<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS HIGH YIELD FUND, INC.
Dear Investor:
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 almost been 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 markets.
These conditions extended the favorable performance of the high yield bond
market. High yield bond financing is one of the tools available in the American
capital market which has been used effectively to support a rapid pace of
business change. Instead of being used to hedge inflation, as they might have
been a decade ago, below investment grade bonds now are increasingly funding the
consolidation or early development of many different enterprises. As a group,
junk bond issuers had enormous operating and financial flexibility to work with.
These prevailing conditions supported credit sensitive bonds and the success of
many aggressive business plans. Starting with a record of attractive risk
adjusted returns, many cross-
currents within the high yield markets have kindled huge investor demand. That
demand led to record bond issuance of over $120 billion, surpassing the previous
record set in 1996, of $73 billion. The default rate has remained low,
reflecting generally strong fundamentals and wide credit availability.
Nevertheless, companies that did encounter serious difficulties saw their
securities punished swiftly and severely.
During 1997, First Investors High Yield Fund returned 11.8% on a net asset value
basis for Class A shares and 11.1% for Class B shares, compared to a return of
12.6% for the average high yield bond funds as measured by Lipper Analytical
Services, Inc. For 1997, the Fund declared dividends from net investment income
of 48.0 cents per share on Class A shares and 44.4 cents per share on Class B
shares. The Fund continued to benefit from tenders and calls of portfolio
holdings in addition to those reported last year. In reinvesting proceeds, our
choices fairly consistently 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
1
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS HIGH YIELD FUND, INC.
fund the types of growth, "buildout" and industry consolidation transactions
that did especially well in 1997.
The Fund avoided defaults and notable credit problems. First Investors High
Yield Fund's negligible exposure to emerging markets held back returns in the
year's first half, and despite growing to only a very small level in the third
quarter, widely reported problems outside the U.S. did not have a material
effect on the Fund. In fact, because values of emerging markets bonds have been
thrown into disarray, we want to consider whether some opportunities might exist
amid the turmoil.
As the new year begins, we should acknowledge that uncertainties abound. We
believe that the domestic economy will be resilient but valuation levels,
especially of equities, will continue to influence the high yield bond market.
We expect to continue to see a large choice of new bond issues. In our view, by
avoiding extreme positions with regard to interest rates or market momentum, the
Fund has been positioned to prosper in a changeable environment. The very
success of most of the portfolio's investments creates another challenge, that
of replacing bonds which have met their objectives with successor values. To do
this, we focus our investment research on the basics of current holdings and of
investment prospects: big picture industry trends, management capability, and
the types of strategies/business plans that will work for bondholders.
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. In
addition, the value of a fund can fluctuate based on changes in the credit
quality of the bonds 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.
Following 1997's strong performance, the outlook for U.S. 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 the ultimate impact will be on the financial markets. On a
positive note, Southeast Asia's problems should 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,
[SIG]
George V. Ganter
Vice President
and Portfolio Manager
January 30, 1998
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. 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
<S> <C> <C> <C>
High Yield Fund Boston High Yield Index
Jan-88 $9,375 $10,000
Dec-88 10,563 11,365
Dec-89 9,710 11,408
Dec-90 8,057 10,680
Dec-91 10,918 15,353
Dec-92 12,986 17,911
Dec-93 15,188 21,298
Dec-94 15,247 21,091
Dec-95 18,057 24,757
Dec-96 20,468 27,832
Dec-97 22,892 31,347
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A Shares
One Year 11.84% 4.85%
Five Years 12.01% 10.58%
Ten Years 9.33% 8.63%
S.E.C. 30-Day Yield 7.11%
Class B Shares
One Year 11.11% 7.11%
Since Inception
(1/12/95) 13.76% 12.97%
S.E.C. 30-Day Yield 6.90%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS HIGH YIELD FUND,
INC. 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. THE
PERFORMANCE OF CLASS B SHARES MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE
LINE GRAPH ABOVE FOR CLASS A SHARES 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 12/31/97) 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 "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR,
FIVE YEARS AND TEN YEARS WOULD HAVE BEEN 4.66%, 10.46% AND 8.52%,
RESPECTIVELY, AND THE S.E.C. YIELD FOR DECEMBER 1997 WOULD HAVE BEEN 6.92%.
THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND
SINCE INCEPTION WOULD HAVE BEEN 6.91% AND 12.74%, RESPECTIVELY, AND THE S.E.C.
YIELD FOR DECEMBER 1997 WOULD HAVE BEEN 6.70%. 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.
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 1997 fiscal year and the dollar weighted average of the total of the
Fund's investments in zero coupon bonds, step bonds and payment-in-kind bonds
during the 1997 fiscal year, computed on a monthly basis, are set forth below.
This information reflects the average composition of the Fund's assets during
the 1997 fiscal year and is not necessarily representative of the Fund as of the
end of its 1997 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
- -----------------------------------------------------------------------------------------
Baa2.............................................. 0.00% 0.70%
Baa3.............................................. 2.47 0.00
Ba1............................................... 0.48 0.00
Ba2............................................... 5.72 1.04
Ba3............................................... 12.23 0.00
B1................................................ 16.40 0.00
B2................................................ 29.77 0.00
B3................................................ 18.44 0.00
Caa............................................... 0.25 2.40
- -----------------------------------------------------------------------------------------
</TABLE>
Zero Coupon Bonds 14.16%
Step Bonds 2.52%
Payment-in-kind Bonds .03%
4
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--88.0%
AEROSPACE/DEFENSE--.7%
$ 1,400M Moog, Inc., 10%, 2006 $ 1,498,000 $ 70
- ---------------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS--.7%
1,400M Terra Industries, Inc., 10.50%, 2005 1,512,000 70
- ---------------------------------------------------------------------------------------
APPAREL/TEXTILES--3.6%
1,000M Pillowtex Corp., 10%, 2006 1,075,000 50
1,300M Polymer Group, Inc., 9%, 2007 1,306,500 61
3,000M Westpoint Stevens, Inc., 9.375%, 2005 3,150,000 146
2,250M Worldtex, Inc., 9.625%, 2007 (Note 4) 2,328,750 108
- ---------------------------------------------------------------------------------------
7,860,250 365
- ---------------------------------------------------------------------------------------
AUTOMOTIVE--3.1%
1,120M Aftermarket Technology Corp., 12%, 2004 1,248,800 58
2,000M Cambridge Industries, Inc., 10.25%, 2007 2,090,000 97
1,185M Safelite Glass Corp., 9.875%, 2006 1,244,250 58
2,000M Walbro Corp., 9.875%, 2005 2,035,000 94
- ---------------------------------------------------------------------------------------
6,618,050 307
- ---------------------------------------------------------------------------------------
BUILDING MATERIALS--2.6%
1,650M American Architectural Products Corp., 11.75%,
2007 (Note 4) 1,674,750 78
2,500M ISP Holdings, Inc., 9.75%, 2002 2,653,125 123
1,274M Waxman USA, Inc., 11.125%, 2001 1,267,630 59
- ---------------------------------------------------------------------------------------
5,595,505 260
- ---------------------------------------------------------------------------------------
CHEMICALS--6.2%
2,250M AEP Industries, Inc., 9.875%, 2007 (Note 4) 2,320,312 108
3,000M Harris Chemical North America, Inc., 10.25%, 2001 3,172,500 147
1,700M Harris Chemical North America, Inc., 10.75%, 2003 1,814,750 84
2,800M Huntsman Polymers Corp., 11.75%, 2004 3,171,000 147
1,800M Hydrochem Industrial Services, Inc., 10.375%,
2007 1,885,500 88
1,000M Pharmaceutical Fine Chemicals, SA, 9.75%, 2007
(Note 4) 1,015,000 47
- ---------------------------------------------------------------------------------------
13,379,062 621
- ---------------------------------------------------------------------------------------
CONSUMER PRODUCTS--3.2%
2,500M Herff Jones, Inc., 11%, 2005 2,725,000 126
1,900M Hines Horticulture, Inc., 11.75%, 2005 2,090,000 97
- ---------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER PRODUCTS (continued)
$ 1,200M Syratech Corp., 11%, 2007 $ 1,122,000 $ 52
1,000M William Carter Co., 10.375%, 2006 1,050,000 49
- ---------------------------------------------------------------------------------------
6,987,000 324
- ---------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--2.4%
2,850M Radnor Holdings, Inc., 10%, 2003 2,971,125 138
2,000M U. S. Can Corp., 10.125%, 2006 2,115,000 98
- ---------------------------------------------------------------------------------------
5,086,125 236
- ---------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--1.6%
750M Amtrol, Inc., 10.625%, 2006 776,250 36
2,445M Fairfield Manufacturing, Inc., 11.375%, 2001 2,585,588 120
- ---------------------------------------------------------------------------------------
3,361,838 156
- ---------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--.3%
671M Thermadyne Holdings Corp., 10.25%, 2002 701,195 33
- ---------------------------------------------------------------------------------------
ENERGY--3.5%
1,500M Giant Industries, Inc., 9.75%, 2003 1,541,250 72
3,000M Gulf Canada Resources, Ltd., 9.625%, 2005 3,270,000 152
1,100M Magnum Hunter Resources, Inc., 10%, 2007 1,127,500 52
1,600M Stone Energy Corp., 8.75%, 2007 1,642,000 76
- ---------------------------------------------------------------------------------------
7,580,750 352
- ---------------------------------------------------------------------------------------
FINANCIAL--.7%
1,300M Terra Nova Holdings PLC, 10.75%, 2005 1,449,500 67
- ---------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--3.3%
2,100M Fleming Companies, Inc., 10.50%, 2004 (Note 4) 2,210,250 103
2,000M International Home Foods, Inc., 10.375%, 2006 2,210,000 103
2,350M Van de Kamps, Inc., 12%, 2005 2,632,000 122
- ---------------------------------------------------------------------------------------
7,052,250 328
- ---------------------------------------------------------------------------------------
GAMING/LODGING--2.4%
2,400M Casino America, Inc., 12.50%, 2003 2,616,000 121
750M Grand Casinos, Inc., 10.125%, 2003 810,000 38
1,750M Prime Hospitality Corp., 9.25%, 2006 1,855,000 86
- ---------------------------------------------------------------------------------------
5,281,000 245
- ---------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE--6.8%
$ 1,300M Genesis Healthcare, Inc., 9.75%, 2005 $ 1,355,250 $ 63
1,400M ICN Pharmaceuticals, Inc., 9.25%, 2005 1,487,500 69
1,600M Integrated Health Services, Inc., 10.25%, 2006
(Note 4) 1,708,000 79
2,600M Integrated Health Services, Inc., 9.25%, 2008 2,661,750 124
1,100M Leiner Health Products, 9.625%, 2007 1,177,000 55
2,489M Owens & Minor, Inc., 10.875%, 2006 2,737,900 127
700M Packard Biosciences Co., 9.375%, 2007 675,500 31
2,700M Tenet Healthcare Corp., 10.125%, 2005 2,943,000 137
- ---------------------------------------------------------------------------------------
14,745,900 685
- ---------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--10.7%
1,000M Allbritton Communications Corp., 9.75%, 2007 1,030,000 48
2,000M Century Communications Corp., 9.50%, 2005 2,125,000 99
3,725M Echostar Communications Corp., 0% - 12.875%, 2004 3,408,375 158
1,000M Groupe Videotron, Ltee, 10.625%, 2005 1,110,000 52
2,050M Grupo Televisa, SA, 11.875%, 2006 2,316,500 108
2,000M Lenfest Communication, Inc., 10.50%, 2006 2,245,000 104
2,000M Rogers Cablesystems, Inc., 10%, 2005 2,210,000 103
1,700M Rogers Communications, Inc., 8.875%, 2007 1,708,500 79
2,000M Salem Communications Corp., 9.50%, 2007 (Note 4) 2,055,000 95
5,100M Videotron Holdings PLC, 0% - 11.125%, 2004 4,832,250 224
- ---------------------------------------------------------------------------------------
23,040,625 1,070
- ---------------------------------------------------------------------------------------
MEDIA (OTHER)--3.7%
3,200M Garden State Newspapers, Inc., 12%, 2004 3,584,000 166
1,800M Garden State Newspapers, Inc., 8.75%, 2009 (Note
4) 1,806,750 84
2,400M Outdoor Systems, Inc., 8.875%, 2007 2,514,000 117
- ---------------------------------------------------------------------------------------
7,904,750 367
- ---------------------------------------------------------------------------------------
MINING/METALS--4.4%
2,500M Commonwealth Aluminum Corp., 10.75%, 2006 2,687,500 125
3,200M CSN Iron, SA, 9.125%, 2007 (Note 4) 2,736,000 127
2,000M Renco Metals, Inc., 11.50%, 2003 2,130,000 99
2,100M Wheeling-Pittsburgh Corp., 9.25%, 2007 (Note 4) 2,026,500 94
- ---------------------------------------------------------------------------------------
9,580,000 445
- ---------------------------------------------------------------------------------------
MISCELLANEOUS--4.5%
3,000M Allied Waste North America, Inc., 10.25%, 2006 3,300,000 153
1,750M Iron Mountain, Inc., 10.125%, 2006 1,925,000 89
- ---------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
MISCELLANEOUS (continued)
$ 2,500M Kindercare Learning Centers, Inc., 9.50%, 2009 $ 2,487,500 $ 115
2,000M Loomis Fargo & Co., 10%, 2004 2,010,000 93
- ---------------------------------------------------------------------------------------
9,722,500 450
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--4.4%
2,850M Fonda Group, Inc., 9.50%, 2007 2,721,750 126
2,600M S.D. Warren Co., Inc., 12%, 2004 2,873,000 133
2,750M Stone Container Corp., 11.875%, 1998 2,887,500 134
1,000M Stone Container Corp., 10.75%, 2002 1,052,500 49
- ---------------------------------------------------------------------------------------
9,534,750 442
- ---------------------------------------------------------------------------------------
REAL ESTATE/CONSTRUCTION--1.2%
2,350M Continental Homes Holding Corp., 10%, 2006 2,526,250 117
- ---------------------------------------------------------------------------------------
RETAIL - FOOD/DRUG--.5%
1,000M Randall's Food Markets, Inc., 9.375%, 2007 (Note
4) 1,025,000 48
- ---------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--1.4%
1,250M Barnes & Noble, Inc., 11.875%, 2003 1,343,750 62
1,700M Big 5 Corp., 10.875%, 2007 (Note 4) 1,691,500 79
- ---------------------------------------------------------------------------------------
3,035,250 141
- ---------------------------------------------------------------------------------------
TELECOMMUNICATIONS--13.7%
3,750M American Communications Services, Inc., 13%, 2005 2,971,875 138
2,200M Brooks Fiber Properties, Inc., 0% - 10.875%, 2006 1,831,500 85
1,400M Brooks Fiber Properties, Inc., 10%, 2007 1,613,500 75
2,100M Comcast Cellular Holdings, Inc., 9.50%, 2007 2,194,500 102
3,000M McCaw International, Ltd., 0% - 13%, 2007 1,770,000 82
2,300M McLeodUSA, Inc., 9.25%, 2007 (Note 4) 2,417,875 112
3,000M Omnipoint Corp., 11.625%, 2006 3,172,500 147
1,300M Orion Network Systems, Inc., 11.25%, 2007 1,475,500 69
2,300M Paging Network, Inc., 10%, 2008 2,389,125 111
1,750M Powertel, Inc., 0% - 12%, 2006 1,295,000 60
4,100M Powertel, Inc., 0% - 12%, 2006 2,952,000 137
2,000M Qwest Communications International, 0% - 9.47%,
2007 (Note 4) 1,365,000 63
3,000M RCN Corp., 0% - 11.125%, 2007 (Note 4) 1,890,000 88
2,000M WorldCom, Inc., 9.375%, 2004 2,135,000 99
- ---------------------------------------------------------------------------------------
29,473,375 1,368
- ---------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
AMOUNT, INVESTED
SHARES FOR EACH
OR $10,000 OF
WARRANTS SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--2.4%
$ 3,550M Eletson Holdings, Inc., 9.25%, 2003 $ 3,647,625 $ 169
1,350M Moran Transportation Co., 11.75%, 2004 1,505,250 70
- ---------------------------------------------------------------------------------------
5,152,875 239
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost
$180,777,653) 189,703,800 8,806
- ---------------------------------------------------------------------------------------
COMMON STOCKS--.2%
ELECTRICAL EQUIPMENT--.1%
6,481 *Thermadyne Holdings Corp. 191,189 9
- ---------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--.1%
8,846 *Echostar Communications Corp. - Class "A" 148,171 7
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.0%
17,861 *Gaylord Container Corporation - Class "A" 102,701 4
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $267,346) 442,061 20
- ---------------------------------------------------------------------------------------
PREFERRED STOCKS--3.7%
FINANCIAL--.6%
40,800 Astoria Financial Corp, 12%, Series "B" 1,264,800 59
- ---------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--2.4%
36,863 Cablevision Systems Corp., 11.125%, PIK, Series
"M" 4,220,847 196
927 Echostar Communications, 12.125% 955,098 44
- ---------------------------------------------------------------------------------------
5,175,945 240
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.7%
30,200 S.D. Warren Co., Inc., 14%, Series "B" 1,479,800 69
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $6,460,184) 7,920,545 368
- ---------------------------------------------------------------------------------------
WARRANTS--.3%
GAMING/LODGING--.0%
17,660 *President Riverboat Casinos, Inc. (expiring
9/30/99) 2,207 --
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.1%
30,200 *S.D. Warren Co., Inc. (expiring 12/15/06) (Note
4) 151,000 7
- ---------------------------------------------------------------------------------------
TELECOMMUNICATIONS--.2%
3,750 *American Communication Services, Inc. (expiring
11/1/05) (Note 4) 393,750 18
3,000 *McCaw International, Ltd. (expiring 4/15/07)
(Note 4) 7,500 --
- ---------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
WARRANTS, AMOUNT
UNITS INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TELECOMMUNICATIONS (continued)
1,300 *Orion Network Systems, Inc. (expiring 1/15/07) $ 15,600 $ 1
5,600 *Powertel, Inc. (expiring 2/1/06) 72,800 4
- ---------------------------------------------------------------------------------------
489,650 23
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF WARRANTS (cost $91,816) 642,857 30
- ---------------------------------------------------------------------------------------
UNITS--1.0%
MEDIA (CABLE TV/BROADCASTING)
2,000 Star Choice Communications (a) (cost $2,000,000)
(Note 4) 2,070,000 96
- ---------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--2.2%
$ 4,500M United States Treasury Note, 7%, 2006 (cost
$4,795,281) 4,860,005 226
- ---------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.8%
800M Ford Motor Credit Corp., 5.95%, 1/7/98 799,207 37
5,200M Lubrizol Corp., 6.35%, 1/5/98 5,196,331 241
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$5,995,538) 5,995,538 278
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $200,387,818) 98.2% 211,634,806 9,824
OTHER ASSETS, LESS LIABILITIES 1.8 3,797,665 176
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $215,432,471 $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
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS HIGH YIELD FUND, INC.
December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in securities, at value
(identified cost $200,387,818) (Note
1A).................................. $211,634,806
Cash................................... 158,950
Receivables:
Interest............................. 4,314,235
Capital shares sold.................. 183,821
Other assets........................... 59,061
-------
Total Assets........................... 216,350,873
LIABILITIES
Payables:
Dividend payable..................... $431,238
Capital shares redeemed.............. 269,923
Accrued advisory fee................... 142,074
Accrued expenses....................... 75,167
-------
Total Liabilities...................... 918,402
-------
NET ASSETS (Note 6)
Class A (37,716,987 shares
outstanding)....................... 208,537,534
Class B (1,247,154 shares
outstanding)....................... 6,894,937 $215,432,471
-------
-------
-------
NET ASSETS CONSIST OF:
Capital paid in........................ $489,114,647
Undistributed net investment income.... 751,565
Accumulated net realized loss on
investment transactions.............. (285,680,729)
Net unrealized appreciation in value of
investments.......................... 11,246,988
-------
Total.................................. $215,432,471
-------
-------
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 5.53
-------
-------
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A ($5.53/.9375)*....... $ 5.90
-------
-------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B (Note 6)............. $ 5.53
-------
-------
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
11
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS HIGH YIELD FUND, INC.
Year Ended December 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $19,158,853
Consent fees......................... 687,574
Dividends (Note 1E).................. 567,681
-------
Total income........................... $20,414,108
Expenses (Notes 1 and 3):
Advisory fee......................... 2,074,251
Shareholder servicing costs.......... 578,311
Distribution plan expenses - Class
A.................................. 306,597
Distribution plan expenses - Class
B.................................. 46,763
Professional fees.................... 42,983
Reports and notices to
shareholders....................... 37,000
Custodian fees....................... 26,018
Other expenses....................... 33,428
-------
Total expenses......................... 3,145,351
Less: Expenses waived or assumed....... (400,000)
Custodian fees paid indirectly.... (8,849)
-------
Net expenses........................... 2,736,502
-------
Net investment income.................. 17,677,606
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 713,528
Net unrealized appreciation of
investments.......................... 5,114,885
-------
Net gain on investments................ 5,828,413
-------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $23,506,019
-------
-------
</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 1997 1996
- --------------------------------------- ------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income................ $ 17,677,606 $ 17,406,418
Net realized gain (loss) on
investments........................ 713,528 (7,765,501)
Net unrealized appreciation of
investments........................ 5,114,885 14,736,452
------------ ------------
Net increase in net assets
resulting from operations........ 23,506,019 24,377,369
------------ ------------
DIVIDENDS TO SHAREHOLDERS
Net investment income - Class A...... (18,059,105) (17,643,461)
Net investment income - Class B...... (449,764) (171,377)
------------ ------------
Total dividends.................... (18,508,869) (17,814,838)
------------ ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............ 18,043,474 20,402,130
Value of dividends reinvested........ 12,110,096 13,062,488
Cost of shares redeemed.............. (28,096,512) (25,196,197)
------------ ------------
2,057,058 8,268,421
------------ ------------
Class B:
Proceeds from shares sold............ 3,582,510 3,074,309
Value of dividends reinvested........ 255,493 88,770
Cost of shares redeemed.............. (1,007,361) (226,919)
------------ ------------
2,830,642 2,936,160
------------ ------------
Net increase from capital share
transactions....................... 4,887,700 11,204,581
------------ ------------
Net increase in net assets......... 9,884,850 17,767,112
NET ASSETS
Beginning of year.................... 205,547,621 187,780,509
------------ ------------
End of year (including undistributed
net investment income of $751,565
and $1,582,828, respectively)...... $215,432,471 $205,547,621
------------ ------------
------------ ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 3,324,677 3,871,810
Issued for dividends reinvested...... 2,233,259 2,471,711
Redeemed............................. (5,175,518) (4,780,167)
------------ ------------
Net increase in Class A capital
shares outstanding................. 382,418 1,563,354
------------ ------------
------------ ------------
Class B:
Sold................................. 661,609 581,031
Issued for dividends reinvested...... 46,771 16,742
Redeemed............................. (185,884) (43,012)
------------ ------------
Net increase in Class B capital
shares outstanding................. 522,496 554,761
------------ ------------
------------ ------------
</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 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 market (including securities listed on
exchanges whose primary market is believed to be over-the-counter) are valued at
the mean between the last bid and asked prices 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 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.
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, 1997, the Fund had capital loss
carryovers of $285,680,729 of which $166,492,834 expires in 1998, $109,407,948
in 1999, $1,762,042 in 2001, $135,416 in 2002, $593,956 in 2003, $4,405,482 in
2004 and $2,883,051 in 2005.
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 capital 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 of the shares
received. During the year ended December 31, 1997, the Fund recognized $567,681
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 $8,849 against
14
<PAGE>
custodian charges based on the uninvested cash balances of the Fund.
2. SECURITIES TRANSACTIONS--For the year ended December 31, 1997, purchases and
sales of securities, other than United States Government obligations and
short-term corporate notes, aggregated $97,863,361 and $90,046,527,
respectively.
At December 31, 1997, the cost of investments for federal income tax purposes
was $200,387,818. Accumulated net unrealized appreciation on investments was
$11,246,988, consisting of $12,337,167 gross unrealized appreciation and
$1,090,179 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) was paid by FIMCO or FIC. Effective January 1, 1998, independent directors
will be remunerated by the Fund.
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's
average daily net assets, .75% on the next $300 million, declining by .03% on
each $250 million thereafter, down to .66% on average daily net assets over $1
billion. For the year ended December 31, 1997, FIMCO has voluntarily waived 20%
of the fee on the first $200 million of the Fund's average daily net assets.
This reduction amounted to $400,000.
For the year ended December 31, 1997, FIC, as underwriter, received $466,862 in
commissions after allowing $133,969 to other dealers. Shareholder servicing
costs included $383,940 in transfer agent fees paid to ADM, and $107,225 in IRA
custodian fees paid to FFS.
Pursuant to Distribution Plans 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, 1997, this fee reduction amounted to $306,597 for Class A and
$8,253 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, 1997, the
Fund held nineteen 144A securities with an aggregate value of $30,892,937
representing 14.3% 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 unrated may be considered speculative and subject to greater
market fluctuations and risks of loss of income and principal than lower
yielding, higher
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS HIGH YIELD FUND, INC.
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
distribution plan 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 distribution plan fees) 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 CLASS B
-------------------------------------- ----------------------
1995
Year Ended December 31 1997 1996 1995 1994 1993 1997 1996 *
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE DATA
Net Asset Value, Beginning of Year..... $ 5.40 $ 5.22 $ 4.84 $ 5.30 $ 4.97 $ 5.40 $ 5.23 $ 4.84
------ ------ ------ ------ ------ ------ ------ ------
Income from Investment Operations
Net investment income................ .46 .47 .47 .48 .47 .43 .44 .42
Net realized and unrealized gain
(loss) on investments.............. .15 .20 .39 (.46) .34 .14 .18 .40
------ ------ ------ ------ ------ ------ ------ ------
Total from Investment Operations... .61 .67 .86 .02 .81 .57 .62 .82
------ ------ ------ ------ ------ ------ ------ ------
Less Dividends from
Net Investment Income................ .48 .49 .48 .48 .48 .44 .45 .43
------ ------ ------ ------ ------ ------ ------ ------
Net Asset Value, End of Year........... $ 5.53 $ 5.40 $ 5.22 $ 4.84 $ 5.30 $ 5.53 $ 5.40 $ 5.23
------ ------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------ ------
TOTAL RETURN (%) +..................... 11.84 13.35 18.43 .39 16.95 11.11 12.41 17.40(a)
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Year (in
millions)............................ $209 $202 $187 $170 $191 $7 $4 $1
Ratio to Average Net Assets: (%)
Expenses............................. 1.29 1.37 1.45 1.56 1.69 1.99 2.07 2.22(a)
Net investment income................ 8.17 8.99 9.22 9.48 8.96 7.47 8.28 8.45(a)
Ratio to Average Net Assets Before
Expenses Waived: (%)
Expenses............................. 1.48 1.52 1.55 1.59 N/A 2.18 2.22 2.32(a)
Net investment income................ 7.98 8.84 9.12 9.44 N/A 7.28 8.13 8.35(a)
Portfolio Turnover Rate (%)............ 46 29 42 32 87 46 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 AUDITORS' 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, including
the portfolio of investments of First Investors High Yield Fund, Inc., 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 the
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. 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, 1997, and the results of its
operations, changes in its net assets and financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 30, 1998
18
<PAGE>
FIRST INVESTORS HIGH YIELD FUND, INC.
DIRECTORS
- -------------------------------------------
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
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
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.
19
<PAGE>
FIRST INVESTORS HIGH YIELD FUND, INC.
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
FIHY-150
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
HIGH YIELD
FUND, INC.
ANNUAL
REPORT
DECEMBER 31, 1997
