 Total SA 290,624 93
1,800 *Ugine SA (Note 5) 126,481 41
- ------------------------------------------------------------------------------------------------------------------------------------
1,886,865 603
- ------------------------------------------------------------------------------------------------------------------------------------
Germany-- 4.4%
1,300 Bayer AG 304,448 97
600 Deutsche Bank AG 278,707 89
900 Mannesmann AG 245,030 78
200 Schering AG 130,966 42
400 Siemens AG 166,450 53
750 Veba AG 259,739 83
- ------------------------------------------------------------------------------------------------------------------------------------
1,385,340 442
- ------------------------------------------------------------------------------------------------------------------------------------
Australia--4.4 %
50,892 Amcor Ltd. 367,903 118
26,235 Broken Hill Proprietary Ltd. 398,439 127
62,000 Coles Myer Ltd. 210,633 67
28,205 National Australia Bank Ltd. 226,210 72
67,492 Pacific Dunlop Ltd. 179,562 57
- ------------------------------------------------------------------------------------------------------------------------------------
1,382,747 441
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Netherlands--3.6 %
30,000 Elsevier NV CVA $ 312,909 $ 100
5,050 International Nederlanden CVA 238,631 76
2,500 Royal Dutch Petroleum NV CVA 272,285 87
2,500 Unilever NV CVA 293,750 94
- ------------------------------------------------------------------------------------------------------------------------------------
1,117,575 357
- ------------------------------------------------------------------------------------------------------------------------------------
Spain--2.8%
4,000 ENDESA 162,880 52
4,000 Empresa Nacional De Electricidad S.A.(ADR) 162,000 52
10,000 Repsol S.A. (ADR) 272,500 87
10,000 Tabacalera 266,656 85
- ------------------------------------------------------------------------------------------------------------------------------------
864,036 276
- ------------------------------------------------------------------------------------------------------------------------------------
Hong Kong--2.6%
100,000 Cathay Pacific Airways Ltd. 145,400 46
17,200 HSBC Holdings PLC 185,626 59
42,000 Hutchison Whampoa Ltd. 169,907 54
34,000 Swire Pacific Ltd. Class "A" 211,810 68
30,000 Wharf Holdings 101,199 32
- ------------------------------------------------------------------------------------------------------------------------------------
813,942 259
- ------------------------------------------------------------------------------------------------------------------------------------
Switzerland--2.4%
600 Ciba-Geigy AG Regd 358,076 114
400 Nestle SA Regd 381,153 122
- ------------------------------------------------------------------------------------------------------------------------------------
739,229 236
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden--2.4%
13,000 AGA AB Series "B" Free 119,786 38
12,100 Astra AB Series "A" Free 312,507 100
19,000 Pharmacia AB Series "A" Free 304,139 97
- ------------------------------------------------------------------------------------------------------------------------------------
736,432 235
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Singapore--2.3%
25,000 Development Bank of Singapore $ 257,205 $ 82
55,000 Keppel Corp. 467,769 149
- ------------------------------------------------------------------------------------------------------------------------------------
724,974 231
- ------------------------------------------------------------------------------------------------------------------------------------
Canada--2.1%
23,000 Canadian Pacific Ltd. 345,000 110
20,000 Westcoast Energy Inc. 317,249 101
- ------------------------------------------------------------------------------------------------------------------------------------
662,249 211
- ------------------------------------------------------------------------------------------------------------------------------------
Malaysia--2.1%
33,333 Arab Malaysian Finance 86,152 28
98,400 Sime Darby Berhad 225,424 72
23,000 Telekom Malaysia 155,823 50
50,000 Tenaga Nasional Bhd 197,765 63
- ------------------------------------------------------------------------------------------------------------------------------------
665,164 213
- ------------------------------------------------------------------------------------------------------------------------------------
Mexico--1.8%
20,000 Kimberly Clark Mexican Class "A" 236,750 76
8,000 Telefonos De Mexico S.A. (ADR) Class "L" 328,000 105
- ------------------------------------------------------------------------------------------------------------------------------------
564,750 181
- ------------------------------------------------------------------------------------------------------------------------------------
New Zealand--1.8%
100,000 Carter Holt Havley Ltd. 204,840 65
60,000 Lion Nathan Ltd. 114,456 37
76,000 Telecom Corp New Zealand Ltd. (Note 5) 248,117 79
- ------------------------------------------------------------------------------------------------------------------------------------
567,413 181
- ------------------------------------------------------------------------------------------------------------------------------------
Norway--1.8%
10,000 Hafslund Nyco Series "A" Free 213,630 68
31,000 Saga Petroleum Series "A" Free 336,855 108
- ------------------------------------------------------------------------------------------------------------------------------------
550,485 176
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Denmark--1.7%
8,700 *Tele Danmark A/S Class "B" (ADS) $ 221,850 $ 71
8,000 Unidanmark A/S Class "A" Regd (3,000 shares 144A Securities-Note 5) 307,615 98
- ------------------------------------------------------------------------------------------------------------------------------------
529,465 169
- ------------------------------------------------------------------------------------------------------------------------------------
Italy--1.6%
33,000 Istituto Mobiliare Italiano 202,808 65
110,000 Telecom Italia SPA 286,143 91
- ------------------------------------------------------------------------------------------------------------------------------------
488,951 156
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina--.9%
3,450 Banco De Galicia Y Buenos Aires S.A. Class "B" (ADR) 59,512 19
2,000 Telefonica De Argentina S.A. Class "B" (ADR) 106,000 34
5,000 YPF Soceidad Anonima S.A. Class "D" (ADR) 106,875 34
- ------------------------------------------------------------------------------------------------------------------------------------
272,387 87
- ------------------------------------------------------------------------------------------------------------------------------------
Chile--.9%
3,500 Compania De Telefonos De Chile S.A. (ADR) 275,625 88
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal--.6%
15,000 *Banco Commercial Portugese Regd 195,979 63
- ------------------------------------------------------------------------------------------------------------------------------------
Austria-- .4%
1,000 EVN 129,910 41
- ------------------------------------------------------------------------------------------------------------------------------------
India--.1%
2,000 ITC Ltd. (GDR) (Note 5) 24,228 8
1,000 *Reliance Industries (GDS) (Note 5) 21,996 7
- ------------------------------------------------------------------------------------------------------------------------------------
46,224 15
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $26,219,411) 28,445,268 9,085
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
December 31, 1994
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Preferred Stocks--.3%
200 Krones AG (cost $142,932) $ 112,257 $ 36
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.5%
$1,730M United States Treasury Bill 5.395%, 3/23/95 (cost $1,709,000) 1,709,000 546
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--.5%
151M Paine Webber Inc., 5.85%, 1/3/95 (Collateralized by
U.S. Treasury Notes 4 1/8%, 6/30/95) (cost $151,000) 151,000 48
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $28,222,343) 97.2% 30,417,525 9,715
Other Assets, Less Liabilities 2.8 890,972 285
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $31,308,497 $10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
<TABLE>
<CAPTION>
At December 31, 1994, sector diversification of the portfolio was as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
Percentage
Sector Diversification of Net Assets Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Financial Services ............................................................ 12.6% $3,945,210
Energy ........................................................................ 8.4 2,643,239
Drugs ......................................................................... 7.9 2,457,091
Telecommunications ............................................................ 7.8 2,441,279
Electrical Equipment .......................................................... 5.2 1,628,484
Industrial Services ........................................................... 4.6 1,442,415
Food/Beverage/Tobacco ......................................................... 4.6 1,439,653
Electronics/Instruments/Components ............................................ 3.9 1,220,363
Household Products ............................................................ 3.1 969,875
Insurance ..................................................................... 2.7 852,177
Building Materials ............................................................ 2.3 727,741
Transportation ................................................................ 2.3 703,400
Chemicals ..................................................................... 2.2 696,826
Retail Trade .................................................................. 2.2 696,440
Conglomerates ................................................................. 2.2 679,579
Real Estate/Construction ...................................................... 2.1 642,637
Media/Cable Television ........................................................ 2.0 640,882
Miscellaneous ................................................................. 2.0 625,693
Machinery/Diversified ......................................................... 2.0 622,227
Automotive .................................................................... 1.6 496,349
Manufacturing/Diversified ..................................................... 1.4 424,592
Electric & Gas Utilities ...................................................... 1.0 324,880
Consumer Durables ............................................................. .9 291,669
Natural Gas ................................................................... .9 290,624
Gaming/Lodging ................................................................ .9 266,656
Retail/General Merchandise .................................................... .8 254,793
Entertainment ................................................................. .8 243,187
Housing ....................................................................... .7 206,973
Utilities ..................................................................... .6 197,765
Paper/Forest Products ......................................................... .6 188,438
Consumer Non-Durables ......................................................... .5 169,907
Metals/Miscellaneous .......................................................... .4 126,481
Repurchase Agreements ......................................................... .5 151,000
U.S. Government Obligations ................................................... 5.5 1,709,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total Investments 97.2 30,417,525
Other Assets, Less Liabilities 2.8 890,972
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $31,308,497
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INVESTMENT GRADE SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--74.4%
Aerospace/Defense--5.1%
$ 100M Allison Engine Co., Inc., 10%, 2003 $ 103,000 $ 89
300M Boeing Co., 6.35%, 2003 265,255 229
250M Lockheed Corp., 6 3/4%, 2003 224,726 194
- ------------------------------------------------------------------------------------------------------------------------------------
592,981 512
- ------------------------------------------------------------------------------------------------------------------------------------
Building Materials--.9%
100M Masco Corp., 9%, 2001 102,408 88
- ------------------------------------------------------------------------------------------------------------------------------------
Computers/Software/Business Equipment--.9%
100M Card Establishment Services, Inc., 10%, 2003 104,500 90
- ------------------------------------------------------------------------------------------------------------------------------------
Conglomerates--4.4%
300M Hanson Overseas, B.V., 7 3/8%, 2003 281,980 243
250M Tenneco, Inc., 7 7/8%, 2002 239,043 206
- ------------------------------------------------------------------------------------------------------------------------------------
521,023 449
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Products--2.0%
250M Mattel, Inc., 6 3/4%, 2000 230,963 199
- ------------------------------------------------------------------------------------------------------------------------------------
Electric & Gas
Utilities--14.2%
250M Baltimore Gas & Electric Co., 6 1/2%, 2003 221,976 192
200M Carolina Power & Light Co., 7 3/4%, 2003 191,952 165
250M Duke Power Co., 5 7/8%, 2003 212,654 184
200M Kansas Gas & Electric Co., 7.6%, 2003 188,662 163
75M Old Dominion Electric Cooperative, 7.97%, 2002 73,447 63
300M Pennsylvania Power & Light Co., 6 7/8%, 2003 269,736 232
250M Philadelphia Electric Co., 8%, 2002 242,408 209
200M SCE Capital Corp., 7 3/8%, 2003 185,507 160
75M Southwestern Electric Power Co., 7%, 2007 66,707 57
- ------------------------------------------------------------------------------------------------------------------------------------
1,653,049 1,425
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services--13.1%
75M Banc One Corp., 7 1/4%, 2002 69,107 60
40M BankAmerica Corp., 9 1/2%, 2001 41,440 36
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Financial Services (continued)
$ 200M Barnett Banks, Inc., 8 1/2%, 1999 $ 200,055 $ 172
300M Chemical Bank, Inc., 7%, 2005 264,418 228
200M Citicorp, 8%, 2003 192,232 166
150M First Union Corp., 8 1/8%, 2002 145,675 126
250M Fleet Financial Group, 6 7/8%, 2003 223,559 193
250M Mellon Bank N.A., 6 1/2%, 2005 211,966 183
50M Meridian Bancorp, 7 7/8%, 2002 47,666 41
75M Morgan Guaranty Trust Co., 7 3/8%, 2002 71,691 62
50M Nationsbank Corp., 8 1/8%, 2002 48,351 42
- ------------------------------------------------------------------------------------------------------------------------------------
1,516,160 1,309
- ------------------------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--1.8%
25M Coca-Cola Enterprises, Inc., 7 7/8%, 2002 24,362 21
200M Philip Morris Cos., Inc., 7 1/8%, 2002 182,111 157
- ------------------------------------------------------------------------------------------------------------------------------------
206,473 178
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare--1.3%
150M Healthtrust, Inc., 8 3/4%, 2005 144,750 125
- ------------------------------------------------------------------------------------------------------------------------------------
Investment/Finance
Companies--7.7%
300M Associates Corp of North America, 7 7/8%, 2001 291,016 251
300M General Electric Capital Corp., 7 7/8%, 2006 290,150 250
300M General Motors Acceptance Corp., 7 1/8%, 1999 282,221 243
25M Heller Financial, Inc., 9 3/8%, 1998 25,642 22
- ------------------------------------------------------------------------------------------------------------------------------------
889,029 766
- ------------------------------------------------------------------------------------------------------------------------------------
Oil/Natural Gas--4.2%
250M BP America, Inc., 7 7/8%, 2002 243,918 210
250M Marathon Oil Co., 8 1/2%, 2000 248,871 214
- ------------------------------------------------------------------------------------------------------------------------------------
492,789 424
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--4.4%
250M Stone Container Corp., 10 3/4%, 2002 249,375 215
250M Temple Inland, Inc., 9%, 2001 257,754 222
- ------------------------------------------------------------------------------------------------------------------------------------
507,129 437
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INVESTMENT GRADE SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Retail/General
Merchandise--1.9%
$ 250M Penney J.C & Co., 6 1/8%, 2003 $ 216,303 $ 186
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--4.2%
250M International Business Machines Corp., 6 3/8%, 2000 228,771 197
275M Xerox Corp., 7.15%, 2004 253,314 218
- ------------------------------------------------------------------------------------------------------------------------------------
482,085 415
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--1.6%
200M Tele-Communications, Inc., 8 1/4%, 2003 188,625 163
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone--6.7%
30M GTE Corp., 8.85%, 1998 30,393 26
350M MCI Communication Corp., 7 1/2%, 2004 331,062 285
200M Pacific Bell Telephone Co., 7%, 2004 183,819 158
250M Southern Bell Telephone & Telegraph Co., Inc., 8 1/8%, 2017 235,962 203
- ------------------------------------------------------------------------------------------------------------------------------------
781,236 672
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $9,368,991) 8,629,503 7,438
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--12.1%
300M Federal Home Loan Mortgage Corp., 7.88%, 2004 283,406 244
690M United States Treasury Notes, 8 7/8%, 1997 708,220 610
450M United States Treasury Notes, 5 1/4%, 1998 413,930 357
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Obligations (cost $1,534,779) 1,405,556 1,211
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--11.2%
550M Florida Power Corp., 5.95%, 1/6/95 549,546 474
400M Ford Motor Credit Co.,5.82%, 1/13/95 399,224 344
350M General Electric Credit Corp., 5.80%, 1/11/95 349,436 301
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $1,298,206) 1,298,206 1,119
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $12,201,976) 97.7% 11,333,265 9,768
Other Assets, Less Liabilities 2.3 269,211 232
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $11,602,476 $10,000
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--UTILITIES INCOME SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--78.6%
Consumer Services--.2%
300 Time Warner Inc. $ 10,538 $ 22
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Power--37.7%
3,100 American Electric Power Co. 101,913 216
3,000 Baltimore Gas & Electric Co. 66,375 141
1,800 Boston Edison Co. 42,975 91
2,000 Carolina Power & Light Co. 53,250 113
2,500 Cinergy Corp. 58,437 124
2,000 CMS Energy Corp. 45,750 97
4,000 DPL, Inc. 82,000 174
3,300 DQE, Inc. 97,762 207
3,000 Duke Power Co. 114,375 242
2,500 Eastern Utilities Association 55,000 117
300 Empresa Nacional De Electricidad 12,150 26
3,000 FPL Group, Inc. 105,375 222
2,000 General Public Utilities Corp. 52,500 111
2,500 Illinova Corp. 54,375 115
2,000 New England Electric System 64,250 136
3,000 Nipsco Industries, Inc. 89,250 189
2,000 Northern States Power Co. 88,000 186
5,000 PacifiCorp 90,625 192
1,500 Peco Energy Co. 36,750 78
6,000 Pinnacle West Capital Corp. 118,500 251
1,000 Public Service Co. of Colorado 29,375 62
3,000 *Public Service Co. of New Mexico 39,000 83
1,000 Public Service Enterprise Group Inc. 26,500 56
3,000 Southern Co. 60,000 127
4,000 Teco Energy Inc. 80,500 171
2,000 Texas Utilities Co. 64,000 136
2,000 Wisconsin Energy Corp. 51,750 110
- ------------------------------------------------------------------------------------------------------------------------------------
1,780,737 3,773
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--UTILITIES INCOME SERIES
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Energy--6.4%
1,000 Coastal Corp. $ 25,750 $ 55
2,500 Enron Corp. 76,250 161
1,700 NICOR, Inc. 38,675 82
3,100 Pacific Enterprises 65,875 140
500 Royal Dutch Petroleum Co. 53,750 114
1,400 Sonat, Inc. 39,200 83
- ------------------------------------------------------------------------------------------------------------------------------------
299,500 635
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Exploration/Production--.4%
1,000 *Seagull Energy Corp. 19,125 41
- ------------------------------------------------------------------------------------------------------------------------------------
Natural Gas--7.6%
1,600 Atlanta Gas Light Co. 48,000 102
1,000 Brooklyn Union Gas Co. 22,250 47
500 KN Energy, Inc. 11,875 25
1,200 MCN Corp. 21,750 46
2,400 National Fuel Gas Co. 61,200 130
2,000 New Jersey Resources Corp. 45,250 96
1,500 Piedmont Natural Gas Co., Inc. 28,313 60
2,500 UGI Corp. 50,938 108
1,000 Washington Energy Co. 13,500 29
2,000 Wicor, Inc. 56,750 119
- ------------------------------------------------------------------------------------------------------------------------------------
359,826 762
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--4.0%
1,500 *Airtouch Communications, Inc. 43,687 93
4,000 MCI Communications Corp. 73,500 156
600 Motorola, Inc. 34,725 74
300 Northern Telecom Ltd. 10,012 21
1,000 Sprint Corp. 27,625 59
- ------------------------------------------------------------------------------------------------------------------------------------
189,549 403
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Telecommunications--2.6%
1,000 *LDDS Communications, Inc. $ 19,437 $ 41
1,000 *Mobile Telecommunication Technologies Corp. 19,500 41
2,000 SBC Communications Inc. 80,750 171
- ------------------------------------------------------------------------------------------------------------------------------------
119,687 253
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone/Utilities--19.7%
3,000 Alltel Corp. 90,375 191
3,500 Ameritech Corp. 141,313 299
2,000 A T & T Corp. 100,500 213
2,000 Bell Atlantic Corp. 99,500 211
2,000 Bellsouth Corp. 108,250 229
3,500 GTE Corp. 106,312 225
1,000 *MFS Communications Co. 32,750 69
2,000 Nynex Corp. 73,500 156
2,000 Pacific Telesis Group 57,000 121
2,000 *Rochester Telephone Corp. 42,250 90
700 Telefonica De Espana (ADR) 24,588 52
1,500 U.S. West, Inc. 53,438 113
- ------------------------------------------------------------------------------------------------------------------------------------
929,776 1,969
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $3,843,448) 3,708,738 7,858
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--21.7%
$ 225M Central Louisiana Electric Co. 5.85%, 1/3/95 224,941 476
225M Lubrizol Corp. 6.00%, 1/6/95 224,812 476
225M Oklahoma Gas & Electric Co. 5.90%, 1/11/95 224,631 476
350M Pitney Bowes, Inc. 5.95%, 1/9/95 349,538 741
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $1,023,922) 1,023,922 2,169
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $4,867,370) 100.3% 4,732,660 10,027
Excess of Liabilities Over Other Assets (.3) (12,633) (27)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $4,720,027 $10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Statement of Assets and Liabilities
FIRST INVESTORS LIFE SERIES FUND
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CASH
BLUE CHIP MANAGEMENT DISCOVERY GOVERNMENT
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost ......................................... $ 39,926,978 $ 3,940,559 $ 32,330,328 $ 7,979,586
============ ============ ============ ============
At value (Note 1A) ......................................... $ 40,280,776 $ 3,940,559 $ 33,303,472 $ 7,736,109
Cash (overdraft) ............................................. 2,309,427 13,442 (194,076) 59,970
Receivables:
Investment securities sold ................................. 2,279,986 -- -- --
Interest and dividends ..................................... 100,719 -- 11,859 103,437
Trust shares sold .......................................... 23,848 3,731 98,339 5,604
Other assets ................................................. 141 644 578 --
------------ ------------ ------------ ------------
Total Assets ................................................. 44,994,897 3,958,376 33,220,172 7,905,120
------------ ------------ ------------ ------------
Liabilities
Payables:
Investment securities purchased ............................ 3,461,850 -- 2,895,677 --
Trust shares redeemed ...................................... 73,721 22,810 55,729 24,865
Accrued advisory fee ......................................... 25,655 988 18,376 2,292
Accrued expenses ............................................. 9,370 6,023 6,776 --
------------ ------------ ------------ ------------
Total Liabilities ............................................ 3,570,596 29,821 2,976,558 27,157
------------ ------------ ------------ ------------
Net Assets ................................................... $ 41,424,301 $ 3,928,555 $ 30,243,614 $ 7,877,963
============ ============ ============ ============
Net Assets Consist of:
Capital paid in .............................................. $ 37,581,050 $ 3,928,555 $ 27,184,884 $ 8,402,775
Undistributed net investment income .......................... 568,071 -- 93,202 506,859
Accumulated net realized gain (loss) on investments
and foreign currencies ..................................... 2,921,382 -- 1,992,384 (788,194)
Net unrealized appreciation (depreciation) in value of
investments and foreign currency related transactions ...... 353,798 -- 973,144 (243,477)
------------ ------------ ------------ ------------
Total ........................................................ $ 41,424,301 $ 3,928,555 $ 30,243,614 $ 7,877,963
============ ============ ============ ============
Shares of Beneficial Interest Outstanding (Note 2) ........... 3,012,284 3,928,555 1,522,470 811,929
============ ============ ============ ============
Net Asset Value, Offering and Redemption Price Per ........... $13.75 $1.00 $19.86 $9.70
====== ===== ====== =====
(Net assets divided by shares outstanding)
</TABLE>
See notes to financial statements
<PAGE>
Statement of Assets and Liabilities
FIRST INVESTORS LIFE SERIES FUND
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INVESTMENT UTILITIES
GROWTH HIGH YIELD SECURITIES GRADE INCOME
------ ---------- ---------- ----- ------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost ................................. $ 31,366,691 $ 33,143,225 $ 28,222,343 $ 12,201,976 $ 4,867,370
============ ============ ============ ============ ============
At value (Note 1A) ................................. $ 32,699,783 $ 31,281,000 $ 30,417,525 $ 11,333,265 $ 4,732,660
Cash (overdraft) ..................................... 22,737 371,436 616,473 72,125 31,020
Receivables:
Investment securities sold ......................... -- -- 166,638 -- --
Interest and dividends ............................. 50,432 663,762 79,162 196,168 15,541
Trust shares sold .................................. 90,797 56,743 163,906 45,790 73,286
Other assets ......................................... 593 792 132 -- --
------------ ------------ ------------ ------------ ------------
Total Assets ......................................... 32,864,342 32,373,733 31,443,836 11,647,348 4,852,507
------------ ------------ ------------ ------------ ------------
Liabilities
Payables:
Investment securities purchased .................... -- -- 80,676 -- 127,937
Trust shares redeemed .............................. 41,062 60,005 16,964 39,255 3,085
Accrued advisory fee ................................. 20,027 19,920 19,192 3,376 1,325
Accrued expenses ..................................... 6,061 9,062 18,507 2,241 133
------------ ------------ ------------ ------------ ------------
Total Liabilities .................................... 67,150 88,987 135,339 44,872 132,480
------------ ------------ ------------ ------------ ------------
Net Assets ........................................... $ 32,797,192 $ 32,284,746 $ 31,308,497 $ 11,602,476 $ 4,720,027
============ ============ ============ ============ ============
Net Assets Consist of:
Capital paid in ...................................... $ 30,747,717 $ 32,264,201 $ 28,230,113 $ 11,913,551 $ 4,844,733
Undistributed net investment income .................. 176,061 2,971,294 279,003 605,176 110,079
Accumulated net realized gain (loss) on investments
and foreign currencies ............................. 540,322 (1,088,524) 605,023 (47,540) (100,075)
Net unrealized appreciation (depreciation) in value
of investments and foreign currency related
transactions ....................................... 1,333,092 (1,862,225) 2,194,358 (868,711) (134,710)
------------ ------------ ------------ ------------ ------------
Total ................................................ $ 32,797,192 $ 32,284,746 $ 31,308,497 $ 11,602,476 $ 4,720,027
============ ============ ============ ============ ============
Shares of Beneficial Interest Outstanding (Note 2) ... 1,960,481 3,050,689 2,317,817 1,125,041 513,634
============ ============ ============ ============ ============
Net Asset Value, Offering and Redemption Price Per ... $16.73 $10.58 $13.51 $10.31 $9.19
====== ====== ====== ====== =====
(Net assets divided by shares outstanding)
</TABLE>
See notes to financial statements
<PAGE>
Statement of Operations
FIRST INVESTORS LIFE SERIES FUND
Year Ended December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
CASH
BLUE CHIP MANAGEMENT DISCOVERY GOVERNMENT
--------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Investment Income
Income:
Interest .................................................. $ 164,430 $ 167,684 $ 237,179 $ 557,614
Dividends ................................................. 739,647 -- 84,495 --
Consent fees .............................................. -- -- -- --
----------- ----------- ----------- -----------
Total income ................................................ 904,077 167,684 321,674 557,614
----------- ----------- ----------- -----------
Expenses:
Advisory fee (Note 6) ..................................... 286,413 29,282 194,546 58,949
Professional fees ......................................... 17,084 3,889 12,844 5,373
Reports to shareholders ................................... 19,356 2,098 12,822 3,943
Custodian fees ............................................ 46 4,347 -- --
Other expenses ............................................ 12,959 1,076 8,260 2,453
----------- ----------- ----------- -----------
Total expenses .............................................. 335,858 40,692 228,472 70,718
Less: Expenses waived or assumed (Note 6) ................. -- 17,258 -- 43,209
----------- ----------- ----------- -----------
Expenses--net ............................................... 335,858 23,434 228,472 27,509
----------- ----------- ----------- -----------
Net investment income ....................................... 568,219 144,250 93,202 530,105
----------- ----------- ----------- -----------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currencies (Note 3):
Net realized gain (loss) on investments
and foreign currencies .................................... 2,931,871 61 1,992,419 (786,678)
Net unrealized depreciation of investments
and foreign currency related transactions ................. (4,069,423) -- (2,687,366) (75,120)
----------- ----------- ----------- -----------
Net gain (loss) on investments .............................. (1,137,552) 61 (694,947) (861,798)
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
from Operations ........................................... $ (569,333) $ 144,311 $ (601,745) $ (331,693)
=========== =========== =========== ===========
</TABLE>
+Net of $37,429 foreign taxes withheld.
(a)Includes $3,391 of net realized foreign currency gains
(b)Includes $824 of net unrealized depreciation on foreign currency transactions
See notes to financial statements
<PAGE>
Statement of Operations
FIRST INVESTORS LIFE SERIES FUND
Year Ended December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INVESTMENT UTILITIES
GROWTH HIGH YIELD SECURITIES GRADE INCOME
------ ---------- ---------- ----- ------
<S> <C> <C> <C> <C> <C>
Investment Income
Income:
Interest ............................................. $ 65,229 $ 3,159,200 $ 96,348 $ 770,466 $ 12,334
Dividends ............................................ 374,665 59,788 512,398+ -- 107,596
Consent fees ......................................... -- 30,500 -- -- --
----------- ----------- ----------- ----------- -----------
Total income ......................................... 439,894 3,249,488 608,746 770,466 119,930
----------- ----------- ----------- ----------- -----------
Expenses:
Advisory fee (Note 6) ................................ 218,813 236,209 202,739 82,832 20,935
Professional fees .................................... 13,337 15,278 12,390 6,335 2,841
Reports to shareholders .............................. 14,711 15,185 14,588 5,672 848
Custodian fees ....................................... 8,121 -- 42,160 430 672
Other expenses ....................................... 8,851 11,425 5,763 6,161 1,129
----------- ----------- ----------- ----------- -----------
Total expenses ....................................... 263,833 278,097 277,640 101,430 26,425
Less: Expenses waived or assumed (Note 6) ............ -- -- -- 60,546 21,652
----------- ----------- ----------- ----------- -----------
Expenses--net ........................................ 263,833 278,097 277,640 40,884 4,773
----------- ----------- ----------- ----------- -----------
Net investment income ................................ 176,061 2,971,391 331,106 729,582 115,157
----------- ----------- ----------- ----------- -----------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currencies (Note 3):
Net realized gain (loss) on investments
and foreign currencies .............................. 555,580 (106,914) 913,209(a) (47,540) (100,075)
Net unrealized depreciation of investments and
currency related transactions foreign ................ (1,490,527) (3,352,582) (1,619,867)(b) (1,054,894) (132,614)
----------- ----------- ----------- ----------- -----------
Net gain (loss) on investments ....................... (934,947) (3,459,496) (706,658) (1,102,434) (232,689)
----------- ----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets Resulting
from Operations ...................................... $ (758,886) $ (488,105) $ (375,552) $ (372,852) $ (117,532)
=========== =========== =========== =========== ===========
</TABLE>
+Net of $37,429 foreign taxes withheld.
(a)Includes $3,391 of net realized foreign currency gains
(b)Includes $824 of net unrealized depreciation on foreign currency transactions
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
BLUE CHIP CASH MANAGEMENT
------------------------------- --------------------------------
Year Ended December 31, 1994 1993 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income (loss) ........................ $ 568,219 $ 362,657 $ 144,250 $ 175,573
Net realized gain (loss) on investments
and foreign currencies ............................ 2,931,871 440,707 61 81
Net unrealized appreciation (depreciation)
of investments and foreign currency
related transactions .............................. (4,069,423) 1,544,756 -- --
------------ ------------ ------------ ------------
Total increase (decrease) in net assets
resulting from operations ....................... (569,333) 2,348,120 144,311 175,654
------------ ------------ ------------ ------------
Distributions to Shareholders from:
Net investment income ............................... (204,030) (316,583) (144,311) (175,573)
Net realized gain on investments .................... (416,537) -- -- (81)
------------ ------------ ------------ ------------
Total distributions ............................... (620,567) (316,583) (144,311) (175,654)
------------ ------------ ------------ ------------
Trust Share Transactions (a)
Issued .............................................. 9,253,157 9,385,494 828,637 430,084
Issued on reinvestments ............................. 620,566 316,582 144,311 175,653
Redeemed ............................................ (1,289,081) (1,468,952) (1,286,977) (4,703,726)
------------ ------------ ------------ ------------
Net increase (decrease) from trust share
transactions .................................... 8,584,642 8,233,124 (314,029) (4,097,989)
------------ ------------ ------------ ------------
Total increase (decrease) ......................... 7,394,742 10,264,661 (314,029) (4,097,989)
Net Assets
Beginning of year ................................... 34,029,559 23,764,898 4,242,584 8,340,573
------------ ------------ ------------ ------------
End of year+ ........................................ $ 41,424,301 $ 34,029,559 $ 3,928,555 $ 4,242,584
============ ============ ============ ============
+Includes undistributed net investment
income of ........................................... $ 568,071 $ 203,882 $ -- $ --
============ ============ ============ ============
(a)Trust Shares Issued and Redeemed
Issued .............................................. 664,327 683,578 828,637 430,084
Issued on reinvestments ............................. 45,969 22,751 144,311 175,653
Redeemed ............................................ (92,113) (107,325) (1,286,977) (4,703,726)
------------ ------------ ------------ ------------
Increase (decrease) in shares ....................... 618,183 599,004 (314,029) (4,097,989)
============ ============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- ----------------------------------- -----------------------------------------------------------------------------------------------
DISCOVERY GOVERNMENT GROWTH
---------------------------- ---------------------------- -----------------------------
Year Ended December 31, 1994 1993 1994 1993 1994 1993
- ----------------------------------- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets from
Operations
Net investment income
(loss) ........................ $ 93,202 $ (4,695) $ 530,105 $ 457,094 $ 176,061 $ 89,167
Net realized gain (loss)
on investments and
foreign currencies ............ 1,992,419 1,124,458 (786,678) 137,176 555,580 610,321
Net unrealized appreciation
(depreciation) of
investments and foreign
currency related
transactions .................. (2,687,366) 2,129,876 (75,120) (174,980) (1,490,527) 615,307
------------ ------------ ------------ ------------ ------------ ------------
Total increase (decrease)
in net assets resulting
from operations ............... (601,745) 3,249,639 (331,693) 419,290 (758,886) 1,314,795
------------ ------------ ------------ ------------ ------------ ------------
Distributions to
Shareholders from:
Net investment income ........... -- -- (84,143) (460,450) -- (105,229)
Net realized gain on
investments ................... (1,014,247) (630,159) (138,692) (99,213) (336,304) (119,293)
------------ ------------ ------------ ------------ ------------ ------------
Total distributions ............. (1,014,247) (630,159) (222,835) (559,663) (336,304) (224,522)
------------ ------------ ------------ ------------ ------------ ------------
Trust Share Transactions (a)
Issued .......................... 10,106,014 7,831,209 1,488,126 3,687,209 8,593,462 8,646,886
Issued on reinvestments ......... 1,014,247 630,159 222,836 559,663 336,304 224,522
Redeemed ........................ (481,564) (386,765) (1,512,005) (936,521) (695,724) (688,752)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)
from trust share
transactions ................ 10,638,697 8,074,603 198,957 3,310,351 8,234,042 8,182,656
------------ ------------ ------------ ------------ ------------ ------------
Total increase
(decrease) .................. 9,022,705 10,694,083 (355,571) 3,169,978 7,138,852 9,272,929
Net Assets
Beginning of year ............... 21,220,909 10,526,826 8,233,534 5,063,556 25,658,340 16,385,411
------------ ------------ ------------ ------------ ------------ ------------
End of year+ .................... $ 30,243,614 $ 21,220,909 $ 7,877,963 $ 8,233,534 $ 32,797,192 $ 25,658,340
============ ============ ============ ============ ============ ============
+Includes undistributed
net investment
income of ..................... $ 93,202 $ -- $ 506,859 $ 60,897 $ 176,061 $ --
============ ============ ============ ============ ============ ============
(a)Trust Shares Issued and
Redeemed
Issued .......................... 501,020 406,157 151,268 350,524 510,485 513,769
Issued on reinvestments ......... 51,897 34,131 22,959 53,327 20,645 13,153
Redeemed ........................ (24,001) (20,400) (152,565) (88,958) (41,089) (41,155)
------------ ------------ ------------ ------------ ------------ ------------
Increase (decrease) in shares ...... 528,916 419,888 21,662 314,893 490,041 485,767
============ ============ ============ ============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD INTERNATIONAL
------------------------------- --------------------------------
Year Ended December 31, 1994 1993 1994 1993
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income (loss) ......................... $ 2,971,391 $ 2,596,525 $ 331,106 $ 145,789
Net realized gain (loss) on investments
and foreign currencies ............................. (106,914) 1,274,083 913,209 (2,151)
Net unrealized appreciation (depreciation)
of investments and foreign currency
related transactions ............................... (3,352,582) 678,815 (1,619,867) 3,063,342
------------ ------------ ------------ ------------
Total increase (decrease) in net assets
resulting from operations ........................ (488,105) 4,549,423 (375,552) 3,206,980
------------ ------------ ------------ ------------
Distributions to Shareholders from:
Net investment income ................................ (1,135,309) (2,797,473) (87,059) (168,456)
Net realized gain on investments ..................... -- -- -- --
------------ ------------ ------------ ------------
Total distributions ................................ (1,135,309) (2,797,473) (87,059) (168,456)
------------ ------------ ------------ ------------
Trust Share Transactions (a)
Issued ............................................... 4,464,152 4,827,225 11,075,210 6,412,595
Issued on reinvestments .............................. 1,135,309 2,797,473 87,058 168,456
Redeemed ............................................. (2,284,666) (3,323,008) (399,664) (857,140)
------------ ------------ ------------ ------------
Net increase (decrease) from trust share
transactions ..................................... 3,314,795 4,301,690 10,762,604 5,723,911
------------ ------------ ------------ ------------
Total increase (decrease) .......................... 1,691,381 6,053,640 10,299,993 8,762,435
Net Assets
Beginning of year ................................... 30,593,365 24,539,725 21,008,504 12,246,069
------------ ------------ ------------ ------------
End of year+ ........................................ $ 32,284,746 $ 30,593,365 $ 31,308,497 $ 21,008,504
============ ============ ============ ============
+Includes undistributed net investment
income of ........................................... $ 2,971,294 $ 1,135,212 $ 279,003 $ 47,517
============ ============ ============ ============
(a)Trust Shares Issued and Redeemed
Issued .............................................. 416,564 441,212 811,007 512,067
Issued on reinvestments ............................. 107,326 254,481 6,642 13,339
Redeemed ............................................ (214,630) (304,969) (29,290) (72,804)
------------ ------------ ------------ ------------
Increase (decrease) in shares ....................... 309,260 390,724 788,359 452,602
============ ============ ============ ============
</TABLE>
*From November 15, 1993 (commencement of operations) to December 31, 1993
(Note 7)
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE UTILITIES INCOME
------------------------------- --------------------------------
Year Ended December 31, 1994 1993 1994 1993*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income (loss) ........................ $ 729,582 $ 468,954 $ 115,157 $ 457
Net realized gain (loss) on investments
and foreign currencies ............................ (47,540) 90,556 (100,075) --
Net unrealized appreciation (depreciation)
of investments and foreign currency
related transactions .............................. (1,054,894) 104,080 (132,614) (2,096)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets
resulting from operations ....................... (372,852) 663,590 (117,532) (1,639)
------------ ------------ ------------ ------------
Distributions to Shareholders from:
Net investment income ............................... (154,441) (479,485) (5,535) --
Net realized gain on investments .................... (90,556) (5,447) -- --
------------ ------------ ------------ ------------
Total distributions ............................... (244,997) (484,932) (5,535) --
------------ ------------ ------------ ------------
Trust Share Transactions (a)
Issued .............................................. 2,762,399 5,237,027 4,449,169 495,195
Issued on reinvestments ............................. 244,996 484,931 5,534 --
Redeemed ............................................ (997,487) (397,160) (105,265) --
------------ ------------ ------------ ------------
Net increase (decrease) from trust share ..........
transactions .................................... 2,009,908 5,324,798 4,349,438 495,195
------------ ------------ ------------ ------------
Total increase (decrease) ......................... 1,392,059 5,503,456 4,226,371 493,556
Net Assets
Beginning of year ................................... 10,210,417 4,706,961 493,656 100
------------ ------------ ------------ ------------
End of year+ ........................................ $ 11,602,476 $ 10,210,417 $ 4,720,027 $ 493,656
============ ============ ============ ============
+Includes undistributed net investment
income of ......................................... $ 605,176 $ 30,035 $ 110,079 $ 457
============ ============ ============ ============
(a)Trust Shares Issued and Redeemed
Issued .............................................. 264,613 477,794 474,683 49,647
Issued on reinvestments ............................. 24,055 44,044 600 --
Redeemed ............................................ (96,249) (36,013) (11,306) --
------------ ------------ ------------ ------------
Increase (decrease) in shares .......................... 192,419 485,825 463,977 49,647
============ ============ ============ ============
</TABLE>
*From November 15, 1993 (commencement of operations) to December 31, 1993
(Note 7)
See notes to financial statements
<PAGE>
Notes to Financial Statements
FIRST INVESTORS LIFE SERIES FUND
1. Significant Accounting Policies--The Fund, a Massachusetts business trust, is
registered under the Investment Company Act of 1940 as a diversified, open-end
management investment company. The Fund operates as a series fund, issuing
shares of beneficial interest in the Blue Chip, Cash Management, Discovery,
Government, Growth, High Yield, International Securities, Investment Grade and
Utilities Income Series and accounts separately for the assets, liabilities and
operations of each Series.
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
system 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 markets are valued at the mean between
the last bid and asked prices. For the Government, High Yield and Investment
Grade Series, each security traded in the over-the-counter market (including
securities listed on exchanges or systems whose primary market is believed to be
over-the-counter) is valued at the mean between the last bid and asked prices
based upon quotes furnished by a market maker for such securities. The High
Yield, International Securities and Investment Grade Series may use prices
provided 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.
Securities for which market quotations are not readily available and any other
assets are valued on a consistent basis at fair value as determined in good
faith by or under the supervision of the Fund's officers in the manner
specifically authorized by the Trustees of the Fund.
The investments in the Cash Management Series, when purchased at a [[1]] EDGAR
only EDG: discount, are valued at amortized cost and when purchased at face
value, are valued at cost plus accrued interest.
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 the 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, federal income taxes.
At December 31, 1994, capital loss carryovers were as follows:
Year Capital Loss Carryovers Expire
-------------------------------------
Series Total 1998 1999 2002
- ------ ---------- ---------- ---------- ----------
GOVERNMENT ............. $ 788,194 $ -- $ -- $ 788,194
HIGH YIELD ............. 1,088,524 625,684 355,926 106,914
INVESTMENT GRADE ....... 47,540 -- -- 47,540
UTILITIES INCOME ....... 100,075 -- -- 100,075
<PAGE>
C. Foreign Currency Translations--For valuation purposes, quotations of
foreign securities in foreign currency are translated to U.S. dollar
equivalents using the daily rate of exchange. Purchases and sales of
investment securities, dividend income and certain expenses are
translated to U.S. dollars at the rates of exchange prevailing on the
respective dates of such transactions.
The fund does not isolate that portion of gains and lossses 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 gain (loss) from foreign currency related
transactions includes gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends and
foreign withholding taxes.
D. Distributions to Shareholders--Distributions to shareholders from net
investment income and net realized gains are declared and paid annually on all
series except for the Cash Management Series which declares daily and pays
monthly. Income distributions 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 foreign currency transactions, capital loss carryforwards and
deferral of wash sales.
E. Expense Allocation--Expenses directly charged or attributable to a Series are
paid from the assets of that Series. 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.
F. 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 securities and the amortized cost basis for short-term
securities, for both financial statement and federal income tax purposes.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities are recorded on the ex-dividend date or as
soon thereafter as the Fund is informed of the dividend. Interest income and
estimated expenses are accrued daily.
2. Trust Shares--The Declaration of Trust permits the issuance of an unlimited
number of shares of beneficial interest, of one or more Series. Shares in the
Fund are acquired through the purchase of variable annuity or variable life
insurance contracts sold by First Investors Life Insurance Company.
<PAGE>
Notes to Financial Statements
FIRST INVESTORS LIFE SERIES FUND
3. Purchases and Sales of Securities--For the year ended December 31, 1994,
purchases and sales of securities and long-term U.S. Government obligations,
excluding foreign currencies, short-term corporate notes and repurchase
agreements were as follows:
Long-Term
Securities U.S. Government Obligations
------------------------ ---------------------------
Cost Proceeds Cost Proceeds
of of of of
Series Purchases Sales Purchases Sales
- ------ ----------- ----------- ------------ -----------
BLUE CHIP .............. $35,397,341 $28,869,597 $ -- $ --
DISCOVERY .............. 20,142,942 11,196,978 -- --
GOVERNMENT ............. -- -- 31,846,462 33,631,190
GROWTH ................. 18,359,605 10,960,242 -- --
HIGH YIELD ............. 20,506,451 14,460,159 -- --
INTERNATIONAL SECURITIES 18,616,178 8,882,379 -- --
INVESTMENT GRADE ....... 3,105,346 1,213,788 300,000 195,326
UTILITIES INCOME ....... 4,225,435 703,164 -- --
At December 31, 1994, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as follows:
Gross Gross Net Unrealized
Aggregate Unrealized Unrealized Appreciation
Series Cost Appreciation Depreciation (Depreciation)
- ------ ----------- ----------- ----------- ------------
BLUE CHIP .............. $39,926,978 $ 1,630,385 $ 1,276,587 $ 353,798
CASH MANAGEMENT ........ 3,940,559 -- -- --
DISCOVERY .............. 32,330,328 3,955,011 2,981,867 973,144
GOVERNMENT ............. 7,979,586 -- 243,477 (243,477)
GROWTH ................. 31,416,730 3,240,315 1,957,262 1,283,053
HIGH YIELD ............. 33,143,225 198,189 2,060,414 (1,862,225)
INTERNATIONAL SECURITIES 28,222,343 3,036,344 841,162 2,195,182
INVESTMENT GRADE ....... 12,201,976 10,426 879,137 (868,711)
UTILITIES INCOME ....... 4,867,370 52,521 187,231 (134,710)
4. Restricted Securities--On April 23, 1992, the High Yield Series purchased
1,620 shares of common stock of Divi Hotels, Inc. at a cost of $35,810. This
security, which was acquired through a private placement, may not be sold or
transferred without prior registration under the Securities Act of 1933 or
pursuant to an exemption therefrom. If and when the High Yield Series sells this
security, additional costs for registration may be required. Restricted
securities are valued pursuant to procedures established by the Life Series
Fund's Trustees which include using data provided by certain dealers that
participate in any secondary market that may exist for these securities. At
<PAGE>
December 31, 1994, the value of the above restricted security was $122.
5. 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 December 31, 1994, the
Discovery, High Yield and International Series held 144A securities with
aggregate values of $582,708, $638,800 and $536,178, respectively. These
securities represent 1.9%, 2.0% and 1.7%, respectively of the Series' net assets
and are valued as set forth in Note 1A.
6. Advisory Fee and Other Transactions With Affiliates (All Series)--Certain
officers and trustees of the Fund are officers and directors of its investment
adviser, First Investors Management Company, Inc.("FIMCO") and/or its transfer
agent, Administrative Data Management Corp. 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 .75% on the first $250 million of each
Series' average daily net assets, declining by .03% on each $250 million
thereafter, down to .66% on average daily net assets over $750 million. For the
year ended December 31, 1994, total advisory fees were $1,330,718 of which
$109,038 was waived by the investment adviser. In addition, $33,627 of expenses
were assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse a Series if
and to the extent that any 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
the year ended December 31, 1994, no reimbursement was required pursuant to
these provisions.
Wellington Management Company serves as investment subadviser to the Growth
Series and the International Securities Series. The subadviser is paid by FIMCO
and not by the Fund.
7. Commencement of Operations--The Utilities Income Series commenced operations
in November 1993 following the sale of 10 shares of beneficial interest to First
Investors Life Insurance Company for $100.
8. Concentration of Credit Risk--The High Yield Series' investments in high
yield securities, whether rated or unrated, may be considered speculative and
subject to greater market fluctuations and risks of loss of income and principal
than lower yielding, higher rated, fixed income securities. The risk of loss due
to default by the issuer may be significantly greater for the holders of high
yielding securities, because such securities are generally unsecured and are
often subordinated to other creditors of the issuer. At December 31, 1994, the
High Yield Series held one defaulted security with a value of $336,000,
representing less than 1.0% of the Series' net assets.
The Utilities Income Series invests in securities issued by companies primarily
engaged in the public utilities industries. As a result, there are certain
credit risks which may subject the Series more significantly to economic changes
occurring in the public utilities industry.
<PAGE>
Independent Auditor's Report
To the Shareholders and Trustees of
First Investors Life Series Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the nine series comprising First Investors
Life Series Fund as of December 31, 1994, 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 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
December 31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the nine series comprising First Investors Life Series Fund as of December
31, 1994, and the results of their operations, changes in their net assets and
financial highlights for each of the respective periods presented, in conformity
with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
January 31, 1995
<PAGE>
Financial Statements as of June 30, 1995
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--90.1%
Basic Industry--6.4%
11,600 Alcan Aluminum Ltd. $ 350,900 $ 67
1,800 Consolidated Papers, Inc. 103,725 20
3,550 Dow Chemical Company 255,156 49
9,100 Du Pont (E.I.) De Nemours & Company 625,625 120
2,300 Georgia Pacific Corporation 199,525 38
4,300 Inland Steel Industries, Inc. 131,150 25
1,700 International Paper Company 145,775 28
3,700 James River Corporation of Virginia 102,213 20
1,600 Mead Corporation 95,000 18
5,500 Minnesota Mining & Manufacturing Company 314,875 60
7,850 Monsanto Company 707,481 135
4,850 Nucor Corporation 259,475 50
1,400 Temple-Inland, Inc. 66,675 13
- ------------------------------------------------------------------------------------------------------------------------------------
3,357,575 643
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Goods--10.2%
4,200 Boeing Company 263,025 50
2,700 Browning-Ferris Industries, Inc. 97,538 19
4,400 Deere & Company 376,750 72
7,000 Dover Corporation 509,250 97
2,100 Eaton Corporation 122,062 23
2,800 Emerson Electric Company 200,200 38
2,200 Foster Wheeler Corporation 77,550 15
22,100 General Electric Company 1,245,887 239
5,200 Grainger (W.W.), Inc. 305,500 58
6,500 Ingersoll-Rand Company 248,625 48
3,600 ITT Corporation 423,000 81
1,800 Loral Corporation 93,150 18
2,700 McDonnell Douglas Corporation 207,225 40
3,300 Raytheon Company 256,161 49
3,300 United Technologies Corporation 257,813 49
11,300 *Varity Corporation 497,200 95
6,100 WMX Technologies, Inc. 173,088 33
- ------------------------------------------------------------------------------------------------------------------------------------
5,354,024 1,024
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Durables--3.2%
4,350 Chrysler Corporation $ 208,256 $ 40
6,200 Corning, Inc. 203,050 39
1,400 Fleetwood Enterprises, Inc. 27,650 5
13,250 Ford Motor Company 394,188 75
9,600 General Motors Corporation 450,000 86
4,500 Goodyear Tire & Rubber Company 185,625 36
6,750 Masco Corporaion 182,250 35
- ------------------------------------------------------------------------------------------------------------------------------------
1,651,019 316
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-durables--20.1%
10,400 Abbott Laboratories 421,200 81
3,800 American Home Products Corporation 294,025 56
6,300 Anheuser-Busch Companies, Inc. 358,312 69
6,400 Bristol-Myers Squibb Company 436,000 83
16,750 Coca-Cola Company 1,067,812 204
1,900 Colgate-Palmolive Company 138,938 27
5,900 Columbia/HCA Healthcare Corporation 255,175 49
4,700 CPC International, Inc. 290,225 56
4,550 Eastman Kodak Company 275,843 53
3,600 Eli Lilly & Company 282,600 54
3,800 General Mills, Inc. 195,225 37
5,400 Gillette Company 240,975 46
8,300 Johnson & Johnson 561,288 107
6,600 Kellogg Company 471,075 90
9,850 Kimberly-Clark Corporation 589,769 113
15,800 Merck & Company, Inc. 774,200 148
1,800 Nike, Inc. 151,200 29
10,300 PepsiCo, Inc. 469,938 90
3,850 Pfizer, Inc. 355,643 68
13,900 Philip Morris Companies, Inc. 1,033,813 198
8,800 Procter & Gamble Company 632,500 121
4,900 *Ralcorp Holdings, Inc. 112,088 21
10,400 Sara Lee Corporation 296,400 57
4,800 Schering-Plough 211,800 41
2,500 Teva Pharmaceutical Industries Ltd. 93,750 18
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Non-durables (Continued)
2,000 Unilever PLC $ 260,250 $ 50
2,400 Warner-Lambert Company 207,300 40
- ------------------------------------------------------------------------------------------------------------------------------------
10,477,344 2,006
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Services--9.6%
4,500 Albertson's, Inc. 133,875 26
6,700 *Bed Bath & Beyond, Inc. 162,475 31
5,900 Brunswick Corporation 100,300 19
1,900 Capital Cities/ABC, Inc. 205,200 39
2,800 Dayton Hudson Corporation 200,900 38
6,300 Gap, Inc. 219,712 42
5,400 Home Depot, Inc. 219,375 42
5,400 *Kroger Company 145,125 28
3,200 Marriott International, Inc. 114,800 22
6,725 Mattel, Inc. 174,850 33
4,400 May Department Stores Company 183,150 35
9,550 McDonald's Corporation 373,644 72
2,600 McGraw-Hill Companies, Inc. 197,275 38
5,200 Nordstrom, Inc. 215,150 41
11,700 *Price/Costco, Inc. 190,125 36
4,300 Rite Aid Corporation 110,187 21
4,550 Sears, Roebuck and Company 272,431 52
7,700 *Tele-Communications, Inc. 180,469 35
4,800 Time Warner, Inc. 197,400 38
4,400 *Toys "R" Us, Inc. 128,700 25
3,400 *Viacom, Inc. Class "B" 157,675 30
29,050 Wal-Mart Stores, Inc. 777,088 149
6,400 Walt Disney Company 356,000 68
- ------------------------------------------------------------------------------------------------------------------------------------
5,015,906 960
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--9.9%
6,200 Amoco Corporation 413,075 79
3,100 Atlantic Richfield Company 340,225 65
2,400 Burlington Resources, Inc. 88,500 17
8,400 Chevron Corporation 391,650 75
9,500 Enron Corporation 333,687 64
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Energy (Continued)
15,500 Exxon Corporation $ 1,094,687 $ 210
5,000 Halliburton Company 178,750 34
2,300 Kerr-McGee Corporation 123,338 24
5,500 Mobil Corporation 528,000 101
4,600 Pacific Enterprises 112,700 22
3,150 Phillips Petroleum Company 105,131 20
6,625 Royal Dutch Petroleum Company 807,422 155
3,800 Schlumberger, Ltd. 236,075 45
3,200 Texaco, Inc. 210,000 40
8,300 Unocal Corporation 229,288 44
- ------------------------------------------------------------------------------------------------------------------------------------
5,192,528 995
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--7.6%
6,350 American Express Company 223,044 43
4,000 American International Group, Inc. 456,000 87
9,200 Banc One Corporation 296,700 57
4,200 Bank of New York Company, Inc. 169,575 32
6,000 BankAmerica Corporation 315,750 60
3,900 Chase Manhattan Corporation 183,300 35
4,800 Chemical Banking Corporation 226,800 43
4,200 Citicorp 243,075 47
5,700 Federal National Mortgage Association 537,937 103
1,900 First Interstate Bancorp 152,475 29
4,300 First Union Corporation 194,575 37
950 Marsh & McLennan Companies, Inc. 77,069 15
5,100 Mellon Bank Corporation 212,287 41
6,300 NationsBank Corporation 337,838 65
7,600 Norwest Corporation 218,500 42
700 Wells Fargo & Company 126,175 24
- ------------------------------------------------------------------------------------------------------------------------------------
3,971,100 760
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--13.1%
20,150 A T & T Corp. 1,070,469 205
8,500 *Airtouch Communications, Inc. 242,250 46
1,700 Autodesk, Inc. 73,100 14
2,800 Automatic Data Processing, Inc. 176,050 34
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Technology (Continued)
4,800 *Cisco Systems, Inc. $ 242,700 $ 46
3,600 *Compaq Computer Corporation 163,350 31
7,600 First Data Corporation 432,250 83
7,000 Hewlett-Packard Company 521,500 100
10,400 Intel Corporation 658,450 126
7,450 International Business Machines Corporation 715,200 137
13,900 MCI Communications Corporation 305,800 59
8,300 *Microsoft Corporation 750,112 144
11,100 Motorola, Inc. 745,088 143
6,500 *National Semiconductor Corporation 180,375 35
6,300 *NETCOM On-Line Communication Services, Inc. 160,650 31
10,350 *Oracle Corporation 399,769 77
- ------------------------------------------------------------------------------------------------------------------------------------
6,837,113 1,311
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--1.4%
2,000 *AMR Corporation 149,250 29
2,100 Burlington Northern, Inc. 133,088 25
10,100 *Southern Pacific Rail Corporation 159,075 30
5,400 Union Pacific Corporation 299,025 57
- ------------------------------------------------------------------------------------------------------------------------------------
740,438 141
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities--8.6%
7,100 Ameritech Corporation 312,400 60
5,700 Bell Atlantic Corporation 319,200 61
7,500 BellSouth Corporation 476,250 91
8,000 Carolina Power & Light Company 242,000 46
14,100 CINergy Corporation 370,125 71
8,100 Duke Power Company 336,150 64
9,900 FPL Group, Inc. 382,387 73
12,300 GTE Corporation 419,737 80
5,300 NYNEX Corporation 213,325 41
5,500 Pacific Telesis Group 147,125 28
9,200 PacifiCorp 172,500 33
5,700 Peco Energy Company 157,462 30
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--BLUE CHIP SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Shares Invested
or for Each
Principal $10,000 of
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Utilities (continued)
7,700 SBC Communications, Inc. $ 366,713 $ 70
9,900 Texas Utilities Company 340,313 65
5,600 US West, Inc. 233,100 45
- ------------------------------------------------------------------------------------------------------------------------------------
4,488,787 858
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $40,070,214) 47,085,834 9,014
- ------------------------------------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS--.7%
Consumer Services
$ 500M Bell Sports Corporation, 4 1/4%, 11/15/2000 (cost $424,299) 373,750 72
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--8.9%
300M Ford Motor Credit Corporation, 5.97%, 7/19/95 299,105 57
600M General Electric Capital Corporation, 5.70%, 7/3/95 599,810 115
1,500M Hertz Corporation, 5.94%, 8/7/95 1,490,842 285
1,900M McDonalds Corporation, 5.93%, 7/6/95 1,898,434 363
100M Prudential Funding Corporation, 5.93%, 7/13/95 99,786 19
250M Prudential Funding Corporation, 5.95%, 7/18/95 249,298 48
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-term Corporate Notes (cost $4,637,275) 4,637,275 887
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $45,131,788) 99.7% 52,096,859 9,973
Other Assets, Less Liabilities .3 135,515 27
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $52,232,374 $ 10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--CASH MANAGEMENT SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SHORT-TERM CORPORATE NOTES--99.8%
$ 180M Anheuser-Busch Companies Inc., 7/14/95 5.92% $ 179,615 $ 440
200M Central Louisiana Electric Co., 7/3/95 6.01 199,935 490
170M Chevron Oil Finance Co., 8/10/95 5.90 168,885 414
150M Colgate-Palmolive Co., 7/17/95 5.94 149,604 366
200M CPC International Inc., 8/14/95 5.93 198,550 486
200M Delaware Funding Corp., 8/24/95 5.93 198,221 486
200M Deluxe Corp., 8/3/95 5.85 198,928 487
200M Ford Motor Credit Co., 9/20/95 5.95 197,322 483
200M Hewlett-Packard Co., 9/28/95 5.87 197,097 483
100M Lilly (Eli) & Co., 9/12/95 5.92 98,800 242
125M National Rural Utilities Cooperative Finance Corp.,8/21/95 5.93 123,950 304
164M NYNEX Credit Co., 7/24/95 6.04 163,367 400
200M Paccar Financial Corp., 7/14/95 5.93 199,572 489
200M Penney (J.C.) Funding Corp., 7/21/95 5.93 199,341 488
150M Pepsico Inc., 7/3/95 5.87 149,951 367
200M Prudential Funding Corp., 7/7/95 5.87 199,804 489
175M Public Service Electric & Gas Co., 8/30/95 5.95 173,264 424
200M Raytheon Co., 7/6/95 5.87 199,837 490
200M The Stanley Works, 8/15/95 5.95 198,513 486
160M Texaco Inc., 7/20/95 5.94 159,499 391
150M US West Telecommunications Inc., 7/10/95 5.90 149,779 367
175M Winn-Dixie Stores Inc., 9/14/95 5.88 172,856 423
200M Wisconsin Electric Power Co., 8/7/95 5.88 198,791 488
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $4,075,481) 99.8% 4,075,481 9,983
Other Assets, Less Liabilities .2 6,978 17
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $4,082,459 $10,000
====================================================================================================================================
</TABLE>
*The interest rate shown is the effective rate at the time of purchase.
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--76.7%
Basic Industry--2.6%
4,400 Chesapeake Corporation $ 136,950 $ 35
19,300 *Interpool, Inc. 262,963 67
25,000 *Repap Enterprises, Inc. 193,750 50
5,600 *Sybron Chemicals, Inc. 75,950 19
6,600 Willamette Industries, Inc. 366,300 94
- ------------------------------------------------------------------------------------------------------------------------------------
1,035,913 265
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Goods--3.5%
13,650 Agco Corporation 511,875 130
14,200 Case Corporation 422,450 108
4,800 *Dovatron International, Inc. 117,600 30
11,400 *Encon Systems, Inc. 57,000 15
21,600 Owosso Corporation 252,450 65
- ------------------------------------------------------------------------------------------------------------------------------------
1,361,375 348
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Durables--1.9%
7,800 *Champion Enterprises, Inc. 123,825 32
9,200 Falcon Products, Inc. 117,300 30
8,200 Federal-Mogul Corporation 149,650 38
21,800 *National R.V. Holdings, Inc. 185,300 47
6,200 Oakwood Homes Corp. 158,875 41
- ------------------------------------------------------------------------------------------------------------------------------------
734,950 188
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-durables--3.6%
6,800 *Canadaigua Wine Company, Inc. 304,300 78
9,500 Dreyer's Grand Ice Cream, Inc. 347,938 89
24,500 *Grist Mill Company 269,500 69
13,500 *Lasermaster Technologies, Inc. 70,875 18
15,300 *Ralcorp Holdings, Inc. 349,987 90
3,900 *Recoton Corporation 76,050 19
- ------------------------------------------------------------------------------------------------------------------------------------
1,418,650 363
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Services--11.2%
10,300 Advo, Inc. 194,412 50
5,100 *Bed Bath & Beyond, Inc. 123,675 32
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Consumer Services (continued)
22,500 *Cinar Films, Inc. Class "B" $ 220,782 $ 56
8,200 *CUC International, Inc. 344,400 88
2,100 Dayton Hudson Corporation 150,675 39
9,400 Equifax, Inc. 313,725 80
18,300 Franklin Electronic Publishers, Inc. 468,937 120
21,100 *Home Shopping Network, Inc. 179,350 46
500 Houghton Mifflin Company 26,375 7
7,600 *Insurance Auto Auctions, Inc. 222,300 57
14,500 *Meyer (Fred), Inc. 393,312 101
18,400 *Monarch Casino & Resort, Inc. 96,600 25
11,000 *Rex Stores Corporation 154,000 39
17,600 Rite Aid Corporation 451,000 115
7,000 Talbots, Inc. 278,250 71
20,750 *US Office Products Company 249,000 64
11,100 *Viacom, Inc. Class "B" 514,762 131
- ------------------------------------------------------------------------------------------------------------------------------------
4,381,555 1,121
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--5.6%
9,800 *American Travellers Corporation 172,725 44
24,300 Amvestors Financial Corporation 282,487 72
18,000 *Credit Acceptance Corporation 369,000 94
9,100 First USA, Inc. 403,813 103
22,500 Independent Bank Corporation 156,094 40
12,500 Integon Corporation 212,500 54
24,500 *Penn Treaty American Corporation 312,375 80
16,350 Reliance Group Holdings, Inc. 106,275 27
7,182 Southern National Corporation 172,368 44
- ------------------------------------------------------------------------------------------------------------------------------------
2,187,637 558
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care/Miscellaneous--12.2%
12,400 *American Medical Response, Inc. 347,200 89
26,500 *Applied Bioscience International, Inc. 135,813 35
10,000 *Arbor Health Care Company 192,500 49
9,000 *Boston Scientific Corporation 286,875 73
9,400 Dentsply International, Inc. 338,400 87
26,300 *Ethical Holdings PLC (ADR) 151,225 39
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Health Care/Miscellaneous (continued)
13,000 Fisher Scientific International $ 430,625 $ 110
9,200 *Health Care and Retirement Corporation 269,100 69
18,300 Ivax Corporation 450,637 115
12,300 *Living Centers of America, Inc. 333,638 85
19,200 *Mid Atlantic Medical Services, Inc. 355,200 91
10,900 *Pacific Physicians Services, Inc. 141,700 36
16,000 *Quantum Health Resources, Inc. 264,000 68
6,500 *Rural/Metro Corporation 144,625 37
11,600 Teva Pharmaceutical Industries Ltd. 435,000 111
6,600 *Value Health, Inc. 212,850 54
7,200 *Watson Pharmaceuticals, Inc. 280,800 72
- ------------------------------------------------------------------------------------------------------------------------------------
4,770,188 1,220
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--34.9%
4,400 A T & T Corporation 233,750 60
14,200 *Adaptec, Inc. 525,400 133
10,800 *Altera Corporation 467,100 118
6,400 *Applied Materials, Inc. 554,400 141
8,600 *Atmel Corporation 476,225 121
11,900 *Bisys Group, Inc. 264,775 68
10,100 *Boston Technology, Inc. 188,112 48
11,400 *Broadway & Seymour, Inc. 236,550 60
3,500 Computer Associates International, Inc. 237,125 61
12,300 *Concentra Corporation 119,925 31
18,000 *Convex Computer Corporation 81,000 21
17,000 ECI Telecommunications Limited Designs (ADR) 232,687 60
5,500 *Electroglas, Inc. 314,875 81
13,900 *EMC Corporation 337,075 86
14,800 Ericsson (L.M.) Telephone Company (ADR) 296,000 76
7,800 FEI Company 101,400 26
6,400 *FileNet Corporation 258,400 66
18,200 *Fulcrum Technologies, Inc. 400,400 102
2,500 *General Instrument Corporation 95,937 25
8,600 *Integrated Device Technology, Inc. 397,750 102
26,000 *Integrated Micro Products PLC (ADR) 312,000 80
15,400 *Intersolv 358,050 92
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Technology (continued)
3,700 Lattice Semiconductor Corporation $ 127,187 $ 33
2,000 *Lotus Development Corporation 127,500 33
11,600 *LSI Logic Corporation 453,850 116
12,100 *Metatec Corporation 155,788 40
3,800 *Microsoft Corporation 343,425 88
6,000 Motorola, Inc. 402,750 103
17,700 *Mysoftware Company 221,250 57
21,200 *National Semiconductor Corporation 588,300 150
14,500 *NETCOM On-Line Communication Services, Inc. 369,750 95
9,600 Nokia Corp. (ADR) 572,400 146
12,700 *Octel Communications Corporation 371,475 95
13,350 *Oracle Corporation 515,644 132
58,800 *Plasma-Therm, Inc. 220,500 56
11,400 *Pyxis Corporation 257,925 66
11,600 Reynolds & Reynolds Company 342,200 88
10,400 *Teltrend, Inc. 205,400 53
12,500 *Tower Semiconductor Ltd. 362,500 93
13,900 US West, Inc. 578,588 148
16,700 *VLSI Technology, Inc. 503,088 129
7,500 *Wang Laboratories, Inc. 122,813 31
3,200 *Xilinx, Inc. 300,800 77
- ------------------------------------------------------------------------------------------------------------------------------------
13,632,069 3,487
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation--1.2%
17,400 *Southern Pacific Rail Corporation 274,050 70
31,000 *Transportacion Maritima Mexicana S.A. (ADR) 193,750 50
- ------------------------------------------------------------------------------------------------------------------------------------
467,800 120
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $23,538,591) 29,990,137 7,670
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--DISCOVERY SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONVERTIBLE BONDS--.3%
Health Care/Miscellaneous
$ 150M Pacific Physicians Services, Inc., 5 1/2%, 2003 (cost $150,000) $ 116,625 $ 30
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--22.9%
1,700M General Electric Credit Corporation, 5.94%, 7/14/95 1,696,354 434
1,600M Hertz Corporation, 5.94%, 8/7/95 1,590,232 406
2,800M McDonalds Corporation, 5.93%, 7/6/95 2,797,694 716
350M Philip Morris Companies, Inc., 5.97%, 7/31/95 348,258 89
150M Prudential Funding Corporation, 5.95%, 7/18/95 149,579 38
2,400M Prudential Funding Corporation, 5.90%, 8/11/95 2,383,873 610
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-term Corporate Notes (cost $8,965,990) 8,965,990 2,293
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $32,654,581) 99.9% 39,072,752 9,993
Other Assets, Less Liabilities .1 26,517 7
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $39,099,269 $ 10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GOVERNMENT SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS--48.8%
$ 1,100M Federal Farm Credit, 8.65%, 10/01/1999 $ 1,200,552 $ 1,316
1,000M Federal Home Loan Bank, 7.36%, 7/01/2004 1,056,483 1,158
39M Federal Home Loan Mortgage Corp., 6 1/2%, 4/1/2024 37,954 42
134M Federal Home Loan Mortgage Corp., 6 1/2%, 6/1/2024 129,190 142
1,100M Federal Home Loan Mortgage Corp., 6 1/2%, 9/1/2024 1,059,883 1,162
927M Federal National Mortgage Association, 9%, 10/1/2020 967,402 1,061
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Obligations (cost $4,434,535) 4,451,464 4,881
- ------------------------------------------------------------------------------------------------------------------------------------
MORTGAGE BACKED CERTIFICATES--14.7%
1,295M Government National Mortgage Association, 8 1/2%, 12/15/2025
(cost $1,345,448) 1,345,036 1,474
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--28.3%
2,000M U.S. Treasury Note, 6 1/4%, 5/31/2000 2,021,875 2,217
500M U.S. Treasury Note, 7 7/8%, 11/15/2004 556,953 611
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Obligations (cost $2,522,969) 2,578,828 2,828
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--4.9%
450M Xerox Corp., 6.20%, 7/5/95 (cost $449,690) 449,690 492
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $8,752,642) 96.7% 8,825,018 9,675
Other Assets, Less Liabilities 3.3 296,456 325
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $ 9,121,474 $ 10,000
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GROWTH SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--93.9%
Beverages/Soft Drinks--2.0%
18,000 PepsiCo, Inc. $ 821,250 $ 199
- ------------------------------------------------------------------------------------------------------------------------------------
Broadcast Media--4.0%
35,000 Comcast Corp. Special Shares Class "A" 649,688 158
21,400 *Viacom Inc. Class "B" 987,075 239
- ------------------------------------------------------------------------------------------------------------------------------------
1,636,763 397
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals/Diversified--5.6%
40,700 Albemarle Corp. 635,938 155
14,400 Engelhard Corp. 617,400 150
19,000 Morton International, Inc. 555,750 135
13,500 Nalco Chemical Company 491,063 119
- ------------------------------------------------------------------------------------------------------------------------------------
2,300,151 559
- ------------------------------------------------------------------------------------------------------------------------------------
Computers/Software/Business Equipment--2.2%
6,300 *Microsoft Corp. 569,363 138
9,800 Sensormatic Electronics Corp. 347,900 84
- ------------------------------------------------------------------------------------------------------------------------------------
917,263 222
- ------------------------------------------------------------------------------------------------------------------------------------
Computers Software/Services--4.3%
8,000 Automatic Data Processing, Inc. 503,000 122
12,000 *Computer Sciences Corporation 682,500 165
13,000 *Policy Management Systems Corporation 598,000 145
- ------------------------------------------------------------------------------------------------------------------------------------
1,783,500 432
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-durables--2.6%
16,000 Rubbermaid, Inc. 444,000 108
22,600 Sara Lee Corp. 644,100 156
- ------------------------------------------------------------------------------------------------------------------------------------
1,088,100 264
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Services--1.4%
36,000 *Price/Costco, Inc. 585,000 142
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Drugs--4.9%
14,000 Mallinckrodt Group $ 497,000 $ 121
30,000 *Perrigo Company 331,875 80
4,600 Pfizer, Inc. 424,925 103
15,000 Zeneca Group PLC 768,750 187
- ------------------------------------------------------------------------------------------------------------------------------------
2,022,550 491
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--4.5%
12,900 AMP, Inc. 545,025 132
11,000 Hubbell, Inc. Class "B" 621,500 151
15,000 York International 675,000 164
- ------------------------------------------------------------------------------------------------------------------------------------
1,841,525 447
- ------------------------------------------------------------------------------------------------------------------------------------
Electronics/Instruments/Components--3.7%
10,800 Hewlett-Packard Co. 804,600 195
10,800 Motorola, Inc. 724,950 176
- ------------------------------------------------------------------------------------------------------------------------------------
1,529,550 371
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--2.2%
7,600 Air Products and Chemicals, Inc. 423,700 103
13,500 Burlington Resources, Inc. 497,813 120
- ------------------------------------------------------------------------------------------------------------------------------------
921,513 223
- ------------------------------------------------------------------------------------------------------------------------------------
Energy Sources--1.1%
18,100 Noble Affiliates, Inc. 461,550 112
- ------------------------------------------------------------------------------------------------------------------------------------
Financial--1.9%
8,320 Federal National Mortgage Association 785,200 190
- ------------------------------------------------------------------------------------------------------------------------------------
Food/Beverages/Tobacco--1.0%
8,000 General Mills, Inc. 411,000 100
- ------------------------------------------------------------------------------------------------------------------------------------
Food Wholesalers--1.3%
19,000 Sysco Corporation 560,500 136
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care/Diversified--3.0%
18,000 Abbott Laboratories 729,000 177
42,800 *Beverly Enterprises 529,650 128
- ------------------------------------------------------------------------------------------------------------------------------------
1,258,650 305
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GROWTH SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Health Care/Miscellaneous--1.0%
12,800 *Genetics Institute, Inc. $ 432,000 $ 105
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance--5.1%
24,000 Ace Ltd. 696,000 169
5,450 American International Group 621,300 150
21,000 American Re Corporation 782,250 190
- ------------------------------------------------------------------------------------------------------------------------------------
2,099,550 509
- ------------------------------------------------------------------------------------------------------------------------------------
Machine Tools--2.1%
15,700 Illinois Tool Works, Inc. 863,500 209
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery/Diversified--1.1%
12,500 Foster Wheeler Corp. 440,625 107
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery/Manufacturing--1.1%
7,600 Minnesota Mining & Manufacturing Company 435,100 106
- ------------------------------------------------------------------------------------------------------------------------------------
Medical Supplies--1.7%
30,000 Hafslund Nycomed-Class "B" (ADR) 693,750 168
- ------------------------------------------------------------------------------------------------------------------------------------
Money Center Banks--3.9%
10,000 J.P. Morgan & Co. 701,250 170
16,000 Republic New York Corp. 896,000 217
- ------------------------------------------------------------------------------------------------------------------------------------
1,597,250 387
- ------------------------------------------------------------------------------------------------------------------------------------
Oil/Domestic--4.4%
13,300 Amoco Corp. 886,112 215
33,000 Unocal Corp. 911,625 221
- ------------------------------------------------------------------------------------------------------------------------------------
1,797,737 436
- ------------------------------------------------------------------------------------------------------------------------------------
Oil Service--1.0%
6,600 Schlumberger Ltd. 410,025 99
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--3.2%
5,300 International Paper Company 454,475 110
14,300 Kimberly-Clark Corp. 856,212 208
- ------------------------------------------------------------------------------------------------------------------------------------
1,310,687 318
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000 of
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Publishing/News--1.7%
21,500 EW Scripps Company $ 693,375 $ 168
- ------------------------------------------------------------------------------------------------------------------------------------
Publishing/Printing--3.1%
12,000 Dun & Bradstreet, Inc. 630,000 153
11,850 *Scholastic Corp. 642,862 156
- ------------------------------------------------------------------------------------------------------------------------------------
1,272,862 309
- ------------------------------------------------------------------------------------------------------------------------------------
Retail/Stores--4.6%
20,000 *Autozone, Inc. 502,500 122
18,000 May Department Stores, Inc. 749,250 182
24,600 Wal-Mart Stores, Inc. 658,050 159
- ------------------------------------------------------------------------------------------------------------------------------------
1,909,800 463
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--5.0%
20,000 *Compuware Corporation 615,000 149
20,000 *General Instrument Corporation 767,500 186
34,600 *Novell, Inc. 689,837 168
- ------------------------------------------------------------------------------------------------------------------------------------
2,072,337 503
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--7.1%
19,700 A T & T Corp. 1,046,562 254
38,000 Ericsson (L.M.) Telephone Co. (ADR) Class "B" 760,000 184
7,200 Nokia Corp. (ADR) Class "A" 429,300 104
18,000 Vodafone Group PLC (ADR) 681,750 166
- ------------------------------------------------------------------------------------------------------------------------------------
2,917,612 708
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone/Utilities--1.1%
14,300 *MFS Communications Company, Inc. 461,175 112
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--GROWTH SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Shares for Each
or $10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Transportation--1.0%
20,000 Werner Enterprises, Inc. $ 400,000 $ 97
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $32,681,466) 38,731,450 9,394
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--5.2%
$ 2,140M UBS Securities, Inc. 6 1/8%, 7/3/95, (collateralized by U.S.
Treasury Note, 7 1/4%, 11/30/1996) (cost $2,140,000) 2,140,000 519
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $34,821,466) 99.1% 40,871,450 9,913
Other Assets, Less Liabilities .9 360,065 87
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $41,231,515 $10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--HIGH YIELD SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--88.7%
Aerospace/Defense--2.0%
$ 229M Dyncorp, PIK, 16%, 2003 $ 228,760 $ 62
500M Fairchild Industries, Inc., 12 1/4%, 1999 508,750 137
- ------------------------------------------------------------------------------------------------------------------------------------
737,510 199
- ------------------------------------------------------------------------------------------------------------------------------------
Apparel/Textiles--1.6%
600M Westpoint Stevens, Inc., 9 3/8%, 2005 582,000 157
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive--2.2%
800M SPX Corp., 11 3/4%, 2002 837,000 225
- ------------------------------------------------------------------------------------------------------------------------------------
Chemicals--6.9%
700M Buckeye Cellulose, Inc., 10 1/4%, 2001 700,000 189
1,000M Harris Chemical North America, Inc., 0%-10 1/4%, 2001 910,000 245
600M Rexene Corp., 11 3/4%, 2004 646,500 174
300M Synthetic Industries, Inc., 12 3/4%, 2002 301,500 81
- ------------------------------------------------------------------------------------------------------------------------------------
2,558,000 689
- ------------------------------------------------------------------------------------------------------------------------------------
Computers/Software/Business Equipment--1.4%
500M Bell & Howell Co., 10 3/4%, 2002 532,500 143
- ------------------------------------------------------------------------------------------------------------------------------------
Conglomerates--2.4%
1,250M Eagle Industries, Inc., 0%-10 1/2%, 2003 893,750 241
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-durables--1.8%
650M Calmar, Inc., 12%, 1997 669,500 180
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical Equipment--3.8%
700M Essex Group, Inc., 10%, 2003 675,500 182
700M IMO Industries, Inc., 12%, 2001 719,250 194
- ------------------------------------------------------------------------------------------------------------------------------------
1,394,750 376
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--HIGH YIELD SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Energy Services--7.1%
$ 405M Clark Oil & Refining Corp., 10 1/2%, 2001 $ 426,263 $ 115
1,000M Clark R & M Holdings, Inc., 0%, 2000 620,000 167
700M Falcon Drilling Co., Inc., 12 1/2%, 2005 731,500 197
800M Giant Industries, Inc., 9 3/4%, 2003 780,000 210
111M Synergy Group, Inc., 9 1/2%, 2000 (Note 4) 99,900 27
- ------------------------------------------------------------------------------------------------------------------------------------
2,657,663 716
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services--3.2%
700M American Life Holding Co., 11 1/4%, 2004 728,000 196
660M Lomas Mortgage, USA, 10 1/4%, 2002 463,650 125
- ------------------------------------------------------------------------------------------------------------------------------------
1,191,650 321
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--3.3%
650M GB Property Funding, Inc., 10 7/8%, 2004 563,875 152
700M Showboat, Inc., 9 1/4%, 2008 647,500 174
- ------------------------------------------------------------------------------------------------------------------------------------
1,211,375 326
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare--10.4%
750M Abbey Healthcare Group, Inc., 9 1/2%, 2002 776,250 209
700M Genesis Healthcare, Inc., 9 3/4%, 2005 707,875 191
600M Integrated Health Services, Inc., 9 5/8%, 2002 (Note 5) 615,000 166
400M Integrated Health Services, Inc., 10 3/4%, 2004 428,000 115
500M Mediq/PRN Life Support Services, Inc., 11 1/8%, 1999 472,500 127
800M National Medical Enterprises, Inc., 10 1/8%, 2005 850,000 229
- ------------------------------------------------------------------------------------------------------------------------------------
3,849,625 1,037
- ------------------------------------------------------------------------------------------------------------------------------------
Media/Cable Television--11.1%
600M Adelphia Communications, Inc., 9 7/8%, 2005 534,000 144
1,000M Affiliated Newspaper Investments, 0%-13 1/4%, 2006 585,000 158
1,000M Bell Cablemedia, PLC., 0%-11.95%, 2004 672,500 181
500M Garden State Newspapers, Inc., 12%, 2004 502,500 135
750M Outdoor Systems, Inc., 10 3/4%, 2003 723,750 195
500M Rogers Cablesystems, Inc., 10%, 2005 515,625 139
600M World Color Press, Inc., 9 1/8%, 2003 591,000 159
- ------------------------------------------------------------------------------------------------------------------------------------
4,124,375 1,111
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Mining/Metals--8.9%
$ 700M Carbide/Graphite Group, Inc., 11 1/2%, 2003 $ 738,500 $ 199
800M Gulf States Steel, Inc., 13 1/2%, 2003 (Note 5) 780,000 210
900M WCI Steel, Inc., 10 1/2%, 2002 882,000 237
1,000M Wheeling-Pittsburgh Steel Corp., 9 3/8%, 2003 912,500 246
- ------------------------------------------------------------------------------------------------------------------------------------
3,313,000 892
- ------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous--3.0%
800M +Acme Holdings, Inc., 11 3/4%, 2000 408,000 110
700M Monarch Acquisition Corp., 12 1/2%, 2003 (Note 5) 703,500 189
- ------------------------------------------------------------------------------------------------------------------------------------
1,111,500 299
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--8.7%
500M Gaylord Container Corp., 11 1/2%, 2001 533,750 144
800M Rainy River Forest Products Co., Inc., 10 3/4%, 2001 836,000 225
800M S.D. Warren Co., Inc., 12%, 2004 868,000 234
1,000M Stone Container Corp., 9 7/8%, 2001 997,500 268
- ------------------------------------------------------------------------------------------------------------------------------------
3,235,250 871
- ------------------------------------------------------------------------------------------------------------------------------------
Real Estate/Construction--1.1%
450M Oriole Homes, Inc., 12 1/2%, 2003 394,875 106
- ------------------------------------------------------------------------------------------------------------------------------------
Retail-Food/Drug--2.3%
800M P&C Food Markets, Inc., 11 1/2%, 2001 838,000 226
- ------------------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--2.0%
1M Barry's Jewelers, Inc., 12 5/8%, 1996 323 --
750M General Host Co., Inc., 11 1/2%, 2002 753,750 203
- -----------------------------------------------------------------------------------------------------------------------------------
754,073 203
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--4.2%
1,400M Echostar Communications Corp., 0%-12 7/8%, 2004 682,500 184
550M Paging Network, Inc., 11 3/4%, 2002 594,688 160
400M PanAmSat Capital Corp., 0%-11 3/8%, 2003 288,000 78
- ------------------------------------------------------------------------------------------------------------------------------------
1,565,188 422
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--HIGH YIELD SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Principal Invested
Amount, for Each
Shares $10,000
or of Net
Warrants Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Transportation--1.3%
$ 500M Trism, Inc., 10 3/4%, 2000 $ 487,500 $ 131
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $33,441,120) 32,939,084 8,871
- ------------------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--.3%
Financial Services--.2%
4,000 *Olympic Financial, Ltd. (Note 4) 66,749 19
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--.0%
1,620 *Divi Hotels, Inc. (Note 4) 122 --
2,000 *Goldriver Hotel & Casino Corp., Series "B" 3,000 --
- ------------------------------------------------------------------------------------------------------------------------------------
3,122 --
- ------------------------------------------------------------------------------------------------------------------------------------
Media/Cable Television--.1%
1,000 *Affiliated Newspaper Investments 25,000 7
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $85,096) 94,871 26
- ------------------------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--6.5%
Financial Services--4.9%
7,000 California Federal Bank, 10 5/8%, Series "B" 749,000 202
10,000 First Nationwide Bank, 11 1/2% 1,076,250 290
- ------------------------------------------------------------------------------------------------------------------------------------
1,825,250 492
- ------------------------------------------------------------------------------------------------------------------------------------
Paper/Forest Products--.8%
10,800 S.D. Warren Co., Inc., 14% 307,800 82
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--.8%
300 PanAmSat Capital Corp., 12 3/4% 300,750 81
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Preferred Stocks (cost $2,299,700) 2,433,800 655
- ------------------------------------------------------------------------------------------------------------------------------------
WARRANTS--.5%
Financial Services--.0%
18 *Reliance Group Holdings, Inc. (expiring 1/28/97) 29 --
- ------------------------------------------------------------------------------------------------------------------------------------
Gaming/Lodging--.0%
200 *Goldriver Finance Corp., Liquidating Trust 3,000 1
4,200 *President Riverboat Casinos, Inc. (expiring 9/23/96)(Note 5) 16,800 5
- ------------------------------------------------------------------------------------------------------------------------------------
19,800 6
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Warrants for Each
or $10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Paper/Forest Products--.2%
10,800 *S.D. Warren Co., Inc. (expiring 12/15/06) $ 64,800 $ 17
- ------------------------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--.0%
100 *Payless Cashways, Inc. (expiring 11/1/96) 25 --
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--.3%
8,400 *Echostar Communications Corp. (expiring 6/1/04) 94,500 25
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $5,375) 179,154 48
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.7%
$ 750M Ford Motor Credit Corporation, 5.95%, 7/7/95 749,256 202
250M New England Loan, 6.28%, 7/5/95 249,826 67
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-term Corporate Notes (cost $999,082) 999,082 269
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $36,830,373) 98.7% 36,645,991 9,869
Other Assets, Less Liabilities 1.3 485,620 131
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $37,131,611 $ 10,000
====================================================================================================================================
</TABLE>
*Non-income producing
+In default as to principal and/or interest(Note 8)
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--93.8%
United States--22.6%
6,500 A T & T Corp. $ 345,313 $ 101
3,750 American International Group, Inc. 427,500 124
6,500 American Re Corp. 242,125 70
3,000 *AMR Corp. 223,875 65
35,000 Canadian Pacific Ltd. 608,125 177
2,000 Capital Cities ABC, Inc. 216,000 63
2,500 Dow Chemical Company 179,688 52
7,000 Exxon Corporation 494,375 144
2,500 Federal National Mortgage Association 235,938 69
5,000 General Electric Company 281,875 82
5,000 Gillette Company 223,125 65
4,000 Hewlett-Packard Co. 298,000 87
2,500 International Paper Co. 214,375 62
9,500 J.C. Penney Company 456,000 133
6,000 Johnson & Johnson 405,750 118
7,000 Kimberly Clark Corporation 419,125 122
10,000 MCI Communications 220,000 64
4,000 Minnesota Mining & Manufacturing Company 229,000 67
5,000 PepsiCo, Inc. 228,125 66
18,000 Unocal Corporation 497,250 145
696 *Viacom Inc., Class "A" 32,364 9
8,273 *Viacom Inc., Class "B" 383,660 112
20,000 Wal-Mart Stores 535,000 156
8,300 York International Corporation 373,500 109
- ------------------------------------------------------------------------------------------------------------------------------------
7,770,088 2,262
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Japan--13.4%
50,000 Chichibu Onoda Cement Co. $ 227,325 $ 66
30,000 Hitachi Co., Ltd. 298,584 87
2,000 Ito Yokado Co., Ltd. 105,300 30
9,000 Kokusai Electric Co., Ltd. 167,491 49
3,000 Kyocera Corp. 246,643 72
1,000 Kyoritsu Air Tech., Inc. 13,663 4
2,000 Mabuchi Motor Co., Ltd. 137,574 40
40,000 Minebea Co., Ltd. 256,300 74
28,000 Mitsui Petrochemical Industries 211,730 61
2,000 Murata Mfg. Co., Ltd. 75,618 22
1,000 Nihon Jumbo Co., Ltd. 28,151 8
25 Nippon Telegraph & Telephone Corp. 209,070 61
92,000 *NKK Corp. 215,639 63
10,000 Nomura Securities Co., Ltd. 174,322 51
6,000 Orix Corp. 199,293 58
2,000 Riso Kagaku Corp. 139,223 40
15,000 Sakura Bank, Ltd. 156,360 46
1,000 Sankyo Co., Ltd. 23,204 7
2,500 Sanyo Shinpan Finance Co., Ltd. 182,568 53
2,000 Secom Co., Ltd. 125,559 37
4,400 Shimamura Corp. 155,477 45
30,000 Showa Corporation 197,877 58
6,000 Sony Corp. 287,632 84
35,000 Sumitomo Realty & Development 208,597 61
21,000 Sumitomo Trust and Banking 254,770 74
7,000 TDK Corp. 318,256 93
- ------------------------------------------------------------------------------------------------------------------------------------
4,616,226 1,344
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
United Kingdom--7.6%
14,000 Abbey National PLC $ 104,236 $ 30
45,000 Bass PLC 430,614 126
212,000 BET PLC 414,842 122
15,000 British Telecommunications PLC 93,545 27
54,560 Cadbury Schweppes PLC (6,571 shares restricted)(Note 4) 398,408 116
50,512 Redland PLC 331,081 96
75,000 Royal Insurance Holdings PLC 368,685 107
45,000 Smith (W.H.) & Son Group "A" PLC 234,815 68
72,000 Tomkins PLC 257,724 75
- ------------------------------------------------------------------------------------------------------------------------------------
2,633,950 767
- ------------------------------------------------------------------------------------------------------------------------------------
France--6.9%
1,000 Canal Plus SA 137,184 40
3,117 Compagnie De Saint Gobain 376,805 110
1,528 EURO RSCG WORLDWIDE SA 159,813 47
1,019 Groupe Danone 171,532 50
7,600 Renault SA 238,308 69
5,034 Societe Generale Paris 588,812 171
4,200 Technip SA 261,660 76
5,122 Total SA 308,533 90
1,800 Ugine SA (Note 5) 126,622 37
- ------------------------------------------------------------------------------------------------------------------------------------
2,369,269 690
- ------------------------------------------------------------------------------------------------------------------------------------
Netherlands--5.4%
30,000 Elsevier NV CVA 354,075 103
10,301 International Nederlanden CVA 569,359 166
3,000 Royal Dutch Petroleum 366,074 107
2,500 Unilever NV CVA 325,055 95
9,000 *Vendex International NV (BDR) 237,986 69
- ------------------------------------------------------------------------------------------------------------------------------------
1,852,549 540
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Norway--4.2%
12,378 Hafslund Nyco Series "A" Free $ 291,127 $ 85
7,500 Kvaerner AS A 340,632 99
9,000 Orkla Series AS A 402,919 117
29,000 Saga Petroleum Series "A" Free 411,597 120
- ------------------------------------------------------------------------------------------------------------------------------------
1,446,275 421
- ------------------------------------------------------------------------------------------------------------------------------------
Australia--3.9%
20,000 Advance Bank of Australia 128,864 38
50,892 Amcor Ltd. 374,442 109
35,159 Australian & New Zealand Banking Group 124,606 36
37,119 Broken Hill Proprietary Ltd. 455,706 133
16,246 National Australia Bank Ltd. 128,053 37
67,492 Pacific Dunlop Ltd. 141,605 41
- ------------------------------------------------------------------------------------------------------------------------------------
1,353,276 394
- ------------------------------------------------------------------------------------------------------------------------------------
Hong Kong--3.3%
117,000 Cathay Pacific Airways Ltd. 170,867 50
92,000 Hong Kong Telecom 181,912 53
42,000 Hutchison Whampoa Ltd. 203,007 59
30,000 Sun Hung Kai Properties 221,970 65
34,000 Swire Pacific Class "A" 259,253 75
30,000 Wharf Holdings 97,899 28
- ------------------------------------------------------------------------------------------------------------------------------------
1,134,908 330
- ------------------------------------------------------------------------------------------------------------------------------------
Spain--3.2%
14,000 Banco Bilbao Vizcaya 404,079 118
4,000 Empresa Nacional De Electricidad S.A. 197,539 57
4,000 Empresa Nacional De Electricidad S.A. (ADR) 197,000 57
10,000 Repsol S.A. (ADR) 316,250 92
- ------------------------------------------------------------------------------------------------------------------------------------
1,114,868 324
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Switzerland--3.1%
500 Ciba Geigy AG Regd $ 366,283 $ 107
400 Nestle S.A. Regd 416,278 121
800 Schw Bankverein Br 283,305 82
- ------------------------------------------------------------------------------------------------------------------------------------
1,065,866 310
- ------------------------------------------------------------------------------------------------------------------------------------
Singapore--3.0%
34,000 Development Bank of Singapore 386,828 113
55,000 Keppel Corp. 448,652 131
18,000 Overseas Chinese Banking Corp. Ltd. 199,640 58
- ------------------------------------------------------------------------------------------------------------------------------------
1,035,120 302
- ------------------------------------------------------------------------------------------------------------------------------------
Germany--2.8%
1,300 Bayer AG 323,093 94
1,350 Mannesmann AG 412,084 120
550 Veba AG 215,769 63
- ------------------------------------------------------------------------------------------------------------------------------------
950,946 277
- ------------------------------------------------------------------------------------------------------------------------------------
New Zealand--2.4%
473,000 Brierley Investments Ltd. 357,162 104
84,000 Carter Holt Havley Ltd. 205,439 60
60,000 Lion Nathan Ltd. 118,680 35
38,000 Telecom Corp New Zealand Ltd. (Note 5) 142,200 41
- ------------------------------------------------------------------------------------------------------------------------------------
823,481 240
- ------------------------------------------------------------------------------------------------------------------------------------
Denmark--2.0%
24,700 Tele Danmark A/S (ADS) "B" 691,600 201
- ------------------------------------------------------------------------------------------------------------------------------------
Sweden--2.0%
10,100 Astra AB Series "A" Free 311,394 91
17,000 Pharmacia AB Series "A" Free 372,377 108
- ------------------------------------------------------------------------------------------------------------------------------------
683,771 199
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Malaysia--1.9%
98,000 Sime Darby Berhad $ 273,332 $ 80
23,000 Telekom Malaysia 174,529 51
50,000 Tenaga Nasional Berhad 204,060 59
- ------------------------------------------------------------------------------------------------------------------------------------
651,921 190
- ------------------------------------------------------------------------------------------------------------------------------------
Austria--1.2%
2,900 EVN 405,486 118
- ------------------------------------------------------------------------------------------------------------------------------------
Italy--.9%
110,000 Telecom Italia S.P.A. 298,012 86
- ------------------------------------------------------------------------------------------------------------------------------------
Canada--.9%
20,000 Westcoast Energy, Inc. 296,606 86
- ------------------------------------------------------------------------------------------------------------------------------------
Mexico--.7%
20,000 Kimberly Clark Mexican Class "A" 229,724 67
- ------------------------------------------------------------------------------------------------------------------------------------
Portugal--.6%
10,700 *Portugal Telecom (ADS) 203,300 59
- ------------------------------------------------------------------------------------------------------------------------------------
Belgium--.5%
4,000 Delhaize Le Lion 179,916 52
- ------------------------------------------------------------------------------------------------------------------------------------
Phillipines--.5%
204,600 Pilipino Telephone (When-Issued) 161,820 47
- ------------------------------------------------------------------------------------------------------------------------------------
Chile--.4%
1,500 Compania De Telefonos De Chile S.A. (ADR) 122,062 35
- ------------------------------------------------------------------------------------------------------------------------------------
Argentina--.3%
5,000 YPF S.A. Class "D" (ADR) 94,374 27
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
India--.1%
2,000 ITC Ltd. (GDR) (Note 5) $ 15,414 $ 4
1,000 Reliance Industries Ltd. (GDR) (Note 5) 16,815 5
- ------------------------------------------------------------------------------------------------------------------------------------
32,229 9
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $28,131,873) 32,217,643 9,377
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--3.8%
$ 450M United States Treasury Bill, 5.59%, 7/27/95 448,183 131
400M United States Treasury Bill, 5.65%, 7/27/95 398,368 116
475M United States Treasury Bill, 5.655%, 7/27/95 473,060 137
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Obligations (cost $1,319,611) 1,319,611 384
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--1.4%
486M Paine Webber Inc., 6.2%, 7/3/95 (collateralized by U.S. Treasury Notes
7 1/4%, 5/15/2016) (cost $486,000) 486,000 142
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $29,937,484) 99.0% 34,023,254 9,903
Other Assets, Less Liabilities 1.0 334,345 97
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $34,357,599 $ 10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INTERNATIONAL SECURITIES SERIES
At June 30, 1995, sector diversification of the portfolio was as follows:
- --------------------------------------------------------------------------------
Percentage
Sector Diversification of Net Assets Value
- --------------------------------------------------------------------------------
Financial Services ............................... 9.4% $ 3,248,145
Telecommunications ............................... 8.3 2,837,300
Food/Beverage/Tobacco ............................ 6.8 2,321,014
Drugs ............................................ 6.1 2,093,228
Utilities ........................................ 4.4 1,516,460
Industrial Services .............................. 4.2 1,441,229
Electrical Equipment ............................. 3.9 1,334,642
Energy ........................................... 3.7 1,271,073
Retail/General Merchandise ....................... 3.5 1,187,717
Finance .......................................... 3.2 1,088,437
Automotive ....................................... 3.1 1,066,679
Insurance ........................................ 3.0 1,038,310
Paper/Forest products ............................ 3.0 1,023,980
Transportation ................................... 2.9 1,002,867
Household Products ............................... 2.8 967,305
Media/Cable/Television ........................... 2.7 938,958
Energy Exploration/Production .................... 2.6 908,847
Electronics/Instruments/Components ............... 2.5 845,938
Retail Trade ..................................... 2.1 716,777
Conglomerates .................................... 2.1 707,905
Metals/Miscellaneous ............................. 1.7 582,328
Building Materials ............................... 1.6 556,271
Manufacturing/Diversified ........................ 1.6 553,689
Real Estate/Construction ......................... 1.6 547,194
Entertainment .................................... 1.2 416,024
Chemicals ........................................ 1.2 408,233
Machinery/Diversified ............................ 1.1 395,523
Electronics/Instrumentation ...................... 0.9 318,256
Natural Gas ...................................... 0.9 308,533
Basic Industry ................................... 0.7 229,000
Housing .......................................... 0.6 208,597
Broadcast Media .................................. 0.4 137,184
Repurchase Agreements ............................ 1.4 486,000
U.S. Government Obligations ...................... 3.8 1,319,611
- --------------------------------------------------------------------------------
Total Investments 99.0 34,023,254
Other Assets, Less Liabilities 1.0 334,345
- --------------------------------------------------------------------------------
Net Assets 100.0% $34,357,599
================================================================================
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INVESTMENT GRADE SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--77.3%
Aerospace/Defense--6.0%
$ 300M Boeing Co., 6.35%, 2003 $ 294,202 $ 217
250M Lockheed Corp., 6 3/4%, 2003 250,029 185
250M Rockwell International Corp., 8 3/8%, 2001 272,629 201
- ------------------------------------------------------------------------------------------------------------------------------------
816,860 603
- ------------------------------------------------------------------------------------------------------------------------------------
Building Materials--.8%
100M Masco Corp., 9%, 2001 111,695 82
- ------------------------------------------------------------------------------------------------------------------------------------
Conglomerates--4.3%
300M Hanson Overseas, B.V., 7 3/8%, 2003 310,378 229
250M Tenneco, Inc., 7 7/8%, 2002 264,987 196
- ------------------------------------------------------------------------------------------------------------------------------------
575,365 425
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Non-durables--2.4%
300M American Home Products Corp., 7.90%, 2005 320,751 237
- ------------------------------------------------------------------------------------------------------------------------------------
Consumer Products--1.9%
250M Mattel, Inc., 6 3/4%, 2000 250,567 185
- ------------------------------------------------------------------------------------------------------------------------------------
Electric & Gas Utilities--15.0%
250M Baltimore Gas & Electric Co., 6 1/2%, 2003 246,771 182
200M Carolina Power & Light Co., 7 3/4%, 2003 204,064 151
250M Duke Power Co., 5 7/8%, 2003 236,240 174
200M Kansas Gas & Electric Co., 7.60%, 2003 207,682 153
75M Old Dominion Electric Cooperative, 7.97%, 2002 79,633 59
300M Pennsylvania Power & Light Co., 6 7/8%, 2003 297,220 219
250M Philadelphia Electric Co., 8%, 2002 264,960 196
200M SCE Capital Corp., 7 3/8%, 2003 204,452 151
75M Southwestern Electric Power Co., 7%, 2007 75,497 56
200M Unicom Corporation, 8 1/4%, 2006 212,861 157
- ------------------------------------------------------------------------------------------------------------------------------------
2,029,380 1,498
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--2.4%
300M Baroid Corp., 8%, 2003 324,532 240
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Financial Services--12.4%
$75M Banc One Corp., 7 1/4%, 2002 $ 76,967 $ 57
40M BankAmerica Corp., 9 1/2%, 2001 45,189 33
200M Barnett Banks, Inc., 8 1/2%, 1999 212,454 157
300M Chemical Bank, Inc., 7%, 2005 300,025 222
200M Citicorp, 8%, 2003 212,243 157
150M First Union Corp., 8 1/8%, 2002 160,790 119
250M Fleet Financial Group, 6 7/8%, 2003 247,958 183
250M Mellon Bank N.A., 6 1/2%, 2005 241,517 178
50M Meridian Bancorp, 7 7/8%, 2002 52,702 39
75M Morgan Guaranty Trust Co., 7 3/8%, 2002 78,279 58
50M Nationsbank Corporation., 8 1/8%, 2002 53,365 39
- ------------------------------------------------------------------------------------------------------------------------------------
1,681,489 1,242
- ------------------------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--1.7%
25M Coca-Cola Enterprises, Inc., 7 7/8%, 2002 26,695 20
200M Philip Morris Cos., Inc., 7 1/8%, 2002 202,017 149
- ------------------------------------------------------------------------------------------------------------------------------------
228,712 169
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare--1.3%
150M Healthtrust, Inc., 8 3/4%, 2005 168,750 125
- ------------------------------------------------------------------------------------------------------------------------------------
Investment/Finance Companies--7.0%
300M Associates Corp. of North America, 7 7/8%, 2001 318,462 235
300M General Electric Capital Corp., 7 7/8%, 2006 329,566 244
300M General Motors Acceptance Corp., 7 1/8%, 1999 305,363 225
- ------------------------------------------------------------------------------------------------------------------------------------
953,391 704
- ------------------------------------------------------------------------------------------------------------------------------------
Oil/Natural Gas--3.8%
250M BP America, Inc., 7 7/8%, 2002 267,364 197
250M Marathon Oil Co., 8 1/2%, 2000 250,520 185
- ------------------------------------------------------------------------------------------------------------------------------------
517,884 382
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--INVESTMENT GRADE SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Paper/Forest Products--4.0%
$ 100M S. D. Warren Company, 12%, 2004 $ 108,500 $ 80
150M Stone Container Corp., 10 3/4%, 2002 158,250 117
250M Temple Inland, Inc., 9%, 2001 279,059 206
- ------------------------------------------------------------------------------------------------------------------------------------
545,809 403
- ------------------------------------------------------------------------------------------------------------------------------------
Retail/General Merchandise--1.8%
250M Penney J.C. & Co., 6 1/8%, 2003 238,846 176
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--3.9%
250M International Business Machines Corp., 6 3/8%, 2000 249,433 184
275M Xerox Corp., 7.15%, 2004 281,290 208
- ------------------------------------------------------------------------------------------------------------------------------------
530,723 392
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--1.5%
200M Tele-Communications, Inc., 8 1/4%, 2003 206,176 153
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone--7.1%
100M Allnet Communication Services, Inc., 9%, 2003 106,625 79
30M GTE Corp., 8.85%, 1998 31,878 24
350M MCI Communication Corp., 7 1/2%, 2004 366,803 270
200M Pacific Bell Telephone Co., 7%, 2004 202,732 150
250M Southern Bell Telephone & Telegraph Co., Inc., 8 1/8%, 2017 259,497 191
- ------------------------------------------------------------------------------------------------------------------------------------
967,535 714
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $10,331,472) 10,468,465 7,730
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--2.2%
300M Federal Home Loan Mortgage Corp., 7.88%, 2004 (cost $300,000) 305,056 225
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--9.5%
1,200M U.S. Treasury Note, 7 3/4%, 2000 (cost $1,280,312) 1,282,687 947
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--8.3%
$ 800M A T & T Capital Corp., 5.95%, 7/14/95 $ 798,280 $ 589
325M Ford Motor Credit Corp., 5.97%, 7/7/95 324,674 240
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-term Corporate Notes (cost $1,122,954) 1,122,954 829
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $13,034,738) 97.3% 13,179,162 9,731
Other Assets, Less Liabilities 2.7 364,256 269
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $13,543,418 $ 10,000
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY ZERO COUPON OBLIGATIONS--74.7%
$ 570M Agency For International Development-Israel ("AID"), 2/15/2007 $ 264,458 $ 1,409
119M Agency For International Development-Israel ("AID"), 3/15/2007 54,893 293
66M Federal Judiciary Office Building ("JOBS"), 8/15/2006 31,173 166
93M Financing Corporations ("FICOS"), 6/6/2007 41,063 219
109M Financing Corporations ("FICOS"), 12/6/2007 46,284 247
67M Financing Corporations ("FICOS"), 12/27/2007 28,318 151
175M Government Trust Certificate, 11/15/2006 82,217 438
526M Government Trust Certificate, 11/15/2007 229,236 1,222
95M International Bank for Reconstruction & Development, 2/15/2007 43,242 230
554M Resolution Funding Corporation, 10/15/2007 246,572 1,314
328M Tennessee Valley Authority, 4/15/2007 148,706 793
425M Tennessee Valley Authority, 10/15/2007 185,659 990
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Zero Coupon Obligations
(cost $1,367,107) 1,401,821 7,472
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED STATES TREASURY ZERO COUPON OBLIGATIONS--14.8%
63M Certificate of Accrual on Treasury Securities ("CATS"), 11/15/2007 27,868 149
67M Coupon Under Book Entry System ("CUBES"), 11/15/2006 31,992 171
62M Treasury Investors Growth Receipts ("TIGERS"), 11/15/2007 27,398 146
62M Treasury Receipts, 11/15/2007 27,426 146
365M U.S. Treasury Strips, 11/15/2007 163,520 872
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of United States Treasury Zero Coupon Obligations
(cost $263,534) 278,204 1,484
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS ZERO COUPON OBLIGATIONS--3.5%
Miscellaneous
150M Los Angeles Cnty Calif. Pension Oblig., 6/30/2007 (cost $63,222) 65,063 345
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $1,693,863) 93.0% 1,745,088 9,301
Other Assets, Less Liabilities 7.0 131,183 699
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $1,876,271 $ 10,000
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--UTILITIES INCOME SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--91.7%
Consumer Services--1.0%
3,500 *Tele-Communications, Inc. $ 82,031 $ 95
- ------------------------------------------------------------------------------------------------------------------------------------
Electric & Gas Utilities--.9%
3,500 Portland General Corporation 77,438 90
- ------------------------------------------------------------------------------------------------------------------------------------
Electric Power--19.3%
2,500 Boston Edison Company 65,313 76
2,000 CMS Energy Corporation 49,250 57
7,000 DPL, Inc. 154,875 179
5,250 DQE, Inc. 123,375 143
2,000 Eastern Utilities Association 45,250 52
1,000 Empresa Nacional De Electricidad 49,250 57
5,000 General Public Utilities Corporation 148,750 172
4,000 Illinova Corporation 101,500 117
3,000 New England Electric System 103,500 120
3,000 NIPSCO Industries, Inc. 102,000 118
4,000 Northeast Utilities 90,000 104
6,500 Pinnacle West Capital Corporation 159,250 184
5,500 Public Service Company of Colorado 178,750 207
3,000 *Public Service Company of New Mexico 42,750 49
6,000 Teco Energy, Inc. 131,250 152
4,500 Wisconsin Energy Corporation 126,000 146
- ------------------------------------------------------------------------------------------------------------------------------------
1,671,063 1,933
- ------------------------------------------------------------------------------------------------------------------------------------
Energy--9.0%
400 Atlantic Richfield Company 43,900 51
3,500 Enron Corporation 122,938 143
400 Mobil Corporation 38,400 44
3,000 NICOR, Inc. 80,625 93
6,000 Pacific Enterprises 147,000 170
3,000 Panhandle Eastern Corporation 73,125 85
500 Royal Dutch Petroleum Company 60,938 70
3,500 Sonat, Inc. 106,750 123
3,000 Williams Companies, Inc. 104,624 121
- ------------------------------------------------------------------------------------------------------------------------------------
778,300 900
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Portfolio of Investments
First Investors Life Series Fund--UTILITIES INCOME SERIES
June 30, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
of Net
Shares Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Miscellaneous--1.3%
2,500 Tenneco, Inc. $ 115,000 $ 133
- ------------------------------------------------------------------------------------------------------------------------------------
Natural Gas--8.0%
3,000 Atlanta Gas Light Company 104,250 121
3,000 Brooklyn Union Gas Company 78,750 91
4,500 MCN Corporation 88,875 103
2,000 National Fuel Gas Company 57,250 66
4,000 New Jersey Resources Corporation 92,500 107
3,500 Piedmont Natural Gas Company 72,625 84
4,500 UGI Corporation 95,063 110
2,500 Washington Energy Company 40,937 47
2,000 Wicor, Inc. 56,250 65
- ------------------------------------------------------------------------------------------------------------------------------------
686,500 794
- ------------------------------------------------------------------------------------------------------------------------------------
Railroads--.8%
2,500 Questar Corporation 71,875 83
- ------------------------------------------------------------------------------------------------------------------------------------
Technology--5.7%
5,000 *Airtouch Communications, Inc. 142,500 165
3,000 A T & T Corp. 159,375 184
4,000 MCI Communications Corporation 88,000 102
3,000 Sprint Corporation 100,875 117
- ------------------------------------------------------------------------------------------------------------------------------------
490,750 568
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications--3.5%
5,000 *Mobile Telecommunication Technologies Corporation 136,875 158
2,500 *Paging Network, Inc. 85,625 99
3,000 WorldCom, Inc. 81,000 94
- ------------------------------------------------------------------------------------------------------------------------------------
303,500 351
- ------------------------------------------------------------------------------------------------------------------------------------
Telephone/Utilities--2.1%
2,500 Frontier Corporation 60,000 69
2,000 *MFS Communications Company, Inc. 64,500 75
1,500 Telefonica De Espana (ADR) 58,125 67
- ------------------------------------------------------------------------------------------------------------------------------------
182,625 211
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
Shares for Each
or $10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Utilities--40.1%
3,500 American Electric Power Company $ 122,937 $ 143
4,000 Ameritech Corporation 176,000 204
5,000 Baltimore Gas & Electric Company 125,000 145
4,000 Bell Atlantic Corporation 224,000 259
3,500 BellSouth Corporation 222,250 258
3,500 Carolina Power & Light Company 105,875 122
5,500 Cinergy Corporation 144,375 167
3,500 Detroit Edison Company 103,250 119
4,500 Duke Power Company 186,750 216
5,500 FPL Group, Inc. 212,437 246
7,000 GTE Corporation 238,875 276
4,000 Houston Industries, Inc. 168,500 195
3,000 Northern States Power Company 138,375 160
2,500 NYNEX Corporation 100,625 116
3,000 Ohio Edison Company 67,875 78
7,500 PacifiCorp 140,625 163
4,000 Peco Energy Company 110,500 128
4,500 Public Service Enterprise Group, Inc. 124,875 144
4,000 SBC Communications, Inc. 190,500 220
4,500 SCE Corp. 77,063 89
6,500 Southern Company 145,437 168
3,000 Texas Utilities Company 103,125 119
3,500 Unicom Corporation 93,188 108
3,500 US West, Inc. 145,687 167
- ------------------------------------------------------------------------------------------------------------------------------------
3,468,124 4,010
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $7,486,027) 7,927,206 9,168
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--3.4%
$ 100M Ford Motor Credit Corporation, 5.97%, 7/19/95 99,702 115
200M General Electric Credit Corporation, 5.85%, 7/6/95 199,837 231
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $299,539) 299,539 346
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $7,785,566) 95.1% 8,226,745 9,514
Other Assets, Less Liabilities 4.9 420,054 486
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $ 8,646,799 $ 10,000
====================================================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
<PAGE>
Statement of Assets and Liabilities
FIRST INVESTORS LIFE SERIES FUND
June 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CASH
BLUE CHIP MANAGEMENT DISCOVERY GOVERNMENT GROWTH
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost ................................. $ 45,131,788 $ 4,075,481 $ 32,654,581 $ 8,752,642 $ 34,821,466
============ ============ ============ ============ ============
At value (Note 1A) ................................. $ 52,096,859 $ 4,075,481 $ 39,072,752 $ 8,825,018 $ 40,871,450
Cash ................................................. 269,144 13,833 382,276 160,267 102,449
Receivables:
Trust shares sold .................................. 220,212 11,575 148,587 21,579 185,901
Investment securities sold ......................... 252,152 -- 243,950 -- 13,485
Interest and dividends ............................. 90,076 -- 7,664 118,013 82,279
Other assets ......................................... 4,969 2,080 4,552 933 4,238
------------ ------------ ------------ ------------ ------------
Total Assets ......................................... 52,933,412 4,102,969 39,859,781 9,125,810 41,259,802
------------ ------------ ------------ ------------ ------------
Liabilities
Payables:
Investment securities purchased .................... 662,912 -- 735,725 -- --
Trust shares redeemed .............................. -- -- 352 767 --
Dividend payable ................................... -- 18,335 -- -- --
Accrued advisory fee ................................. 37,389 1,188 23,705 2,636 25,114
Accrued expenses ..................................... 737 987 730 933 3,173
------------ ------------ ------------ ------------ ------------
Total Liabilities .................................... 701,038 20,510 760,512 4,336 28,287
------------ ------------ ------------ ------------ ------------
Net Assets ........................................... $ 52,232,374 $ 4,082,459 $ 39,099,269 $ 9,121,474 $ 41,231,515
============ ============ ============ ============ ============
Net Assets Consist of:
Capital paid in ...................................... $ 44,273,674 $ 4,082,459 $ 33,274,962 $ 9,381,831 $ 34,634,131
Undistributed net investment income .................. 485,292 -- 103,838 293,079 198,806
Accumulated net realized gain (loss) on
investments and foreign currencies ................. 508,337 -- (697,702) (625,812) 348,594
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ....................................... 6,965,071 -- 6,418,171 72,376 6,049,984
------------ ------------ ------------ ------------ ------------
Total ................................................ $ 52,232,374 $ 4,082,459 $ 39,099,269 $ 9,121,474 $ 41,231,515
============ ============ ============ ============ ============
Shares of Beneficial Interest Outstanding
(Note 2) ........................................... 3,496,919 4,082,459 1,830,046 914,605 2,182,733
============ ============ ============ ============ ============
Net Asset Value, Offering and Redemption
Price Per Share (Net assets divided by
shares outstanding) ................................ $ 14.94 $ 1.00 $ 21.37 $ 9.97 $ 18.89
============ ============ ============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
Statement of Assets and Liabilities
FIRST INVESTORS LIFE SERIES FUND
June 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INVESTMENT TARGET UTILITIES
HIGH YIELD SECURITIES GRADE MATURITY 2007 INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments in securities:
At identified cost ................................. $ 36,830,373 $ 29,937,484 $ 13,034,738 $ 1,693,863 $ 7,785,566
============ ============ ============ ============ ============
At value (Note 1A) ................................. $ 36,645,991 $ 34,023,254 $ 13,179,162 $ 1,745,088 $ 8,226,745
Cash ................................................. 284,886 34,661 80,680 66,519 264,754
Receivables:
Trust shares sold .................................. 61,094 210,272 49,102 130,280 83,045
Investment securities sold ......................... -- 610,101 -- -- 47,858
Interest and dividends ............................. 695,543 124,191 239,063 -- 26,705
Other assets ......................................... 4,413 3,599 1,234 510 665
------------ ------------ ------------ ------------ ------------
Total Assets ......................................... 37,691,927 35,006,078 13,549,241 1,942,397 8,649,772
------------ ------------ ------------ ------------ ------------
Liabilities
Payables:
Investment securities purchased .................... 530,861 610,001 -- 65,616 --
Trust shares redeemed .............................. 2,052 3,446 -- -- --
Dividend payable ................................... -- -- -- -- --
Accrued advisory fee ................................. 23,065 21,363 3,883 -- 2,413
Accrued expenses ..................................... 4,338 13,669 1,940 510 560
------------ ------------ ------------ ------------ ------------
Total Liabilities .................................... 560,316 648,479 5,823 66,126 2,973
------------ ------------ ------------ ------------ ------------
Net Assets ........................................... $ 37,131,611 $ 34,357,599 $ 13,543,418 $ 1,876,271 $ 8,646,799
============ ============ ============ ============ ============
Net Assets Consist of:
Capital paid in ...................................... $ 36,346,623 $ 29,682,703 $ 13,055,300 $ 1,814,384 $ 8,194,363
Undistributed net investment income .................. 1,755,094 331,822 421,550 9,951 145,753
Accumulated net realized gain (loss) on
investments and foreign currencies ................. (785,724) 252,805 (77,856) 711 (134,496)
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ....................................... (184,382) 4,090,269 144,424 51,225 441,179
------------ ------------ ------------ ------------ ------------
Total ................................................ $ 37,131,611 $ 34,357,599 $ 13,543,418 $ 1,876,271 $ 8,646,799
============ ============ ============ ============ ============
Shares of Beneficial Interest Outstanding
(Note 2) ........................................... 3,450,845 2,426,848 1,233,501 170,938 861,787
============ ============ ============ ============ ============
Net Asset Value, Offering and Redemption
Price Per Share (Net assets divided by
shares outstanding) ................................ $ 10.76 $ 14.16 $ 10.98 $ 10.98 $ 10.03
============ ============ ============ ============ ============
</TABLE>
<PAGE>
Statement of Operations
FIRST INVESTORS LIFE SERIES FUND
Six Months ended June 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
CASH
BLUE CHIP MANAGEMENT DISCOVERY GOVERNMENT
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income
Income:
Interest ............................................ $ 143,558 $ 121,367 $ 182,095 $ 308,541
Dividends ........................................... 539,485 -- 65,068 --
Consent fees ........................................ -- -- -- --
----------- ----------- ----------- -----------
Total income .......................................... 683,043 121,367 247,163 308,541
----------- ----------- ----------- -----------
Expenses:
Advisory fee (Note 6) ............................... 173,933 15,177 126,703 31,578
Professional fees ................................... 6,695 2,364 4,563 3,833
Reports to shareholders ............................. 7,790 736 5,627 1,466
Custodian fees ...................................... 5 2,248 163 --
Other expenses ...................................... 7,694 581 5,779 1,455
----------- ----------- ----------- -----------
Total expenses ........................................ 196,117 21,106 142,835 38,332
Less: Expenses waived or assumed
(Note 6) ......................................... -- 9,070 -- 23,595
----------- ----------- ----------- -----------
Expenses--net ......................................... 196,117 12,036 142,835 14,737
----------- ----------- ----------- -----------
Net investment income ................................. 486,926 109,331 104,328 293,804
----------- ----------- ----------- -----------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currencies (Note 3):
Net realized gain (loss) on investments
and foreign currencies .............................. 509,385 -- (697,154) 162,382
Net unrealized appreciation of
investments and foreign currency
related transactions ................................ 6,611,273 -- 5,445,027 315,853
----------- ----------- ----------- -----------
Net gain on investments ............................... 7,120,658 -- 4,747,873 478,235
----------- ----------- ----------- -----------
Net Increase in Net Assets Resulting
from Operations ..................................... $ 7,607,584 $ 109,331 $ 4,852,201 $ 772,039
=========== =========== =========== ===========
</TABLE>
+ Net of $22,045 foreign taxes withheld
(a) Includes $5,323 of net unrealized appreciation on foreign currency
transactions
* From April 25, 1995 (commencement of operations) to June 30, 1995
See notes to financial statements
<PAGE>
Statement of Operations
FIRST INVESTORS LIFE SERIES FUND
Six Months ended June 30, 1995
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL INVESTMENT TARGET UTILITIES
GROWTH HIGH YIELD SECURITIES GRADE MATURITY 2007* INCOME
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income
Income:
Interest ................................ $ 62,160 $ 1,799,677 $ 72,423 $ 452,640 $ 9,951 $ 21,290
Dividends ............................... 297,461 94,779 427,353+ -- -- 136,309
Consent fees ............................ -- 10,537 -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total income .............................. 359,621 1,904,993 499,776 452,640 9,951 157,599
----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Advisory fee (Note 6) ................... 136,284 130,208 121,094 46,605 1,578 24,406
Professional fees ....................... 7,234 6,197 7,915 5,024 -- 1,439
Reports to shareholders ................. 6,075 6,524 5,743 2,671 -- 900
Custodian fees .......................... 4,982 -- 23,278 3 -- --
Other expenses .......................... 6,547 4,505 4,557 1,618 510 1,173
----------- ----------- ----------- ----------- ----------- -----------
Total expenses ............................ 161,122 147,434 162,587 55,921 2,088 27,918
Less: Expenses waived or assumed
(Note 6) ............................. -- -- -- 24,856 2,088 16,528
----------- ----------- ----------- ----------- ----------- -----------
Expenses--net ............................. 161,122 147,434 162,587 31,065 -- 11,390
----------- ----------- ----------- ----------- ----------- -----------
Net investment income ..................... 198,499 1,757,559 337,189 421,575 9,951 146,209
----------- ----------- ----------- ----------- ----------- -----------
Realized and Unrealized Gain (Loss)
on Investments and Foreign
Currencies (Note 3):
Net realized gain (loss) on investments
and foreign currencies .................. 400,178 302,800 249,700 (30,316) 711 (34,421)
Net unrealized appreciation of
investments and foreign currency
related transactions .................... 4,716,892 1,677,843 1,895,911(a) 1,013,135 51,225 575,889
----------- ----------- ----------- ----------- ----------- -----------
Net gain on investments ................... 5,117,070 1,980,643 2,145,611 982,819 51,936 541,468
----------- ----------- ----------- ----------- ----------- -----------
Net Increase in Net Assets Resulting
from Operations ......................... $ 5,315,569 $ 3,738,202 $ 2,482,800 $ 1,404,394 $ 61,887 $ 687,677
=========== =========== =========== =========== =========== ===========
</TABLE>
+ Net of $22,045 foreign taxes withheld
(a) Includes $5,323 of net unrealized appreciation on foreign currency
transactions
* From April 25, 1995 (commencement of operations) to June 30, 1995
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
BLUE CHIP CASH MANAGEMENT
------------------------------ ------------------------------
1/1/95 to 1/1/95 to
6/30/95 1994 6/30/95 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income .................................... $ 486,926 $ 568,219 $ 109,331 $ 144,250
Net realized gain (loss) on investments and foreign
currencies ............................................. 509,385 2,931,871 -- 61
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ........................................... 6,611,273 (4,069,423) -- --
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations ...................................... 7,607,584 (569,333) 109,331 144,311
------------ ------------ ------------ ------------
Distributions to Shareholders from:
Net investment income .................................... (569,705) (204,030) (109,331) (144,311)
Net realized gain on investments ......................... (2,922,430) (416,537) -- --
------------ ------------ ------------ ------------
Total distributions .................................... (3,492,135) (620,567) (109,331) (144,311)
------------ ------------ ------------ ------------
Trust Share Transactions (a)
Issued ................................................... 4,240,735 9,253,157 697,204 828,637
Issued on reinvestments .................................. 3,492,135 620,566 91,068 144,311
Redeemed ................................................. (1,040,246) (1,289,081) (634,368) (1,286,977)
------------ ------------ ------------ ------------
Net increase (decrease) from trust share
transactions ......................................... 6,692,624 8,584,642 153,904 (314,029)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets .................. 10,808,073 7,394,742 153,904 (314,029)
Net Assets
Beginning of period ...................................... 41,424,301 34,029,559 3,928,555 4,242,584
------------ ------------ ------------ ------------
End of period+ ........................................... $ 52,232,374 $ 41,424,301 $ 4,082,459 $ 3,928,555
============ ============ ============ ============
+Includes undistributed net investment income of ........... $ 485,292 $ 568,071 $ -- $ --
============ ============ ============ ============
(a)Trust Shares Issued and Redeemed
Issued ................................................... 297,157 664,327 697,204 828,637
Issued on reinvestments .................................. 261,976 45,969 91,068 144,311
Redeemed ................................................. (74,498) (92,113) (634,368) (1,286,977)
------------ ------------ ------------ ------------
Increase (decrease) in shares .......................... 484,635 618,183 153,904 (314,029)
============ ============ ============ ============
</TABLE>
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
DISCOVERY GOVERNMENT
------------------------------ ----------------------------
1/1/95 to 1/1/95 to
6/30/95 1994 6/30/95 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income ...................................... $ 104,328 $ 93,202 $ 293,804 $ 530,105
Net realized gain (loss) on investments and foreign
currencies ............................................... (697,154) 1,992,419 162,382 (786,678)
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ............................................. 5,445,027 (2,687,366) 315,853 (75,120)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations ........................................ 4,852,201 (601,745) 772,039 (331,693)
------------ ------------ ----------- -----------
Distributions to Shareholders from:
Net investment income ...................................... (93,692) -- (507,584) (84,143)
Net realized gain on investments ........................... (1,992,932) (1,014,247) -- (138,692)
------------ ------------ ----------- -----------
Total distributions ...................................... (2,086,624) (1,014,247) (507,584) (222,835)
------------ ------------ ----------- -----------
Trust Share Transactions (a)
Issued ..................................................... 4,856,650 10,106,014 965,506 1,488,126
Issued on reinvestments .................................... 2,086,624 1,014,247 507,584 222,836
Redeemed ................................................... (853,196) (481,564) (494,034) (1,512,005)
------------ ------------ ----------- -----------
Net increase (decrease) from trust share
transactions ........................................... 6,090,078 10,638,697 979,056 198,957
------------ ------------ ----------- -----------
Net increase (decrease) in net assets .................... 8,855,655 9,022,705 1,243,511 (355,571)
Net Assets
Beginning of period ........................................ 30,243,614 21,220,909 7,877,963 8,233,534
------------ ------------ ----------- -----------
End of period+ ............................................. $ 39,099,269 $ 30,243,614 $ 9,121,474 $ 7,877,963
============ ============ =========== ===========
+Includes undistributed net investment income of ............. $ 103,838 $ 93,202 $ 293,079 $ 506,859
============ ============ =========== ===========
(a)Trust Shares Issued and Redeemed
Issued ..................................................... 241,717 501,020 99,991 151,268
Issued on reinvestments .................................... 109,304 51,897 53,999 22,959
Redeemed ................................................... (43,445) (24,001) (51,314) (152,565)
------------ ------------ ----------- -----------
Increase (decrease) in shares ............................ 307,576 528,916 102,676 21,662
============ ============ =========== ===========
</TABLE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
GROWTH
-------------------------------
1/1/95 to
6/30/95 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income ...................................... $ 198,499 $ 176,061
Net realized gain (loss) on investments and foreign
currencies ............................................... 400,178 555,580
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ............................................. 4,716,892 (1,490,527)
------------ -------------
Net increase (decrease) in net assets resulting
from operations ........................................ 5,315,569 (758,886)
------------ -------------
Distributions to Shareholders from:
Net investment income ...................................... (175,754) --
Net realized gain on investments ........................... (591,906) (336,304)
------------ -------------
Total distributions ...................................... (767,660) (336,304)
------------ -------------
Trust Share Transactions (a)
Issued ..................................................... 3,973,204 8,593,462
Issued on reinvestments .................................... 767,659 336,304
Redeemed ................................................... (854,449) (695,724)
------------ -------------
Net increase (decrease) from trust share
transactions ........................................... 3,886,414 8,234,042
------------ -------------
Net increase (decrease) in net assets .................... 8,434,323 7,138,852
Net Assets
Beginning of period ........................................ 32,797,192 25,658,340
------------ -------------
End of period+ ............................................. $ 41,231,515 $ 32,797,192
============ ============
+Includes undistributed net investment income of ............. $ 198,806 $ 176,061
============ ============
(a)Trust Shares Issued and Redeemed
Issued ..................................................... 225,485 510,485
Issued on reinvestments .................................... 45,612 20,645
Redeemed ................................................... (48,845) (41,089)
------------ -------------
Increase (decrease) in shares ............................ 222,252 490,041
============ ============
</TABLE>
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD INTERNATIONAL SECURITIES
----------------------------- -----------------------------
1/1/95 to 1/1/95 to
6/30/95 1994 6/30/95 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income ........................................ $ 1,757,559 $ 2,971,391 $ 337,189 $ 331,106
Net realized gain (loss) on investments and foreign
currencies ................................................. 302,800 (106,914) 249,700 913,209
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ............................................... 1,677,843 (3,352,582) 1,895,911 (1,619,867)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting
from operations .......................................... 3,738,202 (488,105) 2,482,800 (375,552)
------------ ------------ ------------ ------------
Distributions to Shareholders from:
Net investment income ........................................ (2,973,759) (1,135,309) (284,370) (87,059)
Net realized gain on investments ............................. -- -- (601,918) --
------------ ------------ ------------ ------------
Total distributions ........................................ (2,973,759) (1,135,309) (886,288) (87,059)
------------ ------------ ------------ ------------
Trust Share Transactions (a)
Issued ....................................................... 2,595,709 4,464,152 2,354,114 11,075,210
Issued on reinvestments ...................................... 2,973,759 1,135,309 886,288 87,058
Redeemed ..................................................... (1,487,046) (2,284,666) (1,787,812) (399,664)
------------ ------------ ------------ ------------
Net increase from trust share transactions ................. 4,082,422 3,314,795 1,452,590 10,762,604
------------ ------------ ------------ ------------
Net increase in net assets ................................. 4,846,865 1,691,381 3,049,102 10,299,993
Net Assets
Beginning of period .......................................... 32,284,746 30,593,365 31,308,497 21,008,504
------------ ------------ ------------ ------------
End of period+ ............................................... $ 37,131,611 $ 32,284,746 $ 34,357,599 $ 31,308,497
============ ============ ============ ============
+Includes undistributed net investment income of ............... $ 1,755,094 $ 2,971,294 $ 331,822 $ 279,003
============ ============ ============ ============
(a)Trust Shares Issued and Redeemed
Issued ....................................................... 246,004 416,564 172,814 811,007
Issued on reinvestments ...................................... 296,191 107,326 69,350 6,642
Redeemed ..................................................... (142,039) (214,630) (133,133) (29,290)
------------ ------------ ------------ ------------
Increase in shares ......................................... 400,156 309,260 109,031 788,359
============ ============ ============ ============
</TABLE>
*Commencement of Operations
**See Note 7
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
TARGET
MATURITY
INVESTMENT GRADE 2007 UTILITIES INCOME
--------------------------- ----------- -------------------------
1/1/95 to 4/25/95* to 1/1/95 to
6/30/95 1994 6/30/95 6/30/95 1994
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income .................................... $ 421,575 $ 729,582 $ 9,951 $ 146,209 $ 115,157
Net realized gain (loss) on investments and foreign
currencies ............................................. (30,316) (47,540) 711 (34,421) (100,075)
Net unrealized appreciation (depreciation) of
investments and foreign currency related
transactions ........................................... 1,013,135 (1,054,894) 51,225 575,889 (132,614)
------------ ------------ ---------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations ...................................... 1,404,394 (372,852) 61,887 687,677 (117,532)
------------ ------------ ---------- ----------- -----------
Distributions to Shareholders from:
Net investment income .................................... (605,201) (154,441) -- (110,535) (5,535)
Net realized gain on investments ......................... -- (90,556) -- -- --
------------ ------------ ---------- ----------- -----------
Total distributions .................................... (605,201) (244,997) -- (110,535) (5,535)
------------ ------------ ---------- ----------- -----------
Trust Share Transactions (a)
Issued ................................................... 1,163,493 2,762,399 1,314,384 3,287,704 4,449,169
Issued on reinvestments .................................. 605,201 244,996 -- 110,534 5,534
Redeemed ................................................. (626,945) (997,487) -- (48,608) (105,265)
------------ ------------ ---------- ----------- -----------
Net increase from trust share transactions ............. 1,141,749 2,009,908 1,314,384 3,349,630 4,349,438
------------ ------------ ---------- ----------- -----------
Net increase in net assets ............................. 1,940,942 1,392,059 1,376,271 3,926,772 4,226,371
Net Assets
Beginning of period ...................................... 11,602,476 10,210,417 500,000** 4,720,027 493,656
------------ ------------ ---------- ----------- -----------
End of period+ ........................................... $ 13,543,418 $ 11,602,476 $1,876,271 $ 8,646,799 $ 4,720,027
============ ============ ========== =========== ===========
+Includes undistributed net investment income of ........... $ 421,550 $ 605,176 $ 9,951 $ 145,753 $ 110,079
============ ============ ========== =========== ===========
(a)Trust Shares Issued And Redeemed
Issued ................................................... 109,331 264,613 120,938 341,571 474,683
Issued on reinvestments .................................. 59,159 24,055 -- 11,709 600
Redeemed ................................................. (60,030) (96,249) -- (5,127) (11,306)
------------ ------------ ---------- ----------- -----------
Increase in shares ..................................... 108,460 192,419 120,938 348,153 463,977
============ ============ ========== =========== ===========
</TABLE>
*Commencement of Operations
**See Note 7
See notes to financial statements
<PAGE>
Notes to Financial Statements
FIRST INVESTORS LIFE SERIES FUND
1. Significant Accounting Policies--The Fund, a Massachusetts business trust, is
registered under the Investment Company Act of 1940, as a diversified, open-end
management investment company. The Fund operates as a series fund, issuing
shares of beneficial interest in the Blue Chip, Cash Management, Discovery,
Government, Growth, High Yield, International Securities, Investment Grade,
Target Maturity 2007 and Utilities Income Series and accounts separately for the
assets, liabilities and operations of each Series.
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
system 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 markets are valued at the mean between
the last bid and asked prices. For the Government, High Yield and Investment
Grade Series, each security traded in the over-the-counter market (including
securities listed on exchanges or systems whose primary market is believed to be
over-the-counter) is valued at the mean between the last bid and asked prices
based upon quotes furnished by a market maker for such securities. The High
Yield, International Securities, Investment Grade and Target Maturity 2007
Series may use prices provided 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. Securities for which market quotations are not readily
available and any other assets are valued on a consistent basis at fair value as
determined in good faith by or under the supervision of the Fund's officers in
the manner specifically authorized by the trustees of the Fund.
The investments in the Cash Management Series, when purchased at a discount, are
valued at amortized cost and when purchased at face value, are valued at cost
plus accrued interest.
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 the 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, federal income taxes. At June 30, 1995, capital loss
carryovers were as follows:
Year Capital Loss
Carryovers Expire
----------------------------------
Series Total 1998 1999 2002
- ------ ---------- -------- -------- --------
GOVERNMENT ............... $ 788,194 $ -- $ -- $788,194
HIGH YIELD ............... 1,088,524 625,684 355,926 106,914
INVESTMENT GRADE ......... 47,540 -- -- 47,540
UTILITIES INCOME ......... 100,075 -- -- 100,075
C. Foreign Currency Translations--For valuation purposes, quotations of foreign
securities in foreign currency are translated to U.S. dollar equivalents using
the daily rate of exchange. Purchases and sales of investment securities,
dividend income and certain expenses are translated to U.S. dollars at the rates
of exchange prevailing on the respective dates of such transactions.
The 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 to due to changes
in market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
<PAGE>
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends and
foreign withholding taxes.
D. Distributions to Shareholders--Distributions to shareholders from net
investment income and net realized gains are declared and paid annually on all
series except for the Cash Management Series which declares daily and pays
monthly. 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 foreign currency transactions, capital loss carryforwards and
deferral of wash sales.
E. Expense Allocation--Expenses directly charged or attributable to a Series are
paid from the assets of that Series. 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.
F. 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 securities and the amortized cost basis for short-term
securities, for both financial statement and federal income tax purposes.
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities are recorded on the ex-dividend date or as
soon thereafter as the Fund is informed of the dividend. Interest income and
estimated expenses are accrued daily.
2. Trust Shares--The Declaration of Trust permits the issuance of an unlimited
number of shares of beneficial interest, of one or more Series. Shares in the
Fund are acquired through the purchase of variable annuity or variable life
insurance contracts sold by First Investors Life Insurance Company.
3. Purchases and Sales of Securities--For the six months ended June 30, 1995,
purchases and sales of securities and long-term U.S. Government obligations,
excluding foreign currencies, short-term corporate notes and repurchase
agreements were as follows:
Long-Term U.S.
Securities Government Obligations
------------------------ ----------------------
Cost of Proceeds Cost of Proceeds
Series Purchases of Sales Purchases of Sales
- ------ ----------- ----------- ---------- ----------
BLUE CHIP .................... $ 8,096,396 $ 4,348,281 $ -- $ --
DISCOVERY .................... 8,602,128 10,455,036 -- --
GOVERNMENT ................... -- -- 9,924,979 7,391,526
GROWTH ....................... 13,141,119 10,465,522 -- --
HIGH YIELD ................... 14,414,690 11,280,417 -- --
INTERNATIONAL SECURITIES ..... 7,531,611 6,011,788 -- --
INVESTMENT GRADE ............. 1,288,326 350,258 1,808,047 1,707,783
TARGET MATURITY 2007 ......... 1,292,718 37,799 438,232 --
UTILITIES INCOME ............. 4,126,603 493,969 -- --
<PAGE>
Notes to Financial Statements
FIRST INVESTORS LIFE SERIES FUND
At June 30, 1995, aggregate cost and net unrealized appreciation (depreciation)
of securities for federal income tax purposes were as follows:
Net
Gross Gross Unrealized
Aggregate Unrealized Unrealized Appreciation
Series Cost Appreciation Depreciation (Depreciation)
- --------------------------------------- ------------ ------------ --------------
BLUE CHIP ............... $45,131,788 $7,373,338 $ 408,267 $ 6,965,071
CASH MANAGEMENT ......... 4,075,481 -- -- --
DISCOVERY ............... 32,654,581 7,834,107 1,415,936 6,418,171
GOVERNMENT .............. 8,752,642 157,542 85,166 72,376
GROWTH .................. 34,828,279 6,691,693 648,522 6,043,171
HIGH YIELD .............. 36,830,373 1,067,260 1,251,642 (184,382)
INTERNATIONAL SECURITIES 29,937,484 4,931,157 845,387 4,085,770
INVESTMENT GRADE ........ 13,034,738 281,715 137,291 144,424
TARGET MATURITY 2007 .... 1,693,863 54,055 2,830 51,225
UTILITIES INCOME ........ 7,785,566 486,334 45,155 441,179
4. Restricted Securities--The Series held the following restricted securities at
June 30, 1995:
<TABLE>
<CAPTION>
Date Type of
Acquired Quantity Security Cost
-------- -------- ------------------------------- -----
<S> <C> <C> <C> <C>
HIGH YIELD
- ----------
Divi Hotels, Inc...................... 4/23/92 1,620shs Common Stock $ 35,810
Olympic Financial Limited............. 6/30/95 4,000shs Common Stock 19,000
Synergy Group, Inc.................... 3/15/95 $ 111M Sr. Sec. Incr. Rate Note,
Ser. A, 9 1/2%, 9/15/00 101,283
INTERNATIONAL SECURITIES
- ------------------------
Cadbury Schweppes PLC................. 2/6/95 6,571shs Common Stock 35,724
</TABLE>
These securities, which have been acquired through private placements, may not
be sold or transferred without prior registration under the Securities Act of
1933 or pursuant to an exemption therefrom. If and when these securities are
sold, additional costs for registration may be required. Restricted securities
are valued pursuant to procedures established by the Life Series Fund's Trustees
which include using data provided by certain dealers that participate in any
secondary market that may exist for these securities. At June 30, 1995, the
value of the above restricted securities for the High Yield and International
Securities Series amounted to $166,772 and $47,983, respectively.
5. 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 June 30, 1995, the High
Yield and International Securities Series each held four 144A securities with
aggregate values of $2,115,300 and
<PAGE>
$301,051, respectively. These securities represent 5.7% and .9%, respectively,
of the Series' net assets and are valued as set forth in Note 1A.
6. 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") and/or its transfer agent,
Administrative Data Management Corp. 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 .75% on the first $250 million of each
Series' average daily net assets, declining by .03% on each $250 million
thereafter, down to .66% on average daily net assets over $750 million. For the
six months ended June 30, 1995, total advisory fees were $807,566 of which
$64,387 was waived by the investment adviser. In addition, $11,750 of expenses
were assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse a Series if
and to the extent that any 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
the six months ended June 30, 1995, no reimbursement was required pursuant to
these provisions.
Wellington Management Company serves as investment subadviser to the Growth
Series and the International Securities Series. The subadviser is paid by FIMCO
and not by the Fund.
7. Commencement of Operations--The Target Maturity 2007 Series commenced
operations in April 1995 following the sale of 50,000 shares of beneficial
interest to First Investors Life Insurance Company for $500,000.
8. Concentration of Credit Risk--The High Yield Series' investment in high yield
securities, whether rated or unrated, may be considered speculative and subject
to greater market fluctuations and risk of loss of income and principal than
lower yielding, higher rated, fixed income securities. The risk of loss due to
default by the issuer may be significantly greater for the holders of high
yielding securities, because such securities are generally unsecured and are
often subordinated to other creditors of the issuer. At June 30, 1995, the High
Yield Series held one defaulted security with a value of $408,000, representing
1.1% of the Series' net assets.
The Utilities Income Series invests in securities issued by companies primarily
engaged in the public utilities industries. As a result, there are certain
credit risks which may subject the Series more significantly to economic changes
occurring in the public utilities industry.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Trustees of
First Investors Life Series Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the ten series comprising First Investors Life
Series Fund as of June 30, 1995, the related statement of operations for the six
months then ended, and the statement of changes in net assets for the six months
ended June 30, 1995 and the year ended December 31, 1994, and the financial
highlights for 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, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the ten series comprising First Investors Life Series Fund as of June 30,
1995, and the results of their operations, changes in their net assets and
financial highlights for the respective periods then ended, in conformity with
generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
July 31, 1995
<PAGE>
Target Maturity 2007 Fund
A series of First Investors Life Series Fund
FINANCIAL STATEMENTS
as of August 31, 1995
Portfolio of Investments (Unaudited)
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
August 31, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Amount
Invested
for Each
$10,000
Principal of Net
Amount Security Value Assets
- ------------------------------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY ZERO COUPON OBLIGATIONS--80.2%
$ 570M Agency For International Development-Israel ("AID"), 2/15/2007 $ 265,295 $ 485
119M Agency For International Development-Israel ("AID"), 3/15/2007 55,036 101
1,135M Agency For International Development-Israel ("AID"), 8/15/2007 509,144 931
181M Agency For International Development-Israel ("AID"), 10/1/2007 80,172 147
66M Federal Judiciary Office Building ("JOBS"), 8/15/2006 31,295 57
350M Federal Judiciary Office Building ("JOBS"), 2/15/2007 159,602 292
93M Financing Corporations ("FICOS"), 6/6/2007 41,178 75
592M Financing Corporations ("FICOS"), 12/6/2007 251,935 461
67M Financing Corporations ("FICOS"), 12/27/2007 28,380 52
175M Government Trust Certificate, 11/15/2006 82,514 151
2,506M Government Trust Certificate, 11/15/2007 1,093,786 2,001
95M International Bank for Reconstruction & Development, 2/15/2007 43,391 79
446M International Bank for Reconstruction & Development, 8/15/2007 196,175 359
2,394M Resolution Funding Corporation, 10/15/2007 1,067,659 1,953
646M Tennessee Valley Authority, 4/15/2007 293,581 537
425M Tennessee Valley Authority, 10/15/2007 186,045 340
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Zero Coupon Obligations
(cost $4,330,387) 4,385,188 8,021
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED STATES TREASURY ZERO COUPON OBLIGATIONS--12.3%
67M Coupon Under Book Entry System ("CUBES"), 11/15/2006 32,089 59
62M Treasury Investors Growth Receipts ("TIGERS"), 11/15/2007 27,279 50
1,365M U.S. Treasury Strips, 11/15/2007 613,567 1,123
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of United States Treasury Zero Coupon Obligations
(cost $655,298) 672,935 1,232
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS ZERO COUPON OBLIGATIONS--3.1%
390M Los Angeles Cnty Calif. Pension Oblig., 6/30/2007 (cost $164,885) 169,650 310
- ------------------------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $5,150,570) 95.6% 5,227,773 9,563
Other Assets, Less Liabilities 4.4 239,051 437
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $5,466,824 $ 10,000
====================================================================================================================================
</TABLE>
See notes to financial statements
<PAGE>
Statement of Assets and Liabilities (Unaudited)
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
August 31, 1995
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<S> <C>
Assets
Investments in securities, at value (identified cost $5,150,570)
(Note 1A)........................................................... $ 5,227,773
Cash.................................................................. 86,472
Receivable for trust shares sold...................................... 238,880
----------------
Total Assets.......................................................... 5,553,125
Liabilities
Payable for investment securities purchased .......................... 86,301
----------------
Net Assets ........................................................... $ 5,466,824
================
Net Assets Consist of:
Capital paid in....................................................... $ 5,340,277
Undistributed net investment income................................... 45,804
Accumulated net realized gain on investment transactions.............. 3,540
Net unrealized appreciation in value of investments................... 77,203
----------------
Total................................................................. $ 5,466,824
================
Shares of Beneficial Interest Outstanding (Note 2).................... 496,474
========
Net Asset Value, Offering and Redemption Price Per Share (Net assets
divided by shares outstanding)....................................... $ 11.01
========
</TABLE>
See notes to financial statements
<PAGE>
Statement of Operations (Unaudited)
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
April 25, 1995 (commencement of operations) To August 31, 1995
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income
Interest income....................................................... $ 45,804
Expenses (Note 4):
Advisory fee........................................................ $ 5,895
Other expenses...................................................... 510
----------------
Total expenses........................................................ 6,405
Less: Expenses waived or assumed.................................... 6,405
----------------
Net expenses.......................................................... --
----------------
Net investment income................................................. 45,804
Realized and Unrealized Gain (Loss) on Investments (Note 3):
Net realized gain on investments...................................... 3,540
Net unrealized appreciation of investments............................ 77,203
----------------
Net gain on investments............................................... 80,743
----------------
Net Increase in Net Assets Resulting from Operations.................. $ 126,547
================
</TABLE>
See notes to financial statements
<PAGE>
Statement of Changes in Net Assets (Unaudited)
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
April 25, 1995 (commencement of operations) To August 31,1995
<TABLE>
- ------------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income................................................ $ 45,804
Net realized gain on investments..................................... 3,540
Net unrealized appreciation of investments........................... 77,203
----------------
Net increase in net assets resulting from operations................ 126,547
Trust Shares Issued (446,474 shares).................................. 4,840,277
----------------
Net increase in net assets............................................ 4,966,824
Net Assets
Beginning of period (Note 5)......................................... 500,000
----------------
End of period (including undistributed net investment income of
$45,804)............................................................ $ 5,466,824
================
</TABLE>
See notes to financial statements
<PAGE>
Notes to Financial Statements (Unaudited)
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
1. Significant Accounting Policies - First Investors Life Series Fund (the
"Fund"), a Massachusetts business trust, is registered under the Investment
Company Act of 1940, as a diversified, open-end management investment company.
The Fund operates as a series fund, issuing shares of beneficial interest in the
Blue Chip, Cash Management, Discovery, Government, Growth, High Yield,
International Securities, Investment Grade, Target Maturity 2007 and Utilities
Income Series and accounts separately for the assets, liabilities and operations
of each Series. This report relates only to the Target Maturity 2007 Series (the
"Series").
A. Security Valuation - The U.S. Government Obligations and municipal securities
in which the Series invests are traded primarily in the over-the-counter
markets. Such securities are valued daily at their fair value on the basis of
valuations provided by a pricing service approved by the trustees. 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. Securities for which market quotations are not
readily available and any other assets are valued on a consistent basis at fair
value as determined in good faith by or under the supervision of the Fund's
officers in the manner specifically authorized 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 the Series intends 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 to relieve it from
all, or substantially all, federal income taxes.
C. Distributions to Shareholders - Distributions to shareholders from net
investment income and net realized gains 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.
D. Expense Allocation - Expenses directly charged or attributable to the Series
are paid from the assets of the Series. 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. 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. Interest income, which is accrued daily, consists of accretion of bond
discount.
2. Trust Shares - The Declaration of Trust permits the issuance of an unlimited
number of shares of beneficial interest, of one or more Series. Shares in the
series are acquired through the purchase of Individual Variable Annuity
Contracts sold by First Investors Life Insurance Company.
3. Purchases and Sales of Securities - For the period April 25, 1995 to August
31, 1995, purchases and sales of municipal securities and long-term U.S.
Government obligations aggregated $5,237,936 and $90,906, respectively.
At August 31, 1995, the cost of investments for federal income tax purposes was
$5,150,570. Accumulated net unrealized appreciation on investments was $77,203,
consisting of $87,566 gross unrealized appreciation and $10,363 gross unrealized
depreciation.
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") and/or its transfer agent,
Administrative Data Management Corp. Officers and trustees of the Fund received
<PAGE>
Notes to Financial Statements (Unaudited)
First Investors Life Series Fund--TARGET MATURITY 2007 SERIES
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 First
Investors Corporation, an affiliated underwriter.
The Investment Advisory Agreement provides as compensation to FIMCO an annual
fee, payable monthly, at the rate of .75% on the first $250 million of the
Series average daily net assets, declining by .03% on each $250 million
thereafter, down to .66% on average daily net assets over $750 million. For the
period April 25, 1995 to August 31, 1995, total advisory fees were $5,895 all of
which were waived by FIMCO. In addition, $510 of expenses were assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse the Series
if and to the extent that the 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
the period April 25, 1995 to August 31, 1995, no reimbursement was required
pursuant to these provisions.
5. Commencement of Operations - The Series commenced operations in April 1995
following the sale of 50,000 shares of beneficial interest to First Investors
Life Insurance Company for $500,000.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Financial Statements are set forth in Part B, Statement of Additional
Information.
(b) Exhibits:
(1) Declaration of Trust
(2) By-laws
(3) Not Applicable
(4)2 Specimen Certificate
(5)a.(8) Investment Advisory Agreement between Registrant and First
Investors Management Company, Inc., including form of
Schedule A for Zero Coupon 2007 Series
b.(8) Subadvisory Agreement relating to International Securities
Series and Growth Series
(6) Not Applicable
(7) Not Applicable
(8)a.(1) Custodian Agreement between Registrant and Irving Trust
Company
b.(3) Custodian Agreement between Registrant and Brown Brothers
Harriman & Co.
c.(6) Supplement to Custodian Agreement between Registrant and
The Bank of New York
(9)(1) Administration Agreement between Registrant, First
Investors Management Company, Inc., First Investors
Corporation and Administrative Data Management Corp.
(10)(9) Opinion of Counsel
(11)a. Consent of independent accountants
b. Powers of Attorney
(12) Not Applicable
C-1
<PAGE>
(13)(4,7) Undertakings
(14) Not Applicable
(15) Not Applicable
(16) Not Applicable
- ----------
(1) Incorporated by reference from Registrant's Registration Statement
(File No. 2-98409).
(2) Incorporated by reference from Pre-Effective Amendment No. 2 to
Registrant's Registration Statement (File No. 2-98409).
(3) Incorporated by reference from Post-Effective Amendment No. 8 to
Registrant's Registration Statement (File No. 2-98409) filed with the
Commission on April 13, 1990.
(4) Incorporated by reference from Post-Effective Amendment No. 10 to
Registrant's Registration Statement (File No. 2-98409) filed with the
Commission on October 31, 1991.
(5) Incorporated by reference from Post-Effective Amendment No. 11 to
Registrant's Registration Statement (File No. 2-98409) filed with the
Commission on April 30, 1992.
(6) Incorporated by reference from Post-Effective Amendment No. 12 to
Registrant's Registration Statement (File No. 2-98409) filed with the
Commission on April 29, 1993.
(7) Incorporated by reference from Post-Effective Amendment No. 13 to
Registrant's Registration Statement (File No. 2-98409) filed with the
Commission on September 16, 1993.
(8) Incorporated by reference from Post-Effective Amendment No. 15 to
Registrant's Registration Statement (File No. 2-98409) filed with the
Commission on February 15, 1995.
(9) Incorporated by reference from Registrant's Rule 24f-2 Notice for its
fiscal year ending December 31, 1994 filed with the Commission on
February 21, 1995.
Item 25. Persons Controlled by or under common control with Registrant
There are no persons controlled by or under common control with the
Registrant.
C-2
<PAGE>
Item 26. Number of Holders of Securities
Number of
Record Holders as of
Title of Class September 20, 1995
-------------- ------------------
Shares of
Beneficial Interest,
no par value
Investment Grade Series 2
Government Series 2
Cash Management Series 2
Discovery Series 2
Growth Series 2
High Yield Series 2
Blue Chip Series 2
International Securities Series 2
Utilities Income Series 2
Zero Coupon 2007 Series 1
Item 27. Indemnification
Article XI, Section 2 of Registrant's Declaration of Trust provides as
follows:
"Section 2.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every person who is, or has been, a Trustee or officer of the Trust (a
"Covered Person") shall be indemnified by the Trust to the fullest extent
permitted by law against liability and against expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding which he
becomes involved as a party or otherwise by virtue of his being or having been a
Trustee or officer and against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal or other, including
appeals), actual or threatened, and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) Who shall have been adjudicated by a court or body before which the
proceeding was brought (A) to be liable to the Trust or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office or (B) not to have acted in
good faith in the reasonable belief that his action was in the best interest of
C-3
<PAGE>
the Trust; or
(ii) in the event of a settlement, unless there has been a determination
that such Trustee or officer did not engage in willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office,
(A) by the court or other body approving the settlement; or
(B) by at least a majority or those Trustees who are neither
interested persons of the Trust nor are parties to the matter
based upon a review of readily available facts (as opposed to a
full trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full
trial-type inquiry); provided, however, that any Shareholder may,
by appropriate legal proceedings, challenge any such
determination by the Trustees, or by independent counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under the
law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 2 may be paid by the Trust from time to time prior
to final disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the Trust if it
is ultimately determined that he is not entitled to indemnification under this
Section 2; provided, however, that either (a) such Covered Person shall have
provided appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c) either a majority
of the Trustees who are neither interested persons of the Trust nor are parties
to the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is a reason to believe that such Covered Person
will be found entitled to indemnification under this Section 2."
C-4
<PAGE>
The general effect of this Indemnification will be to indemnify the
officers and Trustees of the Registrant from costs and expenses arising from any
action, suit or proceeding to which they may be made a party by reason of their
being or having been a Trustee or officer of the Registrant, except where such
action is determined to have arisen out of the willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
the Trustee's or officer's office.
The Registrant's Investment Advisory Agreement provides as follows:
The Manager shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Company or any Series in connection with the
matters to which this Agreement relate except a loss resulting from the willful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement. Any person, even though also an officer, partner, employee, or agent
of the Manager, who may be or become an officer, Board member, employee or agent
of the Company shall be deemed, when rendering services to the Company or acting
in any business of the Company, to be rendering such services to or acting
solely for the Company and not as an officer, partner, employee, or agent or one
under the control or direction of the Manager even though paid by it.
Item 28. Business and Other Connections of Investment Adviser
First Investors Management Company, Inc., the Registrant's Investment
Adviser, also serves as Investment Adviser to:
First Investors Cash Management Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
First Investors Government Fund, Inc.
First Investors High Yield Fund, Inc.
First Investors Insured Tax Exempt Fund, Inc.
First Investors Global Fund, Inc.
First Investors Multi-State Insured Tax Free Fund
First Investors New York Insured Tax Free Fund, Inc.
First Investors Special Bond Fund, Inc.
First Investors Tax-Exempt Money Market Fund, Inc.
First Investors U.S. Government Plus Fund
First Investors Series Fund II, Inc.
Affiliations of the officers and directors of the Investment Adviser are
set forth in Part B, Statement of Additional Information, under "Trustees and
Officers."
Item 29. Principal Underwriters
Not applicable
Item 30. Location of Accounts and Records
C-5
<PAGE>
Physical possession of the books, accounts and records of the Registrant
are held by First Investors Management Company, Inc. and its affiliated
companies, First Investors Corporation and Administrative Data Management Corp.,
at their corporate headquarters, 95 Wall Street, New York, NY 10005 and
administrative offices, 518 Main Street, Woodbridge, NJ 07095, except for those
maintained by the Registrant's Custodians, The Bank of New York, 48 Wall Street,
New York, NY 10286, and Brown Brothers Harriman & Co., 40 Water Street, Boston,
MA 02109.
Item 31. Management Services
Inapplicable
Item 32. Undertakings
The Registrant undertakes to carry out all indemnification provisions of
its Declaration of Trust, Advisory Agreement, Subadvisory Agreement and
Underwriting Agreement in accordance with Investment Company Act Release No.
11330 (September 4, 1980) and successor releases.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the provisions under Item 27 herein, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The Registrant hereby undertakes to furnish a copy of its latest annual
report to shareholders, upon request and without charge, to each person to whom
a prospectus is delivered.
C-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant represents that this Amendment
meets all the requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933, and has duly caused this Post-Effective Amendment to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York, State of New York, on the
22nd day of September, 1995.
FIRST INVESTORS LIFE
SERIES FUND
(Registrant)
By: /s/ Glenn O. Head
---------------------------
Glenn O. Head
President and Trustee
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to this Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<S> <C> <C>
/s/ Glenn O. Head Principal Executive September 22, 1995
- ---------------------------- Officer and Trustee
Glenn O. Head
/s/ Joseph I. Benedek Principal Financial September 22, 1995
- ---------------------------- and Accounting Officer
Joseph I. Benedek
* Trustee September 22, 1995
- ----------------------------
Kathryn S. Head
* Trustee September 22, 1995
- ----------------------------
James J. Coy
* Trustee September 22, 1995
- ----------------------------
Roger L. Grayson
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
* Trustee September 22, 1995
- ----------------------------
Herbert Rubinstein
* Trustee September 22, 1995
- ----------------------------
James M. Srygley
* Trustee September 22, 1995
- ----------------------------
John T. Sullivan
* Trustee September 22, 1995
- ----------------------------
Rex R. Reed
* Trustee September 22, 1995
- ----------------------------
Robert F. Wentworth
*By: /s/ Larry R. Lavoie
------------------------
Larry R. Lavoie
Attorney-in-fact
</TABLE>
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
- ------
Description
-----------
99.B1 Declaration of Trust
99.B2 By-laws
99.B11.1 Consent of independent accountants
99.B11.2 Powers of Attorney
27.01 FDS-High Yield Series
27.02 FDS-Discovery Series
27.03 FDS-Blue Chip Series
27.04 FDS-Growth Series
27.05 FDS-Cash Management Series
27.06 FDS-International Securities Series
27.07 FDS-Government Series
27.08 FDS-Investment Grade Series
27.09 FDS-Utilities Income Series
27.10 FDS-Target Maturity 2007 Series
DECLARATION OF TRUST
Dated June 12, 1985
DECLARATION OF TRUST, made June 12, 1985 by Andrew J. Donohue, Glenn O.
Head and David D. Grayson (the "Trustees").
WHEREAS, the Trustees desire to establish a trust fund for the investment
and reinvestment of funds contributed thereto;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust fund hereunder shall be held and managed under this
Declaration of Trust IN TRUST as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as "First Investors Life Series Fund."
DEFINITIONS
Section 2. Wherever used herein, unless otherwise required by the context
or specifically provided:
(a) The Terms "Affiliated Person", "Assignment", "Commission",
"Interested Person", "Majority Shareholder Vote" (the 67% or 50%
requirement of the third sentence of Section 3(a)(42) of the 1940 Act,
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<PAGE>
whichever may be applicable) and "Principal Underwriter" shall have the
meanings given them in the 1940 Act, as amended from time to time;
(b) The "Trust" refers to First Investors Life Series Fund;
(c) "Net Asset Value" means the net asset value of the Trust
determined in the manner provided in Article X, Section 3;
(d) "Shareholder" means a record owner of Shares of the Trust;
(e) The "Trustees" refer to the individual Trustees in their capacity
as Trustees hereunder of the Trust and their successor or successors for
the time being in office as such Trustees;
(f) "Shares" includes each class of Shares which may be issued by the
Trust and means the equal proportionate units of interest into which the
beneficial interest in the Trust shall be divided from time to time and
includes a fraction of Shares as well as whole Shares; and
(g) The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time.
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<PAGE>
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous source of
managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. There may be one or more classes of Shares of the Trust as the
Trustees may from time to time determine. The beneficial interest of each class
shall at all times be divided into an unlimited number of transferable Shares,
without par value, each of which shall represent an equal proportionate interest
in the class with each other Share of the class outstanding, none having
priority or preference over another. The Trustees may from time to time divide
or combine the Shares of any class into a greater or lesser number without
thereby changing the proportionate beneficial interest in the class.
Contributions to the Trust may be accepted for, and Shares shall be redeemed as,
whole Shares and/or 1/1,000ths of a Share or multiples thereof.
OWNERSHIP OF SHARES
Section 2. The ownership of Shares shall be recorded in the books of the
Trust. The Trustees may make such rules as they consider appropriate for the
transfer of shares and similar matters. The record books of the Trust shall be
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<PAGE>
conclusive as to who are the holders of Shares and as to the number of Shares
held from time to time by each.
INVESTMENT IN THE TRUST
Section 3. The Trustees shall accept investments in the Trust from such
persons and on such terms as they may from time to time authorize. Such
investments may be in the form of cash or securities in which the Trust is
authorized to invest, valued as provided in Article X, Section 3. After the date
of the initial contribution for capital, the number of Shares to represent the
initial contribution may in the Trustees' discretion be considered as
outstanding and the amount received by the Trustees on account of the
contribution shall be treated as an asset of the Trust. Subsequent investments
in the Trust shall be credited to the shareholder's account in the form of full
and fractional shares of the Trust at the Net Asset value per Share next
determined after the investment is received; provided, however, that the
Trustees may, in their sole discretion, impose a sales charge upon investments
in the Trust.
NO PREEMPTIVE RIGHTS
Section 4. Shareholders shall have no preemptive or other right to
subscribe to any additional Shares or other securities issued by the Trust or
the Trustees.
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<PAGE>
LIMITATION OF PERSONAL LIABILITY
Section 5. The Trustees shall have no power to bind any Shareholder
personally or to call upon any Shareholder for the payment of any sum of money
or assessment whatsoever other than such as the Shareholder may at any time
personally agree to pay by way of subscription for any Shares or otherwise.
Every note, bond, contract or other undertaking issued by or on behalf of the
Trust or the Trustees relating to the Trust shall include a recitation limiting
the obligation represented thereby to the Trust and its assets (but the omission
of such a recitation shall not operate to bind any Shareholder).
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be managed by the
Trustees, and they shall have all powers necessary and desirable to carry out
that responsibility.
ELECTION: Initial Trustees
Section 2. On or before December 31, 1985, on a date fixed by the Trustees,
the Shareholders shall elect not less than three Trustees. A Trustee shall not
be required to be a Shareholder of the Trust. The initial Trustees shall be
Andrew J. Donohue, David D. Grayson and Glenn O. Head, and such other
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<PAGE>
individuals as the Board of Trustees shall appoint pursuant to Section 4 of this
Article IV.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the lifetime of this
Trust, and until its termination as hereinafter provided; except that (a) any
Trustee may resign by written instrument signed by him and delivered to the
other Trustees, which shall take effect upon such delivery or upon such later
date as is specified therein; (b) any Trustee may be removed at any time by
written instrument, signed by at least two-thirds of the number of Trustees
prior to such removal, specifying the date when such removal shall become
effective; (c) any Trustee who requests in writing to be retired or who has
become incapacitated by illness or injury may be retired by written instrument
signed by a majority of the other Trustees, specifying the date of his
retirement; and (d) a Trustee may be removed at any Special Meeting of the Trust
by a vote of two-thirds of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation, retirement,
removal or inability of any Trustee, or in case a vacancy shall, by reason of an
increase in number, or for any other reason, exist, the remaining Trustees shall
fill such vacancy by appointing such other person as they in their discretion
shall see fit. Such appointment shall be evidenced by a written instrument
signed by a majority of the Trustees in office or by recording in the records of
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<PAGE>
the Trust, whereupon the appointment shall take effect. Within three months of
such appointment, the Trustees shall cause notice of such appointment to be
mailed to each Shareholder at his address as recorded on the books of the Trust.
An appointment of a Trustee may be made by the Trustees then in office and
notice thereof mailed to Shareholders as aforesaid in anticipation of a vacancy
to occur by reason of retirement, resignation or increase in number of Trustees
effective at a later date, provided that said appointment shall become effective
only at or after the effective date of said retirement, resignation or increase
in number of Trustees. As soon as any Trustee so appointed shall have accepted
this trust, the trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or conveyance, and he
shall be deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate his power for a
period not exceeding six months at any one time to any other Trustee or
Trustees, provided that in no case shall less than two Trustees personally
exercise the other powers hereunder except as herein otherwise expressly
provided.
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<PAGE>
NUMBER OF TRUSTEES
Section 6. The number of Trustees, not less than three (3) nor more than
fifteen (15), serving hereunder at any time shall be determined by the Trustees
themselves.
Whenever a vacancy in the Board of Trustees shall occur and until such
vacancy is filled, or while any Trustee is absent from the Commonwealth of
Massachusetts or, if not a domiciliary of Massachusetts, is absent from his
state of domicile, or is physically or mentally incapacitated by reason of
disease or otherwise, the other Trustees shall have all the powers hereunder and
the certificate of the other Trustees of such vacancy, absence or incapacity,
shall be conclusive, provided, however, that no vacancy shall remain unfilled
for a period longer than six calendar months.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation, retirement, removal or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
ASSETS AND LIABILITIES OF THE TRUST
Section 8. The assets of the Trust shall be held separate and apart from
any assets now or hereafter held in any capacity other than as Trustee hereunder
by the Trustees or any successor Trustees. All of the assets of the Trust shall
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<PAGE>
at all times be considered as vested in the Trustees. No Shareholder shall be
deemed to have a severable ownership in any individual asset of the Trust or any
right of partition or possession thereof, but each Shareholder shall have a
proportionate undivided beneficial interest in the Trust.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees in all instances shall act as principals, and are
and shall be free from the control of the Shareholders. The Trustees shall have
full power and authority to do any and all acts and to make and execute any and
all contracts and instruments that they may consider necessary or appropriate in
connection with the management of the Trust. The Trustees shall not in any way
be bound or limited by present or future laws or customs in regard to Trust
investments, but shall have full authority and power to make any and all
investments which they, in their uncontrolled discretion, shall deem proper to
accomplish the purpose of this Trust. Subject to any applicable limitation in
the Declaration of Trust or the Bylaws of the Trust, the Trustees shall have
power and authority to do any act they are permitted by law to do, including:
(a) To buy, and invest funds in their hands in, securities including,
but not limited to, common stock, preferred stock, bonds, debentures,
warrants and rights to purchase or sell securities, certificates of
- 9 -
<PAGE>
beneficial interest, notes or other evidences of indebtedness issued by
corporations, trusts or associations, domestic or foreign, or issued and
guaranteed by the United States of America or any agency thereof, by the
government of any foreign county, or obligations issued by or on behalf of
states, territories and possessions of the United States and the District
of Columbia and their political subdivisions, agencies and
instrumentalities, or by any political subdivision or agency of any foreign
county, in "when-issued" contracts for any such securities, or purchase and
simultaneously resell for later delivery any obligation, or retain such
proceeds in cash, and from time to time change the investments of its
funds.
(b) To adopt Bylaws not inconsistent with this Declaration of Trust
providing for the conduct of the business of the Trust and to amend and
repeal such Bylaws to the extent that they do not reserve that right to the
Shareholders.
(c) To elect and remove such officers and appoint and terminate such
agents as they consider appropriate.
(d) To employ a bank or trust company as custodian of any assets of
the Trust subject to any conditions set forth in this Declaration of Trust
or in the Bylaws, if any.
(e) To retain a transfer agent and Shareholder servicing agent, or
both.
(f) To provide for the distribution of interests of the Trust either
through a principal underwriter in the manner hereinafter provided for or
by the Trust itself, or both.
- 10 -
<PAGE>
(g) To set record dates in the manner hereinafter provided for.
(h) To delegate such authority as they consider desirable to any
officers of the Trust and to any agent, custodian or underwriter.
(i) To sell or exchange any or all of the assets of the Trust, subject
to the provisions of Article XII, Section 4(b) hereof.
(j) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property; and to execute and
deliver powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such powers and discretion
with relation to securities or property as the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or otherwise which
in any manner arise out of ownership of securities.
(l) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form; or either
in its own name or in the name of a custodian or a nominee or nominees,
subject in either case to proper safeguards according to the usual practice
of trust companies or investment companies.
- 11 -
<PAGE>
(m) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or concern, any security of
which is held in the Trust; to consent to any contract, lease, mortgage,
purchase or sale of property by such corporation or concern, and to pay
calls or subscriptions which respect to any security held in the Trust.
(n) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy including, but not limited
to, claims for taxes.
(o) To make distributions to Shareholders in the manner hereinafter
provided for.
(p) To borrow money from a bank for temporary or emergency purposes
and not for investment purposes. The Trustees shall not pledge, mortgage or
hypothecate the assets of the Trust except that, to secure borrowings, it
may pledge securities.
(q) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any
Shareholders whose investment is less than such minimum upon giving notice
to such Shareholder.
No one dealing with the Trustees shall be under any obligation to make any
inquiry concerning the authority of the Trustees, or to see to the application
of any payments made or property transferred to the Trustees or upon their
order.
- 12 -
<PAGE>
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer or other agent of the Trust may acquire,
own and dispose of Shares of the Trust to the same extent as if he were not a
Trustee, officer or agent; and the Trustees may issue and sell or cause to be
issued and sold Shares of the Trust to and buy such Shares from any such person
of any firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the Bylaws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at a meeting duly
called, or by unanimous written consent without a meeting, or by telephone
consent provided a quorum of Trustees participate in any such telephonic
meeting, unless the 1940 Act requires that a particular action be taken only at
a meeting of the Trustees. At any meeting of the Trustees, a majority of the
Trustees shall constitute a quorum. Meetings of the Trustees may be called
orally or in writing by the Chairman of the Trustees or by any two other
Trustees. Notice of the time, date and place of all meetings of the Trustees
shall be given by the party calling the meeting to each Trustee by telephone or
telegram sent to his home or business address at least twenty-four (24) hours in
advance of the meeting or by written notice mailed to his home or business
address at least seventy-two (72) hours in advance of the meeting. Notice need
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<PAGE>
not be given to any Trustee who attends the meeting without objecting to the
lack of notice or who executes a written waiver of notice with respect to the
meeting. Subject to the requirements of the 1940 Act, the Trustees by majority
vote may delegate to any one of their number their authority to approve
particular matters or take particular actions on behalf of the Trust.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number to be Chairman of
the Board of Trustees. The Chairman shall preside at all meetings of the
Trustees, shall be responsible for the execution of policies established by the
Trustees and the administration of the Trust, and may also be any officer of the
Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. The Trustees shall be reimbursed from the Trust estate for their
expenses and disbursements, including, without limitation, fees and expenses of
Trustees who are not Interested Persons of the Trust or its investment adviser;
interest expense; taxes; fees and commissions of every kind; expenses of pricing
Trust portfolio securities; expenses of issue, repurchase and redemption of
Shares, including expenses attributable to a program of periodic repurchases or
redemptions; expenses of registering and qualifying the Trust and its Shares
under Federal and State laws and regulations; charges of custodians, transfer
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<PAGE>
agents and registrars; expenses of preparing and setting up in type
prospectuses; expenses of printing and distributing prospectuses sent to
existing shareholders; auditing and legal expenses; reports to Shareholders;
expenses of meetings of Shareholders and proxy solicitations therefor; insurance
expenses; association membership dues; and such nonrecurring items as may arise,
including litigation to which the Trust is a party and for all losses and
liabilities, by them incurred in administering the Trust, and for the payment of
such expenses, disbursements, losses and liabilities, the Trustees shall have a
lien on the Trust estate prior to any rights or interests of the Shareholders
thereto. This section shall not preclude the Trust from directly paying any of
the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL UNDERWRITER AND TRANSFER AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the Trustees in their
discretion from time to time may enter into an investment advisory or management
contract whereby the other party to such contract shall undertake to furnish the
Trustees such management, investment advisory, statistical and research
facilities and services and such other facilities and services, if any, and all
upon such terms and conditions, as the Trustees may in their discretion
determine. Notwithstanding any provisions of this Declaration of Trust, the
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<PAGE>
Trustees may authorize the investment adviser (subject to such general or
specific instructions as the Trustees may from time to time adopt) to effect
purchases, sales or exchanges of portfolio securities of the Trust on behalf of
the Trustees or may authorize any officer, agent or Trustee to effect such
purchases, sales or exchanges pursuant to recommendations of the investment
adviser (and all without further action by the Trustees). Any such purchases,
sales and exchanges shall be deemed to have been authorized by all of the
Trustees.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time to time enter
into a contract providing for the sale of the Shares of the Trust, whereby the
Trust may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, the
contract shall be on such terms and conditions as may be prescribed in the
Bylaws, if any, and such further terms and conditions as the Trustees may in
their discretion determine not inconsistent with the provisions of this Article
VII, or of the Bylaws, if any; and such contract may also provide for the
repurchase or sale of Shares of the Trust by such other party as principal or as
agent of the Trust.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time to time enter
into a transfer agency and shareholder service contract whereby the other party
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<PAGE>
shall undertake to furnish the Trustees transfer agency and Shareholder services
including clerical and accounting services. The contract shall be on such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of Trust or of the Bylaws,
if any, and may provide for the computation of the Trust's Net Asset Value in
accordance herewith. Such services may be provided by one or more entities.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections 1, 2 and 3
of this Article VII or in Article IX hereof may be entered into with any
corporation, firm, partnership, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, trustee,
shareholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any
relationship, nor shall any person holding such relationship be liable merely by
reason of such relationship for any loss or expense to the Trust under or by
reason of said contract or accountable for any profit realized directly or
indirectly therefrom. The same person (including a firm, corporation,
partnership, trust or association) may be the other party to contracts entered
into pursuant to Sections 1, 2 and 3 above or Article IX, and any individual may
be financially interested or otherwise affiliated with persons who are parties
to any or all of the contracts mentioned in this Section 4.
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<PAGE>
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to Section 1 and 2 of this
Article VII shall be consistent with and subject to the requirements of Section
15 of the 1940 Act (including any amendments thereof or other applicable Act of
Congress hereafter enacted) with respect to its continuance in effect, its
termination, and the method of authorization and approval of such contract or
renewal thereof, and no amendment to any contract, entered into pursuant to
Section 1 of this Article VII, shall be effective unless assented to by a
Majority Shareholder Vote.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote: (i) for the election
of Trustees as provided in Article IV, Section 2; (ii) for the removal of
Trustees as provided in Article IV, Section 3(d); (iii) with respect to any
investment adviser as provided in Article VII, Section 1; (iv) with respect to
the amendment of this Declaration of Trust as provided in Article XII, Section
7; (v) to the same extent as the shareholders of a Massachusetts business
corporation, as to whether or not a court action, proceeding or claim should be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders; and (vi) with respect to such additional matters relating
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<PAGE>
to the Trust as may be required or authorized by law, by this Declaration of
Trust, or the Bylaws of the Trust, if any, or any registration of the Trust or
its Shares with the Commission or any State, or as the Trustees may consider
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or by proxy. Until Shares
are issued, the Trustees may exercise all rights of Shareholders and may take
any action required or permitted by law, this Declaration of Trust or any Bylaws
of the Trust, to be taken by Shareholders.
MEETINGS
Section 2. The first Shareholders meeting shall be held as specified in
Section 2 of Article IV at the principal office of the Trust or such other place
as the Trustees may designate. Special meetings of the Shareholders may be
called by the Trustees and shall be called by the Trustees upon the written
request of Shareholders owning at least one-tenth (1/10) of the outstanding
Shares entitled to vote. Shareholders shall be entitled to at least fifteen (15)
days' notice of any meeting.
QUORUM AND REQUIRED VOTE
Section 3. At any meeting of the Shareholders a quorum for the transaction
of business shall consist of one or more persons appearing in person or by proxy
and owning or representing a majority of the Shares of the Trust then
outstanding and entitled to vote, provided that a less number may make
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<PAGE>
reasonable adjournment of such meeting until a quorum is obtained. Subject to
any applicable requirements of law or of this Declaration of Trust or the
Bylaws, if any, a majority of the Shares voted shall decide any question and a
plurality shall elect a Trustee.
ARTICLE IX
CUSTODIAN
APPOINTMENT AND DUTIES
Section 1. The Trustees shall at all times employ a bank or trust company
having capital, surplus and undivided profits of at least two million dollars
($2,000,000) as custodian with authority as its agent, but subject to such
restrictions, limitations and other requirements, if any, as may be contained in
the Bylaws of the Trust:
(1) to hold the securities owned by the Trust and deliver the same
upon written order;
(2) to receive and receipt for any monies due to the Trust and deposit
the same in its own banking department or elsewhere as the Trustees may
direct; and
(3) to disburse such funds upon orders or vouchers. The Trust may also
employ such custodian as its agent:
(1) to keep the books and accounts of the Trust and furnish clerical
and accounting services; and
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(2) to compute, if authorized to do so by the Trustees, the Net Asset
Value of the Trust in accordance with the provisions hereof;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. If so directed by a Majority Shareholder Vote, the custodian
shall deliver and pay over all property of the Trust held by it as specified in
such vote.
The Trustees may also authorize the custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
custodian and upon such terms and conditions, as may be agreed upon between the
custodian and such sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank or trust company organized under
the laws of the United States or one of the states thereof and having capital,
surplus and undivided profits of at least two million dollars ($2,000,000).
CENTRAL CERTIFICATE SYSTEM
Section 2. Subject to such rules, regulations and orders as the Commission
may adopt, the Trustees may direct the custodian to deposit all or any part of
the securities owned by the Trust in a system for the central handling of
securities established by a national securities exchange or a national
securities association registered with the Commission under the Securities
Exchange Act of 1934, or such other person as may be permitted by the
Commission, or otherwise in accordance with the 1940 Act as from time to time
amended, pursuant to which system all securities of any particular class or
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series of any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 1.
(a) The Trustees shall have power, to the fullest extent permitted by the
laws of Massachusetts, at any time to, or from time to time, to declare and
cause to be paid dividends or distributions in such amounts as the Trustees may
determine, which dividends or distributions, at the election of the Trustees,
may be payable in Shares, in cash, or in cash or Shares at the election of each
Shareholder.
(b) Anything in this instrument to the contrary notwithstanding, the
Trustees may at any time declare and distribute pro rata among the Shareholders
a "stock dividend."
(c) The record date for the determination of Shareholders entitled to
dividends or distributions declared pursuant to (a) and (b) above shall be fixed
by the Trustees as provided in Article XII, Section 3 hereof.
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REDEMPTIONS
Section 2. In case any Shareholder of record of the Trust desires to
dispose of his Shares, he may deposit at the office of the transfer agent or
other authorized agent of the Trust a written request or such other form of
request as the Trustees may from time to time authorize, requesting that the
Trust purchase his Shares in accordance with this Section 2; and the Shareholder
so requesting shall be entitled to require the Trust to purchase, and the Trust
or the principal underwriter of the Trust shall purchase his said Shares, but
only at the Net Asset Value thereof (as described in Section 3 hereof), next
determined after the request is deemed to be received by the Trust. Payment for
such Shares shall be made by the Trust or the principal underwriter of the Trust
in accordance with the instructions of such Shareholder within seven (7) days
after the date upon which the request is received in proper form, unless
otherwise delayed by law or order of the Commission. In connection with such
purchases of Shares by the Trust, the Trustees may from time to time determine
to charge shareholders a fee in an amount not to exceed 2% of the Net Asset
Value of the Shares so purchased.
DETERMINATION OF NET ASSET VALUE AND VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of the Trust shall mean that amount
by which the assets of the Trust, at fair market values, exceed its liabilities,
all as determined by or under the direction of the Trustees. Net asset value per
Share shall be determined on each day on which the Trust is open for business or
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trading in the Trust's assets takes place, and at such time or times during said
day as the Trustees may determine, and the value so determined shall become
effective at such time. Such determination shall be made (i) by appraising
securities in the portfolio of the Trust at market value, or in the absence of
readily available market quotations, at fair value, both as determined by and
pursuant to methods presented or approved by the Trustees; (ii) by appraising
all other assets at their fair value in the best judgment of the Trustees; (iii)
by deducting any actual and accrued liabilities determined in accordance with
good accounting practice, and (iv) by dividing by the number of Shares then
outstanding; provided, however, that the Trustees, without Shareholder approval,
may alter the method of appraising portfolio securities insofar as permitted
under the 1940 Act and the rules, regulations and interpretations thereof
promulgated or issued by the Securities and Exchange Commission or insofar as
permitted by any Order of the Securities and Exchange Commission applicable to
the Trust. The Trustees may delegate any of their powers and duties under this
Section 3 with respect to appraisal of assets and liabilities.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. The Trustees may declare a suspension of the right of redemption
or postpone the date of payment for the whole or any part of any period (i)
during which the New York Stock Exchange is closed other than customary weekend
and holiday closings, (ii) during which trading on the New York Stock Exchange
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is restricted, (iii) during which an emergency exists as a result of which
disposal by the Trust of securities owned by it is not reasonably practicable or
it is not reasonably practicable for the Trust fairly to determine the value of
its net assets, or (iv) during any other period when the Commission (or any
succeeding governmental authority) may for the protection of security holders of
the Trust by order permit suspension of the right of redemption or postponement
of the date of payment on redemption; provided that applicable rules and
regulations of the Commission (or any succeeding governmental authority) shall
govern as to whether the conditions prescribed in (ii), (iii) or (iv) exist.
Such suspension shall take effect at such time as the Trustees shall specify but
not later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment until the Trustees shall declare the suspension at an end, except
that the suspension shall terminate in any event on the first business day of
the Trust on which said stock exchange shall have reopened or the period
specified in (ii) or (iii) shall have expired (as to which in the absence of an
official ruling by said Commission or succeeding authority, the determination of
the Trustees shall be conclusive). In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request for redemption or
receive payment based on the Net Asset Value existing after the termination of
the suspension.
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ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. Provided they have exercised reasonable care and have acted
under the reasonable belief that their actions are in the best interest of the
Trust, the Trustees shall not be responsible for or liable in any event for
neglect or wrongdoing of them or any officer, agent, employee or investment
adviser of the Trust, but nothing contained herein shall protect any Trustee
against any liability to which he would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office.
INDEMNIFICATION
Section 2.
(a) Subject to the exceptions and limitations contained in Section (b)
below:
(i) every person who is, or has been, a Trustee or officer of the
Trust (a "Covered Person") shall be indemnified by the Trust to the fullest
extent permitted by law against liability and against all expenses
reasonably incurred or paid by him in connection with any claim, action,
suit or proceeding in which he becomes involved as a party or otherwise by
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virtue of his being or having been a Trustee or officer and against amounts
paid or incurred by him in the settlement thereof;
(ii) the words "claim," "action," "suit" or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal or other,
including appeals), actual or threatened, and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and other
liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before which
the proceeding was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of his office
or (B) not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Trustee or officer did not engage in willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office,
(A) by the court or other body approving the settlement; or
(B) by at least a majority of those Trustees who are neither
interested persons of the Trust nor are parties to the matter based
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upon a review of readily available facts (as opposed to a full
trial-type inquiry); or
(C) by written opinion of independent legal counsel based upon a
review of readily available facts (as opposed to a full trial-type
inquiry); provided, however, that any Shareholder may, by appropriate
legal proceedings, challenge any such determination by the Trustees,
or by independent counsel.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not be exclusive of
or affect any other rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel, other than Trustees and
officers, and other persons may be entitled by contract or otherwise under law.
(d) Expenses in connection with the preparation and presentation of a
defense to any claim, action, suit or proceeding of the character described in
paragraph (a) of this Section 2 may be paid by the Trust from time to time prior
to final disposition thereof upon receipt of an undertaking by or on behalf of
such Covered Person that such amount will be paid over by him to the Trust if it
is ultimately determined that he is not entitled to indemnification under this
Section 2; provided, however, that either (a) such Covered Person shall have
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provided appropriate security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments or (c) either a majority
of the Trustees who are neither interested persons of the Trust nor are parties
to the matter, or independent legal counsel in a written opinion, shall have
determined, based upon a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that such Covered Person
will be found entitled to indemnification under this Section 2.
SHAREHOLDERS
Section 3. In case any Shareholder or former Shareholder shall be held to
be personally liable solely by reason of his being or having been a Shareholder
and not because of his acts or omissions or for some other reason, the
Shareholder or former Shareholder (or his heirs, executors, administrators or
other legal representatives or in the case of a corporation or other entity, its
corporate or other general successor) shall be entitled out of the trust estate
to be held harmless from and indemnified against all loss and expense arising
from such liability. The Trust shall, upon request by the Shareholder, assume
the defense of any claim made against any Shareholder for any act or obligation
of the Trust and satisfy any judgment thereon.
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ARTICLE XII
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust and not a
partnership is created hereby. No Trustee hereunder shall have any power to bind
personally either the Trust's officers or any Shareholder. All persons extending
credit to, contracting with or having any claim against the Trust or the
Trustees shall look only to the assets of the Trust for payment under such
credit, contract or claim; and neither the Shareholders nor the Trustees, nor
any of their agents, whether past, present or future, shall be personally liable
therefor. Nothing in this Declaration of Trust shall protect the Trustee against
any liability to which the Trustee would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of the office of Trustee hereunder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and discretions
hereunder in good faith and with reasonable care under the circumstances then
prevailing, shall be binding upon everyone interested. Subject to the provisions
of Section 1 of this Article XII and to Article XI, the Trustees shall not be
liable for errors of judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning and operation of
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this Declaration of Trust, and subject to the provisions of Section 1 of this
Article XII and to Article XI, shall be under no liability for any act or
omission in accordance with such advice or for failing to follow such advice.
The Trustees shall not be required to give any bond as such, nor any surety if a
bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of the Trust for
a period not exceeding sixty (60) days preceding the date of any meeting of
shareholders, or the date for the payment of any dividends or distributions, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of shares shall go into effect; or in lieu of closing the stock
transfer books as aforesaid, the Trustees may fix in advance a date, not
exceeding sixty (60) days preceding the date of any meeting of Shareholders, or
the date for payment of any dividend or distributions, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at, any such meeting, or
entitled to receive payment of any such dividend or distributions, or to any
such allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of Shares, and in such case such Shareholders and
only such Shareholders as shall be Shareholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting, or to receive
payment of such dividend, or to receive such allotment or rights, or to exercise
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such rights, as the case may be, notwithstanding any transfer of any Shares on
the books of the Trust after any such record date fixed as aforesaid.
TERMINATION OF TRUST
Section 4.
(a) This Trust shall continue without limitation of time but subject to the
provisions of sub-sections (b), (c) and (d) of this Section 4.
(b) The Trustees, with the approval of the Shareholders by Majority
Shareholder Vote and in accordance with all applicable law, may sell and convey
the assets of the Trust to another trust, partnership, association or
corporation organized under the laws of any state of the United States, or
political subdivision thereof, for an adequate consideration which may include
the assumption of all outstanding obligations, taxes and other liabilities,
accrued or contingent, of the Trust; and which may include shares of beneficial
interest or stock of such trust, partnership, association or corporation. Upon
making provision for the payment of all such liabilities, by such assumption or
otherwise, the Trustees shall distribute the remaining proceeds ratably among
the holders of the Shares of the Trust then outstanding.
(c) Subject to a Majority Shareholder Vote and in accordance with all
applicable law, the Trustees may at any time sell and convert into money all the
assets of the Trust. Upon making provision for the payment of all outstanding
obligations, taxes and other liabilities, accrued or contingent, of the Trust,
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the Trustees shall distribute the remaining assets of the Trust ratably among
the holders of the outstanding shares.
(d) Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in subsections (b) and (c), the Trust shall
terminate and the Trustees shall be discharged of any and all further
liabilities and duties hereunder and the right, title and interest of all
parties shall be cancelled and discharged.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument and of each
Declaration of Trust supplemental hereto shall be kept at the office of the
Trust where it may be inspected by any Shareholder. A copy of this instrument
and of each Supplemental Declaration of Trust shall be filed by the Trustees
with the Secretary of the Commonwealth of Massachusetts and the Boston City
Clerk, as well as any other governmental office where such filing may from time
to time be required. Anyone dealing with the Trust may rely on a certificate by
an officer or Trustee of the Trust as to whether or not any such Supplemental
Declarations of Trust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the original, may
rely on a copy certified by an officer or Trustee of the Trust to be a copy of
this instrument or of any such Supplemental Declaration of Trust. In this
instrument or in any such Supplemental Declaration of Trust, references to this
instrument, and all expressions like "herein," "hereof" and "hereunder," shall
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be deemed to refer to this instrument as amended or affected by any such
Supplemental Declaration of Trust. Headings are placed herein for convenience of
reference only and in case of any conflict, the text of this instrument, rather
than the headings, shall control. This instrument may be executed in any number
of counterparts, each of which shall be deemed an original.
APPLICABLE LAW
Section 6. The Trust set forth in this instrument is created under and is
to be governed by and construed and administered according to the laws of the
Commonwealth of Massachusetts. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
AMENDMENTS
Section 7. If authorized by votes of the Trustees and a Majority
Shareholder Vote, or by any larger vote which may be required by applicable law
or this Declaration of Trust in any particular case, the Trustees shall amend or
otherwise supplement this instrument, by making a Declaration of Trust
supplemental hereto, which thereafter shall form a part hereof. Copies of the
Supplemental Declaration of Trust shall be filed as specified in Section 5 of
this Article XII.
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REGISTERED AGENT
Section 8. The Registered Agent of the Trust within the Commonwealth of
Massachusetts for service of process, and the principal place of business of the
Trust within the Commonwealth of Massachusetts, shall be U.S. Corporation
Company, One Court Street, Boston, Massachusetts 02108.
FISCAL YEAR
Section 9. The fiscal year of the Trust shall be the calendar year,
provided, however, that the Trustees may, without Shareholder approval, change
the fiscal year of the Trust.
IN WITNESS WHEREOF, the undersigned, being all of the Trustees of the
Trust, have executed this instrument this 12th day of June, 1985
/s/ Andrew J. Donohue
---------------------------------
Andrew J. Donohue
/s/ David D. Grayson
---------------------------------
David D. Grayson
/s/ Glenn O. Head
---------------------------------
Glenn O. Head
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STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
BE IT REMEMBERED, that on this 12th day of June 1985, personally came
before me, a Notary Public in and for the State of New York, ANDREW J. DONOHUE,
DAVID D. GRAYSON and GLENN O. HEAD, all of the parties to the foregoing
Declaration of Trust known to me personally to be such, and severally
acknowledged the said certificate to be the act and deed of the signers
respectively, and that the facts therein stated are truly set forth, given under
my hand and seal of office the day and year aforesaid.
/s/ Thatcher A. Stone
---------------------------------
Thatcher A. Stone
Notary Public, State of New York
No. 31-4830010
Qualified in New York County
Commission Expires March 30, 1987
(SEAL)
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BY-LAWS
FIRST INVESTORS LIFE SERIES FUND
ARTICLE I
Officers and Their Election
SECTION 1. Officers. The officers of the Trust shall be a President, a
Treasurer, a Secretary, one or more Vice Presidents and such other officers as
the Trustees may from time to time elect. It shall not be necessary for any
Trustee or other officer to be a holder of shares in the Trust.
SECTION 2. Election of Officers. The Treasurer and Secretary shall be chosen
annually by the Trustees. The President shall be chosen annually by and from the
Trustees.
Two or more offices may be held by a single person except the offices of
President and Secretary. The officers shall hold office until their successors
are chosen and qualified.
SECTION 3. Resignations and Removals. Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary, which shall take effect on being so filed at such time as may be
therein specified. The Trustees may at any meeting remove any officer.
ARTICLE II
Powers and Duties of Officers and Trustees
SECTION 1. Trustees. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to carry
out the responsibility, so far as such powers are not inconsistent with
applicable law, the Declaration of Trust, or with these By-Laws.
SECTION 2. Executive and Other Committees. The Trustees may elect from their own
number an executive committee to consist of not less than three nor more than
five members which shall have the power and duty to conduct the current and
ordinary business of the Trust, including the purchase and sale of securities,
while the Trustees are not in session, and such other powers and duties as the
Trustees may from time to time delegate to such committee. The Trustees may also
elect from their own number other committees from time to time, the number
composing such committees and the powers conferred upon the same to be
determined by vote of the Trustees.
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SECTION 3. Chairman of the Trustees. The Trustees may, but need not appoint from
among their number a Chairman. He shall perform any such duties as the Trustees
may from time to time designate.
SECTION 4. President. The President shall be the chief executive officer of the
Trust and, subject to the Trustees, shall have general supervision over the
business and policies of the Trust. When present, he shall preside at all
meetings of the shareholders and the Trustees, and he may, subject to the
approval of the Trustees, appoint a Trustee to preside at such meetings in his
absence. The President shall perform such duties additional to all of the
foregoing as the Trustees may from time to time designate.
SECTION 5. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as Custodian in accordance with Article IX of the
Declaration of Trust. He shall have the custody of the seal of the Trust. He
shall make annual reports in writing of the business conditions of the Trust,
which reports shall be preserved upon its records, and he shall furnish such
other reports regarding the business and conditions as the Trustees may from
time to time require. The Treasurer shall perform such duties additional to the
foregoing as the Trustees may from time to time designate.
SECTION 6. Secretary. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings.
The Secretary shall perform such duties additional to the foregoing as the
Trustees may from time to time designate.
SECTION 7. Vice President. Each Vice President of the Trust shall perform such
duties as the Trustees may from time to time designate.
SECTION 8. Assistant Treasurer. The Assistant Treasurer of the Trust shall
perform such duties as the Trustees may from time to time designate.
ARTICLE III
Shareholders' Meetings
SECTION 1. Special Meetings. A special meeting of the shareholders shall be
called by the Secretary whenever ordered by the Trustees or requested in writing
by the holder or holders of at least one-tenth of the outstanding shares
entitled to vote. If the Secretary, when so ordered or requested, refuses or
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neglects for more than two days to call such special meeting, the Trustees or
the shareholders so requesting may, in the name of the Secretary, call the
meeting by giving notice thereof in the manner required when notice is given by
the Secretary.
SECTION 2. Notices. Except as above provided, notices of any special meeting of
the shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each shareholder entitled to vote at said meeting, a written
or printed notification of such meeting, at least fifteen days before the
meeting, to such address as may be registered with the Trust by the shareholder.
SECTION 3. Place of Meeting. All special meetings of the shareholders shall be
held at the principal place of business of the Trust or at such other place in
the United States as the Trustees may designate.
ARTICLE IV
Trustees' Meetings
SECTION 1. Special Meetings. Special meetings of the Trustees shall be called by
the Secretary at the written request of the President, the Treasurer, or any two
Trustees, and if the Secretary when so requested refuses or fails for more than
twenty-four hours to call such meeting, the President, the Treasurer, or such
two Trustees, may in the name of the Secretary call such meeting by giving due
notice in the manner required when notice is given by the Secretary.
SECTION 2. Regular Meeting. Regular meetings of the Trustees may be held without
call or notice at such places and at such times as the Trustees may from time to
time determine, provided that any Trustee who is absent when such determination
is made shall be given notice of the determination.
SECTION 3. Quorum. A majority of the Trustees shall constitute a quorum for the
transaction of business.
SECTION 4. Notice. Except as otherwise provided, notice of any special meeting
of the Trustees shall be given by the Secretary to each Trustee, by mailing to
him, postage prepaid, addressed to him at his address as registered on the books
of the Trust or, if not so registered, at his last known address, a written or
printed notification of such meeting at least three days before the meeting or
by delivering such notice to him at least two days before the meeting, or by
sending to him at least 24 hours before the meeting, by prepaid telegram,
addressed to him at his said registered address, if any, or if he has no such
registered address, at his last known address, notice of such meeting.
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SECTION 5. Place of Meeting. All special meetings of the Trustees shall be held
at the principal place of business of the Trust or such other place as the
person or persons requesting said meeting to be called may designate, but any
meeting may adjourn to any other place.
SECTION 6. Special Action. When all the Trustees shall be present at any
meeting, however called, or wherever held, or shall assent to the holding of the
meeting without notice, or after the meeting shall sign a written assent thereto
on the record of such meeting, the acts of such meeting shall be valid as if
such meeting had been regularly held.
SECTION 7. Action by Consent. Any action by the Trustees may be taken without a
meeting if a written consent thereto is signed by all the Trustees and filed
with the records of the Trustees meetings, or by telephone consent provided a
quorum of Trustees participate in any such telephone meeting. Such consent shall
be treated as a vote of the Trustees for all purposes.
ARTICLE V
Shares of Beneficial Interest
SECTION 1. Beneficial Interest. The beneficial interest in the Trust shall at
all times be divided into an unlimited number of transferable Shares without par
value, each of which shall represent an equal proportionate interest in the
class or series with each other Share of the class or series outstanding, none
having priority or preference over another.
SECTION 2. Transfer of Stock. The Shares of the Trust shall be transferable, so
as to affect the rights of the Trust, only by transfer recorded on the books of
the Trust, in person or by attorney.
SECTION 3. Equitable Interest Not Recognized. The Trust shall be entitled to
treat the holder of record of any share or shares of beneficial interest as the
holder in fact thereof, and shall not be bound to recognize any equitable or
other claim or interest in such share or shares on the part of any other person
except as may be otherwise expressly provided by law.
ARTICLE VI
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the shareholders; and no shareholder shall have any right to inspect any
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account or book or document of the Trust except as conferred by law or otherwise
by the Trustees or by resolution of the shareholders.
ARTICLE VII
Custodian
SECTION 1. Contract with Custodian. The Custodian employed by the Trust pursuant
to Article IX of the Declaration of Trust shall be required to enter into a
contract with the Trust which shall contain in substance the following
provisions:
(a) The Trust will cause all securities and funds owned by the Trust to be
delivered or paid to the Custodian.
(b) The Custodian will receive and receipt for any moneys due to the Trust
and deposit the same in its own banking department and in such other
banking institutions, if any, as the Custodian and the Trustees may
approve. The Custodian shall have the sole power to draw upon any such
account.
(c) The Custodian shall release and deliver securities owned by the Trust
in the following cases only:
(1) Upon the sale of such securities for the account of the Trust and
receipt of payment therefore;
(2) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that in any such case, the cash is to be delivered to the
Custodian;
(3) To the issuer thereof or its agent for transfer into the name of
the Trust, the Custodian or a nominee of either, or for exchange
for a different number of bonds or certificates representing the
same aggregate face amount or number of units; provided that in
any such case the new securities are to be delivered to the
Custodian;
(4) To the broker selling the same for examination, in accord with
the "street delivery" custom;
(5) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities or pursuant to
provisions of any deposit agreement; provided that, in any such
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case, the new securities and cash, if any, are to be delivered to
the Custodian;
(6) In the case of warrants, rights, or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(7) To any pledge by way of pledge or hypothecation to secure any
loan, but openly within the limits permitted to the Trust by
Article V, Section 1(p) of the Declaration of Trust.
(8) For deposit in a system for the central handling of securities in
accordance with the provisions of Article IX, Section 2 of the
Declaration of Trust.
(d) The Custodian shall pay out monies of the Trust only upon the purchase
of securities for the account of the Trust and the delivery in due
course of such securities to the Custodian, or in connection with the
conversion, exchange or surrender of securities owned by the Trust as
set forth in (c), or for the repurchase of shares issued by the Trust
or for the making of any disbursements authorized by the Trustees
pursuant to the Declaration of Trust or these By-laws, or for the
payment of any expense or liability incurred by the Trust; provided
that, in every case where payment is made by the Custodian in advance
of receipt of the securities purchased, the Custodian shall be
absolutely liable to the Trust for such securities to the same extent
as if the securities had been received by the Custodian.
(e) The Custodian shall make deliveries of securities and payments of cash
only upon written instructions signed or initialled by such officer or
officers or other agent or agents of the Trust as may be authorized to
sign or initial such instructions by resolution of the Trustees; it
being understood that the Trustees may from time to time authorize a
different person or persons to sign or initial instructions for
different purposes.
SECTION 2. Other Provision. The contract between the Trust and the Custodian may
contain any such other provisions not inconsistent with the provisions of
Article IX of the Declaration of Trust or with these By-Laws as the Trustees may
approve.
SECTION 3. Termination of Contract with Custodian. Upon termination of the
contract or inability of the Custodian to continue to serve, the Custodian
shall, upon written notice of appointment of another bank or trust company as
- 6 -
<PAGE>
custodian, deliver and pay over to such successor custodian all securities and
moneys held by it for account of the Trust. In such case, the Trustees shall
promptly appoint a successor custodian, but in the event that no successor
custodian can be found having the required qualifications and willing to serve,
it shall be the duty of the Trustees to call as promptly as possible a special
meeting of the shareholders to determine whether the Trust shall function
without a custodian or shall be liquidated. If so directed by vote of the
holders of a majority of the outstanding shares, the Custodian shall deliver and
pay over all property of the Trust held by it as specified in such vote.
SECTION 4. Aggregate Capital Requirement. Such contract may also provide that,
pending appointment of a successor custodian or a vote of the shareholders
specifying some other disposition of the funds and property, the Custodian shall
not deliver funds and property of the Trust to the Trust, but may deliver them
to a bank or trust company doing business in New York, New York, of its own
selection having an aggregate capital, surplus and undivided profits, as shown
by its last published report, of not less than $2,000,000, as the property of
the Trust to be held under terms similar to those on which they were held by the
retiring custodian.
SECTION 5. Sub-custodians. Any sub-custodian employed by the Custodian pursuant
to authorization to do so granted by the Trust pursuant to Article IX of the
Declaration of Trust shall be required to enter into a contract with the
Custodian containing in substance the same provisions as those described in
paragraphs (a) through (e) above, except that any contract with a sub-custodian
performing its duties outside the United States and its territories and
possessions, may omit or limit any of such conditions, provided that, any such
omission or limitation shall be expressly approved by a majority of the Trustees
of the Trust.
ARTICLE VIII
Seal
The seal of the Trust shall be circular in form bearing the inscription:
"FIRST INVESTORS LIFE SERIES FUND - 1985"
- 7 -
<PAGE>
ARTICLE IX
Fiscal Year
The fiscal year of the Trust shall be the calendar year. However, the
Trustees may adopt such other fiscal year as they may approve pursuant to these
By-laws.
ARTICLE X
Limitations on Investments
SECTION 1. The Trust shall not purchase the securities of any issuer if such
purchase at the time thereof would cause more than 10% of any class of the
outstanding securities of such issuer to be held by the Trust, nor will it
acquire more than 10% of the outstanding voting securities of any one issuer.
This limitation shall not apply to securities issued or guaranteed as to
principal and interest by the United States or any agency or instrumentality
thereof. All debt obligations of an issuer maturing in less than one year shall
be treated as a single class of securities.
SECTION 2. The Trust shall not purchase securities of any issuer if such
purchase at the time thereof would cause more than 5% of the total assets of the
Trust to be invested in securities of companies which have a record of less than
three years' continuous operation, including in such three years the operation
of any predecessor company or companies, partnership or individual enterprise if
the company whose securities are to be purchased by the Trust had come into
existence as a result of a merger, consolidation, reorganization or the purchase
of substantially all of the assets of such predecessor company or companies,
partnership or individual enterprise.
SECTION 3. The Trust shall neither purchase for nor retain in its portfolio
securities issued by an issuer any of whose officers, directors or
security-holders is an officer or director, or Trustee of the Trust or of its
investment adviser if or so long as the officers, directors and Trustees of the
Trust and of its investment adviser, together, own beneficially more than 5% of
any class of the securities of such issuer.
ARTICLE XI
Amendments
These By-laws may be amended at any meeting of the Trustees of the Trust by
a majority vote; provided, however, that any amendment which changes or affects
the provisions of Article VII, Article X, or Article XII (other than changes
which add further provisions not inconsistent with the terms thereof) shall be
- 8 -
<PAGE>
approved by vote of a majority of the outstanding shares of the Trust entitled
to vote.
ARTICLE XII
Underwriting Arrangements
Any contract entered into for the sale of shares of the Trust pursuant to
Article VII, Section 2 of the Declaration of Trust shall require the other party
thereto (hereinafter called the "underwriter") whether acting as principal or as
agent to use all reasonable efforts, consistent with the other business of the
underwriter, to secure purchasers for the shares of the Trust. Such contract
shall require the underwriter to bear all expenses (a) of printing and
distributing any Prospectus or reports prepared for its use in connection with
the offering of the shares of the Trust for sale to the public, other than the
expenses of preparing, setting up in type, printing and distributing (i)
Prospectuses used in connection with the registration and qualification of
shares under the Securities Act of 1933 or various state laws, (ii) any report
or other communication to shareholders of the Trust in their capacity as such
and (iii) Prospectuses sent to existing shareholders, (b) of any other
literature used by it in connection with such offering, and (c) advertising in
connection with such offering.
ARTICLE XIII
Reports to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including financial
statements which shall at least annually be certified by independent public
accountants.
- 9 -
Consent of Independent Certified Public Accountants
First Investors Life Series Fund
95 Wall Street
New York, New York 10005
We consent to the use in Post-Effective Amendment No. 17 to the
Registration Statement on Form N-1A (File No. 2-98409) of our report dated
January 31, 1995 relating to the December 31, 1994, and our report dated July
31, 1995 relating to the June 30, 1995, financial statements of First Investors
Life Series Fund, which are included in said Registration Statement.
/s/ Tait, Weller & Baker
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
September 27, 1995
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ Robert F. Wentworth
-------------------------------------
Robert F. Wentworth
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ John T. Sullivan
-------------------------------------
John T. Sullivan
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ Herbert Rubinstein
-------------------------------------
Herbert Rubinstein
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ James M. Srygley
-------------------------------------
James M. Srygley
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ Rex R. Reed
-------------------------------------
Rex R. Reed
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ Kathryn S. Head
-------------------------------------
Kathryn S. Head
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ Roger L. Grayson
-------------------------------------
Roger L. Grayson
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ Glenn O. Head
-------------------------------------
Glenn O. Head
<PAGE>
First Investors Life Series Fund
Power of Attorney
KNOW ALL MEN BY THESE PRESENTS that the undersigned officer and/or trustee
of First Investors Life Series Fund hereby appoints Larry R. Lavoie or Glenn O.
Head, and each of them, his true and lawful attorney to execute in his name,
place and stead and on his behalf a Registration Statement on Form N-1A for the
registration pursuant to the Securities Act of 1933 and the Investment Company
Act of 1940 of shares of beneficial interest of said Massachusetts business
trust, and any and all amendments to said Registration Statement (including
post-effective amendments), and all instruments necessary or incidental in
connection therewith and to file the same with the Securities and Exchange
Commission. Said attorney shall have full power and authority to do and perform
in the name and on behalf of the undersigned every act whatsoever requisite or
desirable to be done in the premises, as fully and to all intents and purposes
as the undersigned might or could do, the undersigned hereby ratifying and
approving all such acts of said attorney.
IN WITNESS WHEREOF, the undersigned has executed this instrument this 21st
day of September, 1995.
/s/ James J. Coy
-------------------------------------
James J. Coy
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 005
<NAME> CASH MANAGEMENT SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
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<NET-ASSETS> 4082
<DIVIDEND-INCOME> 0
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<EXPENSES-NET> (12)
<NET-INVESTMENT-INCOME> 109
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<NUMBER-OF-SHARES-SOLD> 697
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<GROSS-ADVISORY-FEES> (15)
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<AVERAGE-NET-ASSETS> 4047
<PER-SHARE-NAV-BEGIN> 1.00
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 006
<NAME> INTERNATIONAL SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 29937
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<TOTAL-LIABILITIES> 648
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 29683
<SHARES-COMMON-STOCK> 2427
<SHARES-COMMON-PRIOR> 2318
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4090
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<EXPENSES-NET> (162)
<NET-INVESTMENT-INCOME> 337
<REALIZED-GAINS-CURRENT> 250
<APPREC-INCREASE-CURRENT> 1896
<NET-CHANGE-FROM-OPS> 2483
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<NUMBER-OF-SHARES-SOLD> 173
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<SHARES-REINVESTED> 69
<NET-CHANGE-IN-ASSETS> 3049
<ACCUMULATED-NII-PRIOR> 279
<ACCUMULATED-GAINS-PRIOR> 605
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<AVERAGE-NET-ASSETS> 32292
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 007
<NAME> GOVERNMENT SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
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<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 9382
<SHARES-COMMON-STOCK> 915
<SHARES-COMMON-PRIOR> 812
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<NET-ASSETS> 9121
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<EXPENSES-NET> (15)
<NET-INVESTMENT-INCOME> 294
<REALIZED-GAINS-CURRENT> 162
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<NET-CHANGE-FROM-OPS> 772
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<NUMBER-OF-SHARES-SOLD> 100
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<ACCUMULATED-GAINS-PRIOR> (788)
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<AVERAGE-NET-ASSETS> 8421
<PER-SHARE-NAV-BEGIN> 9.70
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 008
<NAME> INVESTMENT GRADE SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
<INVESTMENTS-AT-COST> 13035
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<SENIOR-EQUITY> 0
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<NET-ASSETS> 13543
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 009
<NAME> UTILITIES INCOME SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-1-1995
<PERIOD-END> JUN-30-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 010
<NAME> TARGET MATURITY 2007 SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
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</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000770906
<NAME> FIRST INVESTORS LIFE SERIES FUND
<SERIES>
<NUMBER> 010
<NAME> TARGET MATURITY 2007 SERIES
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 4-MOS
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</TABLE>
