<PAGE>
CHIEF INVESTMENT OFFICER'S LETTER
FIRST INVESTORS LIFE SERIES FUND
Dear Investor:
We are pleased to present the annual report for the First Investors Life Series
Fund for 1997. The Fund offers eleven separate investment series, each of which
has a different investment objective.
1997 was a very good year for the U.S. economy and financial markets. The
economy grew at an annual pace of 3.8%, with the unemployment rate falling to
its lowest level since the 1970's. Despite faster economic growth, inflation, as
measured by the Consumer Price Index, rose less than 2%, its smallest increase
in over ten years. Reflecting the strong economy, the Federal budget deficit
declined substantially, and had been almost eliminated by year-end. Against this
backdrop, the Federal Reserve held monetary policy steady after one small
increase in the benchmark Federal funds rate in March.
Although both the U.S. bond and stock markets suffered setbacks at times during
the year, the combination of moderate growth and low inflation ultimately
provided a rewarding environment for investors. Long-term bond yields fell to
their lowest level in two years, while the broad stock market indices recorded
their third consecutive year of substantial gains. While many overseas markets
were buffeted by the economic crisis in Southeast Asia, U.S. markets remained
relatively stable or--in the case of the bond market--benefited from a "flight
to safety" as investors sought the security of the world's largest and most
efficient financial market.
Money market rates remained relatively stable during 1997. Short-term interest
rates edged higher during the first quarter after the Federal Reserve raised the
Federal funds rate by 25 basis points. The next several months were marked by
on-again off-again expectations of further tightening from the Federal Reserve.
During the second half, the market became more comfortable with the outlook for
stable short-term interest rates as continued growth in the economy and
tightness in labor markets failed to produce little more than a hint of
inflation.
The bond market traded in a historically narrow range until the last four months
of the year when a sharp rally brought long-term yields to their lowest level in
two years. Bond investors reacted positively to low inflation, a substantial
reduction in the Federal budget deficit, and the turmoil in Southeast Asia.
Within the bond market, corporate high yield bonds generally provided the
highest total returns, followed in order by investment grade corporate bonds,
Treasury securities, and mortgage-backed bonds. High yield corporate bonds
benefited from a strong economy, merger and acquisition activity, refinancing of
outstanding high coupon debt and substantial investor demand. Investment grade
corporate bonds similarly benefited from a strong economy and merger and
acquisition activity, although the events in Southeast Asia caused corporate
bond spreads to widen which detracted from performance during the last few
months of the year. Mortgage-backed bonds performed exceptionally well during
the first eight months of 1997 as interest rates generally remained in a narrow
range with low volatility. However, the bond market's rally during the latter
part of the year caused mortgage-backed spreads to widen substantially as
homeowners were offered their best opportunity in years to refinance their
mortgages. Within the Treasury market, long-term bonds provided the highest
returns.
Returns in the equity market, as measured by the Standard & Poor's 500 Index,
were double digits for an unprecedented third year in a row. Bullish equity
investor sentiment was sustained by an outlook for continued low inflation and
interest rates, and solid economic growth. Within the equity market, large
capitalization companies as a group provided better returns than mid- and
small-capitalization companies as investors rewarded the former for predictable,
1
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CHIEF INVESTMENT OFFICER'S LETTER (continued)
FIRST INVESTORS LIFE SERIES FUND
sustained earnings growth. Strong industry groups for the year included retail,
media, banks, insurance, financial services, energy services, and major
pharmaceuticals. Weak groups for the twelve months included electronics,
communications equipment, metals, paper & forest products, oil companies, and
apparel. Utility stocks as a group moved sideways during the first eight months
of the year and then moved sharply higher during the last four months in
response to lower interest rates and their limited international exposure.
During the latter part of the year, concerns about the economic problems facing
Southeast Asia spilled over into the United States markets and had a negative
impact on the investment outlook for certain sectors, most notably technology.
Overseas stock markets were mixed in 1997. Some regions of the world were
strong, while economic difficulties caused Japanese and other Asian markets to
underperform significantly. Europe and Latin America showed strong equity
returns in 1997 as profit growth continued to surprise investors positively and
falling inflation kept interest rates under control. During the latter part of
1997, the Southeast Asia currency crisis spread with a global impact, resulting
in a general flight to safety. The hardest hit markets during the year were the
emerging markets of Asia, including South Korea, Malaysia, Indonesia, Thailand,
and the Philippines. Japan also experienced a significant market decline. In
Europe, as in the U.S., large capitalization growth stocks were prized, while
any stock with significant exposure to Asia declined sharply.
The following investment performance data relates to the Funds, which are only
available through the purchase of certain variable life insurance policy and
variable annuity contract separate accounts. This data does not reflect the
additional expenses and charges to which a variable life insurance policyowner
or variable annuity contractowner would be subject. In addition, charges will
differ among variable life insurance policyowners because of age, gender and
risk classification at the time of policy issue. Not all Fund subaccounts are
available in each separate account.
LIFE BLUE CHIP FUND
For the year ended December 31, 1997, First Investors Life Blue Chip Fund
returned 26.7% on a net asset value basis compared to a 27.1% return for the
Lipper Growth and Income Fund category. The Life Blue Chip Fund's performance in
1997 was bolstered by select investments in the healthcare, financial and
publishing sectors of the S&P 500 Index. While the second half of the year was a
difficult one for the technology sector, certain technology stocks performed
quite well over the full year. The Fund's performance also benefited from select
investments in the telecommunications equipment area.
The fundamentals supporting performance of the healthcare sector remained in
place during the year. Demographics and continued demand for high quality
healthcare generated above average returns for innovative healthcare companies.
Stocks in companies such as Eli Lilly, Warner-Lambert, Pfizer and Medtronic all
outperformed in 1997. The demographic trend supporting healthcare--the aging
baby boomers--also benefited the financial sector as more money flowed into
investment and retirement products. The retirement investment trend led to
outsized gains in the stocks of financial services companies such as Merrill
Lynch and Travelers Group as well as solid gains in the stocks of banks such as
BankBoston and BankAmerica. Supported by the growing demand for wireless
telephone services worldwide, stocks in companies like Ericsson and Nokia
performed well in the first half of the year. Newspaper publishers benefited
from declining newsprint prices and increased help wanted advertising, which
generated above average returns in the stock of Tribune Company. Finally,
perennial performers like Microsoft and General Electric contributed to the
Fund's performance.
2
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Anticipating a slowdown in demand, along with possible competitive pricing
pressures from less expensive sources, many technology stocks retreated in the
fourth quarter, generating underperformance for the full year. The stocks in the
Fund most directly affected by the Asian situation, Motorola and Intel,
subsequently underperformed. The concerns about Asia also had an impact on the
stocks of the major money center banks held by the Fund, Chase Manhattan and
Citicorp. Although Chase and Citicorp both generated good absolute returns, they
underperformed the market. Companies whose growth was driven by exports, most
notably those in the capital goods sector, were also affected by the Asian
problem. AlliedSignal, Boeing, Lockheed Martin and United Technologies were all
impacted by the downturn in the Asian economies and were all underperformers for
the year.
LIFE GROWTH FUND
For the year ended December 31, 1997, First Investors Life Growth Fund returned
29.3% on a net asset value basis compared to a 25.3% return for the Lipper
Growth Fund category. The Fund was generally helped by positions in financial
services, major pharmaceuticals, energy services, and retail. Positions in
selected technology sectors and an underweighted bank weighting detracted from
returns.
During 1997, leading contributors to the Fund's return included Pfizer which
benefited from the company's new product sales momentum and lack of significant
patent expiration risk. Automatic Data Processing was another solid performer
during the fourth quarter as the company continued to experience strong growth
in its payroll business. ADP's stable outlook also attracted investors'
attention. Finally, in the financial services sector, Fannie Mae supplied strong
returns as the enterprise thrived in an environment of declining interest rates.
Importantly, Fannie Mae is also relatively immune from credit risks. Weaker
performers during 1997 included Intel, which suffered from concerns about
slowing personal computer sales and the price reduction on the Pentium II chip.
Another weak performer was First Data, which declined as investors worried about
competition in the money transfer business, as well as margins in the core
transaction processing division. Finally, Amoco was soft due to falling oil and
chemical prices.
LIFE DISCOVERY FUND
For the year ended December 31, 1997, First Investors Life Discovery Fund
returned 16.8% on a net asset value basis compared to a 20.8% return for the
Lipper Small Company Growth Fund category. The Fund's performance was driven by
investments in the energy and financial sectors. Other sectors, such as the
technology and healthcare sectors proved to be mixed performers, while the
forest and paper products sector underperformed the market as a whole.
In the energy sector, oilfield service stocks generated solid returns for the
year despite a difficult fourth quarter. Because the Fund acquired the majority
of its holdings in the first quarter, stocks in companies such as Patterson
Energy, EVI, Newpark Resources, Global Industries, R&B Falcon (formerly Falcon
Drilling), Veritas DGC, Maverick Tube and Cliffs Drilling generated above
average returns for the full year.
The Fund also benefited from its holdings in financial stocks. Consolidation,
real and perceived, was the driver of the solid performance in financial stocks,
especially in the fourth quarter. The Fund held consolidators such as Centura
Banks, Commercial Federal, and Peoples Heritage Financial Group. The Fund's top
performer in the financial sector was HealthCare Financial Partners, a specialty
finance company focused on asset based lending to growing healthcare service
providers. However, not all financial stocks held by the Fund generated above
average returns. Redwood Trust reported disappointing earnings, while the Money
Store was hampered by concerns about slower loan growth and delinquencies in the
subprime auto finance and mortgage industries. While
3
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CHIEF INVESTMENT OFFICER'S LETTER (continued)
FIRST INVESTORS LIFE SERIES FUND
the Fund had roughly twelve percent of its assets invested in the financial
sector, in hindsight, a higher weighting would have been preferable.
The Fund's investment in the technology sector generated mixed results. While
the stocks in companies such as EMC, Network Appliance, and Cisco Systems
appreciated over 30% for the year, the rapid and unexpected downturn in the
Asian economies had adverse impacts on many technology companies. With the
possible loss of the Asian markets for their products and the expectations of
increased competition in many areas of the technology sector, many technology
companies adjusted earnings expectations downward. The lowered earnings
expectations led to lower fourth quarter returns in many technology stocks. The
stocks in companies such as Hadco, Altera and Adaptec all suffered from the
"Asian Flu".
While the demographic trends supporting the healthcare sector remained in place,
the Fund's holdings in this sector had lackluster performances. Health Care and
Retirement Corporation, a nursing home benefiting from the "graying of America"
did generate a return in excess of 40%. However, other companies in the nursing
home sector for reasons ranging from poor execution of strategy to use of
questionable accounting practices did not generate good returns and hindered the
Fund's performance. Examples of such companies are Genesis Health Ventures and
Vencor.
The outlook for the forest and paper products industry appeared to be improving
before the Asian economic crisis occurred. However, just as we began to see some
positive momentum in the sector, the Asian crisis undercut the investment thesis
in the paper and forest products sector. Asia accounts for approximately 33% of
the world's consumption of paper products and approximately 29% of its
production. The downturn in Southeast Asia led to concerns about the earnings
rebound of the paper industry. The Fund's holdings in stocks in companies like
Boise Cascade, Louisiana-Pacific, and Gaylord Container were adversely affected
by the turmoil in Asia.
LIFE INTERNATIONAL SECURITIES FUND
For the year ended December 31, 1997, First Investors Life International
Securities Fund returned 9.1% on a net asset value basis compared to a 13.0%
return for the Lipper Global Fund category.
In the first part of the year, we believed that the U.S. market, after two very
strong years, was overvalued relative to other opportunities and that U.S.
profits were approaching a cyclical peak. We also believed that the Japanese
market was becoming increasingly attractive as our analysis indicated that
economic growth would be above consensus. Meanwhile, Japanese economic growth
actually came in well below consensus, and the Japanese equity market and the
yen weakened dramatically. This held back the Fund's performance in the first
part of the year as the U.S. market initially surged and Japan deeply
underperformed.
Within Japan, we had also structured the Fund to take advantage of our above
consensus growth view by focusing on more domestically oriented shares. Given
the actual economic decline, these shares significantly underperformed the
Japanese market.
Finally, although total exposure was relatively small, the stocks that the Fund
held in both developed and emerging Southeast Asia were a drag on performance
during most of the year. The Fund had too large an exposure to "cheaply" valued
securities that turned out to be hit particularly hard as the crisis in the
region escalated, particularly as interest rates rose and currencies started
falling.
LIFE UTILITIES INCOME FUND
For the year ended December 31, 1997, First Investors Life Utilities Income Fund
returned 25.1% on a net asset value basis compared to an average return of
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<PAGE>
26.0% for all utilities funds as measured by Lipper Analytical Services, Inc.
The Fund's positive performance was primarily attributable to the strong showing
of the telephone and electric sectors of the utilities industry.
The telephone sector performed well as investors became more comfortable with
the Baby Bells' ability to weather industry changes. Both the telephone and
electric sectors benefited late in the year as the Asia crisis led investors to
purchase defensive domestic equities with little international earnings
exposure. The electric utility stocks also got a charge from the dramatic drop
in long-term interest rates in the fourth quarter.
LIFE HIGH YIELD FUND
For the year ended December 31, 1997, First Investors Life High Yield Fund
returned 12.5% on a net asset value basis compared with a 12.6% return for the
Lipper high yield bond fund group.
The Fund benefited from tenders for and calls on portfolio holdings. In
reinvesting proceeds, our choices generally avoided the most aggressive risk
profiles that the market presented, both in terms of credit and interest rate
risks. This precaution was ultimately unnecessary during the year just ended, as
the market generally rewarded aggressive business plans and costly consolidation
strategies. The Fund was well positioned with holdings in the competitive local
exchange carrier segment of the telecommunications market as the importance of
that business became widely apparent. A comparatively low concentration in long
maturity deferred coupon bonds dampened returns because this bond structure,
while carrying risks, accentuates appreciation of bonds when interest rates
decline as they did last year. Also, these bonds were used extensively to fund
the growth, "buildout" and industry consolidation transactions that did
especially well in 1997.
The Fund avoided defaults and notable credit problems. The Fund's negligible
exposure to emerging markets held back returns in the year's first half, and,
despite slightly greater exposure in the third quarter, widely reported problems
outside the U.S. did not have a material effect on the Fund.
LIFE INVESTMENT GRADE FUND
For the year ended December 31, 1997, First Investors Life Investment Grade Fund
returned 9.8% on a net asset value basis compared to a 10.1% return for the
Lipper corporate BBB bond fund category.
Sector choices were important as the events in Asia impacted the Fund's
performance. The bonds of money center banks such as Citicorp and J.P. Morgan
lagged as spreads widened over concerns of potential loan and trading losses
stemming from their Asian exposures. The Fund had maintained a high exposure to
bank paper, including money center banks, due to the improving credit
fundamentals within the sector. On the other hand, the portfolio continued to be
underweighted in Yankee bonds (dollar denominated bonds issued by foreign
entities). These issues significantly underperformed the market due to the
overseas volatility. The Fund's large exposure to industrial and utility paper
also aided returns as these two sectors were the top performers in 1997.
Duration was also an important determinant of performance. In early 1997 we held
the Fund's duration shorter than its peer group because of concerns over the
strength of the domestic economy and the fear that higher inflation would
follow. We lengthened the duration in mid-year as it became apparent that
inflation rates were not increasing. That move proved to be beneficial as the
bond market rallied and the longer maturities outperformed shorter ones.
However, on balance we believe the Fund's duration was shorter than that of our
peers, and that had the duration been longer, relative performance would have
been better.
LIFE TARGET MATURITY 2007 FUND AND LIFE TARGET MATURITY 2010 FUND
For the year ended December 31, 1997, First Investors Life Target Maturity 2007
Fund returned 13.4% on a
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CHIEF INVESTMENT OFFICER'S LETTER (continued)
FIRST INVESTORS LIFE SERIES FUND
net asset value basis and First Investors Life Target Maturity 2010 Fund
returned 15.9% on a net asset value basis. The Funds' investment objective is to
seek a predictable compounded return for investors who hold the Funds until
maturity. In order to meet this objective, the Funds are fully invested in high
quality zero coupon bonds. These bonds are very sensitive to changes in interest
rates. Consequently, with long-term interest rates falling during 1997, zero
coupon bonds provided higher total returns than the bond market in general.
Target Maturity 2010 Fund had a higher return than Target Maturity 2007 Fund
because the former has a longer average maturity.
LIFE GOVERNMENT FUND
For the year ended December 31, 1997, First Investors Life Government Fund
returned 8.6% on a net asset value basis compared to a 8.8% return for the
Lipper GNMA bond fund category.
Management of the Fund focused on minimizing interest rate risk and prepayment
risk. Prepayment risk is the risk that homeowners, whose mortgages comprise
mortgage-backed bonds, will refinance their mortgages when interest rates fall.
This would cause the Fund to lose its higher yielding bonds at a time when
market yields are relatively low. The first eight months of 1997 were very
favorable for mortgage-backed bonds as interest rates generally remained in a
narrow range with low volatility. The Fund reduced its interest rate exposure
during the first quarter when the economy appeared to be accelerating and the
Federal Reserve raised short-term interest rates. During the second quarter, as
the economy showed signs of slowing, the Fund increased its interest rate
exposure.
The bond market's rally during the last four months of the year put pressure on
the mortgage-backed market. Falling interest rates offered many homeowners their
best opportunity to refinance their mortgages. Consequently, the Fund's focus
shifted from interest rate risk to prepayment risk. To reduce prepayment risk,
the Fund decreased its exposure to higher coupon mortgage-backed bonds,
replacing them with lower coupon bonds which are less likely to be prepaid.
Nonetheless, the Fund's return were negatively affected by above-average
prepayments on several high coupon mortgage-backed positions.
LIFE CASH MANAGEMENT FUND
For the year ended December 31, 1997, First Investors Life Cash Management Fund
returned 5.1%. The Fund will continue to focus on credit quality and liquidity
in 1998 while maintaining its conservative approach to investing. The Fund will
invest only in those securities considered at the time of purchase to present
minimal market and credit risk to its shareholders. Given the outlook for stable
short-term interest rates, the Fund will likely maintain weighted average
maturities that are similar to those of its peers.
While we continue to believe the fundamentals that pushed U.S. stock markets to
new highs remain in place, investors should remain aware of the risks associated
with investing in the stock markets. Stock markets tend to follow cycles and the
current upward cycle or bull market is now the longest in history. On a
technical basis, the length of the cycle could present some pressure against
continued gains in the short-term. As well, the impact of lower global economic
growth, due to turmoil in the Southeast Asian economies and the possible impact
on U.S. companies' profits, could present a risk to U.S. equity investors.
Finally, investments in foreign markets involve currency risks as well as
country specific political and economic risks.
The bond market can also be volatile. For example, a 100 basis point (or 1%)
increase in yield on a ten-year Treasury bond results in roughly a 7 1/2%
decrease in that bond's price. In each of the last five years, ten-year Treasury
bond yields have fluctuated by more than 100 basis points. In addition, the
value of a bond can fluctuate based on changes in the credit quality. In
6
<PAGE>
particular, investments in higher yielding lower-rated debt obligations are more
sensitive than higher-rated investments to adverse economic changes or
individual corporate developments, and thus can be subject to a higher incidence
of default. Investors should be aware of these risks and recognize that
successful investing generally requires a long-term commitment to the market.
Following 1997's strong performance, the outlook for the financial markets
continues to be positive, although uncertainties do exist. In particular, we
believe that the economic problems in Southeast Asia will slow growth in the
U.S. However, it is unclear to what extent growth will be slowed and,
consequently, what will be the ultimate impact on the financial markets. On a
positive note, Southeast Asia's problems will result in lower inflation
worldwide. Uncertainty often leads to
volatile markets. During such times, investors are generally best served by
focusing on long-term objectives and maintaining a disciplined approach to
investing.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ Clark D. Wagner
Clark D. Wagner
Chief Investment Officer
January 30, 1998
7
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--BLUE CHIP FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Blue Chip Fund and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
LIFE BLUE CHIP FUND STANDARD & POOR'S 500 INDEX
<S> <C> <C>
Mar-90 $9,300 $10,000
Dec-90 $9,349 $10,007
Dec-91 $11,795 $13,033
Dec-92 $12,582 $13,966
Dec-93 $13,652 $15,332
Dec-94 $13,454 $15,529
Dec-95 $18,028 $21,879
Dec-96 $21,908 $26,902
Dec-97 $27,760 $35,808
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 26.72% 17.83%
Five Years 17.15% 15.45%
Since Inception (3/8/90) 15.00% 13.94%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--BLUE CHIP FUND BEGINNING 3/8/90 (INCEPTION DATE) WITH A THEORETICAL
INVESTMENT IN THE STANDARD & POOR'S 500 INDEX. THE STANDARD & POOR'S 500 INDEX
IS AN UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE
PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE
MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. IT IS NOT
POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE
INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING
TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES
CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL
DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN SINCE INCEPTION WOULD HAVE
BEEN 13.78%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. STANDARD & POOR'S 500 INDEX FIGURES FROM STANDARD & POOR'S
AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
8
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CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--DISCOVERY FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Discovery Fund, the Lipper Small Company Growth Fund Index and the
Russell 2000 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 LIPPER SMALL COMPANY
LIFE DISCOVERY FUND GROWTH FUND INDEX RUSSELL 2000 INDEX
<S> <C> <C> <C>
Jan-88 $9,300 $10,000 $10,000
Dec-88 $9,638 $12,034 $12,237
Dec-89 $11,914 $14,568 $13,982
Dec-90 $11,263 $12,560 $10,997
Dec-91 $17,110 $18,656 $15,800
Dec-92 $19,779 $20,742 $18,377
Dec-93 $24,149 $24,253 $21,501
Dec-94 $23,538 $24,136 $20,815
Dec-95 $29,478 $31,768 $26,512
Dec-96 $33,158 $36,332 $30,865
Dec-97 $38,742 $43,870 $37,673
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 16.84% 8.65%
Five Years 14.39% 12.75%
Ten Years 15.33% 14.50%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--DISCOVERY FUND BEGINNING 1/1/88 WITH THEORETICAL INVESTMENTS IN THE LIPPER
SMALL COMPANY GROWTH FUND INDEX AND THE RUSSELL 2000 INDEX. THE LIPPER SMALL
COMPANY GROWTH FUND INDEX IS A NET VALUE WEIGHTED INDEX OF THE 30 LARGEST SMALL
COMPANY GROWTH FUNDS. IT IS CALCULATED WITH ADJUSTMENTS FOR INCOME DIVIDENDS AND
CAPITAL GAINS DISTRIBUTIONS AS OF EX-DIVIDEND DATES. THE RUSSELL 2000 INDEX
CONSISTS OF THE SMALLEST 2,000 COMPANIES IN THE RUSSELL 3000 INDEX (WHICH
REPRESENTS APPROXIMATELY 98% OF THE INVESTABLE U.S. EQUITY MARKET). THE RUSSELL
2000 INDEX IS AN UNMANAGED INDEX GENERALLY CONSIDERED AS THE PREMIER OF SMALL
CAPITALIZATION STOCKS. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THESE INDICES.
IN ADDITION, THE RUSSELL 2000 INDEX DOES NOT TAKE INTO ACCOUNT FEES AND
EXPENSES. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS OTHERWISE
INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM
THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS
WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR TEN YEARS WOULD HAVE
BEEN 13.58%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. LIPPER SMALL COMPANY GROWTH FUND INDEX FIGURES FROM LIPPER
ANALYTICAL SERVICES, INC., RUSSELL 2000 INDEX FIGURES FROM FRANK RUSSELL AND
COMPANY AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
9
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CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--GOVERNMENT FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Government Fund, the Salomon Brothers Mortgage Index and the
Salomon Brothers Government Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
LIFE GOVERNMENT FUND SALOMON BROTHERS MORTGAGE INDEX
<S> <C> <C>
Jan-92 $9,300 $10,000
Dec-92 $10,213 $10,848
Dec-93 $10,865 $11,611
Dec-94 $10,419 $11,445
Dec-95 $12,048 $13,364
Dec-96 $12,480 $14,080
Dec-97 $13,555 $15,385
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 8.61% .98%
Five Years 5.82% 4.30%
Since Inception (1/7/92) 6.49% 5.21%
<CAPTION>
AS OF DECEMBER 31, 1997
SALOMON BROTHERS GOVERNMENT INDEX
<S> <C>
Jan-92 $10,000
Dec-92 $10,893
Dec-93 $12,056
Dec-94 $11,650
Dec-95 $13,794
Dec-96 $14,200
Dec-97 $15,570
One Year
Five Years
Since Inception (1/7/92)
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--GOVERNMENT FUND BEGINNING 1/7/92 (INCEPTION DATE) WITH THEORETICAL
INVESTMENTS IN THE SALOMON BROTHERS MORTGAGE INDEX AND THE SALOMON BROTHERS
GOVERNMENT INDEX. THE SALOMON BROTHERS MORTGAGE INDEX IS A MARKET
CAPITALIZATION-WEIGHTED INDEX THAT CONSISTS OF ALL AGENCY PASS-THROUGHS AND FHA
AND GNMA PROJECT NOTES. THE SALOMON BROTHERS GOVERNMENT INDEX IS A MARKET
CAPITALIZATION-WEIGHTED INDEX THAT CONSISTS OF DEBT ISSUED BY THE U.S. TREASURY
AND U.S. GOVERNMENT SPONSORED AGENCIES. EVERY ISSUE INCLUDED IN THE INDICES IS
TRADER-PRICED, AND THE INDICES FOLLOW CONSISTENT AND REALISTIC AVAILABILITY
LIMITS, INCLUDING ONLY THOSE SECURITIES WITH SUFFICIENT AMOUNTS OUTSTANDING. IT
IS NOT POSSIBLE TO INVEST DIRECTLY IN THESE INDICES. IN ADDITION, THE INDICES DO
NOT TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE
ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE
MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE
FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR, FIVE YEARS AND
SINCE INCEPTION WOULD HAVE BEEN .76%, 3.92% AND 4.80%, RESPECTIVELY. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT
RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. SALOMON BROTHERS MORTGAGE INDEX AND SALOMON BROTHERS GOVERNMENT INDEX
FIGURES FROM SALOMON BROTHERS AND ALL OTHER FIGURES FROM FIRST INVESTORS
MANAGEMENT COMPANY, INC.
10
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--GROWTH FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Growth Fund and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
LIFE GROWTH FUND STANDARD & POOR'S 500 INDEX
<S> <C> <C>
Jan-88 $9,300 $10,000
Dec-88 $10,019 $11,635
Dec-89 $12,423 $15,278
Dec-90 $12,052 $14,803
Dec-91 $16,231 $19,244
Dec-92 $17,819 $20,670
Dec-93 $18,888 $22,721
Dec-94 $18,345 $23,014
Dec-95 $22,953 $31,583
Dec-96 $28,565 $38,682
Dec-97 $36,930 $51,488
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 29.28% 20.23%
Five Years 15.69% 14.03%
Ten Years 14.78% 13.96%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--GROWTH FUND BEGINNING 1/1/88 WITH A THEORETICAL INVESTMENT IN THE STANDARD
& POOR'S 500 INDEX. THE STANDARD & POOR'S 500 INDEX IS AN UNMANAGED
CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE PERFORMANCE OF
THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE MARKET VALUE OF SUCH
STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. IT IS NOT POSSIBLE TO INVEST
DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES
AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS
OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES CHARGE WAS
DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL DIVIDENDS AND
DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR TEN YEARS WOULD HAVE
BEEN 11.94%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. STANDARD & POOR'S 500 INDEX FIGURES FROM STANDARD & POOR'S
AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
11
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--HIGH YIELD FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--High Yield Fund and the Credit Suisse First Boston High Yield
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 CREDIT SUISSE FIRST
LIFE HIGH YIELD FUND BOSTON HIGH YIELD INDEX
<S> <C> <C>
Jan-88 $9,300 $10,000
Dec-88 $10,753 $11,365
Dec-89 $10,564 $11,408
Dec-90 $9,828 $10,680
Dec-91 $13,155 $15,353
Dec-92 $14,898 $17,911
Dec-93 $17,603 $21,298
Dec-94 $17,327 $21,091
Dec-95 $20,762 $24,757
Dec-96 $23,370 $27,832
Dec-97 $26,284 $31,347
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 12.47% 4.58%
Five Years 12.02% 10.40%
Ten Years 10.95% 10.15%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--HIGH YIELD FUND BEGINNING 1/1/88 WITH A THEORETICAL INVESTMENT IN THE
CREDIT SUISSE FIRST BOSTON HIGH YIELD INDEX. THE CREDIT SUISSE FIRST BOSTON HIGH
YIELD INDEX IS DESIGNED TO MEASURE THE PERFORMANCE OF THE HIGH YIELD BOND
MARKET. THE INDEX CONSISTS OF 1,282 DIFFERENT ISSUES, 1,089 OF WHICH ARE CASH
PAY, 150 ARE ZERO-COUPON, 12 ARE STEP BONDS, 21 ARE PAYMENT-IN-KIND BONDS AND
THE REMAINING 10 ARE IN DEFAULT. THE BONDS INCLUDED IN THE INDEX HAVE AN AVERAGE
LIFE OF 8.2 YEARS, AN AVERAGE MATURITY OF 8.3 YEARS, AN AVERAGE DURATION OF 4.5
YEARS AND AN AVERAGE COUPON OF 10.4%. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN
THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES.
FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS OTHERWISE
INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM
THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS
WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR TEN YEARS WOULD HAVE
BEEN 9.87%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. THE UNUSUALLY HIGH CURRENT YIELDS OFFERED REFLECT THE
SUBSTANTIAL RISKS ASSOCIATED WITH INVESTMENTS IN HIGH YIELD BONDS. THE ISSUERS
OF THE BONDS PAY HIGHER INTEREST RATES BECAUSE THEY HAVE A GREATER LIKELIHOOD
OF FINANCIAL DIFFICULTY, WHICH COULD RESULT IN THEIR INABILITY TO REPAY THE
BONDS FULLY WHEN DUE. PRICES OF HIGH YIELD BONDS ARE ALSO SUBJECT TO GREATER
FLUCTUATIONS. CREDIT SUISSE FIRST BOSTON HIGH YIELD INDEX FIGURES FROM CREDIT
SUISSE FIRST BOSTON CORPORATION AND ALL OTHER FIGURES FROM FIRST INVESTORS
MANAGEMENT COMPANY, INC.
12
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--INTERNATIONAL SECURITIES FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--International Securities Fund and the Morgan Stanley World Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 LIFE INTERNATIONAL MORGAN STANLEY
SECURITIES FUND WORLD INDEX
<S> <C> <C>
Apr-90 $9,300 $10,000
Dec-90 $9,647 $9,873
Dec-91 $11,135 $11,746
Dec-92 $10,991 $11,200
Dec-93 $13,427 $13,791
Dec-94 $13,254 $14,563
Dec-95 $15,732 $17,665
Dec-96 $18,129 $20,138
Dec-97 $19,777 $23,159
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 9.09% 1.48%
Five Years 12.47% 10.84%
Since Inception (4/16/90) 10.27% 9.24%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--INTERNATIONAL SECURITIES FUND BEGINNING 4/16/90 (INCEPTION DATE) WITH A
THEORETICAL INVESTMENT IN THE MORGAN STANLEY WORLD INDEX. THE MORGAN STANLEY
WORLD INDEX IS DESIGNED TO MEASURE THE PERFORMANCE OF STOCK MARKETS IN THE
UNITED STATES, EUROPE, CANADA, AUSTRALIA, NEW ZEALAND AND THE FAR EAST. THE
INDEX CONSISTS OF APPROXIMATELY 60% OF THE AGGREGATE MARKET VALUE OF THE COVERED
STOCK EXCHANGES. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN
ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES
OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN
ASSUMED THAT THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000
INVESTMENT IN THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN SINCE INCEPTION WOULD HAVE
BEEN 8.95%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. MORGAN STANLEY WORLD INDEX FIGURES FROM MORGAN STANLEY &
COMPANY, INC. AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY,
INC.
13
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--INVESTMENT GRADE FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Investment Grade Fund and the Lehman Brothers Corporate Bond Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 LEHMAN BROTHERS CORPORATE
LIFE INVESTMENT GRADE FUND BOND INDEX
<S> <C> <C>
Jan-92 $9,300 $10,000
Dec-92 $10,120 $10,869
Dec-93 $11,215 $12,190
Dec-94 $10,819 $11,711
Dec-95 $12,949 $14,317
Dec-96 $13,317 $14,787
Dec-97 $14,642 $16,300
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 9.81% 2.08%
Five Years 7.64% 6.10%
Since Inception (1/7/92) 7.85% 6.55%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--INVESTMENT GRADE FUND BEGINNING 1/7/92 (INCEPTION DATE) WITH A THEORETICAL
INVESTMENT IN THE LEHMAN BROTHERS CORPORATE BOND INDEX. THE LEHMAN BROTHERS
CORPORATE BOND INDEX INCLUDES ALL PUBLICLY ISSUED, FIXED RATE, NONCONVERTIBLE
INVESTMENT GRADE DOLLAR-DENOMINATED, S.E.C.-REGISTERED CORPORATE DEBT. ALL
ISSUES HAVE AT LEAST ONE YEAR TO MATURITY AND AN OUTSTANDING PAR VALUE OF AT
LEAST $100 MILLION. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN
ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES
OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN
ASSUMED THAT THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000
INVESTMENT IN THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR, FIVE YEARS AND
SINCE INCEPTION WOULD HAVE BEEN 1.83%, 5.51% AND 5.98%, RESPECTIVELY. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT
RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. LEHMAN BROTHERS CORPORATE BOND INDEX FIGURES FROM LEHMAN BROTHERS, INC.
AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
14
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--TARGET MATURITY 2007 FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Target Maturity 2007 Fund and the Salomon Brothers Government
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
LIFE TARGET MATURITY 2007 FUND SALOMON BROTHERS GOVERNMENT INDEX
<S> <C> <C>
Apr-95 9,300 10,000
Dec-95 11,405 11,162
Dec-96 11,159 11,490
Dec-97 12,652 12,599
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 13.38% 5.46%
Since Inception (4/26/95) 12.14% 9.16%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--TARGET MATURITY 2007 FUND BEGINNING 4/26/95 (INCEPTION DATE) WITH A
THEORETICAL INVESTMENT IN THE SALOMON BROTHERS GOVERNMENT INDEX. THE SALOMON
BROTHERS GOVERNMENT INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX THAT
CONSISTS OF DEBT ISSUED BY THE U.S. TREASURY AND U.S. GOVERNMENT SPONSORED
AGENCIES. EVERY ISSUE INCLUDED IN THE INDEX IS TRADER-PRICED AND THE INDEX
FOLLOWS CONSISTENT AND REALISTIC AVAILABILITY LIMITS, INCLUDING ONLY THOSE
SECURITIES WITH SUFFICIENT AMOUNTS OUTSTANDING. IT IS NOT POSSIBLE TO INVEST
DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES
AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS
OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES CHARGE WAS
DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL DIVIDENDS AND
DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE
INCEPTION WOULD HAVE BEEN 5.22% AND 8.97%, RESPECTIVELY. RESULTS REPRESENT
PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. SALOMON
BROTHERS GOVERNMENT INDEX FIGURES FROM SALOMON BROTHERS AND ALL OTHER FIGURES
FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
15
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--TARGET MATURITY 2010 FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Target Maturity 2010 Fund and the Salomon Brothers Government
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
LIFE TARGET MATURITY 2010 FUND SALOMON BROTHERS GOVERNMENT INDEX
<S> <C> <C>
Apr-96 $9,300 $10,000
Dec-96 $10,381 $10,596
Dec-97 $12,028 $11,619
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 15.86% 7.75%
Since Inception (4/30/96) 16.62% 11.68%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--TARGET MATURITY 2010 FUND BEGINNING 4/30/96 (INCEPTION DATE) WITH A
THEORETICAL INVESTMENT IN THE SALOMON BROTHERS GOVERNMENT INDEX. THE SALOMON
BROTHERS GOVERNMENT INDEX IS A MARKET CAPITALIZATION-WEIGHTED INDEX THAT
CONSISTS OF DEBT ISSUED BY THE U.S. TREASURY AND U.S. GOVERNMENT SPONSORED
AGENCIES. EVERY ISSUE INCLUDED IN THE INDEX IS TRADER-PRICED AND THE INDEX
FOLLOWS CONSISTENT AND REALISTIC AVAILABILITY LIMITS, INCLUDING ONLY THOSE
SECURITIES WITH SUFFICIENT AMOUNTS OUTSTANDING. IT IS NOT POSSIBLE TO INVEST
DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES
AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS
OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE MAXIMUM SALES CHARGE WAS
DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE FUND AND ALL DIVIDENDS AND
DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE
INCEPTION WOULD HAVE BEEN 7.48% AND 11.46%, RESPECTIVELY. RESULTS REPRESENT
PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. SALOMON
BROTHERS GOVERNMENT INDEX FIGURES FROM SALOMON BROTHERS AND ALL OTHER FIGURES
FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
16
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS LIFE SERIES FUND--UTILITIES INCOME FUND
Comparison of change in value of $10,000 investment in the First Investors Life
Series Fund--Utilities Income Fund, the Standard & Poor's 500 Index and the
Standard & Poor's Utilities Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
LIFE UTILITIES INCOME FUND STANDARD & POOR'S 500 INDEX
<S> <C> <C>
Nov-93 $9,300 $10,000
Dec-93 $9,247 $10,121
Dec-94 $8,577 $10,251
Dec-95 $11,172 $14,443
Dec-96 $12,242 $17,759
Dec-97 $15,312 $23,638
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
One Year 25.07% 16.29%
Since Inception (11/15/93) 12.83% 10.87%
<CAPTION>
AS OF DECEMBER 31, 1997
STANDARD & POOR'S UTILITIES INDEX
<S> <C>
Nov-93 $10,000
Dec-93 $9,906
Dec-94 $8,617
Dec-95 $11,815
Dec-96 $12,133
Dec-97 $15,138
One Year
Since Inception (11/15/93)
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS LIFE SERIES
FUND--UTILITIES INCOME FUND BEGINNING 11/15/93 (INCEPTION DATE) WITH THEORETICAL
INVESTMENTS IN THE STANDARD & POOR'S 500 INDEX AND THE STANDARD & POOR'S
UTILITIES INDEX. THE STANDARD & POOR'S 500 INDEX IS AN UNMANAGED
CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE PERFORMANCE OF
THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE MARKET VALUE OF SUCH
STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. THE STANDARD & POOR'S UTILITIES
INDEX IS A CAPITALIZATION-WEIGHTED INDEX OF 37 STOCKS DESIGNED TO MEASURE THE
PERFORMANCE OF THE UTILITY SECTOR OF THE STANDARD & POOR'S 500 INDEX. IT IS NOT
POSSIBLE TO INVEST DIRECTLY IN THESE INDICES. IN ADDITION, THE INDICES DO NOT
TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE
ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE
MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE
FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE "S.E.C. STANDARDIZED" RETURNS SHOWN ARE
BASED ON THE MAXIMUM SALES CHARGE OF 7%. SOME OR ALL OF THE EXPENSES OF THE
FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE
INCEPTION WOULD HAVE BEEN 16.08% AND 10.68%, RESPECTIVELY. RESULTS REPRESENT
PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. STANDARD &
POOR'S 500 INDEX AND STANDARD & POOR'S UTILITIES INDEX FIGURES FROM STANDARD &
POOR'S AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
17
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE BLUE CHIP FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--92.6%
BASIC MATERIALS--2.9%
6,600 Aluminum Company of America $ 464,475 $ 30
8,500 Dow Chemical Company 862,750 56
24,300 Du Pont (E.I.) de Nemours & Company 1,459,519 95
21,000 Monsanto Company 882,000 57
14,400 Morton International, Inc. 495,000 32
9,600 Sigma-Aldrich Corporation 381,600 25
- ---------------------------------------------------------------------------------------
4,545,344 295
- ---------------------------------------------------------------------------------------
CAPITAL GOODS--10.0%
24,000 AlliedSignal, Inc. 934,500 61
19,600 *American Power Conversion Corporation 463,050 30
15,300 Avery Dennison Corporation 684,675 44
26,200 Boeing Company 1,282,162 83
15,500 Corning, Inc. 575,437 37
11,300 Emerson Electric Company 637,744 41
64,000 General Electric Company 4,696,000 305
35,100 Ingersoll-Rand Company 1,421,550 92
7,600 Lockheed Martin Corporation 748,600 49
15,200 Textron, Inc. 950,000 62
15,500 Thomas & Betts Corporation 732,375 47
25,100 Tyco International, Ltd. 1,131,069 73
28,200 *USA Waste Services, Inc. 1,106,850 72
- ---------------------------------------------------------------------------------------
15,364,012 996
- ---------------------------------------------------------------------------------------
COMMUNICATION SERVICES--5.5%
39,000 *AirTouch Communications, Inc. 1,620,937 105
17,500 Bell Atlantic Corporation 1,592,500 103
18,500 BellSouth Corporation 1,041,781 68
25,100 GTE Corporation 1,311,475 85
4,200 *Intermedia Communications, Inc. 255,150 17
33,900 *LCI International, Inc. 1,042,425 68
21,100 SBC Communications, Inc. 1,545,575 100
- ---------------------------------------------------------------------------------------
8,409,843 546
- ---------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS--9.0%
26,500 *Cendant Corporation $ 910,937 $ 59
24,000 Chrysler Corporation 844,500 55
13,100 *Costco Companies, Inc. 584,587 38
25,300 *Federated Department Stores, Inc. 1,089,481 71
5,300 Goodyear Tire & Rubber Company 337,212 22
23,900 Hilton Hotels Corporation 711,025 46
18,750 Home Depot, Inc. 1,103,906 72
26,800 *Lear Corporation 1,273,000 83
10,550 Masco Corporation 536,731 35
28,200 Mattel, Inc. 1,050,450 68
6,000 McGraw-Hill Companies, Inc. 444,000 29
20,900 Ogden Corporation 589,119 38
17,600 *Staples, Inc. 488,400 32
25,300 Tribune Company 1,574,925 102
12,500 Unifi, Inc. 508,594 33
46,000 Wal-Mart Stores, Inc. 1,814,125 118
- ---------------------------------------------------------------------------------------
13,860,992 901
- ---------------------------------------------------------------------------------------
CONSUMER STAPLES--14.4%
21,200 American Stores Company 435,925 28
27,300 Anheuser-Busch Companies, Inc. 1,201,200 78
14,000 *Apollo Group, Inc. 661,500 43
11,200 Clorox Company 885,500 57
25,000 Coca-Cola Company 1,665,625 108
28,600 ConAgra, Inc. 938,437 61
12,900 CPC International, Inc. 1,389,975 90
24,400 Felcor Suite Hotels, Inc. 866,200 56
14,000 Fort James Corporation 535,500 35
10,900 Gillette Company 1,094,769 71
39,000 *Host Marriott Corporation 765,375 50
16,500 Kimberly-Clark Corporation 813,656 53
51,000 PepsiCo, Inc. 1,858,312 121
33,800 Philip Morris Companies, Inc. 1,531,562 99
26,100 Procter & Gamble Company 2,083,106 135
- ---------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE BLUE CHIP FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
8,500 Rite Aid Corporation $ 498,844 $ 32
9,690 *Safeway, Inc. 612,892 40
16,537 *Tele-Communications, Inc. Liberty Media Group -
Series "A" 599,466 39
22,500 Time Warner, Inc. 1,395,000 90
18,400 Unilever N.V. 1,148,850 75
12,000 Walt Disney Company 1,188,750 77
- ---------------------------------------------------------------------------------------
22,170,444 1,438
- ---------------------------------------------------------------------------------------
ENERGY--9.6%
9,500 Amoco Corporation 808,687 52
19,800 Atlantic Richfield Company 1,586,475 103
15,900 Baker Hughes, Inc. 693,637 45
12,700 Chevron Corporation 977,900 63
14,300 Dresser Industries, Inc. 599,706 39
28,000 Exxon Corporation 1,713,250 111
4,800 Kerr-McGee Corporation 303,900 20
15,200 Mobil Corporation 1,097,250 71
41,700 Royal Dutch Petroleum Company 2,259,619 147
11,800 Schlumberger, Ltd. 949,900 62
10,800 Texaco, Inc. 587,250 38
42,400 Tosco Corporation 1,603,250 104
56,400 Williams Companies, Inc. 1,600,350 104
- ---------------------------------------------------------------------------------------
14,781,174 959
- ---------------------------------------------------------------------------------------
FINANCIAL--16.4%
14,400 Allstate Corporation 1,308,600 85
9,300 American Express Company 830,025 54
14,150 American International Group, Inc. 1,538,812 100
13,600 BankAmerica Corporation 992,800 64
20,900 BankBoston Corporation 1,963,294 127
7,800 Chase Manhattan Corporation 854,100 55
9,900 Chubb Corporation 748,687 49
9,500 Citicorp 1,201,156 78
28,000 Conseco, Inc. 1,272,250 83
- ---------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
32,000 Fannie Mae $ 1,826,000 $ 118
35,300 First Union Corporation 1,809,125 117
19,800 Freddie Mac 830,363 54
12,100 Jefferson-Pilot Corporation 942,288 61
12,200 Marshall & Ilsley Corporation 757,925 49
15,200 Merrill Lynch & Company, Inc. 1,108,650 72
41,700 Money Store, Inc. 875,700 57
9,800 Morgan Stanley, Dean Witter, Discover and Company 579,425 38
14,500 NationsBank Corporation 881,781 57
56,000 Norwest Corporation 2,163,000 140
28,350 Travelers Group, Inc. 1,527,356 99
28,700 USF&G Corporation 633,194 41
8,500 Wachovia Corporation 689,563 45
- ---------------------------------------------------------------------------------------
25,334,094 1,643
- ---------------------------------------------------------------------------------------
HEALTHCARE--10.9%
12,900 Abbott Laboratories 845,756 55
11,700 Baxter International, Inc. 590,119 38
23,100 Bristol-Myers Squibb Company 2,185,838 142
25,200 Eli Lilly and Company 1,754,550 114
24,050 *Health Management Associates, Inc. - Class "A" 607,263 39
19,500 Johnson & Johnson 1,284,563 83
34,900 *MedPartners, Inc. 780,888 51
28,200 *Medtronic, Inc. 1,475,213 96
23,100 Merck & Company, Inc. 2,454,375 159
22,300 Pfizer, Inc. 1,662,744 108
42,300 Pharmacia & Upjohn, Inc. 1,549,238 100
12,000 United Healthcare Corporation 596,250 39
8,400 Warner-Lambert Company 1,041,600 68
- ---------------------------------------------------------------------------------------
16,828,397 1,092
- ---------------------------------------------------------------------------------------
TECHNOLOGY--10.7%
18,400 *Adaptec, Inc. 683,100 44
39,400 *Cadence Design Systems, Inc. 965,300 63
- ---------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE BLUE CHIP FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
27,600 *Cisco Systems, Inc. $ 1,538,700 $ 100
28,200 Comdisco, Inc. 942,938 61
5,550 Eastman Kodak Company 337,509 22
5,900 Grainger (W.W.), Inc. 573,406 37
16,000 Hewlett-Packard Company 1,000,000 65
20,000 Intel Corporation 1,405,000 91
17,200 International Business Machines Corporation 1,798,475 117
9,600 *Microsoft Corporation 1,240,800 80
20,800 Motorola, Inc. 1,186,900 77
7,500 Raytheon Company 378,750 25
16,200 *Sterling Commerce, Inc. 622,688 40
30,700 *Sun Microsystems, Inc. 1,224,163 79
28,200 *Synopsys, Inc. 1,008,150 65
14,000 *Tellabs, Inc. 740,250 48
32,100 *Transcrypt International, Inc. 798,488 52
- ---------------------------------------------------------------------------------------
16,444,617 1,066
- ---------------------------------------------------------------------------------------
TRANSPORTATION--.6%
6,900 Burlington Northern Santa Fe Corporation 641,269 42
5,900 *US Airways Group, Inc. 368,750 24
- ---------------------------------------------------------------------------------------
1,010,019 66
- ---------------------------------------------------------------------------------------
UTILITIES--2.6%
24,000 Consolidated Edison, Inc. 984,000 64
17,500 Duke Energy Corporation 969,063 63
21,800 FPL Group, Inc. 1,290,288 84
20,900 Sierra Pacific Resources 783,750 51
- ---------------------------------------------------------------------------------------
4,027,101 262
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $101,878,281) 142,776,037 9,264
- ---------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--6.9%
$ 2,500M American Express Credit Corp., 5.75%, 1/12/98 $ 2,495,608 $ 162
1,600M Bell Atlantic Network Funding, Inc., 5.88%,
1/13/98 1,596,864 103
4,300M BP America, Inc., 5.95%, 1/22/98 4,285,075 278
2,200M Hartford Steam Boiler Insp. & Ins. Co., 5.88%,
1/5/98 2,198,563 143
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$10,576,110) 10,576,110 686
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $112,454,391) 99.5% 153,352,147 9,950
OTHER ASSETS, LESS LIABILITIES .5 773,724 50
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $154,125,871 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
23
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE CASH MANAGEMENT FUND
December 31, 1997
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL INTEREST $10,000 OF
AMOUNT SECURITY RATE* VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
BANKERS' ACCEPTANCES--4.1%
$ 200M Regions Bank, 4/28/98 (cost $196,379) 5.57% $ 196,379 $ 413
- ------------------------------------------------------------------------------------------------
CORPORATE NOTES--80.5%
200M Ameritech Capital Corp., 2/11/98 5.57 198,731 418
230M Avnet, Inc., 1/23/98 5.77 229,189 481
100M Bell Atlantic Financial Corp., 1/14/98 6.15 99,778 210
200M BellSouth Telecommunications, Inc., 2/25/98 5.75 198,243 416
200M Carolina Power & Light Co., 3/20/98 5.70 197,530 415
230M Engelhard Corporation, 2/27/98 5.72 227,917 479
150M Ford Motor Credit Corp., 2/11/98 5.65 149,035 313
85M Ford Motor Credit Corp., 2/12/98 5.58 84,447 177
200M Gannett, Inc., 3/1/98 5.72 199,806 420
200M General Electric Capital Corp., 2/25/98 5.71 198,255 416
200M Idaho Power Co., 1/13/98 6.00 199,600 419
225M Laclede Gas Co., 1/14/98 5.70 224,537 472
200M McGraw-Hill, Inc., 3/19/98 5.67 197,574 415
200M Merrill Lynch & Co., 3/27/98 5.71 197,303 414
200M MetLife Funding, Inc., 3/2/98 5.68 198,106 416
200M Nalco Chemical Co., 2/17/98 5.75 198,499 417
100M Paccar Financial Corp., 6/15/98 6.18 99,926 210
230M Prudential Funding Corp., 2/13/98 5.67 228,442 480
150M Southern Company, 3/12/98 5.77 148,317 312
110M Texaco, Inc., 1/30/98 5.78 109,488 230
100M Texaco, Inc., 3/13/98 5.74 98,868 208
150M Winn-Dixie Stores, Inc., 1/13/98 5.58 149,721 315
- ------------------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE NOTES (cost $3,833,312) 3,833,312 8,053
- ------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES--6.3%
100M Federal Home Loan Mortgage Corp., 3/11/98 5.19 99,889 210
200M Federal National Mortgage Association, 7/15/98 5.24 199,373 419
- ------------------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT AGENCIES (cost
$299,262) 299,262 629
- ------------------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL INTEREST $10,000 OF
AMOUNT SECURITY RATE* VALUE NET ASSETS
- ------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
VARIABLE RATE NOTES--8.4%
$ 200M IBM Credit Corp., 7/6/98 6.11% $ 199,934 $ 420
200M PNC Bank N.A., 9/18/98 6.12 199,916 420
- ------------------------------------------------------------------------------------------------
TOTAL VALUE OF VARIABLE RATE NOTES (cost $399,850) 399,850 840
- ------------------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $4,728,803) 99.3% 4,728,803 9,935
OTHER ASSETS, LESS LIABILITIES .7 31,087 65
- ------------------------------------------------------------------------------------------------
NET ASSETS 100.0% $4,759,890 $ 10,000
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
* The interest rates shown for the bankers' acceptances, corporate and U.S.
Government agency notes are the effective rates at the time of purchase by the
Fund. The interest rates shown on variable rate notes are adjusted
periodically; the interest rates shown are the rates that were in effect at
December 31, 1997.
See notes to financial statements
25
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE DISCOVERY FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--86.4%
BASIC MATERIALS--3.6%
31,832 Birmingham Steel Corporation $ 501,354 $ 50
18,022 Boise Cascade Corporation 545,165 55
4,700 ChemFirst, Inc. 132,775 13
19,000 *ChiRex, Inc. 334,875 34
7,900 Dexter Corporation 341,181 34
42,400 *Gaylord Container Corporation - Class "A" 243,800 25
16,056 Lilly Industries, Inc. - Class "A" 331,155 33
19,567 Louisiana-Pacific Corporation 371,773 37
10,673 Schulman (A.), Inc. 268,159 27
7,900 Southdown, Inc. 466,100 47
- ---------------------------------------------------------------------------------------
3,536,337 355
- ---------------------------------------------------------------------------------------
CAPITAL GOODS--8.1%
14,700 Aeroquip-Vickers, Inc. 721,219 72
14,700 *American Power Conversion Corporation 347,287 35
20,222 *American Residential Services, Inc. 315,969 32
26,121 *Checkpoint Systems, Inc. 457,117 46
16,500 Columbus McKinnon Corporation 400,125 40
19,005 Corning, Inc. 705,561 71
32,346 *Corporate Express, Inc. 416,455 42
12,400 *Eastern Environmental Services, Inc. 272,800 27
35,100 Gleason Corporation 945,506 95
11,900 *Hadco Corporation 538,475 54
31,700 *ITEQ, Inc. 364,550 37
19,600 *Jacobs Engineering Group, Inc. 497,350 50
38,760 *Newpark Resources, Inc. 678,300 68
25,400 *Philip Services Corporation 365,125 37
6,662 *Sanmina Corporation 451,350 45
23,452 Titan International, Inc. 470,506 47
9,400 *Tractor Supply Company 138,650 14
- ---------------------------------------------------------------------------------------
8,086,345 812
- ---------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMUNICATION SERVICES--4.6%
13,800 *Brooks Fiber Properties, Inc. $ 759,000 $ 76
17,500 Cincinnati Bell, Inc. 542,500 55
23,900 *Clearnet Communications, Inc. - Class "A" 271,862 27
31,738 ECI Telecommunications, Ltd. (ADR) 809,319 81
11,700 *ICG Communications, Inc. 318,825 32
19,239 *IXC Communications, Inc. 603,624 61
20,000 *Primus Telecommunications Group, Inc. 322,500 32
21,800 *Tel-Save Holdings, Inc. 433,275 44
74,600 *USCI, Inc. 522,200 52
- ---------------------------------------------------------------------------------------
4,583,105 460
- ---------------------------------------------------------------------------------------
CONSUMER CYCLICALS--18.2%
23,900 *Activision, Inc. 427,212 43
16,000 *American Skiing Company 238,000 24
10,986 *APAC Teleservices, Inc. 148,311 15
9,600 *Avis Rent A Car, Inc. 306,600 31
24,950 *Building Materials Holding Corporation 261,975 26
25,475 *Cendant Corporation 875,703 88
51,292 *CheckFree Holdings Corporation 1,384,884 139
13,600 *Children's Place Retail Stores, Inc. 69,700 7
13,400 *Coleman Company, Inc. 215,237 22
3,200 *Computer Learning Centers, Inc. 196,000 20
16,000 *dELiA*s, Inc. 356,000 36
24,600 *Eagle Hardware & Garden, Inc. 476,625 48
29,678 *Extended Stay America, Inc. 369,120 37
15,839 *Federated Department Stores, Inc. 682,067 69
27,000 Innkeepers USA Trust 418,500 42
28,600 *International Comfort Products Corporation 239,525 24
17,500 *Just For Feet, Inc. 229,687 23
1,600 *Lamar Advertising Company 63,600 6
9,450 *NCO Group, Inc. 243,337 24
23,733 *Neiman Marcus Group, Inc. 717,923 72
32,710 Oakwood Homes Corporation 1,085,563 109
30,112 *OfficeMax, Inc. 429,096 43
- ---------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE DISCOVERY FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
40,200 Ogden Corporation $ 1,133,137 $ 114
8,100 *Outdoor Systems, Inc. 310,837 31
16,000 *Pegasystems, Inc. 323,000 32
11,235 *Petco Animal Supplies, Inc. 269,640 27
33,049 *PETsMART, Inc. 239,605 24
19,200 *PMT Services, Inc. 266,400 27
35,693 *Prime Hospitality Corporation 727,245 73
12,600 *Proffitt's, Inc. 358,312 36
42,500 *Saks Holdings, Inc. 879,219 88
22,000 *Scientific Games Holdings Corporation 445,500 45
8,000 *Signature Resorts, Inc. 175,000 18
17,600 *Stage Stores, Inc. 657,800 66
31,800 *Travis Boats & Motors, Inc. 767,175 77
44,558 *U.S. Office Products Company 874,451 88
6,500 *Universal Outdoor Holdings, Inc. 338,000 34
39,900 Wolverine World Wide, Inc. 902,737 91
- ---------------------------------------------------------------------------------------
18,102,723 1,819
- ---------------------------------------------------------------------------------------
CONSUMER STAPLES--8.9%
22,469 Apple South, Inc. 294,906 30
29,900 *Cinar Films, Inc. - Class "B" 1,162,362 117
14,400 *Emmis Broadcasting Corporation - Class "A" 657,000 66
77,894 *Four Media Company 701,046 70
20,700 *Jones Intercable, Inc. - Class "A" 363,544 37
64,501 *Metromedia International Group, Inc. 612,759 62
15,900 *Pre-Paid Legal Services, Inc. 543,581 55
27,806 Richfood Holdings, Inc. 785,519 79
24,108 Rite Aid Corporation 1,414,838 142
21,300 Rival Company 279,562 28
16,800 *Steiner Leisure, Ltd. 518,700 52
43,183 *Tele-Communications, Inc. Liberty Media Group -
Series "A" 1,565,384 157
- ---------------------------------------------------------------------------------------
8,899,201 895
- ---------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENERGY--7.0%
10,300 *EVI, Inc. $ 533,025 $ 54
37,400 *Global Industries, Ltd. 635,800 64
28,600 *Nabors Industries, Inc. 899,112 90
34,000 *Patterson Energy, Inc. 1,315,375 132
35,400 *Precision Drilling Corporation - Class "A" 862,875 87
23,200 *R&B Falcon Corporation 813,450 82
14,600 Tosco Corporation 552,063 55
9,400 *Trico Marine Services, Inc. 276,125 28
27,000 *Veritas DGC, Inc. 1,066,500 107
- ---------------------------------------------------------------------------------------
6,954,325 699
- ---------------------------------------------------------------------------------------
FINANCIAL--11.7%
8,000 Astoria Financial Corporation 446,000 45
12,700 Centura Banks, Inc. 876,300 88
15,435 Charter One Financial, Inc. 974,334 98
23,850 Commercial Federal Corporation 848,166 85
15,944 Conseco, Inc. 724,456 73
14,600 Dime Bancorp, Inc. 441,650 44
8,700 GreenPoint Financial Corporation 631,294 63
24,389 *HealthCare Financial Partners, Inc. 865,810 87
41,500 *Imperial Credit Industries, Inc. 850,750 86
22,300 *LINC Capital, Inc. 437,638 44
20,982 Mercantile Bancorporation, Inc. 1,290,393 130
20,878 Money Store, Inc. 438,438 44
12,000 *New Century Financial Corporation 123,000 12
9,600 Peoples Heritage Financial Group, Inc. 441,600 44
25,313 Resources Bancshares Mortgage Group, Inc. 412,918 42
25,600 TCF Financial Corporation 868,800 87
12,873 Washington Federal, Inc. 404,695 41
30,900 Westfield America, Inc. 525,300 53
- ---------------------------------------------------------------------------------------
11,601,542 1,166
- ---------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE DISCOVERY FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE--7.6%
24,000 *Acuson Corporation $ 397,500 $ 40
47,800 *American Oncology Resources, Inc. 764,800 77
44,751 *Cardiovascular Dynamics, Inc. 246,131 25
11,200 *Centocor, Inc. 372,400 37
35,389 *FPA Medical Management, Inc. 659,120 66
12,800 *Gilead Sciences, Inc. 489,600 49
17,950 *Health Care and Retirement Corporation 722,488 73
32,400 *Health Systems Design Corporation 332,100 33
6,600 *IMPATH, Inc. 216,150 22
30,300 Jones Medical Industries, Inc. 1,158,975 116
28,180 *Kensey Nash Corporation 468,493 47
16,600 *Ligand Pharmaceuticals - Class "B" 213,725 22
27,788 Mylan Laboratories, Inc. 581,811 58
20,222 *Pediatric Services of America, Inc. 386,746 39
33,400 *PharMerica, Inc. 346,525 35
24,482 *US Bioscience, Inc. 221,868 22
- ---------------------------------------------------------------------------------------
7,578,432 761
- ---------------------------------------------------------------------------------------
TECHNOLOGY--14.6%
23,800 *ACE*COMM Corporation 281,138 28
27,700 *Adaptec, Inc. 1,028,363 103
10,300 *Adtran, Inc. 283,250 28
11,900 *Altera Corporation 394,188 40
19,500 *Bay Networks, Inc. 498,469 50
13,200 *Cisco Systems, Inc. 735,900 74
29,100 *Cymer, Inc. 436,500 44
47,000 *EMC Corporation 1,289,563 130
25,700 *Envoy Corporation 748,513 75
16,000 *Etec Systems, Inc. 744,000 75
34,800 *Hybrid Networks, Inc. 387,150 39
13,100 *Information Management Resources, Inc. 491,250 49
17,882 *Integrated Device Technology, Inc. 168,761 17
7,490 Intel Corporation 526,173 53
11,375 Motorola, Inc. 649,086 65
- ---------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
11,403 National Data Corporation $ 411,933 $ 41
16,000 *Network Appliance, Inc. 568,000 57
16,490 *Network Associates, Inc. 871,909 88
36,838 *PairGain Technologies, Inc. 713,736 72
32,400 *Saville Systems Ireland PLC (ADR) 1,344,600 135
18,373 *Sterling Commerce, Inc. 706,212 71
13,200 *Synopsys, Inc. 471,900 47
25,300 *Transcrypt International, Inc. 629,338 63
40,100 *Turbodyne Technologies, Inc. 155,388 16
- ---------------------------------------------------------------------------------------
14,535,320 1,460
- ---------------------------------------------------------------------------------------
TRANSPORTATION--2.1%
6,300 *Budget Group, Inc. - Class "A" 217,744 22
7,300 Caliber System, Inc. 355,419 36
24,500 Interpool, Inc. 362,906 36
9,900 *Landstar System, Inc. 261,113 26
8,700 *Tower Automotive, Inc. 365,944 37
76,700 Transportacion Maritima Mexicana SA de C.V. -
Class "L" (ADR) 565,663 57
- ---------------------------------------------------------------------------------------
2,128,789 214
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $69,531,189) 86,006,119 8,641
- ---------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--.7%
FINANCIAL
22,300 Excel Realty Trust, Inc., "A" $2.125 (cost
$557,500) 662,031 67
- ---------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE DISCOVERY FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--15.5%
$ 6,300M BP America, 5.95%, 1/22/98 $ 6,278,134 $ 631
1,300M Dresser Industries, Inc., 5.90%, 1/6/98 1,298,935 130
4,800M Hartford Steam Boiler Insp. & Ins. Co., 6.50%,
1/2/98 4,799,133 482
2,500M National Rural Utilities Corp., 5.93%, 1/12/98 2,495,470 251
600M Texaco, Inc., 5.88%, 1/13/98 598,824 60
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$15,470,496) 15,470,496 1,554
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $85,559,185) 102.6% 102,138,646 10,262
EXCESS OF LIABILITIES OVER OTHER ASSETS (2.6) (2,608,717) (262)
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $ 99,529,929 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
32
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE GOVERNMENT FUND
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MORTGAGE-BACKED CERTIFICATES--74.6%
$ 1,197M Federal Home Loan Mortgage Corp., 7.50%, 5/1/2024 $1,230,115 $ 1,349
Federal National Mortgage Association:
227M 7%, 1/1/2026 229,598 252
866M 7%, 2/1/2026 874,506 959
1,246M 9%, 6/1/2015 1,327,916 1,456
556M 9%, 10/1/2020 598,423 656
1,074M 11%, 10/1/2015 1,208,903 1,326
Government National Mortgage Association I
Program:
990M 7.50%, 8/15/2026 1,015,976 1,114
108M 11.50%, 10/15/2012 122,727 134
168M 11.50%, 5/15/2015 191,328 210
- -------------------------------------------------------------------------------------
TOTAL VALUE OF MORTGAGE-BACKED CERTIFICATES (cost
$6,684,862) 6,799,492 7,456
- -------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--11.2%
1,000M Tennessee Valley Authority, 6.375%, 6/15/2005
(cost $1,004,832) 1,022,196 1,121
- -------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--12.2%
1,050M U.S. Treasury Note, 6.625%, 5/15/2007 (cost
$1,099,359) 1,112,015 1,219
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $8,789,053) 98.0% 8,933,703 9,796
OTHER ASSETS, LESS LIABILITIES 2.0 186,030 204
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $9,119,733 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
33
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE GROWTH FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--94.8%
AEROSPACE/DEFENSE--2.0%
26,000 Boeing Company $ 1,272,375 $ 100
10,000 General Motors Corporation - Class "H" 369,375 29
13,000 United Technologies Corporation 946,562 74
- ---------------------------------------------------------------------------------------
2,588,312 203
- ---------------------------------------------------------------------------------------
AUTOMOTIVE--.6%
11,900 Goodyear Tire & Rubber Company 757,137 59
- ---------------------------------------------------------------------------------------
BANKS--7.6%
15,160 Associated Banc-Corp. 835,695 66
12,000 Citicorp 1,517,250 119
11,000 Crestar Financial Corporation 627,000 49
11,917 First Commercial Corporation 698,634 55
33,000 First Union Corporation 1,691,250 133
20,000 Mercantile Bankshares Corporation 782,500 61
18,400 NationsBank Corporation 1,118,950 88
10,600 State Street Corporation 616,787 48
10,000 U.S. Bancorp 1,119,375 88
11,000 Wilmington Trust Corporation 686,125 54
- ---------------------------------------------------------------------------------------
9,693,566 761
- ---------------------------------------------------------------------------------------
BUSINESS SERVICES--3.2%
6,000 Avnet, Inc. 396,000 31
25,000 Dames & Moore Group 331,250 26
12,800 Foster Wheeler Corporation 346,400 27
20,000 G & K Services, Inc. - Class "A" 840,000 66
18,000 Ionics, Inc. 704,250 55
21,500 Metromail Corporation 384,312 30
25,000 Tetra Tech, Inc. 500,000 39
25,000 U.S. Rentals, Inc. 587,500 46
- ---------------------------------------------------------------------------------------
4,089,712 320
- ---------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CHEMICALS--1.3%
15,500 Du Pont (E.I.) de Nemours & Company $ 930,969 $ 73
16,500 Minerals Technologies, Inc. 749,719 59
- ---------------------------------------------------------------------------------------
1,680,688 132
- ---------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--3.0%
7,500 *3Com Corporation 262,031 21
15,000 *Andrew Corporation 360,000 28
3,000 *Black Box Corporation 106,125 8
27,000 *Cisco Systems, Inc. 1,505,250 118
9,884 Lucent Technologies, Inc. 789,484 62
14,000 Motorola, Inc. 798,875 63
- ---------------------------------------------------------------------------------------
3,821,765 300
- ---------------------------------------------------------------------------------------
COMPUTERS & OFFICE EQUIPMENT--3.5%
16,000 *Adaptec, Inc. 594,000 47
36,000 *EMC Corporation 987,750 77
18,600 Hewlett-Packard Company 1,162,500 91
16,000 International Business Machines Corporation 1,673,000 131
- ---------------------------------------------------------------------------------------
4,417,250 346
- ---------------------------------------------------------------------------------------
DRUGS--7.7%
11,000 American Home Products Corporation 841,500 66
33,000 *Covance, Inc. 655,875 51
20,000 *Genzyme Corporation (General Division) 555,000 43
10,000 Johnson & Johnson 658,750 52
10,000 Merck & Company, Inc. 1,062,500 83
27,000 Pfizer, Inc. 2,013,187 158
40,000 Pharmacia & Upjohn, Inc. 1,465,000 115
12,600 Warner-Lambert Company 1,562,400 122
9,700 Zeneca Group PLC (ADR) 1,047,600 82
- ---------------------------------------------------------------------------------------
9,861,812 772
- ---------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE GROWTH FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRICAL EQUIPMENT--3.9%
42,000 General Electric Company $ 3,081,750 $ 242
20,000 Hubbell, Inc. - Class "B" 986,250 77
27,000 *Littlefuse, Inc. 671,625 53
14,000 X-Rite, Inc. 255,500 20
- ---------------------------------------------------------------------------------------
4,995,125 392
- ---------------------------------------------------------------------------------------
ELECTRONICS--4.0%
16,700 AMP, Inc. 701,400 55
35,000 *Analog Devices, Inc. 969,062 76
15,000 Dallas Semiconductor Corporation 611,250 48
19,000 Intel Corporation 1,334,750 105
14,000 *Maxim Integrated Products, Inc. 483,000 38
23,500 *Silicon Valley Group, Inc. 531,687 42
10,000 Texas Instruments, Inc. 450,000 35
- ---------------------------------------------------------------------------------------
5,081,149 399
- ---------------------------------------------------------------------------------------
ENERGY SERVICES--1.6%
11,000 Diamond Offshore Drilling, Inc. 529,375 41
19,000 Schlumberger, Ltd. 1,529,500 120
- ---------------------------------------------------------------------------------------
2,058,875 161
- ---------------------------------------------------------------------------------------
ENERGY SOURCES--4.1%
13,300 Amoco Corporation 1,132,162 89
7,000 Anadarko Petroleum Corporation 424,812 33
4,500 *Barrett Resources Corporation 136,125 11
16,500 Chevron Corporation 1,270,500 100
19,000 Exxon Corporation 1,162,562 91
14,000 Royal Dutch Petroleum Company 758,625 59
10,000 Unocal Corporation 388,125 30
- ---------------------------------------------------------------------------------------
5,272,911 413
- ---------------------------------------------------------------------------------------
ENTERTAINMENT PRODUCTS--.5%
24,000 *Speedway Motorsports, Inc. 595,500 47
- ---------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL SERVICES--4.6%
20,000 American Express Company $ 1,785,000 $ 140
10,400 Associates First Capital Corporation 739,700 58
33,280 Fannie Mae 1,899,040 149
23,285 Morgan Stanley, Dean Witter, Discover and Company 1,376,726 108
- ---------------------------------------------------------------------------------------
5,800,466 455
- ---------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--4.4%
12,000 *Beringer Wine Estates Holdings, Inc. - Class "B" 456,000 36
11,000 General Mills, Inc. 787,875 62
30,000 PepsiCo, Inc. 1,093,125 86
36,000 Philip Morris Companies, Inc. 1,631,250 128
30,000 Sara Lee Corporation 1,689,375 132
- ---------------------------------------------------------------------------------------
5,657,625 444
- ---------------------------------------------------------------------------------------
HEALTH SERVICES--2.1%
19,750 Columbia/HCA Healthcare Corporation 585,094 46
16,000 Shared Medical System Corporation 1,056,000 83
7,300 *Tenet Healthcare Corporation 241,812 19
16,000 United Healthcare Corporation 795,000 62
- ---------------------------------------------------------------------------------------
2,677,906 210
- ---------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--3.5%
14,200 *Bush Boake Allen, Inc. 371,862 29
8,900 Estee Lauder Companies - Class "A" 457,794 36
9,600 Ethan Allen Interiors, Inc. 370,200 29
5,000 Gillette Company 502,188 39
23,000 Kimberly-Clark Corporation 1,134,188 89
19,800 Procter & Gamble Company 1,580,288 124
- ---------------------------------------------------------------------------------------
4,416,520 346
- ---------------------------------------------------------------------------------------
INSURANCE--6.7%
15,000 Ace, Ltd. 1,447,500 113
17,000 Allstate Corporation 1,544,875 121
12,262 American International Group, Inc. 1,333,493 105
- ---------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE GROWTH FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
INSURANCE (continued)
25,000 Frontier Insurance Group, Inc. $ 571,875 $ 45
14,000 Marsh & McLennan Companies, Inc. 1,043,875 82
13,200 Reinsurance Group of America 561,825 44
38,299 Travelers Group, Inc. 2,063,359 162
- ---------------------------------------------------------------------------------------
8,566,802 672
- ---------------------------------------------------------------------------------------
MACHINERY & MANUFACTURING--2.7%
13,200 Caterpillar, Inc. 641,025 50
12,000 Donaldson Company 540,750 42
10,000 Minnesota Mining and Manufacturing Company 820,625 64
3,200 *MSC Industrial Direct Company, Inc. - Class "A" 135,600 11
8,000 Nordson Corporation 367,000 29
23,500 *Paxar Corporation 348,094 27
8,000 *UCAR International, Inc. 319,500 25
9,000 W.H. Brady Company 279,000 22
- ---------------------------------------------------------------------------------------
3,451,594 270
- ---------------------------------------------------------------------------------------
MEDIA--3.3%
24,500 *ADVO, Inc. 477,750 37
33,400 *Cox Communications, Inc. - Class "A" 1,338,088 105
24,000 Gannett Company, Inc. 1,483,500 116
9,000 Walt Disney Company 891,563 70
- ---------------------------------------------------------------------------------------
4,190,901 328
- ---------------------------------------------------------------------------------------
MEDICAL PRODUCTS--1.6%
13,000 Abbott Laboratories 852,313 67
20,000 Biomet, Inc. 512,500 40
18,500 Life Technologies, Inc. 615,125 48
- ---------------------------------------------------------------------------------------
1,979,938 155
- ---------------------------------------------------------------------------------------
METALS & MINERALS--.5%
8,100 Aluminum Company of America 570,038 45
- ---------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
PAPER/FOREST PRODUCTS--1.1%
7,000 Bemis Company, Inc. $ 308,438 $ 24
11,000 Crown Cork & Seal Company, Inc. 551,375 43
13,400 International Paper Company 577,875 45
- ---------------------------------------------------------------------------------------
1,437,688 112
- ---------------------------------------------------------------------------------------
RETAIL--5.3%
38,500 Arbor Drugs, Inc. 712,250 56
16,000 *Barnes & Noble, Inc. 534,000 42
10,500 CVS Corporation 672,656 53
18,000 Dayton Hudson Corporation 1,215,000 95
22,500 Home Depot, Inc. 1,324,688 104
42,000 *OfficeMax, Inc. 598,500 47
6,600 *Stein Mart, Inc. 176,550 14
40,000 Wal-Mart Stores, Inc. 1,577,500 124
- ---------------------------------------------------------------------------------------
6,811,144 535
- ---------------------------------------------------------------------------------------
SOFTWARE/SERVICES--8.4%
31,000 *American Management Systems, Inc. 604,500 47
24,000 Automatic Data Processing, Inc. 1,473,000 115
15,000 BGS Systems, Inc. 525,000 41
15,000 *BISYS Group, Inc. 498,750 39
16,000 *Computer Sciences Corporation 1,336,000 105
14,500 *DST Systems, Inc. 618,969 49
25,000 First Data Corporation 731,250 57
16,000 *Microsoft Corporation 2,068,000 162
16,000 *PeopleSoft, Inc. 624,000 49
10,500 *Policy Management Systems Corporation 730,406 57
21,000 *Sterling Software, Inc. 861,000 67
13,000 *Synopsys, Inc. 464,750 36
4,000 *Systems & Computer Technology Corporation 198,500 16
- ---------------------------------------------------------------------------------------
10,734,125 840
- ---------------------------------------------------------------------------------------
</TABLE>
39
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE GROWTH FUND
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TELEPHONE--3.3%
16,400 A T & T Corporation $ 1,004,500 $ 79
8,500 Century Telephone Enterprises, Inc. 423,406 33
24,000 SBC Communications, Inc. 1,758,000 138
35,000 *WorldCom, Inc. 1,058,750 83
- ---------------------------------------------------------------------------------------
4,244,656 333
- ---------------------------------------------------------------------------------------
TRANSPORTATION--1.3%
20,250 Air Express International Corporation 617,625 48
12,000 Union Pacific Corporation 749,250 59
13,000 Werner Enterprises, Inc. 266,500 21
- ---------------------------------------------------------------------------------------
1,633,375 128
- ---------------------------------------------------------------------------------------
TRAVEL & LEISURE--3.0%
11,000 *Landry's Seafood Restaurants, Inc. 264,000 21
22,000 McDonald's Corporation 1,050,500 82
40,000 *Mirage Resorts, Inc. 910,000 71
66,000 Southwest Airlines Company 1,625,250 127
- ---------------------------------------------------------------------------------------
3,849,750 301
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $85,141,628) 120,936,330 9,479
- ---------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--4.9%
$ 6,203M Paribas Corp., 6.75%, 1/2/98 (collateralized by
U.S. Treasury Note, 7.50%, 2/15/05, valued at
$6,323,522) (cost $6,203,000) 6,203,000 486
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $91,344,628) 99.7% 127,139,330 9,965
OTHER ASSETS, LESS LIABILITIES .3 445,220 35
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $127,584,550 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
40
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE HIGH YIELD FUND
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--90.9%
APPAREL/TEXTILES--3.7%
$ 350M Pillowtex Corp., 9%, 2007 (Note 4) $ 360,500 $ 60
800M Polymer Group, Inc., 9%, 2007 804,000 135
1,000M Westpoint Stevens, Inc., 9.375%, 2005 1,050,000 176
- -------------------------------------------------------------------------------------
2,214,500 371
- -------------------------------------------------------------------------------------
AUTOMOTIVE--2.5%
700M Collins & Aikman Products Co., 11.50%, 2006 784,000 132
700M Walbro Corp., 9.875%, 2005 712,250 119
- -------------------------------------------------------------------------------------
1,496,250 251
- -------------------------------------------------------------------------------------
BUILDING MATERIALS--.9%
500M Falcon Building Products Corp., 9.50%, 2007 521,250 87
- -------------------------------------------------------------------------------------
CHEMICALS--4.1%
700M Harris Chemical North America, Inc., 10.25%, 2001 740,250 124
600M Huntsman Polymers Corp., 11.75%, 2004 679,500 114
950M Hydrochem Industrial Services, Inc., 10.375%,
2007 995,125 167
- -------------------------------------------------------------------------------------
2,414,875 405
- -------------------------------------------------------------------------------------
CONSUMER PRODUCTS--2.5%
700M Commemorative Brands, Inc., 11%, 2007 701,750 118
700M Herff Jones, Inc., 11%, 2005 763,000 128
- -------------------------------------------------------------------------------------
1,464,750 246
- -------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--1.7%
1,000M Radnor Holdings, Inc., 10%, 2003 (Note 4) 1,042,500 175
- -------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--1.3%
750M Clark Material Handling, Inc., 10.75%, 2006 798,750 134
- -------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--1.7%
1,000M AES Corp., 8.50%, 2007 (Note 4) 1,005,000 169
- -------------------------------------------------------------------------------------
</TABLE>
41
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE HIGH YIELD FUND
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRICAL EQUIPMENT--2.2%
$ 550M Amphenol Corp., 9.875%, 2007 $ 580,250 $ 97
700M Essex Group, Inc., 10%, 2003 724,500 122
- -------------------------------------------------------------------------------------
1,304,750 219
- -------------------------------------------------------------------------------------
ENERGY--7.2%
700M Falcon Drilling Co., Inc., 12.50%, 2005 802,585 135
800M Giant Industries, Inc., 9.75%, 2003 822,000 138
800M United Meridian Corp., 10.375%, 2005 888,000 149
1,000M Veritas DGC, Inc., 9.75%, 2003 1,085,000 182
650M Vintage Petroleum, Inc., 9%, 2005 687,375 115
- -------------------------------------------------------------------------------------
4,284,960 719
- -------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--4.4%
320M Doane Products Co., 10.625%, 2006 342,400 57
1,000M International Home Foods, Inc., 10.375%, 2006 1,105,000 185
600M Van de Kamps, Inc., 12%, 2005 672,000 113
500M Windy Hill Pet Food Co., 9.75%, 2007 522,500 88
- -------------------------------------------------------------------------------------
2,641,900 443
- -------------------------------------------------------------------------------------
GAMING/LODGING--2.6%
750M Casino America, Inc., 12.50%, 2003 817,500 137
700M Showboat, Inc., 9.25%, 2008 749,000 126
- -------------------------------------------------------------------------------------
1,566,500 263
- -------------------------------------------------------------------------------------
HEALTHCARE--7.6%
750M Abbey Healthcare Group, Inc., 9.50%, 2002 785,625 132
700M Dade International, Inc., 11.125%, 2006 770,000 129
700M Genesis Healthcare, Inc., 9.75%, 2005 729,750 122
600M ICN Pharmaceuticals, Inc., 9.25%, 2005 637,500 107
400M Integrated Health Services, Inc., 10.25%, 2006 427,000 72
1,100M Tenet Healthcare Corp., 10.125%, 2005 1,199,000 201
- -------------------------------------------------------------------------------------
4,548,875 763
- -------------------------------------------------------------------------------------
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MEDIA (CABLE TV/BROADCASTING)--11.2%
$ 500M Diamond Cable Communications PLC, 0% - 11.75%,
2005 $ 387,500 $ 65
1,075M Echostar Communications Corp., 0% - 12.875%, 2004 983,625 165
500M Grupo Televisa, SA, 11.875%, 2006 565,000 95
500M Rogers Cablesystems, Inc., 10%, 2005 552,500 93
1,000M Salem Communications Corp., 9.50%, 2007 (Note 4) 1,027,500 172
500M Sinclair Broadcasting Group, Inc., 9%, 2007 510,000 86
1,000M Sullivan Broadcasting Co., Inc., 10.25%, 2005 1,075,000 180
900M TCI Satellite Entertainment, Inc., 10.875%, 2007
(Note 4) 945,000 159
600M World Color Press, Inc., 9.125%, 2003 621,000 104
- -------------------------------------------------------------------------------------
6,667,125 1,119
- -------------------------------------------------------------------------------------
MEDIA (OTHER)--3.4%
1,000M Affiliated Newspaper Investments, Inc., 0% -
13.25%, 2006 955,000 160
500M Garden State Newspapers, Inc., 12%, 2004 560,000 94
500M Outdoor Systems, Inc., 8.875%, 2007 523,750 88
- -------------------------------------------------------------------------------------
2,038,750 342
- -------------------------------------------------------------------------------------
MINING/METALS--7.3%
900M Commonwealth Aluminum, Corp., 10.75%, 2006 967,500 162
1,000M CSN Iron, SA, 9.125%, 2007 (Note 4) 855,000 143
800M Gulf States Steel Inc., 13.50%, 2003 820,000 138
700M Wells Aluminum Corp., 10.125%, 2005 745,500 125
1,000M Wheeling-Pittsburgh Corp., 9.25%, 2007 (Note 4) 965,000 162
- -------------------------------------------------------------------------------------
4,353,000 730
- -------------------------------------------------------------------------------------
MISCELLANEOUS--3.8%
700M Allied Waste North America, Inc., 10.25%, 2006 770,000 129
950M Loomis Fargo & Co., 10%, 2004 954,750 160
450M Pierce-Leahy Corp., 11.125%, 2006 510,750 86
- -------------------------------------------------------------------------------------
2,235,500 375
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--5.2%
500M Container Corp., 11.25%, 2004 545,000 91
650M Riverwood International, 10.25%, 2006 645,938 108
- -------------------------------------------------------------------------------------
</TABLE>
43
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE HIGH YIELD FUND
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
PAPER/FOREST PRODUCTS (continued)
$ 800M S.D. Warren Co., Inc., 12%, 2004 $ 884,000 $ 148
1,000M Stone Container Corp., 10.75%, 2002 1,052,500 177
- -------------------------------------------------------------------------------------
3,127,438 524
- -------------------------------------------------------------------------------------
RESTAURANTS--.9%
500M Perkins Family Restaurant, 10.125%, 2007 (Note 4) 510,000 86
- -------------------------------------------------------------------------------------
RETAIL-FOOD/DRUG--2.7%
1,000M Randall's Food Markets, Inc., 9.375%, 2007 (Note
4) 1,025,000 172
570M Stater Brothers Holdings, 9%, 2004 598,500 100
- -------------------------------------------------------------------------------------
1,623,500 272
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS--14.0%
1,500M American Communications Services, Inc., 0% - 13%,
2005 (Note 4) 1,188,750 199
1,000M Brooks Fiber Properties, Inc., 0% - 10.875%, 2006 832,500 140
1,000M Comcast Cellular Holdings, Inc., 9.50%, 2007 1,045,000 175
1,000M McCaw International, Ltd., 0% - 13%, 2007 (Note
4) 590,000 99
1,500M McLeodUSA, Inc., 0% - 10.50%, 2007 1,096,875 184
800M Netia Holdings BV, 0% - 11.25%, 2007 (Note 4) 454,000 76
700M Paging Network, Inc., 10%, 2008 727,125 122
1,100M Powertel, Inc., 0% - 12%, 2006 792,000 133
1,000M Qwest Communications International, 0% - 9.47%,
2007 (Note 4) 682,500 114
800M Qwest Communications International, Inc.,
10.875%, 2007 908,000 152
- -------------------------------------------------------------------------------------
8,316,750 1,394
- -------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $51,579,358) 54,176,923 9,087
- -------------------------------------------------------------------------------------
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES FOR EACH
OR $10,000 OF
WARRANTS SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--.2%
MEDIA (CABLE TV/BROADCASTING)--.0%
2,100 *Echostar Communications Corp. - Class "A" $ 35,175 $ 6
- -------------------------------------------------------------------------------------
MEDIA (OTHER)--.2%
1,000 *Affiliated Newspaper Investments, Inc. 110,000 18
- -------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $20,963) 145,175 24
- -------------------------------------------------------------------------------------
PREFERRED STOCKS--2.5%
MEDIA (CABLE TV/BROADCASTING)--1.6%
830 Time Warner, Inc., 10.25%, PIK, Series "M" 933,750 156
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.9%
10,800 S.D. Warren Co., Inc., 14%, Series "B" 529,200 89
- -------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $1,118,083) 1,462,950 245
- -------------------------------------------------------------------------------------
WARRANTS--.4%
GAMING/LODGING--.0%
200 *Goldriver Finance Corp., Liquidating Trust 200 --
- -------------------------------------------------------------------------------------
MINING/METALS--.0%
800 *Gulf State Steel Acquisition Corp. (expiring
4/15/03) (Note 4) 8 --
- -------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.1%
10,800 *S.D. Warren Co., Inc. (expiring 12/15/06) (Note
4) 54,000 9
- -------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.3%
1,500 *American Communications Services, Inc. (expiring
11/1/05) (Note 4) 157,500 26
1,000 *McCaw International, Ltd. (expiring 4/15/07)
(Note 4) 2,500 1
- -------------------------------------------------------------------------------------
160,000 27
- -------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $2,500) 214,208 36
- -------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE HIGH YIELD FUND
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
UNITS INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
UNITS--1.2%
MEDIA (CABLE TV/BROADCASTING)
700 Star Choice Communications (a) (Note 4) (cost
$700,000) $ 724,500 $ 122
- -------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--3.0%
$ 100M Ford Motor Credit Corp., 5.95%, 1/7/98 99,901 17
700M Ford Motor Credit Corp., 6.12%, 1/9/98 699,048 117
1,000M Lubrizol Corp., 6.35%, 1/5/98 999,294 168
- -------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$1,798,243) 1,798,243 302
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $55,219,147) 98.2% 58,521,999 9,816
OTHER ASSETS, LESS LIABILITIES 1.8 1,096,796 184
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $59,618,795 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
(a) Each unit consists of one 13% Senior Secured Note due 2005, and 23.16
Warrants (expiring 12/15/05) to buy one share of common stock at $.01 per
share
See notes to financial statements
46
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INTERNATIONAL SECURITIES FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--91.4%
UNITED STATES--30.4%
7,075 Abbott Laboratories $ 463,855 $ 62
15,450 American Express Company 1,378,912 185
6,132 American International Group, Inc. 666,855 90
20,400 *Analog Devices, Inc. 564,825 76
11,000 Boeing Company 538,312 72
17,250 *Cisco Systems, Inc. 961,687 129
5,010 Citicorp 633,452 85
3,650 Coca-Cola Company 243,181 33
6,500 CVS Corporation 416,406 56
9,370 Du Pont (E.I.) de Nemours & Company 562,786 76
6,750 Duke Energy Corporation 373,781 50
11,700 Exxon Corporation 715,894 96
9,250 Fannie Mae 527,828 71
7,525 First Data Corporation 220,106 30
10,000 Gannett Company, Inc. 618,125 83
14,700 General Electric Company 1,078,612 145
5,280 Gillette Company 530,310 71
7,675 Hertz Corporation - Class "A" 308,919 42
13,620 Hewlett-Packard Company 851,250 114
9,750 Home Depot, Inc. 574,031 77
6,010 Intel Corporation 422,203 57
10,950 Johnson & Johnson 721,331 97
6,850 Kimberly-Clark Corporation 337,791 45
3,729 Lucent Technologies, Inc. 297,854 40
13,750 McDonald's Corporation 656,563 88
3,575 *Microsoft Corporation 462,069 62
8,700 *Mirage Resorts, Inc. 197,925 27
10,000 *PeopleSoft, Inc. 390,000 52
4,400 Pfizer, Inc. 328,075 44
17,780 Pharmacia & Upjohn, Inc. 651,193 87
6,885 Procter & Gamble Company 549,509 74
8,440 SBC Communications, Inc. 618,230 83
7,930 Schlumberger, Ltd. 638,365 86
- ----------------------------------------------------------------------------------------
</TABLE>
47
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INTERNATIONAL SECURITIES FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
UNITED STATES (continued)
11,400 Southwest Airlines Company $ 280,725 $ 38
13,400 State Street Corporation 779,713 105
12,600 Travelers Group, Inc. 678,825 91
8,800 Unocal Corporation 341,550 46
21,550 Wal-Mart Stores, Inc. 849,878 114
4,780 Walt Disney Company 473,519 64
6,150 Warner-Lambert Company 762,600 102
- ----------------------------------------------------------------------------------------
22,667,045 3,045
- ----------------------------------------------------------------------------------------
UNITED KINGDOM--11.7%
43,000 Associated British Foods PLC 368,617 50
31,900 Bank of Scotland 289,209 39
22,900 Bass PLC 352,681 47
87,900 *Billiton PLC 225,622 30
45,821 BOC Group PLC 758,837 102
40,300 British Petroleum PLC 530,477 71
92,000 BTR PLC 278,530 37
26,400 Burmah Castrol PLC 459,144 62
66,000 Carlton Communications PLC 508,226 68
135,661 Cookson Group PLC 436,381 59
36,000 Diageo PLC 330,822 44
21,700 HSBC Holdings PLC 536,292 72
45,000 Johnson Matthey PLC 403,533 54
45,491 PowerGen PLC 595,063 80
39,000 Rank Group PLC 223,794 30
35,579 Reckitt & Colman PLC 559,071 75
47,509 Royal & Sun Alliance Insurance Group PLC 476,843 64
32,000 Royal Bank of Scotland Group PLC 407,005 55
28,200 Zeneca Group PLC 991,571 133
- ----------------------------------------------------------------------------------------
8,731,718 1,172
- ----------------------------------------------------------------------------------------
JAPAN--7.1%
24,000 Aisin Seiki Company, Ltd. 249,190 34
24,000 Bank Tokyo - Mitsubishi, Ltd. 332,254 45
- ----------------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
JAPAN (continued)
20,000 Daiwa Securities Company, Ltd. $ 69,218 $ 9
22,000 Eisai Company, Ltd. 336,714 45
7,000 Exedy Corporation 53,245 7
9,000 Fuji Machine Manufacturing Company 218,041 29
10,000 Fujisawa Pharmaceutical Company, Ltd. 87,678 12
4,000 Fukuda Denshi, Ltd. 40,916 6
19,000 Hitachi Company, Ltd. 135,899 18
40,000 JGC Corporation 84,600 11
5,000 Mabuchi Motor Company, Ltd. 254,958 34
10,000 Maruichi Steel Tube, Ltd. 122,287 16
6,200 Matsumotokiyoshi Company, Ltd. 238,423 32
21,000 Matsushita Electric Industrial Company, Ltd. 308,488 41
102,000 *Mazda Motor Corporation 243,188 33
3,000 Meiwa Estate Company, Ltd. 22,588 3
6,000 Murata Manufacturing Company, Ltd. 151,360 20
11,000 Namco, Ltd. 320,640 43
6,000 Nomura Securities Company, Ltd. 80,294 11
53,000 Okumura Corporation 126,363 17
2,400 Otsuka Kagu, Ltd. 86,755 12
1,000 Rohm Company, Ltd. 102,291 14
47,000 Sakura Bank, Ltd. 134,829 18
12,000 Sanwa Bank, Ltd. 121,825 16
200 Sawako Corporation 1,323 --
7,400 Shimachu 116,673 16
3,000 Sony Corporation 267,649 36
12,600 Sony Music Entertainment, Inc. 465,154 63
4,000 Square Company, Ltd. 111,366 15
57,000 Sumitomo Rubber Industries, Inc. 241,549 32
18,000 Toyo Ink Manufacturing Company, Ltd. 31,840 4
24,000 Yamato Kogyo Company, Ltd. 144,898 19
- ----------------------------------------------------------------------------------------
5,302,496 711
- ----------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INTERNATIONAL SECURITIES FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
FRANCE--6.4%
10,900 Assurances Generales de France $ 577,807 $ 78
8,812 Banque Nationale de Paris 468,587 63
1,990 Compagnie de Saint Gobain 282,827 38
3,200 Credit Commercial de France 219,420 30
9,194 Havas SA 661,750 89
2,150 Peugeot SA 271,258 36
17,659 Rhone-Poulenc SA - Series "A" 791,385 106
2,898 Societe Generale Paris 395,016 53
5,750 Societe Nationale Elf Aquitaine SA 669,064 90
4,214 Total SA - Class "B" 458,815 62
- ----------------------------------------------------------------------------------------
4,795,929 645
- ----------------------------------------------------------------------------------------
GERMANY--5.6%
28,500 Bayer AG 1,058,023 142
8,050 Degussa AG 398,461 54
10,850 Deutsche Lufthansa AG 203,960 27
2,280 Karstadt AG 788,724 106
2,250 MAN AG 650,082 87
1,140 Mannesmann AG 576,327 77
26,850 *Metallgesellschaft AG 491,291 66
- ----------------------------------------------------------------------------------------
4,166,868 559
- ----------------------------------------------------------------------------------------
CANADA--3.6%
11,200 Alcan Aluminium, Ltd. 308,367 41
21,200 Canadian Imperial Bank of Commerce 659,802 89
14,400 Canadian National Railway Company 680,400 91
25,700 Canadian Pacific, Ltd. 700,325 94
17,700 Canwest Global Communications Corporation - Class
"A" 318,600 43
- ----------------------------------------------------------------------------------------
2,667,494 358
- ----------------------------------------------------------------------------------------
SWITZERLAND--3.4%
50 *Ciba Specialty Chemicals Holding, Inc. 5,965 1
580 Holderbank Financiere Glarus AG 474,005 64
- ----------------------------------------------------------------------------------------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
SWITZERLAND (continued)
543 Nestle AG Regd $ 814,937 $ 109
121 Roche Holdings AG - Genusscheine 1,203,321 162
- ----------------------------------------------------------------------------------------
2,498,228 336
- ----------------------------------------------------------------------------------------
NETHERLANDS--2.9%
2,950 Akzo-Nobel NV 508,734 68
24,571 ING Groep NV 1,035,090 139
9,833 PolyGram NV 470,495 63
2,500 Unilever NV-CVA 154,151 21
- ----------------------------------------------------------------------------------------
2,168,470 291
- ----------------------------------------------------------------------------------------
SWEDEN--2.8%
8,210 ForeningsSparbanken AB - Class "A" 186,770 25
200,600 *Nordbanken Holding AB 1,135,175 152
20,500 Pharmacia & Upjohn, Inc. 754,439 101
- ----------------------------------------------------------------------------------------
2,076,384 278
- ----------------------------------------------------------------------------------------
ITALY--2.3%
15,450 Arnaldo Mondadori Editore SpA 121,468 16
18,800 Istituto Bancario San Paolo Di Torino 179,705 24
222,333 Telecom Italia SpA 1,421,019 191
- ----------------------------------------------------------------------------------------
1,722,192 231
- ----------------------------------------------------------------------------------------
AUSTRALIA--2.1%
50,892 Amcor, Ltd. 223,823 30
42,000 Australian & New Zealand Banking Group, Ltd. 277,485 37
53,514 Boral, Ltd. 135,283 18
37,395 Broken Hill Proprietary, Ltd. 347,205 47
61,000 CSR, Ltd. 206,674 28
98,246 Goodman Fielder, Ltd. 156,191 21
22,992 *ICI Australia, Ltd. 161,043 22
14,000 News Corporation, Ltd. 77,262 10
- ----------------------------------------------------------------------------------------
1,584,966 213
- ----------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INTERNATIONAL SECURITIES FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINLAND--2.0%
18,000 Kesko Oyj $ 284,933 $ 38
31,500 Metsa-Serla OY - Class "B" 245,845 33
7,100 Nokia Corporation - Class "A" (ADR) 497,000 67
3,100 Nokia Oyj - Class "A" 220,311 30
15,200 Rauma OY 237,260 32
- ----------------------------------------------------------------------------------------
1,485,349 200
- ----------------------------------------------------------------------------------------
DENMARK--1.8%
18,500 Unidanmark A/S - Class "A" Regd 1,359,019 183
- ----------------------------------------------------------------------------------------
SPAIN--1.6%
9,300 Banco Popular Espanol SA 649,836 87
19,500 Endesa SA 346,076 47
1,900 Telefonica de Espana (ADR) 173,019 23
- ----------------------------------------------------------------------------------------
1,168,931 157
- ----------------------------------------------------------------------------------------
HONG KONG--1.3%
58,000 Hutchison Whampoa, Ltd. 363,793 49
28,000 Hysan Development Company, Ltd. 55,829 8
55,000 New World Development Company, Ltd. 190,234 26
32,400 Sun Hung Kai Properties, Ltd. 225,802 30
780,000 Tingyi Holding Company 101,634 14
- ----------------------------------------------------------------------------------------
937,292 127
- ----------------------------------------------------------------------------------------
IRELAND--1.0%
14,839 Allied Irish Banks PLC 141,785 19
224,931 Jefferson Smurfit Group PLC 625,466 84
- ----------------------------------------------------------------------------------------
767,251 103
- ----------------------------------------------------------------------------------------
BRAZIL--.8%
5,000 Centrais Electricas Brasileiras SA - Electrobras
(ADR) 124,325 17
4,806,000 Telecomunicacoes Brasileiras SA - Telebras 488,674 66
- ----------------------------------------------------------------------------------------
612,999 83
- ----------------------------------------------------------------------------------------
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
SINGAPORE--.8%
56,750 Keppel Corporation, Ltd. $ 163,014 $ 22
50,000 Keppel Fels, Ltd. 139,470 19
47,000 Keppel Land, Ltd. 64,714 9
51,000 Overseas Union Bank, Ltd. Foreign Redg 195,228 26
- ----------------------------------------------------------------------------------------
562,426 76
- ----------------------------------------------------------------------------------------
MEXICO--.8%
9,700 *Grupo Televisa SA 188,782 25
78,000 Kimberly Clark de Mexico - Class "A" 369,587 50
- ----------------------------------------------------------------------------------------
558,369 75
- ----------------------------------------------------------------------------------------
NEW ZEALAND--.7%
114,595 Brierley Investments, Ltd. 81,844 11
102,000 Carter Holt Harvey, Ltd. 157,539 21
6,950 Telecom Corporation of New Zealand, Ltd. (ADR) 269,312 36
- ----------------------------------------------------------------------------------------
508,695 68
- ----------------------------------------------------------------------------------------
NORWAY--.6%
26,700 Saga Petroleum ASA - Series "A" 459,958 62
- ----------------------------------------------------------------------------------------
ARGENTINA--.5%
26,000 Banco de Galicia Buenos Aires SA - Class "B" 166,429 22
6,200 Telefonica de Argentina SA - Class "B" (ADR) 230,950 31
- ----------------------------------------------------------------------------------------
397,379 53
- ----------------------------------------------------------------------------------------
AUSTRIA--.5%
2,500 OMV AG 345,826 46
- ----------------------------------------------------------------------------------------
CHILE--.2%
6,400 Embotelladora Andina SA - Series "B" (ADR) 124,400 17
- ----------------------------------------------------------------------------------------
PHILIPPINES--.1%
15,600 Metropolitan Bank & Trust Company 106,543 14
- ----------------------------------------------------------------------------------------
CHINA--.1%
7,900 *China Southern Airlines Company, Ltd. - Class
"H" (ADR) 104,181 14
- ----------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INTERNATIONAL SECURITIES FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
INDIA--.1%
3,200 Ranbaxy Laboratories, Ltd. (GDR) $ 82,000 $ 11
- ----------------------------------------------------------------------------------------
THAILAND--.1%
91,434 Land & House Public Company, Ltd. Foreign Regd 18,223 2
6,760 Siam City Cement Public Company, Ltd. Foreign
Regd 7,020 1
1,500 Siam Commercial Bank Public Company, Ltd. Foreign
Regd 1,713 --
7,500 Thai Farmers Bank Public Company, Ltd. Foreign
Regd 13,629 2
- ----------------------------------------------------------------------------------------
40,585 5
- ----------------------------------------------------------------------------------------
MALAYSIA--.1%
47,000 Renong Berhad 21,733 3
18,500 Sime Darby Berhad 17,775 2
- ----------------------------------------------------------------------------------------
39,508 5
- ----------------------------------------------------------------------------------------
INDONESIA--.0%
177,000 PT Kalbe Farma 31,400 4
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $59,654,084) 68,073,901 9,142
- ----------------------------------------------------------------------------------------
PREFERRED STOCKS--2.3%
BRAZIL--1.0%
6,200 Aracruz Celulose SA - Class "B" (ADR) 89,125 12
3,714,700 Companhia Energetic de Minas Gerais (CEMIG) 161,218 22
112,400 *Companhia Riograndense de Telecomunicacoes -
Class "A" 138,484 19
941,000 Petroleo Brasileiro SA - Petrobras 220,006 29
580,000 Telecomunicacoes de Sao Paulo SA 154,338 21
5,000 *Vale Do Rio Doce - Class "B" -- --
- ----------------------------------------------------------------------------------------
763,171 103
- ----------------------------------------------------------------------------------------
DENMARK--.9%
14,330 *ProSieben Media AG 657,506 88
- ----------------------------------------------------------------------------------------
GERMANY--.4%
3,750 Hornbach Holdings AG 258,614 35
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $1,706,775) 1,679,291 226
- ----------------------------------------------------------------------------------------
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT OBLIGATIONS--4.9%
$ 3,700M U.S. Treasury Bills, 5.23%-5.33%, 1/22/98 (cost
$3,666,625) $ 3,666,625 $ 492
- ----------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--2.0%
1,496M Paine Webber, Inc., 6.60%, 1/2/98,
(collateralized by U.S. Treasury Bill, due
7/23/98, valued at $1,529,012) (cost
$1,496,000) 1,496,000 201
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $66,523,484) 100.6% 74,915,817 10,061
EXCESS OF LIABILITIES OVER OTHER ASSETS (.6) (453,129) (61)
- ----------------------------------------------------------------------------------------
NET ASSETS 100.0% $74,462,688 $10,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
55
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INTERNATIONAL SECURITIES FUND
December 31, 1997
Sector diversification of the portfolio was as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
PERCENTAGE
SECTOR OF NET ASSETS VALUE
- -------------------------------------------------------------------
<S> <C> <C>
Banks.................................. 12.6% $ 9,390,721
Drugs.................................. 10.7 7,960,773
Media.................................. 5.7 4,250,071
Energy Sources......................... 5.2 3,854,908
Retail Trade........................... 4.7 3,527,682
Insurance.............................. 4.6 3,435,420
Telephone.............................. 4.5 3,339,688
Food/Beverage/Tobacco.................. 3.7 2,733,369
Machinery & Manufacturing.............. 3.3 2,451,531
Chemicals.............................. 3.2 2,388,910
Household Products..................... 3.1 2,346,268
Metals & Minerals...................... 3.1 2,328,760
Financial Services..................... 2.9 2,138,096
Travel & Leisure....................... 2.7 1,987,788
Communication Equipment................ 2.6 1,976,852
Electronics............................ 2.3 1,685,066
Electric Utilities..................... 2.1 1,600,463
Transportation......................... 2.1 1,543,739
Paper/Forest Products.................. 1.8 1,341,798
Electrical Equipment................... 1.8 1,333,570
Computers & Office Equipment........... 1.7 1,287,631
Software Services...................... 1.6 1,183,541
Automotive............................. 1.4 1,058,430
Business Services...................... 1.1 796,820
Energy Services........................ 1.0 777,835
Entertainment Products................. 1.0 732,803
Real Estate Companies.................. .8 577,390
Aerospace/Defense...................... .7 538,312
Medical Products....................... .7 504,771
Pipeline............................... .5 345,826
Building Materials..................... .3 206,674
Housing................................ .2 127,686
U.S. Treasury Bills.................... 4.9 3,666,625
Repurchase Agreement................... 2.0 1,496,000
- -------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS 100.6 74,915,817
EXCESS OF LIABILITIES OVER OTHER ASSETS (.6) (453,129)
- -------------------------------------------------------------------
NET ASSETS 100.0% $74,462,688
- -------------------------------------------------------------------
- -------------------------------------------------------------------
</TABLE>
See notes to financial statements
56
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INVESTMENT GRADE FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--85.8%
AEROSPACE/DEFENSE--4.8%
$ 300M Boeing Co., 6.35%, 2003 $ 304,094 $ 177
250M Lockheed Martin Corp., 7.25%, 2006 262,563 152
250M Rockwell International Corp., 8.375%, 2001 266,671 155
- ----------------------------------------------------------------------------------------
833,328 484
- ----------------------------------------------------------------------------------------
BUILDING MATERIALS--.6%
100M Masco Corp., 9%, 2001 109,121 63
- ----------------------------------------------------------------------------------------
CHEMICALS--3.4%
250M Du Pont (E.I.) de Nemours & Co., 8.125%, 2004 274,156 159
300M Lubrizol Corp., 7.25%, 2025 318,805 185
- ----------------------------------------------------------------------------------------
592,961 344
- ----------------------------------------------------------------------------------------
CONGLOMERATES--3.4%
300M Hanson Overseas, B.V., 7.375%, 2003 313,307 182
250M Tenneco, Inc., 7.875%, 2027 276,862 161
- ----------------------------------------------------------------------------------------
590,169 343
- ----------------------------------------------------------------------------------------
CONSUMER PRODUCTS--1.5%
250M Mattel, Inc., 6.75%, 2000 252,922 147
- ----------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--8.4%
250M Baltimore Gas and Electric Co., 6.50%, 2003 253,589 147
250M Duke Energy Corp., 5.875%, 2003 245,881 143
200M Kansas Gas & Electric Co., 7.60%, 2003 212,033 123
75M Old Dominion Electric Cooperative, 7.97%, 2002 78,568 46
300M Pennsylvania Power & Light Co., 6.875%, 2003 308,293 179
250M Philadelphia Electric Co., 8%, 2002 265,689 154
75M Southwestern Electric Power Co., 7%, 2007 79,038 46
- ----------------------------------------------------------------------------------------
1,443,091 838
- ----------------------------------------------------------------------------------------
</TABLE>
57
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INVESTMENT GRADE FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENERGY--5.2%
$ 315M Baroid Corp., 8%, 2003 $ 340,226 $ 198
300M Newpark Resources, Inc., 8.625%, 2007 (Note 4) 306,375 178
250M Phillips Petroleum Co., 7.20%, 2023 252,578 147
- ----------------------------------------------------------------------------------------
899,179 523
- ----------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--1.8%
300M Walt Disney Company, 6.75%, 2006 310,376 180
- ----------------------------------------------------------------------------------------
FINANCIAL SERVICES--13.9%
40M BankAmerica Corp., 9.50%, 2001 43,910 26
200M Barnett Banks, Inc., 8.50%, 1999 205,486 119
300M Chemical Bank, Inc., 7%, 2005 312,194 181
200M Citicorp, 8%, 2003 214,227 124
300M First Union Corp., 8.125%, 2002 321,971 187
250M Fleet Capital, 7.92%, 2026 265,400 154
300M Key Corp., 7.50%, 2006 318,701 185
250M Mellon Bank N.A., 6.50%, 2005 250,946 146
50M Meridian Bancorp, 7.875%, 2002 53,295 31
75M Morgan Guaranty Trust Co., 7.375%, 2002 78,289 45
300M NationsBank Corp., 8.125%, 2002 322,100 187
- ----------------------------------------------------------------------------------------
2,386,519 1,385
- ----------------------------------------------------------------------------------------
FOOD SERVICE--1.5%
250M McDonalds Corporation, 6.625%, 2005 252,161 146
- ----------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--4.6%
250M Anheuser-Busch Cos., Inc., 7%, 2005 257,910 150
25M Coca-Cola Enterprises, Inc., 7.875%, 2002 26,533 15
300M Hershey Foods Corp., 6.70%, 2005 309,227 180
200M Philip Morris Cos., Inc., 7.125%, 2002 205,847 120
- ----------------------------------------------------------------------------------------
799,517 465
- ----------------------------------------------------------------------------------------
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
GAS TRANSMISSION--3.6%
$ 300M Columbia Gas System, Inc., 6.80%, 2005 $ 306,321 $ 178
300M Enron Corp., 7.125%, 2007 310,987 181
- ----------------------------------------------------------------------------------------
617,308 359
- ----------------------------------------------------------------------------------------
HEALTHCARE--1.0%
150M Tenet Healthcare Corp., 10.125%, 2005 163,500 95
- ----------------------------------------------------------------------------------------
INSURANCE--1.5%
250M First Colony Corp., 6.625%, 2003 254,476 148
- ----------------------------------------------------------------------------------------
INVESTMENT/FINANCE COMPANIES--5.5%
300M Associates Corp. of North America, 7.875%, 2001 316,524 184
300M General Electric Capital Corp., 7.875%, 2006 332,317 193
300M General Motors Acceptance Corp., 7.125%, 1999 304,512 177
- ----------------------------------------------------------------------------------------
953,353 554
- ----------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--5.1%
300M Bell Cablemedia PLC, 0% - 11.95%, 2004 285,750 166
300M New York Times Co., Inc., 7.625%, 2005 322,788 187
250M News America Holdings, Inc., 8.50%, 2005 274,339 159
- ----------------------------------------------------------------------------------------
882,877 512
- ----------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.6%
250M Temple Inland, Inc., 9%, 2001 271,547 158
- ----------------------------------------------------------------------------------------
RETAIL-FOOD/DRUG--1.8%
300M Kroger Co., 8.50%, 2003 315,251 183
- ----------------------------------------------------------------------------------------
RETAIL-GENERAL MERCHANDISE--3.8%
300M Federated Department Stores, Inc., 7.45%, 2017 315,589 183
300M Wal-Mart Stores, Inc., 8%, 2006 336,986 196
- ----------------------------------------------------------------------------------------
652,575 379
- ----------------------------------------------------------------------------------------
</TABLE>
59
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE INVESTMENT GRADE FUND
December 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--3.2%
$ 250M International Business Machines Corp., 7%, 2025 $ 259,263 $ 151
275M Xerox Corp., 7.15%, 2004 288,031 167
- ----------------------------------------------------------------------------------------
547,294 318
- ----------------------------------------------------------------------------------------
TELECOMMUNICATIONS--7.8%
350M MCI Communication Corp., 7.50%, 2004 368,977 214
250M New Jersey Bell Telephone Co., 7.375%, 2012 255,068 148
300M New York Telephone Co., 7.25%, 2024 307,644 179
200M Pacific Bell Telephone Co., 7%, 2004 207,563 121
184M WorldCom, Inc., 8.875%, 2006 198,720 115
- ----------------------------------------------------------------------------------------
1,337,972 777
- ----------------------------------------------------------------------------------------
TRANSPORTATION--1.8%
300M Norfolk Southern Corp., 7.35%, 2007 317,598 184
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $14,382,328) 14,783,095 8,585
- ----------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--10.8%
250M U.S. Treasury Bond, 6.625%, 2027 271,406 158
1,500M U.S. Treasury Note, 6.625%, 2007 1,588,595 922
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT OBLIGATIONS (cost
$1,807,672) 1,860,001 1,080
- ----------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--1.2%
150M Ford Motor Credit Corp., 6.12%, 1/9/98 149,796 87
50M Ford Motor Credit Corp., 5.59%, 1/30/98 49,775 29
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$199,571) 199,571 116
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $16,389,571) 97.8% 16,842,667 9,781
OTHER ASSETS, LESS LIABILITIES 2.2 376,850 219
- ----------------------------------------------------------------------------------------
NET ASSETS 100.0% $17,219,517 $10,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
60
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE TARGET MATURITY 2007 FUND
December 31, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY ZERO COUPON
OBLIGATIONS--56.1%
Agency For International Development-Israel:
$ 570M 2/15/2007 $ 331,281 $ 163
119M 3/15/2007 68,817 34
1,513M 8/15/2007 853,568 420
1,000M 11/15/2007 555,361 274
980M 2/15/2008 535,086 264
493M Federal Judiciary Office Building, 2/15/2007 281,939 139
Federal National Mortgage Association:
215M 2/1/2008 116,321 57
1,030M 8/1/2008 539,346 266
Government Trust Certificate-Israel Trust:
181M 10/1/2007 101,391 50
4,870M 11/15/2007 2,699,446 1,330
766M Government Trust Certificate-Turkey Trust,
11/15/2007 424,594 209
586M International Bank for Reconstruction &
Development, 8/15/2007 325,504 160
4,600M Resolution Funding Corporation, 10/15/2007 2,581,120 1,271
Tennessee Valley Authority:
2,600M 11/1/2007 1,440,837 710
1,000M 4/15/2008 537,496 265
- --------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT AGENCY ZERO COUPON
OBLIGATIONS (cost $10,638,045) 11,392,107 5,612
- --------------------------------------------------------------------------------------
U.S. TREASURY ZERO COUPON OBLIGATIONS--43.5%
200M Treasury Investors Growth Receipts, 11/15/2007 111,927 55
15,475M U.S. Treasury Strips, 11/15/2007 8,718,770 4,295
- --------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. TREASURY ZERO COUPON
OBLIGATIONS (cost $8,238,579) 8,830,697 4,350
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $18,876,624) 99.6% 20,222,804 9,962
OTHER ASSETS, LESS LIABILITIES .4 76,912 38
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $20,299,716 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
61
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE TARGET MATURITY 2010 FUND
December 31, 1997
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
U.S. GOVERNMENT AGENCY ZERO COUPON
OBLIGATIONS--46.4%
Agency For International Development-Israel:
$ 603M 8/15/2010 $ 280,074 $ 538
495M 9/15/2010 228,808 439
400M Federal National Mortgage Association, 2/1/2011 177,949 342
200M Government Trust Certificate-Israel Trust,
11/15/2010 91,278 175
750M Government Trust Certificate-Turkey Trust,
11/15/2010 342,292 657
1,600M Resolution Funding Corporation, 1/15/2011 728,552 1,399
1,250M Tennessee Valley Authority, 11/1/2010 568,394 1,091
- -------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT AGENCY ZERO COUPON
OBLIGATIONS (cost $2,115,061) 2,417,347 4,641
- -------------------------------------------------------------------------------------
U.S. TREASURY ZERO COUPON OBLIGATIONS--52.4%
5,850M U.S. Treasury Strips, 11/15/2010 (cost
$2,526,558) 2,730,564 5,242
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $4,641,619) 98.8% 5,147,911 9,883
OTHER ASSETS, LESS LIABILITIES 1.2 60,749 117
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $5,208,660 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
62
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE UTILITIES INCOME FUND
December 31, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--96.0%
CONSUMER CYCLICALS--1.4%
8,500 Felcor Suite Hotels, Inc. $ 301,750 $ 89
11,200 Innkeepers USA Trust 173,600 51
- --------------------------------------------------------------------------------------
475,350 140
- --------------------------------------------------------------------------------------
ELECTRIC POWER--45.5%
9,000 *AES Corporation 419,625 123
14,000 American Electric Power Company, Inc. 722,750 213
10,300 Baltimore Gas and Electric Company 350,844 103
9,400 Boston Edison Company 356,025 105
12,400 Cinergy Corporation 475,075 140
8,600 CIPSCO, Inc. 380,550 112
13,200 CMS Energy Corporation 581,625 171
9,400 Consolidated Edison, Inc. 385,400 113
6,700 Dominion Resources, Inc. 285,169 84
17,500 DPL, Inc. 503,125 148
16,150 DQE, Inc. 567,269 167
9,300 Duke Energy Corporation 514,987 152
11,700 Edison International 318,094 94
13,000 Endesa SA (ADR) 236,437 70
16,200 Florida Progress Corporation 635,850 187
16,200 FPL Group, Inc. 958,837 282
3,100 General Electric Company 227,462 67
10,800 GPU, Inc. 454,950 134
9,400 Houston Industries, Inc. 250,862 74
10,800 MDU Resources Group, Inc. 341,550 101
14,800 New Century Energies, Inc. 709,475 209
11,000 New York State Electric & Gas Corporation 390,500 115
14,000 NIPSCO Industries, Inc. 692,125 204
5,400 Northern States Power Company 314,550 93
14,000 OGE Energy Corporation 765,625 225
7,800 Oneok, Inc. 314,925 93
18,900 PacifiCorp 516,206 152
8,100 Pinnacle West Capital Corporation 343,237 101
11,000 SCANA Corporation 329,312 97
- --------------------------------------------------------------------------------------
</TABLE>
63
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE UTILITIES INCOME FUND
December 31, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRIC POWER (continued)
10,100 Sierra Pacific Resources $ 378,750 $ 111
27,000 Southern Company 698,625 206
5,100 Texas Utilities Company 211,969 62
9,500 Union Electric Company 410,875 121
11,100 UtiliCorp United, Inc. 430,819 127
- --------------------------------------------------------------------------------------
15,473,479 4,556
- --------------------------------------------------------------------------------------
ENERGY--5.8%
3,200 Ashland, Inc. 171,800 51
3,500 Baker Hughes, Inc. 152,687 45
10,500 *Calpine Corporation 156,187 46
3,400 Diamond Offshore Drilling, Inc. 163,625 48
3,800 Dresser Industries, Inc. 159,362 47
3,400 Noble Affiliates, Inc. 119,850 35
4,000 Schlumberger, Ltd. 322,000 95
5,500 *Seagull Energy Corporation 113,437 33
3,800 Unocal Corporation 147,487 43
16,200 Williams Companies, Inc. 459,675 135
- --------------------------------------------------------------------------------------
1,966,110 578
- --------------------------------------------------------------------------------------
FINANCIAL--.9%
18,100 Westfield America, Inc. 307,700 91
- --------------------------------------------------------------------------------------
NATURAL GAS--18.6%
10,000 Coastal Corporation 619,375 182
5,400 Columbia Gas System, Inc. 424,237 125
7,300 Consolidated Natural Gas Company 441,650 130
5,700 El Paso Natural Gas Company 379,050 112
5,000 Enron Corporation 207,813 61
7,800 KN Energy, Inc. 421,200 124
10,800 MCN Energy Group, Inc. 436,050 128
7,300 National Fuel Gas Company 355,419 105
8,100 New Jersey Resources Corporation 324,506 96
7,000 NICOR, Inc. 295,313 87
8,100 Pacific Enterprises 304,763 90
7,100 Piedmont Natural Gas Company, Inc. 255,156 75
- --------------------------------------------------------------------------------------
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
NATURAL GAS (continued)
8,100 Questar Corporation $ 361,463 $ 106
8,100 Sonat, Inc. 370,575 109
10,900 Southwest Gas Corporation 203,694 60
7,300 TransCanada Pipelines, Ltd. 163,338 48
9,400 UGI Corporation 275,538 81
8,200 Washington Gas Light Company 253,688 75
9,200 Westcoast Energy, Inc. 211,600 62
- --------------------------------------------------------------------------------------
6,304,428 1,856
- --------------------------------------------------------------------------------------
TELECOMMUNICATIONS--9.9%
4,000 *AirTouch Communications, Inc. 166,250 49
11,000 Century Telephone Enterprises, Inc. 547,938 161
8,300 Cincinnati Bell, Inc. 257,300 76
3,000 *Intermedia Communications, Inc. 182,250 54
12,500 *LCI International, Inc. 384,375 113
4,100 Lucent Technologies, Inc. 327,488 96
11,000 SBC Communications, Inc. 805,750 237
8,000 *Teleport Communications Group, Inc. - Class "A" 439,000 129
8,900 *WorldCom, Inc. 269,225 79
- --------------------------------------------------------------------------------------
3,379,576 994
- --------------------------------------------------------------------------------------
TELEPHONE/UTILITIES--13.9%
8,100 Ameritech Corporation 652,050 192
10,800 Bell Atlantic Corporation 982,800 289
14,300 BellSouth Corporation 805,269 237
5,600 Cia de Telecomunicaciones de Chile SA (ADR) 167,300 49
13,800 GTE Corporation 721,050 212
4,900 Telefonica de Argentina SA (ADR) 182,525 54
4,000 Telefonica de Espana SA (ADR) 364,250 107
5,400 Telephone and Data Systems, Inc. 251,438 74
13,200 US West, Inc. Communications Group 595,650 175
- --------------------------------------------------------------------------------------
4,722,332 1,389
- --------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $25,418,774) 32,628,975 9,604
- --------------------------------------------------------------------------------------
</TABLE>
65
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS LIFE UTILITIES INCOME FUND
December 31, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--7.4%
$ 1,300M BP America, 5.95%, 1/22/98 $ 1,295,488 $ 381
1,200M Texaco, Inc., 5.88%, 1/6/98 1,199,020 353
- --------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$2,494,508) 2,494,508 734
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $27,913,282) 103.4% 35,123,483 10,338
EXCESS OF LIABILITIES OVER OTHER ASSETS (3.4) (1,146,919) (338)
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $33,976,564 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
66
<PAGE>
(This page has been left blank intentionally.)
67
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS LIFE SERIES FUND
December 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
CASH
BLUE CHIP MANAGEMENT DISCOVERY GOVERNMENT
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investment in securities:
At identified cost............... $112,454,391 $4,728,803 $ 85,559,185 $8,789,053
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
At value (Note 1A)............... $153,352,147 $4,728,803 $102,138,646 $8,933,703
Cash............................... 760,372 24,646 758,962 145,034
Receivables:
Investment securities sold....... -- -- 1,117,060 --
Interest and dividends........... 157,102 15,718 65,009 58,657
Trust shares sold................ 201,745 6 58,511 1,290
------------ ---------- ------------ ----------
Total Assets....................... 154,471,366 4,769,173 104,138,188 9,138,684
------------ ---------- ------------ ----------
LIABILITIES
Payables:
Investment securities
purchased...................... 195,925 -- 4,504,962 --
Trust shares redeemed............ 49,841 4,426 36,906 14,421
Forward currency contracts (Note
6)............................. -- -- -- --
Accrued advisory fee............... 94,896 2,368 60,930 4,530
Accrued expenses................... 4,833 2,489 5,461 --
------------ ---------- ------------ ----------
Total Liabilities.................. 345,495 9,283 4,608,259 18,951
------------ ---------- ------------ ----------
NET ASSETS......................... $154,125,871 $4,759,890 $ 99,529,929 $9,119,733
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
NET ASSETS CONSIST OF:
Capital paid in.................... $102,034,916 $4,759,890 $ 75,962,595 $9,005,372
Undistributed net investment
income........................... 1,263,951 -- 279,901 591,364
Accumulated net realized gain
(loss) on investment transactions
and foreign currency
transactions..................... 9,929,248 -- 6,707,972 (621,653)
Net unrealized appreciation of
investments and foreign currency
transactions..................... 40,897,756 -- 16,579,461 144,650
------------ ---------- ------------ ----------
Total.............................. $154,125,871 $4,759,890 $ 99,529,929 $9,119,733
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING (Note 2)............. 6,500,732 4,759,890 3,583,625 882,821
------------ ---------- ------------ ----------
------------ ---------- ------------ ----------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(Net assets divided by shares
outstanding)................... $ 23.71 $ 1.00 $ 27.77 $ 10.33
------ ----- ------ ----------
------ ----- ------ ----------
</TABLE>
See notes to financial statements
68
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
TARGET TARGET
INTERNATIONAL INVESTMENT MATURITY MATURITY UTILITIES
GROWTH HIGH YIELD SECURITIES GRADE 2007 2010 INCOME
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in securities:
At identified cost............... $ 91,344,628 $55,219,147 $ 66,523,484 $16,389,571 $18,876,624 $4,641,619 $27,913,282
------------ ----------- ------------- ----------- ----------- ---------- -----------
------------ ----------- ------------- ----------- ----------- ---------- -----------
At value (Note 1A)............... $127,139,330 $58,521,999 $ 74,915,817 $16,842,667 $20,222,804 $5,147,911 $35,123,483
Cash............................... 82,648 82,461 37,468 120,659 36,650 62,955 195,473
Receivables:
Investment securities sold....... 279,115 -- 378,592 9,682 -- -- --
Interest and dividends........... 125,995 1,057,260 157,507 259,624 -- -- 71,814
Trust shares sold................ 91,965 24,857 4,789 11,808 57,774 288 54,973
------------ ----------- ------------- ----------- ----------- ---------- -----------
Total Assets....................... 127,719,053 59,686,577 75,494,173 17,244,440 20,317,228 5,211,154 35,445,743
------------ ----------- ------------- ----------- ----------- ---------- -----------
LIABILITIES
Payables:
Investment securities
purchased...................... 17,550 -- 823,756 -- -- -- 1,446,318
Trust shares redeemed............ 32,086 18,927 34,923 16,177 7,400 -- 4,136
Forward currency contracts (Note
6)............................. -- -- 4,650 -- -- -- --
Accrued advisory fee............... 78,530 36,945 47,044 8,570 9,995 2,487 16,262
Accrued expenses................... 6,337 11,910 121,112 176 117 7 2,463
------------ ----------- ------------- ----------- ----------- ---------- -----------
Total Liabilities.................. 134,503 67,782 1,031,485 24,923 17,512 2,494 1,469,179
------------ ----------- ------------- ----------- ----------- ---------- -----------
NET ASSETS......................... $127,584,550 $59,618,795 $ 74,462,688 $17,219,517 $20,299,716 $5,208,660 $33,976,564
------------ ----------- ------------- ----------- ----------- ---------- -----------
------------ ----------- ------------- ----------- ----------- ---------- -----------
NET ASSETS CONSIST OF:
Capital paid in.................... $ 86,207,308 $52,018,370 $ 61,599,985 $15,697,069 $18,072,845 $4,489,512 $24,613,648
Undistributed net investment
income........................... 650,933 4,821,761 701,594 1,073,268 996,524 209,070 847,130
Accumulated net realized gain
(loss) on investment transactions
and foreign currency
transactions..................... 4,931,607 (524,188) 3,770,558 (3,916) (115,833) 3,786 1,305,585
Net unrealized appreciation of
investments and foreign currency
transactions..................... 35,794,702 3,302,852 8,390,551 453,096 1,346,180 506,292 7,210,201
------------ ----------- ------------- ----------- ----------- ---------- -----------
Total.............................. $127,584,550 $59,618,795 $ 74,462,688 $17,219,517 $20,299,716 $5,208,660 $33,976,564
------------ ----------- ------------- ----------- ----------- ---------- -----------
------------ ----------- ------------- ----------- ----------- ---------- -----------
SHARES OF BENEFICIAL INTEREST
OUTSTANDING (Note 2)............. 4,363,365 4,845,432 4,402,412 1,475,666 1,606,942 410,211 2,271,954
------------ ----------- ------------- ----------- ----------- ---------- -----------
------------ ----------- ------------- ----------- ----------- ---------- -----------
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER SHARE
(Net assets divided by shares
outstanding)................... $ 29.24 $ 12.30 $ 16.91 $ 11.67 $ 12.63 $ 12.70 $ 14.95
------ ----------- ------ ----------- ----------- ---------- -----------
------ ----------- ------ ----------- ----------- ---------- -----------
</TABLE>
See notes to financial statements
69
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS LIFE SERIES FUND
Year Ended December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
CASH
BLUE CHIP MANAGEMENT DISCOVERY GOVERNMENT
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest......................... $ 553,389 $ 257,194 $ 535,512 $ 681,537
Dividends........................ 1,752,615 -- 440,446 --
Consent fees..................... -- -- -- --
----------- ---------- ----------- ----------
Total income....................... 2,306,004 257,194 975,958 681,537
----------- ---------- ----------- ----------
Expenses (Notes 1 and 5):
Advisory fee..................... 965,995 34,230 640,895 67,703
Reports and notices to
shareholders................... 22,361 642 11,847 1,318
Professional fees................ 20,340 5,137 15,316 5,767
Custodian fees................... 18,216 6,981 21,190 4,862
Other expenses................... 20,508 1,371 14,356 3,413
----------- ---------- ----------- ----------
Total expenses..................... 1,047,420 48,361 703,604 83,063
Less: Expenses waived or assumed... -- (17,432) -- (25,641)
Custodian fees paid
indirectly.................. (18,216) (382) (21,190) (3,309)
----------- ---------- ----------- ----------
Expenses - net..................... 1,029,204 30,547 682,414 54,113
----------- ---------- ----------- ----------
Net investment income.............. 1,276,800 226,647 293,544 627,424
----------- ---------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS (Note 3):
Net realized gain (loss) on
investments and foreign currency
transactions..................... 9,946,550 -- 6,771,658 29,320
Net unrealized appreciation of
investments and foreign currency
transactions..................... 17,961,543 -- 5,866,659 87,654
----------- ---------- ----------- ----------
Net gain from investments and
foreign currencies............... 27,908,093 -- 12,638,317 116,974
----------- ---------- ----------- ----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $29,184,893 $ 226,647 $12,931,861 $ 744,398
----------- ---------- ----------- ----------
----------- ---------- ----------- ----------
</TABLE>
(a) Net of $71,063 foreign taxes withheld
(b) Includes net realized loss of $5,496 on foreign currency transactions
(c) Includes $2,001 of net unrealized depreciation on translation of assets in
foreign currencies.
+ See Note 1H
See notes to financial statements
70
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
TARGET TARGET
INTERNATIONAL INVESTMENT MATURITY MATURITY UTILITIES
GROWTH HIGH YIELD SECURITIES GRADE 2007 2010 INCOME
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest......................... $ 219,622 $4,907,142 $ 214,791 $1,173,303 $1,102,114 $ 231,425 $ 54,371
Dividends........................ 1,285,782 248,831+ 1,348,180(a) -- -- -- 968,592
Consent fees..................... -- 119,525 -- 1,834 -- -- --
----------- ---------- ------------- ---------- ---------- ---------- -----------
Total income....................... 1,505,404 5,275,498 1,562,971 1,175,137 1,102,114 231,425 1,022,963
----------- ---------- ------------- ---------- ---------- ---------- -----------
Expenses (Notes 1 and 5):
Advisory fee..................... 777,312 407,953 512,589 123,368 126,985 26,781 203,740
Reports and notices to
shareholders................... 13,865 7,672 10,622 2,389 2,367 471 3,761
Professional fees................ 15,756 14,803 15,322 7,746 4,534 2,115 5,408
Custodian fees................... 24,726 11,370 217,882 4,704 2,349 620 7,310
Other expenses................... 14,931 11,586 17,412 4,173 3,291 1,022 10,812
----------- ---------- ------------- ---------- ---------- ---------- -----------
Total expenses..................... 846,590 453,384 773,827 142,380 139,526 31,009 231,031
Less: Expenses waived or assumed... -- -- -- (40,558) (35,652) (8,973) (48,667)
Custodian fees paid
indirectly.................. (3,716) (6,067) -- (3,129) (2,303) (611) (7,152)
----------- ---------- ------------- ---------- ---------- ---------- -----------
Expenses - net..................... 842,874 447,317 773,827 98,693 101,571 21,425 175,212
----------- ---------- ------------- ---------- ---------- ---------- -----------
Net investment income.............. 662,530 4,828,181 789,144 1,076,444 1,000,543 210,000 847,751
----------- ---------- ------------- ---------- ---------- ---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS (Note 3):
Net realized gain (loss) on
investments and foreign currency
transactions..................... 4,950,237 1,155,537 3,702,768(b) 60,576 (4,036) 3,786 1,309,881
Net unrealized appreciation of
investments and foreign currency
transactions..................... 20,037,061 488,433 832,056(c) 417,171 1,286,771 414,843 4,449,509
----------- ---------- ------------- ---------- ---------- ---------- -----------
Net gain from investments and
foreign currencies............... 24,987,298 1,643,970 4,534,824 477,747 1,282,735 418,629 5,759,390
----------- ---------- ------------- ---------- ---------- ---------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS........ $25,649,828 $6,472,151 $ 5,323,968 $1,554,191 $2,283,278 $ 628,629 $ 6,607,141
----------- ---------- ------------- ---------- ---------- ---------- -----------
----------- ---------- ------------- ---------- ---------- ---------- -----------
</TABLE>
(a) Net of $71,063 foreign taxes withheld
(b) Includes net realized loss of $5,496 on foreign currency transactions
(c) Includes $2,001 of net unrealized depreciation on translation of assets in
foreign currencies.
+ See Note 1H
See notes to financial statements
71
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
BLUE CHIP CASH MANAGEMENT
---------------------------- --------------------------
YEAR ENDED DECEMBER 31 1997 1996 1997 1996
- ----------------------------------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............ $ 1,276,800 $ 1,134,680 $ 226,647 $ 191,090
Net realized gain (loss) on
investments.................... 9,946,550 4,724,627 -- --
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... 17,961,543 10,323,427 -- --
------------ ------------ ----------- -----------
Net increase in net assets
resulting from operations.... 29,184,893 16,182,734 226,647 191,090
------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income............ (1,146,250) (1,020,182) (226,647) (191,090)
Net realized gain................ (4,741,304) (1,953,044) -- --
------------ ------------ ----------- -----------
Total distributions............ (5,887,554) (2,973,226) (226,647) (191,090)
------------ ------------ ----------- -----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold........ 26,984,341 19,440,336 3,084,309 3,660,848
Value of distributions
reinvested..................... 5,887,554 2,973,226 226,647 191,090
Cost of shares redeemed.......... (2,121,391) (2,444,786) (2,847,598) (3,716,970)
------------ ------------ ----------- -----------
Net increase (decrease) from
trust share transactions....... 30,750,504 19,968,776 463,358 134,968
------------ ------------ ----------- -----------
Net increase (decrease) in net
assets....................... 54,047,843 33,178,284 463,358 134,968
NET ASSETS
Beginning of year................ 100,078,028 66,899,744 4,296,532 4,161,564
------------ ------------ ----------- -----------
End of year+..................... $154,125,871 $100,078,028 $ 4,759,890 $ 4,296,532
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
+Includes undistributed net
investment income of.............. $ 1,263,951 $ 1,133,401 -- --
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold............................. 1,238,452 1,083,789 3,084,309 3,660,848
Issued for dividends
reinvested..................... 294,820 175,515 226,647 191,090
Redeemed......................... (94,839) (137,254) (2,847,598) (3,716,970)
------------ ------------ ----------- -----------
Net increase (decrease) in trust
shares oustanding.............. 1,438,433 1,122,050 463,358 134,968
------------ ------------ ----------- -----------
------------ ------------ ----------- -----------
</TABLE>
72
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
DISCOVERY GOVERNMENT GROWTH
------------------------- ------------------------- --------------------------
1997 1996 1997 1996 1997 1996
- ----------------------------------- ----------- ----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............ $ 293,544 $ 379,609 $ 627,424 $ 618,623 $ 662,530 $ 584,948
Net realized gain (loss) on
investments.................... 6,771,658 3,299,510 29,320 (251,224) 4,950,237 6,150,722
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... 5,866,659 3,592,400 87,654 (44,522) 20,037,061 7,441,191
----------- ----------- ----------- ----------- ------------ -----------
Net increase in net assets
resulting from operations.... 12,931,861 7,271,519 744,398 322,877 25,649,828 14,176,861
----------- ----------- ----------- ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income............ (392,698) (254,154) (596,590) (593,694) (596,375) (459,017)
Net realized gain................ (3,359,761) (2,006,247) -- -- (6,162,537) (1,505,267)
----------- ----------- ----------- ----------- ------------ -----------
Total distributions............ (3,752,459) (2,260,401) (596,590) (593,694) (6,758,912) (1,964,284)
----------- ----------- ----------- ----------- ------------ -----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold........ 17,633,092 14,650,798 933,756 1,075,016 24,410,876 14,976,944
Value of distributions
reinvested..................... 3,752,459 2,260,401 596,590 593,694 6,758,912 1,964,284
Cost of shares redeemed.......... (1,934,034) (1,923,260) (1,582,844) (1,873,657) (1,282,464) (1,518,718)
----------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) from
trust share transactions....... 19,451,517 14,987,939 (52,498) (204,947) 29,887,324 15,422,510
----------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) in net
assets....................... 28,630,919 19,999,057 95,310 (475,764) 48,778,240 27,635,087
NET ASSETS
Beginning of year................ 70,899,010 50,899,953 9,024,423 9,500,187 78,806,310 51,171,223
----------- ----------- ----------- ----------- ------------ -----------
End of year+..................... $99,529,929 $70,899,010 $ 9,119,733 $ 9,024,423 $127,584,550 $78,806,310
----------- ----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ----------- ------------ -----------
+Includes undistributed net
investment income of............. $ 279,901 $ 379,055 $ 591,364 $ 595,393 $ 650,933 $ 584,778
----------- ----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ----------- ------------ -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold............................. 670,839 623,364 93,360 108,024 917,303 683,046
Issued for dividends
reinvested..................... 158,198 100,062 62,210 60,767 284,586 95,585
Redeemed......................... (74,661) (81,422) (158,149) (186,705) (47,245) (69,590)
----------- ----------- ----------- ----------- ------------ -----------
Net increase (decrease) in trust
shares oustanding.............. 754,376 642,004 (2,579) (17,914) 1,154,644 709,041
----------- ----------- ----------- ----------- ------------ -----------
----------- ----------- ----------- ----------- ------------ -----------
<CAPTION>
HIGH YIELD
-------------------------
1997 1996
- ----------------------------------- ----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............ $ 4,828,181 $ 4,255,464
Net realized gain (loss) on
investments.................... 1,155,537 (443,404)
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... 488,433 1,579,035
----------- -----------
Net increase in net assets
resulting from operations.... 6,472,151 5,391,095
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income............ (4,259,486) (3,666,317)
Net realized gain................ -- --
----------- -----------
Total distributions............ (4,259,486) (3,666,317)
----------- -----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold........ 7,042,988 5,773,021
Value of distributions
reinvested..................... 4,259,486 3,666,317
Cost of shares redeemed.......... (3,369,888) (3,584,533)
----------- -----------
Net increase (decrease) from
trust share transactions....... 7,932,586 5,854,805
----------- -----------
Net increase (decrease) in net
assets....................... 10,145,251 7,579,583
NET ASSETS
Beginning of year................ 49,473,544 41,893,961
----------- -----------
End of year+..................... $59,618,795 $49,473,544
----------- -----------
----------- -----------
+Includes undistributed net
investment income of............. $ 4,821,761 $ 4,253,066
----------- -----------
----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold............................. 606,213 508,596
Issued for dividends
reinvested..................... 381,333 334,213
Redeemed......................... (287,780) (317,951)
----------- -----------
Net increase (decrease) in trust
shares oustanding.............. 699,766 524,858
----------- -----------
----------- -----------
</TABLE>
73
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS (continued)
FIRST INVESTORS LIFE SERIES FUND
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
INTERNATIONAL
SECURITIES INVESTMENT GRADE
-------------------------- --------------------------
YEAR ENDED DECEMBER 31 1997 1996 1997 1996
- ----------------------------------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............ $ 789,144 $ 606,472 $ 1,076,444 $ 1,037,959
Net realized gain (loss) on
investments.................... 3,702,768 5,267,040 60,576 18,857
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... 832,056 1,100,316 417,171 (623,436)
----------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations................... 5,323,968 6,973,828 1,554,191 433,380
----------- ----------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income............ (671,803) (497,039) (1,040,936) (936,444)
Net realized gain................ (5,219,395) (1,333,455) -- --
----------- ----------- ----------- -----------
Total distributions............ (5,891,198) (1,830,494) (1,040,936) (936,444)
----------- ----------- ----------- -----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold........ 13,088,361 11,599,460 1,562,904 2,104,757
Value of distributions
reinvested..................... 5,891,198 1,830,494 1,040,936 936,444
Cost of shares redeemed.......... (1,904,255) (1,630,236) (2,287,154) (2,410,432)
----------- ----------- ----------- -----------
Net increase from trust share
transactions................... 17,075,304 11,799,718 316,686 630,769
----------- ----------- ----------- -----------
Net increase in net assets..... 16,508,074 16,943,052 829,941 127,705
NET ASSETS
Beginning of year................ 57,954,614 41,011,562 16,389,576 16,261,871
----------- ----------- ----------- -----------
End of year+..................... $74,462,688 $57,954,614 $17,219,517 $16,389,576
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
+Includes undistributed net
investment income of............. $ 701,594 $ 611,224 $ 1,073,268 $ 1,037,760
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold............................. 767,110 722,385 140,313 189,792
Issued for dividends
reinvested..................... 375,475 118,709 97,649 85,991
Redeemed......................... (111,951) (101,516) (205,347) (218,491)
----------- ----------- ----------- -----------
Net increase in trust shares
oustanding..................... 1,030,634 739,578 32,615 57,292
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
* For the period 4/30/96 (commencement of operations) to 12/31/96
** See Note 7
See notes to financial statements
74
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
TARGET
TARGET MATURITY 2010 UTILITIES
MATURITY 2007 ----------------------- INCOME
------------------------ 1996 ------------------------
1997 1996 1997 * 1997 1996
- ----------------------------------- ----------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Net investment income............ $ 1,000,543 $ 741,356 $ 210,000 $ 50,304 $ 847,751 $ 693,324
Net realized gain (loss) on
investments.................... (4,036) (111,154) 3,786 -- 1,309,881 634,751
Net unrealized appreciation
(depreciation) of investments
and foreign currency
transactions................... 1,286,771 (665,288) 414,843 91,449 4,449,509 694,844
----------- ----------- ---------- ---------- ----------- -----------
Net increase (decrease) in net
assets resulting from
operations................... 2,283,278 (35,086) 628,629 141,753 6,607,141 2,022,919
----------- ----------- ---------- ---------- ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income............ (745,063) (209,644) (51,234) -- (692,647) (382,098)
Net realized gain................ -- (42,790) -- -- (517,046) --
----------- ----------- ---------- ---------- ----------- -----------
Total distributions............ (745,063) (252,434) (51,234) -- (1,209,693) (382,098)
----------- ----------- ---------- ---------- ----------- -----------
TRUST SHARE TRANSACTIONS (a)
Proceeds from shares sold........ 4,604,910 5,404,919 3,021,064 1,653,022 4,789,797 8,211,785
Value of distributions
reinvested..................... 745,063 252,434 51,234 -- 1,209,693 382,098
Cost of shares redeemed.......... (1,235,132) (582,920) (635,808) -- (1,528,352) (825,061)
----------- ----------- ---------- ---------- ----------- -----------
Net increase from trust share
transactions................... 4,114,841 5,074,433 2,436,490 1,653,022 4,471,138 7,768,822
----------- ----------- ---------- ---------- ----------- -----------
Net increase in net assets..... 5,653,056 4,786,913 3,013,885 1,794,775 9,868,586 9,409,643
NET ASSETS
Beginning of year................ 14,646,660 9,859,747 2,194,775 400,000** 24,107,978 14,698,335
----------- ----------- ---------- ---------- ----------- -----------
End of year+..................... $20,299,716 $14,646,660 $5,208,660 $2,194,775 $33,976,564 $24,107,978
----------- ----------- ---------- ---------- ----------- -----------
----------- ----------- ---------- ---------- ----------- -----------
+Includes undistributed net
investment income of............. $ 996,524 $ 741,044 $ 209,070 $ 50,304 $ 847,130 $ 692,026
----------- ----------- ---------- ---------- ----------- -----------
----------- ----------- ---------- ---------- ----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Sold............................. 395,345 477,864 266,975 156,734 374,184 701,601
Issued for dividends
reinvested..................... 67,549 22,399 4,766 -- 100,724 33,459
Redeemed......................... (106,979) (53,374) (58,264) -- (120,432) (69,947)
----------- ----------- ---------- ---------- ----------- -----------
Net increase in trust shares
oustanding..................... 355,915 446,889 213,477 156,734 354,476 665,113
----------- ----------- ---------- ---------- ----------- -----------
----------- ----------- ---------- ---------- ----------- -----------
</TABLE>
* For the period 4/30/96 (commencement of operations) to 12/31/96
** See Note 7
See notes to financial statements
75
<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, Target Maturity 2010, and Utilities Income Funds and
accounts separately for the assets, liabilities and operations of each Fund. The
objective of each Fund is as follows:
BLUE CHIP FUND seeks high total investment return consistent with the
preservation of capital.
CASH MANAGEMENT FUND seeks to earn a high rate of current income consistent with
the preservation of capital and maintenance of liquidity.
DISCOVERY FUND seeks long-term capital appreciation, without regard to dividend
or interest income.
GOVERNMENT FUND seeks to achieve a significant level of current income which is
consistent with the security and liquidity of principal.
GROWTH FUND seeks long-term capital appreciation.
HIGH YIELD FUND seeks to earn a high level of current income and secondarily to
seek capital appreciation.
INTERNATIONAL SECURITIES FUND seeks long-term capital growth and secondarily to
earn a reasonable level of current income.
INVESTMENT GRADE FUND seeks a maximum level of income consistent with investment
in investment grade debt securities.
TARGET MATURITY 2007 FUND AND TARGET MATURITY 2010 FUND seek a predictable
compounded investment return for investors who hold their Fund shares until the
Fund's maturity, consistent with the preservation of capital.
UTILITIES INCOME FUND primarily seeks high current income. Long-term capital
appreciation is a secondary objective.
A. Security Valuation--A security listed or traded on an exchange or the Nasdaq
Stock Market is valued at its last sale price on the exchange where the security
is principally traded, and lacking any sales, the security is valued at the mean
between the closing bid and asked prices. Securities traded in the
over-the-counter ("OTC") market (including securities listed on exchanges whose
primary market is believed to be OTC) are valued at the mean between the closing
bid and asked prices. For the High Yield and Investment Grade Funds, 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
last bid and asked prices based upon quotes furnished by a market maker for such
securities. The Government, High Yield, International Securities, Investment
Grade, Target Maturity 2007 and Target Maturity 2010 Funds 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.
Short-term corporate notes which are purchased at a discount are valued at
amortized cost. 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 Fund are valued using the amortized cost
method, which
76
<PAGE>
excludes unrealized gains or losses from the computation of portfolio value.
This is accomplished by valuing a security at cost plus amortization of discount
or accretion of premium.
B. Federal Income Taxes--No provision has been made for federal income taxes on
net income or capital gains since it is the policy of each Fund to continue to
comply with the special provisions of
the Internal Revenue Code applicable to investment companies, and to make
sufficient distributions of income and capital gains (in excess of any available
capital loss carryovers), to relieve each fund from all, or substantially all,
federal income taxes. At December 31, 1997, capital loss carryovers were as
follows:
<TABLE>
<CAPTION>
Year Capital Loss
Carryovers Expire
---------------------------
<S> <C> <C> <C> <C>
Fund Total 2002 2003 2004
- --------------------------------------- -------- -------- ------- --------
Government............................. $621,653 $393,633 $ -- $228,020
High Yield............................. 524,188 -- 80,783 443,405
Investment Grade....................... 3,916 -- 3,916 --
Target Maturity 2007................... 88,227 -- -- 88,227
</TABLE>
C. Foreign Currency Translations--For valuation purposes, quotations of foreign
securities in foreign currency are translated to U.S. dollar equivalents using
the foreign exchange quotation in effect. Portfolio securities and other assets
and liabilities denominated in foreign currencies are translated into U.S.
dollars at the date of valuation. Purchases and sales of investment securities,
dividend income and certain expenses are translated to U.S. dollars at the rates
of exchange prevailing on the respective dates of such transactions.
The International Securities Fund does not isolate that portion of gains and
losses on investments which is due to changes in foreign exchange rates from
that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains and losses
from investments.
Net realized and unrealized gain (loss) on foreign currency transactions
includes gains and losses from the sales of foreign currency, forward currency
contracts, and gains and losses on accrued foreign dividends and related
withholding taxes.
D. Distributions to Shareholders--Distributions to shareholders from net
investment income and net realized gains are declared and paid annually on all
funds except for the Cash Management Fund 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 Fund are
paid from the assets of that Fund. General expenses of the Life Series Fund are
allocated among and charged to the assets of each Fund on a fair and equitable
basis, which may be based on the relative assets of each Fund or the nature of
the services performed and relative applicability to each Fund.
77
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS LIFE SERIES FUND
F. Repurchase Agreements--Securities pledged as collateral for repurchase
agreements are held by the Fund's custodian until maturity of the repurchase
agreement. The agreements provide that the Fund will receive, as collateral,
securities with a market value which will at all times be at least equal to 100%
of the amount invested by the Fund.
G. Use of Estimates--The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
H. 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. Shares of stock received in
lieu of cash dividends on certain preferred stock holdings are recognized as
dividend income and recorded at the market value of the shares received. During
the year ended December 31, 1997, the High Yield Fund recognized $106,800 of
dividend income from these taxable "payment-in-kind" distributions. Interest
income and estimated expenses are accrued daily. Bank of New York, custodian for
all the Funds, except the International Securities Fund, has provided credits in
the amount of $66,075 against custodian charges based on the uninvested cash
balances of the Fund.
2. TRUST SHARES--The Declaration of Trust permits the issuance of an unlimited
number of shares of beneficial interest, of one or more Funds. Shares in the
Funds are acquired through the purchase of variable annuity or variable life
insurance contracts sold by First Investors Life Insurance Company.
3. SECURITY TRANSACTIONS--For the year ended December 31, 1997, 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:
<TABLE>
<CAPTION>
Long-Term U.S.
Government
Securities Obligations
------------------------ ------------------------
<S> <C> <C> <C> <C>
Cost of Proceeds Cost of Proceeds
Fund Purchases from Sales Purchases from Sales
- --------------------------------------- ----------- ----------- ----------- -----------
Blue Chip.............................. $96,503,695 $73,158,602 $ -- $ --
Discovery.............................. 70,921,506 62,244,993 -- --
Government............................. -- -- 12,303,167 11,742,991
Growth................................. 45,728,630 26,334,190 -- --
High Yield............................. 29,271,130 20,218,069 -- --
International Securities............... 54,276,815 44,472,994 -- --
Investment Grade....................... 4,345,981 3,911,683 2,762,984 2,511,703
Target Maturity 2007................... -- -- 3,669,024 102,123
Target Maturity 2010................... -- -- 2,859,487 436,159
Utilities Income....................... 19,858,246 16,238,677 -- --
</TABLE>
78
<PAGE>
At December 31, 1997, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized Net Unrealized
Fund Aggregate Cost Appreciation Depreciation Appreciation
- --------------------------------------- -------------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Blue Chip.............................. $ 112,458,655 $ 41,501,827 $ 608,335 $ 40,893,492
Cash Management........................ 4,728,803 -- -- --
Discovery.............................. 85,567,203 20,101,439 3,529,996 16,571,443
Government............................. 8,789,053 147,737 3,087 144,650
Growth................................. 91,355,800 37,337,448 1,553,918 35,783,530
High Yield............................. 55,219,147 3,599,003 296,151 3,302,852
International Securities............... 66,523,484 13,061,475 4,669,142 8,392,333
Investment Grade....................... 16,389,571 521,956 68,860 453,096
Target Maturity 2007................... 18,904,231 1,318,573 -- 1,318,573
Target Maturity 2010................... 4,641,619 506,292 -- 506,292
Utilities Income....................... 27,932,165 7,314,068 122,750 7,191,318
</TABLE>
4. 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 resold to qualified institutional investors. At December 31, 1997, the
High Yield Fund and Investment Grade Fund held eighteen and one 144A securities,
respectively, with aggregate values of $11,589,258 and $306,375, respectively.
The securities represent 19.4% and 1.8%, respectively, of the Funds' net assets
and are valued as set forth in Note 1A.
5. 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) was paid by FIMCO or First
Investors Corporation. Effective January 1, 1998, independent trustees will be
remunerated by the Fund.
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
Fund's 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, 1997, total advisory fees were $3,887,551 of which
$116,562 was waived by the investment adviser. In addition, $60,361 of expenses
were assumed by FIMCO.
Wellington Management company serves as investment subadviser to the Growth Fund
and the International Securities Fund. The subadviser is paid by FIMCO and not
by the Funds.
6. FORWARD CURRENCY CONTRACTS--A forward currency contract is an obligation to
purchase or sell a specific currency for an agreed-upon price at a future date.
When the International Securities Fund
79
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS LIFE SERIES FUND
purchases or sells foreign securities it customarily enters into a forward
currency contract to minimize foreign exchange risk between the trade date and
the settlement date of such transactions. The Fund could be exposed to risk if
counterparties to the contracts are unable to meet the terms of their contracts
or if the value of the foreign currency changes unfavorably. The International
Securities Fund had the following forward currency contracts outstanding at
December 31, 1997:
<TABLE>
<CAPTION>
Unrealized
Contracts to Buy Foreign Currency In Exchange for Settlement Date Gain (Loss)
- -------------------------------------------------------- --------------- ----------------- -----------
<S> <C> <C> <C> <C>
167,990 Australian Dollar U.S. $109,457 1/2/98 U.S. $(812)
196,325 Deutsche Mark 109,188 1/2/98 (1,518)
11,146,557 Spanish Peseta 73,121 1/2/98 (1,144)
27,206 British Pounds 44,765 1/2/98 (612)
36,938 Australian Dollar 24,068 1/5/98 (256)
2,152,587 Japanese Yen 16,553 1/5/98 9
208,209 Deutsche Mark 115,797 1/6/98 (611)
1,249,853 Japanese Yen 9,611 1/6/98 (42)
13,141,999 Japanese Yen 101,062 1/7/98 (30)
--------------- -----------
$603,622 $(5,016)
--------------- -----------
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Contracts to Sell Foreign Currency In Exchange for Settlement Date Gain (Loss)
- -------------------------------------------------------- --------------- ----------------- -----------
<S> <C> <C> <C> <C>
28,608 Malaysian Ringit U.S. $7,350 1/2/98 U.S. $96
15,196 Hong Kong Dollar 1,961 1/2/98 --
29,271 Malaysian Ringit 7,520 1/5/98 (7)
26,587 Singapore Dollar 15,779 1/5/98 141
91,294 Hong Kong Dollar 11,782 1/6/98 --
26,665 Singapore Dollar 15,826 1/6/98 61
26,273 New Zealand Dollar 15,255 1/6/98 25
18,903 Australian Dollar 12,316 1/6/98 55
26,291 Malaysian Ringit 6,754 1/6/98 (10)
42,257 Singapore Dollar 25,079 1/7/98 (2)
35,328 Australian Dollar 23,019 1/7/98 19
55,907 Malaysian Ringit 14,363 1/7/98 9
138,618 Hong Kong Dollar 17,890 1/7/98 (3)
25,134 New Zealand Dollar 14,594 1/7/98 29
25,400 New Zealand Dollar 14,749 1/8/98 (47)
--------------- -----------
$204,237 $366
--------------- -----------
Unrealized Loss on Forward Currency Contracts $(4,650)
-----------
-----------
</TABLE>
80
<PAGE>
7. COMMENCEMENT OF OPERATIONS--Target Maturity 2010 Fund commenced operations in
April 1996 following the sale of 40,000 shares of beneficial interest to First
Investors Life Insurance Company for $400,000.
8. CONCENTRATION OF CREDIT RISK--The High Yield Fund's investment 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.
81
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS LIFE SERIES FUND
The following table sets forth the per share operating performance data for a
trust share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-----------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
---------------------------------------
NET REALIZED LESS DISTRIBUTIONS
NET ASSET AND FROM
VALUE UNREALIZED ----------------------
--------- NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP
1993..................... $ 13.24 $ .15 $ .97 $ 1.12 $ .15 $ -- $ .15
1994..................... 14.21 .18 (.39) (.21) .08 .17 .25
1995..................... 13.75 .26 4.11 4.37 .19 .95 1.14
1996..................... 16.98 .22 3.31 3.53 .25 .49 .74
1997..................... 19.77 .19 4.88 5.07 .22 .91 1.13
- --------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT
1993..................... $ 1.00 $ .027 $ -- $ .027 $ .027 $ -- $ .027
1994..................... 1.00 .037 -- .037 .037 -- .037
1995..................... 1.00 .054 -- .054 .054 -- .054
1996..................... 1.00 .049 -- .049 .049 -- .049
1997..................... 1.00 .050 -- .050 .050 -- .050
- --------------------------------------------------------------------------------------------------------------------
DISCOVERY
1993..................... $ 18.35 $ -- $ 3.92 $ 3.92 $ -- $ .91 $ .91
1994..................... 21.36 .06 (.62) (.56) -- .94 .94
1995..................... 19.86 .11 4.62 4.73 .06 1.26 1.32
1996..................... 23.27 .13 2.66 2.79 .11 .89 1.00
1997..................... 25.06 .08 3.93 4.01 .14 1.16 1.30
- --------------------------------------------------------------------------------------------------------------------
GOVERNMENT
1993..................... $ 10.65 $ .64 $ .02 $ .66 $ .70 $ .19 $ .89
1994..................... 10.42 .79 (1.21) (.42) .25 .05 .30
1995..................... 9.70 .66 .78 1.44 .62 -- .62
1996..................... 10.52 .68 (.33) .35 .68 -- .68
1997..................... 10.19 .72 .11 .83 .69 -- .69
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through December 31, 1997 (Note 5).
++ The effect of fees and charges incurred at the separate account level are not
reflected in these performance figures.
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in 1996.
82
<PAGE>
The following table sets forth the per share operating performance data for a
trust share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
-------------------------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
RATIO TO AVERAGE NET ASSETS BEFORE
EXPENSES WAIVED OR
ASSETS+ ASSUMED
NET ASSET NET ASSETS --------------------- ----------------------
VALUE TOTAL END OF NET NET PORTFOLIO AVERAGE
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER COMMISSION
END ++ (IN EXPENSES INCOME EXPENSES INCOME RATE RATE
OF PERIOD (%) THOUSANDS) (%) (%) (%) (%) (%) +++
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP
1993..................... $ 14.21 8.51 $ 34,030 .88 1.27 N/A N/A 37 $ --
1994..................... 13.75 (1.45) 41,424 .88 1.49 N/A N/A 82 --
1995..................... 16.98 34.00 66,900 .86 1.91 N/A N/A 26 --
1996..................... 19.77 21.52 100,078 .84 1.39 N/A N/A 45 .0692
1997..................... 23.71 26.72 154,126 .81 .99 N/A N/A 63 .0649
- ---------------------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT
1993..................... $ 1.00 2.70 $ 4,243 .60 2.67 1.05 2.22 N/A $ --
1994..................... 1.00 3.77 3,929 .60 3.69 1.04 3.25 N/A --
1995..................... 1.00 5.51 4,162 .60 5.36 1.10 4.87 N/A --
1996..................... 1.00 5.00 4,297 .60 4.89 1.11 4.38 N/A --
1997..................... 1.00 5.08 4,760 .70 4.97 1.06 4.61 N/A --
- ---------------------------------------------------------------------------------------------------------------------------------
DISCOVERY
1993..................... $ 21.36 22.20 $ 21,221 .87 (.03) N/A N/A 69 $ --
1994..................... 19.86 (2.53) 30,244 .88 .36 N/A N/A 53 --
1995..................... 23.27 25.23 50,900 .87 .63 N/A N/A 78 --
1996..................... 25.06 12.48 70,899 .85 .63 N/A N/A 98 .0689
1997..................... 27.77 16.84 99,530 .82 .34 N/A N/A 85 .0648
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT
1993..................... $ 10.42 6.35 $ 8,234 .35 6.60 .84 6.11 525 $ --
1994..................... 9.70 (4.10) 7,878 .35 6.74 .90 6.19 457 --
1995..................... 10.52 15.63 9,500 .40 6.79 .93 6.26 198 --
1996..................... 10.19 3.59 9,024 .60 6.75 .94 6.41 199 --
1997..................... 10.33 8.61 9,120 .60 6.95 .92 6.63 134 --
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through December 31, 1997 (Note 5).
++ The effect of fees and charges incurred at the separate account level are not
reflected in these performance figures.
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in 1996.
83
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
FIRST INVESTORS LIFE SERIES FUND
The following table sets forth the per share operating performance data for a
trust share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
----------------------------------------
NET REALIZED
NET ASSET AND LESS DISTRIBUTIONS FROM
VALUE UNREALIZED --------------------------
------------ NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GROWTH
1993..................... $ 16.64 $ .07 $ .93 $ 1.00 $ .09 $ .10 $ .19
1994..................... 17.45 .09 (.60) (.51) -- .21 .21
1995..................... 16.73 .18 3.94 4.12 .09 .29 .38
1996..................... 20.47 .18 4.68 4.86 .18 .59 .77
1997..................... 24.56 .15 6.57 6.72 .18 1.86 2.04
- ----------------------------------------------------------------------------------------------------------------------------
HIGH YIELD
1993..................... $ 10.44 $ .96 $ .88 $ 1.84 $ 1.12 $ -- $ 1.12
1994..................... 11.16 .87 (1.14) (.27) .31 -- .31
1995..................... 10.58 1.00 .95 1.95 .96 -- .96
1996..................... 11.57 1.02 .35 1.37 1.01 -- 1.01
1997..................... 11.93 .98 .41 1.39 1.02 -- 1.02
- ----------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL SECURITIES
1993..................... $ 11.37 $ .10 $ 2.41 $ 2.51 $ .14 $ -- $ .14
1994..................... 13.74 .14 (.32) (.18) .05 -- .05
1995..................... 13.51 .19 2.25 2.44 .12 .25 .37
1996..................... 15.58 .18 2.12 2.30 .19 .50 .69
1997..................... 17.19 .18 1.26 1.44 .20 1.52 1.72
- ----------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE
1993..................... $ 10.53 $ .65 $ .49 $ 1.14 $ .71 $ .01 $ .72
1994..................... 10.95 .67 (1.06) (.39) .16 .09 .25
1995..................... 10.31 .67 1.28 1.95 .53 -- .53
1996..................... 11.73 .72 (.42) .30 .67 -- .67
1997..................... 11.36 .74 .31 1.05 .74 -- .74
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through December 31, 1997 (Note 5).
++ The effect of fees and charges incurred at the separate account level are not
reflected in these performance figures.
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in 1996.
84
<PAGE>
The following table sets forth the per share operating performance data for a
trust share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
---------------------------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
RATIO TO AVERAGE NET ASSETS BEFORE
EXPENSES WAIVED OR
ASSETS+ ASSUMED
NET ASSET NET ASSETS ---------------------- ----------------------
VALUE TOTAL END OF NET NET PORTFOLIO AVERAGE
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER COMMISSION
END ++ (IN EXPENSES INCOME EXPENSES INCOME RATE RATE
OF PERIOD (%) THOUSANDS) (%) (%) (%) (%) (%) +++
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GROWTH
1993..................... $ 17.45 6.00 $ 25,658 .91 .43 N/A N/A 51 $ --
1994..................... 16.73 (2.87) 32,797 .90 .60 N/A N/A 40 --
1995..................... 20.47 25.12 51,171 .88 1.11 N/A N/A 64 --
1996..................... 24.56 24.45 78,806 .85 .92 N/A N/A 49 .0485
1997..................... 29.24 29.28 127,585 .82 .64 N/A N/A 27 .0506
- -----------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD
1993..................... $ 11.16 18.16 $ 30,593 .91 9.49 N/A N/A 96 $ --
1994..................... 10.58 (1.56) 32,285 .88 9.43 N/A N/A 50 --
1995..................... 11.57 19.82 41,894 .87 9.86 N/A N/A 57 --
1996..................... 11.93 12.56 49,474 .85 9.43 N/A N/A 34 --
1997..................... 12.30 12.47 59,619 .83 8.88 N/A N/A 40 --
- -----------------------------------------------------------------------------------------------------------------------------------
INTERNATIONAL SECURITIES
1993..................... $ 13.74 22.17 $ 21,009 1.14 .97 N/A N/A 37 $ --
1994..................... 13.51 (1.29) 31,308 1.03 1.22 N/A N/A 36 --
1995..................... 15.58 18.70 41,012 1.02 1.42 N/A N/A 45 --
1996..................... 17.19 15.23 57,955 1.12 1.25 N/A N/A 67 .0093
1997..................... 16.91 9.09 74,463 1.13 1.15 N/A N/A 71 .0042
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE
1993..................... $ 10.95 10.93 $ 10,210 .35 6.32 .85 5.82 64 $ --
1994..................... 10.31 (3.53) 11,602 .37 6.61 .92 6.06 15 --
1995..................... 11.73 19.69 16,262 .51 6.80 .91 6.40 26 --
1996..................... 11.36 2.84 16,390 .60 6.47 .88 6.19 19 --
1997..................... 11.67 9.81 17,220 .60 6.54 .87 6.27 41 --
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through December 31, 1997 (Note 5).
++ The effect of fees and charges incurred at the separate account level are not
reflected in these performance figures.
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in 1996.
85
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
FIRST INVESTORS LIFE SERIES FUND
The following table sets forth the per share operating performance data for a
trust share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
--------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
--------------------------------------
NET REALIZED
NET ASSET AND LESS DISTRIBUTIONS FROM
VALUE UNREALIZED -----------------------
--------- NET GAIN (LOSS) TOTAL FROM NET NET
BEGINNING INVESTMENT ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TARGET MATURITY 2007
4/26/95* to
12/31/95.......... $ 10.00 $ .26 $ 2.00 $ 2.26 $ -- $ -- $ --
1996................ 12.26 .56 (.83) (.27) .23 .05 .28
1997................ 11.71 .59 .90 1.49 .57 -- .57
- -------------------------------------------------------------------------------------------------------------------
TARGET MATURITY 2010
4/30/96* to
12/31/96.......... $ 10.00 $ .26 $ .90 $ 1.16 $ -- $ -- $ --
1997................ 11.16 .45 1.29 1.74 .20 -- .20
- -------------------------------------------------------------------------------------------------------------------
UTILITIES INCOME
11/15/93* to
12/31/93.......... $ 10.00 $ .01 $ (.07) $ (.06) $ -- $ -- $ --
1994................ 9.94 .24 (.96) (.72) .03 -- .03
1995................ 9.19 .28 2.46 2.74 .19 -- .19
1996................ 11.74 .32 .78 1.10 .27 -- .27
1997................ 12.57 .37 2.64 3.01 .36 .27 .63
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
(a) Annualized
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through December 31, 1997 (Note 5).
++ The effect of fees and charges incurred at the separate account level are not
reflected in these performance figures.
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in 1996.
See notes to financial statements
86
<PAGE>
The following table sets forth the per share operating performance data for a
trust share outstanding, total return, ratios to average net assets and other
supplemental data for each period indicated.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
--------------------------------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
RATIO TO AVERAGE NET ASSETS BEFORE
EXPENSES WAIVED OR
ASSETS+ ASSUMED
NET ASSET NET ASSETS --------------------- ------------------------
VALUE TOTAL END OF NET NET PORTFOLIO AVERAGE
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER COMMISSION
END ++ (IN EXPENSES INCOME EXPENSES INCOME RATE RATE
OF PERIOD (%) THOUSANDS) (%) (%) (%) (%) (%) +++
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
TARGET MATURITY 2007
4/26/95* to
12/31/95.......... $ 12.26 22.60 $ 9,860 .04(a) 6.25(a) .87(a) 5.42(a) 28 $ --
1996................ 11.71 (2.16) 14,647 .60 6.05 .82 5.83 13 --
1997................ 12.63 13.38 20,300 .60 5.91 .82 5.69 1 --
- -----------------------------------------------------------------------------------------------------------------------------------
TARGET MATURITY 2010
4/30/96* to
12/31/96.......... $ 11.16 11.60 $ 2,195 .60(a) 6.05(a) .98(a) 5.67(a) -- $ --
1997................ 12.70 15.86 5,209 .60 5.88 .87 5.61 13 --
- -----------------------------------------------------------------------------------------------------------------------------------
UTILITIES INCOME
11/15/93* to
12/31/93.......... $ 9.94 (4.66)(a) $ 494 -- 1.46(a) 3.98(a) (2.52)(a) 0 $ --
1994................ 9.19 (7.24) 4,720 .17 4.13 .95 3.35 31 --
1995................ 11.74 30.26 14,698 .41 4.23 .91 3.73 17 --
1996................ 12.57 9.57 24,108 .60 3.48 .86 3.22 45 .0707
1997................ 14.95 25.07 33,977 .67 3.12 .85 2.94 64 .0681
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations
(a) Annualized
+ Some or all expenses have been waived or assumed by the investment adviser
from commencement of operations through December 31, 1997 (Note 5).
++ The effect of fees and charges incurred at the separate account level are not
reflected in these performance figures.
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in 1996.
See notes to financial statements
87
<PAGE>
INDEPENDENT AUDITORS' 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 eleven Funds comprising First Investors
Life Series Fund as of December 31, 1997, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in period then ended, and financial highlights for each of
the periods indicated thereon. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, 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 eleven Funds comprising First Investors Life Series Fund at December 31,
1997, and the results of their operations, changes in their net assets and
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 30, 1998
88
<PAGE>
(This page has been left blank intentionally.)
89
<PAGE>
FIRST INVESTORS LIFE SERIES FUND
TRUSTEES
- -------------------------------------------
JAMES J. COY (Emeritus)
ROGER L. GRAYSON
GLENN O. HEAD
KATHRYN S. HEAD
REX R. REED
HERBERT RUBINSTEIN
NANCY S. SCHAENEN
JAMES M. SRYGLEY
JOHN T. SULLIVAN
ROBERT F. WENTWORTH
OFFICERS
- -------------------------------------------
GLENN O. HEAD
President
CONCETTA DURSO
Vice President and Secretary
JOSEPH I. BENEDEK
Treasurer
CAROL LERNER BROWN
Assistant Secretary
GREGORY R. KINGSTON
Assistant Treasurer
MARK S. SPENCER
Assistant Treasurer
THE CASH MANAGEMENT FUND IS A MONEY MARKET FUND AND SEEKS TO MAINTAIN A STABLE
NET ASSET VALUE OF $1.00 PER SHARE. HOWEVER, THERE CAN BE NO ASSURANCE THAT THE
FUND WILL BE ABLE TO DO SO OR ACHIEVE ITS INVESTMENT OBJECTIVE. AN INVESTMENT IN
THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT.
90
<PAGE>
FIRST INVESTORS LIFE SERIES FUND
SHAREHOLDER INFORMATION
- -------------------------------------------
INVESTMENT ADVISER
FIRST INVESTORS MANAGEMENT COMPANY, INC.
95 Wall Street
New York, NY 10005
SUBADVISER (Growth Fund and International Securities Fund Only)
WELLINGTON MANAGEMENT COMPANY
75 State Street
Boston, MA 02109
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
CUSTODIAN (International Securities Fund Only)
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
TRANSFER AGENT
ADMINISTRATIVE DATA MANAGEMENT CORP.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Fund will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Fund's prospectus.
91
<PAGE>
FIRST INVESTORS LIFE SERIES FUND
95 WALL STREET
NEW YORK, NY 10005
First Investors Logo
Logo is described as follows: The arabic numeral one separated into seven
vertical segments followed by the words "First Investors."
A MEMBER OF THE
FIRST INVESTORS FINANCIAL NETWORK
FIFE310
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" appear in a box to the
right of a circle containing the words "MAILED FROM ZIP CODE 11201" which
appears to the right of the above language in the printed piece.
Vertically reading from bottom to top in the center of the page the words "FIRST
INVESTORS" appear in the printed piece.
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
Target Maturity 2010 Fund
Utilities Income Fund
ANNUAL
REPORT
DECEMBER 31, 1997
