<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS HIGH YIELD FUND, INC.
Dear Investor:
The current economic expansion extended to its fifth year in 1996. The economy
grew by 3.4% during the year with the core rate of consumer price inflation
increasing 2.6%, its slowest pace since the mid-1960's. The combination of
moderate growth and low inflation provided a positive background for the
financial markets. The broad stock market averages made new highs during 1996
while long-term interest rates moved somewhat higher during the year. Besides
the economy, the markets benefited from strong demand for U.S. securities.
Individual investors bought a record amount of stock mutual funds, while foreign
investors bought a record amount of U.S. Treasury bonds.
1996 was a year of incredible activity in fixed income markets and for high
yield bonds in particular. The net result was positive for the high yield market
and the First Investors High Yield Fund. Junk bond market returns of 13.7% and
12.4% as measured by the Lipper Analytical Services average of fund returns and
Credit Suisse First Boston, respectively, were sharply higher than the 0.1%
total return for ten year Treasury notes. Buoyant capital markets, led by rising
equity valuations, created an environment in which credit sensitive bonds as a
group, especially junk bonds, outperformed Treasury securities of equivalent
maturities. Investors who observed this profit potential and who were willing to
assume the credit risk inherent in high yield issuers responded by directing
tens of billions of dollars into the high yield bond market. In spite of record
new issuance, there has still been market wide competition for new investments.
High yield issuers thus had more flexibility with which to bolster liquidity,
implement growth plans, reduce their costs of capital and improve their credit
strength. The greatest benefit of this flexibility generally accrued to the
lowest rated companies in the junk bond pecking order - weak single B or split
rated single B/CCC+ - companies with the least room for error. Consequently,
many of those bonds outperformed higher quality issuers, which tended to be more
affected by rising interest rates.
During 1996, First Investors High Yield Fund Class A shares returned on a net
asset value basis 13.4% compared with 13.7% for the average of all high yield
funds as measured by Lipper Analytical Services, Inc. Class B shares returned
12.4%. Our strategy has been to emphasize companies with managements intent on -
and capable of - paying their obligations and improving their credit ratings. As
noted above, the best relative performance in 1996 often came from companies
employing much more aggressive and risky financial and operating strategies.
Nevertheless, the Fund had several investments which exceeded market
expectations and delivered exceptional performance such as: WCI Steel, Garden
State News, Monarch Marking, Lamar Advertising, Gulf Canada, Outdoor Systems,
Synthetic Industries and Moran Transportation. A few of these are no longer held
because the companies bought back their bonds at above market prices that we
simply could not refuse. The Fund has a material investment in Bell Cablemedia
and Videotron Holdings because of their strong location and strategy. They have
become a major force in Cable TV and deregulated telephone service in Great
Britain. Their bonds have appreciated because these companies are being acquired
by a much larger investment grade U.K. company. A low concentration in gaming
slowed performance in the first half of 1996 and enhanced it later in the year
1
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS HIGH YIELD FUND, INC.
as investors realized that the industry's expansion phase was ending and more
intense competition was beginning. The market wide default rate declined from
3.1% in 1995 to 1.4% in 1996; however, the Fund experienced no defaults. We
elected to sell at moderate discounts a few holdings where credit deterioration
appeared likely.
Investors who buy bond funds -- whether for income or total return -- should be
aware that the value of their investment fluctuates as interest rates change.
For example, a 1% increase in yield on a ten year bond results in roughly a 7%
decrease in that bond's price. In each of the last five years, ten year Treasury
bond yields have moved more than 1%. In addition, the value of a fund can
fluctuate based on changes in the credit quality of the bonds which it holds. In
particular, high yield funds invest in lower-rated debt obligations which 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.
As 1997 begins, it is important to recognize that high yield bonds are very much
intertwined with valuations that prevail throughout the capital markets. This
means that the health of the equity market is every bit as important as the
direction of interest rates in understanding the overall direction of our
market. We do not rely on yield declines to continue to drive portfolio
appreciation as in the last couple of years. Instead, we emphasize basic
"blocking and tackling" - investment research that perceives big picture
industry trends, identifies management capability, and locks in on strategies
and business plans that will work for bondholders. This will be key in
delivering value - superior yield that compensates the Fund for the higher risks
assumed by investing in the junk bond market.
Looking forward, the factors that benefited the markets in 1996 appear likely to
continue in 1997: moderate growth, low inflation, and strong demand for
financial assets. A significant risk to the market is that inflation may
increase due to the length of the economic expansion. This could lead the
Federal Reserve to raise interest rates, hurting both the bond and stock
markets. On the other hand, the markets may be positively surprised by
legislation from the President and Congress to eliminate the federal budget
deficit. We will continue to be alert to events that may affect the value of
your investments.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIG]
George V. Ganter
Vice President
and Portfolio Manager
January 31, 1997
2
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS HIGH YIELD FUND, INC.
Comparison of change in value of $10,000 investment in the First Investors High
Yield Fund, Inc. (Class A shares) and the First Boston High Yield Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C> <C> <C>
High Yield Fund First Boston High Yield Index
Jan-87 $9,375.00 $10,000.00
Dec-87 9263 12319
Dec-88 10431 14001
Dec-89 9589 14054
Dec-90 7956 13157
Dec-91 10782 18914
Dec-92 12824 22065
Dec-93 14998 26237
Dec-94 15057 25983
Dec-95 17832 30498
Dec-96 20213 34286
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A shares
One Year 13.35% 6.23%
Five Years 13.39% 11.92%
Ten Years 7.99% 7.29%
S.E.C. 30-Day Yield 6.67%
Class B shares
One Year 12.41% 7.88%
Since Inception 15.13% 12.79%
S.E.C. 30-Day Yield 6.43%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS HIGH YIELD FUND,
INC. (CLASS A SHARES) BEGINNING 1/1/87 WITH A THEORETICAL INVESTMENT IN THE
FIRST BOSTON HIGH YIELD INDEX. THE FIRST BOSTON HIGH YIELD INDEX IS DESIGNED TO
MEASURE THE PERFORMANCE OF THE HIGH YIELD BOND MARKET. THE INDEX CONSISTS OF 852
DIFFERENT ISSUES, 706 OF WHICH ARE CASH PAY, 127 ARE ZERO-COUPON, 9 ARE STEP
BONDS, 1 IS A PAYMENT-IN-KIND BOND AND THE REMAINING 9 ARE IN DEFAULT. THE BONDS
INCLUDED IN THE INDEX HAVE AN AVERAGE LIFE OF 7.8 YEARS, AN AVERAGE MATURITY OF
7.8 YEARS, AN AVERAGE DURATION OF 4.2 YEARS AND AN AVERAGE COUPON OF 10.6%. 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. CLASS B SHARES
PERFORMANCE MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH ABOVE
BASED ON DIFFERENCES IN SALES LOADS AND FEES PAID BY SHAREHOLDERS INVESTING IN
THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 12/31/96) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25% (PRIOR TO 7/1/93 AND
12/29/89, THE MAXIMUM SALES CHARGES WERE 6.9% AND 8.5%, RESPECTIVELY). THE
CLASS B "S.E.C. STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED
SALES CHARGE (MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF
THE FUND WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND,
THE CLASS A SHARES "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE
YEAR, FIVE YEARS AND TEN YEARS WOULD HAVE BEEN 5.99%, 11.80% AND 7.20%,
RESPECTIVELY, AND THE S.E.C. 30-DAY YIELD FOR DECEMBER 1996 WOULD HAVE BEEN
6.53%. THE CLASS B SHARES "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN 7.63% AND 12.55%,
RESPECTIVELY, AND THE S.E.C. 30-DAY YIELD FOR DECEMBER 1996 WOULD HAVE BEEN
6.28%. 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. THE FUND WAS CLOSED TO NEW INVESTMENTS FROM 11/9/90 TO 7/27/92.
FIRST BOSTON HIGH YIELD INDEX FIGURES FROM CS FIRST BOSTON AND ALL OTHER
FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
3
<PAGE>
PORTFOLIO COMPOSITION
FIRST INVESTORS HIGH YIELD FUND, INC.
The dollar weighted average of credit ratings of all bonds held by the Fund
during the 1996 fiscal year and the dollar weighted average of the total of the
Fund's investments in zero coupon bonds and pay-in-kind bonds during the 1996
fiscal year, computed on a monthly basis, is set forth below. This information
reflects the average composition of the Fund's assets during the 1996 fiscal
year and is not necessarily representative of the Fund as of the end of its 1996
fiscal year, the current fiscal year or at any other time in the future.
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------
Comparable Quality
Rated by of Unrated Securities
Moody's to Bonds Rated by Moody's
- ----------------------------------------------------------------------------------
A1 0.01% 0.00%
A2 0.12 0.00
Baa2 1.08 0.00
Baa3 0.50 0.00
Ba1 0.60 0.00
Ba2 3.48 0.13
Ba3 15.20 0.18
B1 20.51 0.13
B2 23.75 0.21
B3 17.50 0.29
Caa 2.33 1.64
Ca 0.01 0.13
- ----------------------------------------------------------------------------------
</TABLE>
Zero Coupon Bonds 14.13%
Pay-in-kind Bonds .19%
4
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--85.7%
AEROSPACE/DEFENSE--2.3%
$ 3,000M K & F Industries, Inc., 10.375%, 2004 $ 3,165,000 $ 154
1,400M Moog, Inc., 10%, 2006 1,473,500 72
- -----------------------------------------------------------------------------------------
4,638,500 226
- -----------------------------------------------------------------------------------------
APPAREL/TEXTILES--1.5%
3,000M Westpoint Stevens, Inc., 9.375%, 2005 3,067,500 149
- -----------------------------------------------------------------------------------------
AUTOMOTIVE--4.3%
1,500M Aftermarket Technology Corp., 12%, 2004 1,676,250 82
1,100M Lear Seating, Inc., 11.25%, 2000 1,128,875 55
1,185M Safelite Glass Corp., 9.875%, 2006 (Note 4) 1,214,625 59
2,450M SPX Corp., 11.75%, 2002 2,737,875 133
2,000M Walbro Corp., 9.875%, 2005 2,050,000 100
- -----------------------------------------------------------------------------------------
8,807,625 429
- -----------------------------------------------------------------------------------------
BUILDING MATERIALS--2.1%
2,500M ISP Holdings, Inc., 9.75%, 2002 (Note 4) 2,612,500 127
1,600M Waxman USA Inc., 11.125%, 2001 1,600,000 78
- -----------------------------------------------------------------------------------------
4,212,500 205
- -----------------------------------------------------------------------------------------
CHEMICALS--5.2%
3,000M Harris Chemical North America, Inc., 10.25%, 2001 3,127,500 152
1,700M Harris Chemical North America, Inc., 10.75%, 2003 1,763,750 86
2,800M Rexene Corp., 11.75%, 2004 3,108,000 151
2,500M Synthetic Industries, Inc., 12.75%, 2002 2,756,250 134
- -----------------------------------------------------------------------------------------
10,755,500 523
- -----------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.0%
1,900M Hines Horticulture, Inc., 11.75%, 2005 2,023,500 98
- -----------------------------------------------------------------------------------------
CONSUMER PRODUCTS--3.5%
2,500M Herff Jones, Inc., 11%, 2005 2,675,000 130
5,500M Semi-Tech Corp., 0%-11.50%, 2003 3,547,500 173
1,000M William Carter Co., 10.375%, 2006 (Note 4) 1,050,000 51
- -----------------------------------------------------------------------------------------
7,272,500 354
- -----------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONTAINERS/PACKAGING--4.9%
$ 5,400M Owens Illinois, Inc., 11%, 2003 $ 6,021,000 $ 293
1,850M Radnor Holdings, 10%, 2003 (Note 4) 1,877,750 91
2,000M U.S. Can Corp., 10.125%, 2006 (Note 4) 2,100,000 102
- -----------------------------------------------------------------------------------------
9,998,750 486
- -----------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--2.6%
750M Amtrol Acquisition, Inc., 10.625%, 2006 (Note 4) 772,500 38
2,445M Fairfield Manufacturing, Inc., 11.375%, 2001 2,555,025 124
2,500M RACI Acquisition Corp., 10%, 2003 (Note 4) 2,106,250 102
- -----------------------------------------------------------------------------------------
5,433,775 264
- -----------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--.2%
450M Thermadyne Industries, Inc., 10.25%, 2002 462,375 23
- -----------------------------------------------------------------------------------------
ENERGY--2.3%
1,500M Giant Industries, Inc., 9.75%, 2003 1,560,000 76
3,052M Maxus Energy Corp., 11.50%, 2015 3,200,785 156
- -----------------------------------------------------------------------------------------
4,760,785 232
- -----------------------------------------------------------------------------------------
ENERGY EXPLORATION/PRODUCTS--1.6%
3,000M Gulf Canada Resources, Ltd., 9.625%, 2005 3,240,000 158
- -----------------------------------------------------------------------------------------
FINANCIAL--.7%
1,300M Terra Nova Holdings, PLC, 10.75%, 2005 1,469,000 71
- -----------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--3.8%
550M Delta Beverage Group, Inc., 9.75%, 2003 (Note 4) 565,125 28
2,000M International Home Food, Inc., 10.375%, 2006
(Note 4) 2,060,000 100
2,500M TLC Beatrice International Holdings, Inc.,
11.50%, 2005 2,656,250 129
2,350M Van de Kamps, 12%, 2005 2,596,750 126
- -----------------------------------------------------------------------------------------
7,878,125 383
- -----------------------------------------------------------------------------------------
GAMING/LODGING--2.6%
2,400M Casino America, Inc., 12.50%, 2003 2,256,000 110
750M Grand Casinos, Inc., 10.125%, 2003 757,500 37
800M Player's International, Inc., 10.875%, 2005 792,000 39
- -----------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
GAMING/LODGING (continued)
$ 1,000M Prime Hospitality Corp., 9.25%, 2006 $ 1,012,500 $ 49
1,080M SHRP Capital Corp., 11%, 2001 431,944 21
- -----------------------------------------------------------------------------------------
5,249,944 256
- -----------------------------------------------------------------------------------------
HEALTHCARE--5.3%
1,300M Genesis Healthcare, Inc., 9.75%, 2005 1,358,500 66
1,600M Integrated Health Services, Inc., 10.75%, 2004 1,700,000 83
2,700M Ornda Healthcorp., 12.25%, 2002 2,889,000 141
2,489M Owens & Minor, Inc., 10.875%, 2006 2,650,785 129
2,000M Tenet Healthcare Corporation, 10.125%, 2005 2,207,500 107
- -----------------------------------------------------------------------------------------
10,805,785 526
- -----------------------------------------------------------------------------------------
INFORMATION TECHNOLOGY/OFFICE EQUIPMENT--.5%
1,000M Bell & Howell Co., 10.75%, 2002 1,060,000 52
- -----------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--14.9%
1,000M Allbritton Communications Corp., 9.75%, 2007 970,000 47
4,000M Bell Cablemedia, PLC, 0%-11.95%, 2004 3,500,000 170
2,000M Century Communications Corp., 9.50%, 2005 2,055,000 100
3,725M Echostar Communications Corp., 0%-12.875%, 2004 3,063,812 149
3,200M Garden State Newspapers, Inc., 12%, 2004 3,488,000 170
2,050M Grupo Televisa, S.A., 11.875%, 2006 2,265,250 110
1,000M Le Groupe Videotron, Ltee, 10.625%, 2005 1,100,000 54
2,000M Lenfest Communication, Inc., 10.50%, 2006 2,105,000 102
3,700M PanAmSat Capital Corp., 0%-11.375%, 2003 3,431,750 167
2,000M Rogers Cablesystems, Inc., 10%, 2005 2,100,000 102
2,000M Rogers Communication Inc., 10.875%, 2004 2,105,000 102
5,100M Videotron Holdings, PLC., 0%-11.125%, 2004 4,386,000 213
- -----------------------------------------------------------------------------------------
30,569,812 1,486
- -----------------------------------------------------------------------------------------
MINING/METALS--5.2%
2,755M Carbide/Graphite Group, Inc., 11.50%, 2003 2,989,175 145
2,500M Commonwealth Aluminum, Inc., 10.75%, 2006 (Note
4) 2,587,500 126
- -----------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
MINING/METALS (continued)
$ 2,000M Renco Metals, Inc., 11.50%, 2003 $ 2,105,000 $ 102
3,200M Wheeling-Pittsburgh Steel Corp., 9.375%, 2003 3,104,000 151
- -----------------------------------------------------------------------------------------
10,785,675 524
- -----------------------------------------------------------------------------------------
MISCELLANEOUS--3.5%
1,700M Allied Waste, North America, 10.25%, 2006 (Note
4) 1,785,000 87
1,750M Iron Mountain, Inc., 10.125%, 2006 1,855,000 90
3,000M Monarch Marking Systems, Inc., 12.50%, 2003 3,450,000 168
- -----------------------------------------------------------------------------------------
7,090,000 345
- -----------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--6.1%
2,700M Gaylord Container Corp., 11.50%, 2001 2,862,000 139
2,600M S.D. Warren Co., Inc., 12%, 2004 2,808,000 137
2,750M Stone Container Corp., 11.875%, 1998 2,901,250 141
4,000M Stone Container Corp., 9.875%, 2001 4,040,000 197
- -----------------------------------------------------------------------------------------
12,611,250 614
- -----------------------------------------------------------------------------------------
REAL ESTATE/CONSTRUCTION--1.2%
2,350M Continental Homes Holding Corp., 10%, 2006 2,426,375 118
- -----------------------------------------------------------------------------------------
TELECOMMUNICATIONS--7.0%
3,750M American Communication Services, Inc., 0%-13%,
2005 2,212,500 108
1,700M Brooks Fiber Properties, Inc., 0%-10.875%, 2006 1,134,750 55
1,750M InterCel, Inc., 0%-12%, 2006 1,120,000 55
4,100M InterCel, Inc., 0%-12%, 2006 2,488,700 121
6,525M MFS Communications, Inc., 0%-9.375%, 2004 5,660,438 275
1,800M Paging Network, Inc., 10%, 2008 (Note 4) 1,829,250 89
- -----------------------------------------------------------------------------------------
14,445,638 703
- -----------------------------------------------------------------------------------------
TRANSPORTATION--3.4%
3,550M Eletson Holdings, Inc., 9.25%, 2003 3,576,625 174
1,350M Moran Transportation Co., 11.75%, 2004 1,458,000 71
2,050M Trism, Inc., 10.75%, 2000 1,952,625 95
- -----------------------------------------------------------------------------------------
6,987,250 340
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost
$169,996,318) 176,052,164 8,565
- -----------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES FOR EACH
OR $10,000 OF
WARRANTS SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--.4%
ELECTRICAL EQUIPMENT--.1%
6,481 *Thermadyne Holdings Corp. $ 184,708 $ 9
- -----------------------------------------------------------------------------------------
GAMING/LODGING--.0%
287 *SHRP Equity, Inc. 1,148 --
- -----------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--.1%
12,623 *Echostar Communications - Class "A" 277,706 13
- -----------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.1%
46,061 *Gaylord Container Corp., Class "A" 282,124 14
- -----------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--.1%
55,160 *Barry's Jewelers, Inc. 124,111 6
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $1,577,686) 869,797 42
- -----------------------------------------------------------------------------------------
PREFERRED STOCKS--3.7%
FINANCIAL--1.7%
20,000 California Federal Bank, 10.625%, Series "B" 2,215,000 108
40,800 Greater New York Savings Bank, 12%, Series "B" 1,326,000 64
- -----------------------------------------------------------------------------------------
3,541,000 172
- -----------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--1.5%
33,035 Cablevision Systems Corp., 11.125% 2,956,633 144
- -----------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.5%
30,200 S.D. Warren Co., Inc., 14% 1,102,300 54
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $7,286,777) 7,599,933 370
- -----------------------------------------------------------------------------------------
WARRANTS--.3%
GAMING/LODGING--.0%
17,660 *President Riverboat Casinos, Inc. (expiring
9/30/99)(Note 4) 17,660 1
- -----------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.1%
11,029 *Gaylord Container Corp. (expiring 11/1/02) 68,241 3
30,200 *S.D. Warren Co., Inc. (expiring 12/15/06)(Note
4) 151,000 7
- -----------------------------------------------------------------------------------------
219,241 10
- -----------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
WARRANTS OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
TELECOMMUNICATIONS--.2%
3,750 *American Communication Services, Inc. (expiring
11/1/05)(Note 4) $ 318,750 $ 16
5,600 *InterCel, Inc. (expiring 2/01/06) 39,200 2
- -----------------------------------------------------------------------------------------
357,950 18
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $118,685) 594,851 29
- -----------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--1.9%
$ 4,000M Federal Home Loan Bank Board, 6.02%, 1998 (cost
$4,000,000) 3,994,824 194
- -----------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--6.0%
5,000M Ford Motor Credit Company, 5.55%, 1/10/97 4,993,062 243
2,000M Laclede Gas Company, 5.60%, 1/21/97 1,993,778 97
500M Texaco, Inc., 5.57%, 1/10/97 499,275 24
4,750M Xerox Credit Corporation, 5.50%, 1/10/97 4,743,469 231
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$12,229,584) 12,229,584 595
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $195,209,050) 98.0% 201,341,153 9,795
OTHER ASSETS, LESS LIABILITIES 2.0 4,206,468 205
- -----------------------------------------------------------------------------------------
NET ASSETS 100.0% $205,547,621 $10,000
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities, at value
(identified cost $195,209,050) (Note
1A).................................. $201,341,153
Cash................................... 2,314,548
Receivables:
Interest............................. $3,562,129
Capital shares sold.................. 288,268 3,850,397
-------
Other assets........................... 59,061
-------
Total Assets........................... 207,565,159
LIABILITIES
Payables:
Investment securities purchased...... 1,061,437
Cash portion of dividend payable
January 15, 1997................... 465,964
Capital shares redeemed.............. 237,693
Accrued advisory fee................... 144,041
Accrued expenses....................... 108,403
-------
Total Liabilities...................... 2,017,538
-------
NET ASSETS (Note 6):
Class A (37,334,569 shares
outstanding)....................... 201,633,652
Class B (724,658 shares
outstanding)....................... 3,913,969 $205,547,621
-------
-------
-------
NET ASSETS CONSIST OF:
Capital paid in........................ $591,645,281
Undistributed net investment income.... 1,582,828
Accumulated net realized loss on
investment transactions.............. (393,812,591)
Net unrealized appreciation in value of
investments.......................... 6,132,103
-------
Total.................................. $205,547,621
-------
-------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 5.40
-------
-------
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A ($5.40/.9375)........ $ 5.76
-------
-------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B...................... $ 5.40
-------
-------
</TABLE>
See notes to financial statements
11
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS HIGH YIELD FUND, INC.
Year Ended December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $19,126,365
Dividends (Note 1E).................. 623,639
Consent fees......................... 311,281
-------
Total income........................... $20,061,285
Expenses (Notes 1E and 3):
Advisory fee......................... 1,937,648
Shareholder servicing costs.......... 545,147
Distribution plan expenses - Class
A.................................. 287,850
Distribution plan expenses - Class
B.................................. 16,818
Reports and notices to
shareholders....................... 60,897
Professional fees.................... 47,046
Custodian fees....................... 23,622
Other expenses....................... 38,338
-------
Total expenses......................... 2,957,366
Less: Expenses waived or assumed....... (290,138)
Custodian fees paid indirectly.... (12,361)
-------
Net expenses........................... 2,654,867
-------
Net investment income.................. 17,406,418
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2)
Net realized loss on investments....... (7,765,501)
Net unrealized appreciation of
investments.......................... 14,736,452
-------
Net gain on investments................ 6,970,951
-------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $24,377,369
-------
-------
</TABLE>
See notes to financial statements
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS HIGH YIELD FUND, INC.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------
Year Ended December 31 1996 1995
- --------------------------------------- ------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................ $ 17,406,418 $ 16,736,625
Net realized loss on investments..... (7,765,501) (720,031)
Net unrealized appreciation of
investments........................ 14,736,452 14,815,104
------------ ------------
Net increase in net assets
resulting from operations........ 24,377,369 30,831,698
------------ ------------
DIVIDENDS TO SHAREHOLDERS
Net investment income - Class A...... (17,643,461) (17,039,142)
Net investment income - Class B...... (171,377) (37,544)
------------ ------------
Total dividends.................... (17,814,838) (17,076,686)
------------ ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............ 20,402,130 12,606,146
Value of dividends reinvested........ 13,062,488 12,721,081
Cost of shares redeemed.............. (25,196,197) (22,568,327)
------------ ------------
8,268,421 2,758,900
------------ ------------
Class B:
Proceeds from shares sold............ 3,074,309 856,809
Value of dividends reinvested........ 88,770 16,473
Cost of shares redeemed.............. (226,919) (5,776)
------------ ------------
2,936,160 867,506
------------ ------------
Net increase from capital share
transactions....................... 11,204,581 3,626,406
------------ ------------
Net increase in net assets......... 17,767,112 17,381,418
NET ASSETS
Beginning of year.................... 187,780,509 170,399,091
------------ ------------
End of year (including undistributed
net investment income of $1,582,828
and $1,991,248, respectively)...... $205,547,621 $187,780,509
------------ ------------
------------ ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 3,871,810 2,473,148
Issued for dividends reinvested...... 2,471,711 2,489,075
Redeemed............................. (4,780,167) (4,415,539)
------------ ------------
Net increase in Class A capital
shares outstanding................. 1,563,354 546,684
------------ ------------
------------ ------------
Class B:
Sold................................. 581,031 167,832
Issued for dividends reinvested...... 16,742 3,176
Redeemed............................. (43,012) (1,111)
------------ ------------
Net increase in Class B capital
shares outstanding................. 554,761 169,897
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
13
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
1. SIGNIFICANT ACCOUNTING POLICIES--The Fund is registered under the Investment
Company Act of 1940 (the "1940 Act") as a diversified, open-end management
investment company. The primary objective of the Fund is to seek high current
income and secondarily to seek capital appreciation.
A. Security Valuation--Except as provided below, a security listed or traded on
an exchange or the NASDAQ National Market System is valued at its last sale
price on the exchange or system where the security is principally traded, and
lacking any sales, the security is valued at the last bid price. Each security
traded in the over-the-counter market (including securities listed on exchanges
whose primary market is believed to be over-the-counter) is valued at the most
recent bid price based upon quotes furnished by a market maker for such
securities. Securities may also be priced by a pricing service. The pricing
service uses quotations obtained from investment dealers or brokers and other
available information in determining bid values. 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 a manner specifically authorized
by the Board of Directors.
Effective January 2, 1997, the Board of Directors approved a change in the
pricing policy for certain securities. Each security traded in the over-the-
counter market (including securities listed on exchanges whose primary market is
believed to be over-the-counter) which had been valued at the last bid price,
will be priced at the mean between the bid and asked prices.
B. Federal Income Taxes--No provision has been made for federal income taxes on
net income or capital gains since it is the policy of the Fund to comply with
the special provisions of the Internal Revenue Code applicable to investment
companies and to make sufficient distributions of income and capital gains (in
excess of any available capital loss carryovers) to relieve it from all, or
substantially all, such taxes. At December 31, 1996, the Fund had capital loss
carryovers of $390,216,012 of which $107,418,334 expires in 1997, $166,492,834
in 1998, $109,407,948 in 1999, $1,762,042 in 2001, $135,416 in 2002, $593,956 in
2003, and $4,405,482 in 2004.
C. Distributions to Shareholders--Dividends to shareholders from net investment
income are declared daily and paid 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 capital loss carryforwards and post
October losses.
D. 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.
E. Other--Security transactions are accounted for on the date the securities are
purchased or sold. Cost is determined, and gains and losses are based, on the
identified cost basis for both financial statement and federal income tax
purposes. 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
14
<PAGE>
of the shares received. During the year ended December 31, 1996, the Fund
recognized $288,727 of dividend income from these taxable "pay in kind"
distributions. Interest income and estimated expenses are accrued daily. The
Fund's custodian has provided credits in the amount of $12,361 against custodian
charges based on the uninvested cash balances of the Fund.
2. SECURITIES TRANSACTIONS--For the year ended December 31, 1996, purchases and
sales of securities, other than United States Government obligations and
short-term corporate notes, aggregated $57,486,055 and $54,029,192,
respectively.
At December 31, 1996, the cost of investments for federal income tax purposes
was $195,209,050. Accumulated net unrealized appreciation on investments was
$6,132,103, consisting of $10,372,886 gross unrealized appreciation and
$4,240,783 gross unrealized depreciation.
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
directors of the Fund are officers and directors of its investment adviser,
First Investors Management Company, Inc. ("FIMCO"), its underwriter, First
Investors Corporation ("FIC"), its transfer agent, Administrative Data
Management Corp. ("ADM"), and/or First Financial Savings Bank, S.L.A. ("FFS"),
custodian of the Fund's individual retirement accounts. Officers and directors
of the Fund received no remuneration from the Fund for serving in such
capacities. Their remuneration (together with certain other expenses of the
Fund) is paid by FIMCO or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO an annual
fee, payable monthly, at the rate of 1% on the first $200 million of the Fund'
average daily net assets, .75% on the next $300 million, declining by .03% on
each $250 million thereafter, down to .66% on average daily net assets over $1
billion. For the year ended December 31, 1996, FIMCO has voluntarily waived 15%
of the fee.
For the year ended December 31, 1996, FIC, as underwriter, received $499,411 in
commissions after allowing $284,181 to other dealers. Shareholder servicing
costs included $344,444 in transfer agent fees paid to ADM, and $115,434 in
custodian fees paid to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940 Act, the
Fund is authorized to pay FIC a fee in an amount up to .30% of the average net
assets of the Class A shares and 1% of the average net assets of the Class B
shares on an annualized basis each year, payable monthly. The fee consists of a
distribution fee and a service fee. The service fee is paid for the ongoing
servicing of clients who are shareholders of the Fund. However, pursuant to
settlements entered into with various state regulators, the fee is limited to
.15% for Class A and .85% for Class B until February 1, 1998. For the year ended
December 31, 1996, this fee reduction amounted to $287,850 for Class A and
$2,968 for Class B.
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, 1996, the
Fund held fifteen 144A securities with an aggregate value of $21,047,910
representing 10.2% of the Fund's net assets. These securities are valued as set
forth in Note 1A.
5. CONCENTRATION OF CREDIT RISK--The Fund's investment in high yield securities
whether rated or
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
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.
6. CAPITAL--The Fund sells two classes of shares, Class A and Class B, each with
a public offering price that reflects different sales charges and expense
levels. Class A shares are sold with an initial sales charge of up to 6.25% of
the amount invested and together with the Class B shares are subject to 12b-1
fees as described in Note 3. Class B shares are sold without an initial sales
charge, but are generally subject to a contingent deferred sales charge which
declines in steps from 4% to 0% over a six-year period. Class B shares
automatically convert into Class A shares after eight years. Realized and
unrealized gains or losses, investment income and expenses (other than 12b-1
fees and certain other class expenses) are allocated daily to each class of
shares based upon the relative proportion of net assets of each class. Of the
500,000,000 shares originally authorized, the Fund has designated 250,000,000
shares as Class A and 250,000,000 shares as Class B.
16
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS HIGH YIELD FUND, INC.
The following table sets forth the per share operating performance for a share
of capital stock outstanding, total return, ratios to average net assets and
other supplemental data for each year indicated.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Class A
-----------------------------------------------------------------------------------------
Year Ended December 31 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value,
Beginning of Year.................... $ 5.22 $ 4.84 $ 5.30 $ 4.97 $ 4.59 $ 3.83 $ 5.26 $ 6.52 $ 6.51 $ 7.40
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Income from Investment Operations
Net investment income................ .47 .47 .48 .47 .53 .53 .61 .78 .81 .81
Net realized and unrealized gain
(loss) on investments.............. .20 .39 (.46) .34 .31 .75 (1.44) (1.26) -- (.87)
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Total from Investment Operations... .67 .86 .02 .81 .84 1.28 (.83) (.48) .81 (.06)
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Less Distributions from:
Net investment income................ .49 .48 .48 .48 .46 .52 .60 .78 .80 .82
Capital surplus...................... -- -- -- -- -- -- -- -- -- .01
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Total Distributions................ .49 .48 .48 .48 .46 .52 .60 .78 .80 .83
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Net Asset Value,
End of Year.......................... $ 5.40 $ 5.22 $ 4.84 $ 5.30 $ 4.97 $ 4.59 $ 3.83 $ 5.26 $ 6.52 $ 6.51
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------- ------- ------- -------
TOTAL RETURN (%) +..................... 13.35 18.43 .39 16.95 18.94 35.87 (17.25) (8.07) 12.86 (1.38)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in
millions)............................ $202 $187 $170 $191 $192 $211 $297 $754 $637 $228
Ratio to Average Net Assets: (%)
Expenses............................. 1.37 1.45 1.56 1.69 1.39 1.58 1.48 1.23 1.30 1.28
Net investment income................ 8.99 9.22 9.48 8.96 10.65 12.36 13.18 12.85 12.08 11.42
Ratio to Average Net Assets Before
Expenses Waived: (%)
Expenses............................. 1.52 1.55 1.59 N/A N/A N/A N/A N/A N/A 1.30
Net investment income................ 8.84 9.12 9.44 N/A N/A N/A N/A N/A N/A 11.40
Portfolio Turnover Rate (%)............ 29 42 32 87 43 45 26 45 82 80
<CAPTION>
Class B
----------------
1995
Year Ended December 31 1996 *
- ------------------------------------------------------------------
<S> <C> <C>
PER SHARE DATA
Net Asset Value,
Beginning of Year.................... $ 5.23 $ 4.84
------- -------
Income from Investment Operations
Net investment income................ .44 .42
Net realized and unrealized gain
(loss) on investments.............. .18 .40
------- -------
Total from Investment Operations... .62 .82
------- -------
Less Distributions from:
Net investment income................ .45 .43
Capital surplus...................... -- --
------- -------
Total Distributions................ .45 .43
------- -------
Net Asset Value,
End of Year.......................... $ 5.40 $ 5.23
------- -------
------- -------
TOTAL RETURN (%) +..................... 12.41 17.40(a)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in
millions)............................ $4 $1
Ratio to Average Net Assets: (%)
Expenses............................. 2.07 2.22(a)
Net investment income................ 8.28 8.45(a)
Ratio to Average Net Assets Before
Expenses Waived: (%)
Expenses............................. 2.22 2.32(a)
Net investment income................ 8.13 8.35(a)
Portfolio Turnover Rate (%)............ 29 42
</TABLE>
+ Calculated without sales charge
* For the period 1/12/95 (date Class B shares first offered) to 12/31/95
(a) Annualized
See notes to financial statements
17
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Directors of
First Investors High Yield Fund, Inc.
We have audited the accompanying statement of assets and liabilities of First
Investors High Yield Fund, Inc., including the portfolio of investments, as of
December 31, 1996, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and financial highlights for each of the years presented.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements.
Our procedures included confirmation of securities owned as of December 31,
1996, 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 First
Investors High Yield Fund, Inc. at December 31, 1996, and the results of its
operations, changes in its net assets and financial highlights for the years
presented, in conformity with generally accepted accounting principles.
[LOGO]
Philadelphia, Pennsylvania
January 31, 1997
18
<PAGE>
FIRST INVESTORS HIGH YIELD FUND, INC.
DIRECTORS
- -------------------------------------------
JAMES J. COY
ROGER L. GRAYSON
GLENN O. HEAD
KATHRYN S. HEAD
REX R. REED
HERBERT RUBINSTEIN
JAMES M. SRYGLEY
JOHN T. SULLIVAN
ROBERT F. WENTWORTH
OFFICERS
- -------------------------------------------
GLENN O. HEAD
President
GEORGE V. GANTER
Vice 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
SHAREHOLDER INFORMATION
- -------------------------------------------
INVESTMENT ADVISER
FIRST INVESTORS
MANAGEMENT COMPANY, INC.
95 Wall Street
New York, NY 10005
UNDERWRITER
FIRST INVESTORS CORPORATION
95 Wall Street
New York, NY 10005
CUSTODIAN
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10286
TRANSFER AGENT
ADMINISTRATIVE DATA
MANAGEMENT CORP.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Fund will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Fund's prospectus.
19
<PAGE>
FIRST
INVESTORS
HIGH YIELD
FUND, INC.
ANNUAL
REPORT
DECEMBER 31, 1996
Vertically reading from bottom to top in the center of the page the words "FIRST
INVESTORS" appear.
The following appears in a box to the left of the above language:
First Investors Logo (as described above)
NEED SERVICE?
If you have questions about your account...or would like information regarding
other products or services...please contact your representative or call our
Shareholder Services Department at...
(800) 423-4026
The following appears in a box within the above box:
Our business is...putting investors first
The following appears on the bottom lefthand side:
FIHY150
