<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS BLUE CHIP FUND
Dear Investor:
The current economic expansion extended into its fifth year in 1996. The economy
grew by 3.4% during the year while the core rate of consumer price inflation
increased 2.6%, its slowest growth since the mid 1960's. The combination of
moderate growth and low inflation provided a positive background for the
financial markets and generated strong demand for U.S. equity securities in
particular.
The U.S. stock market posted its second consecutive year of strong gains in 1996
with the S&P 500 Index rising 22.9%. Recognizing that deregulation and
internationalization had generated fundamental changes in the U.S. economy,
investors remained comfortable with the earnings outlook for U.S. based
companies. Supported by a continuing revolution in technology, profit margins
were bolstered by management tools such as just-in-time inventory, the ability
to bring labor and capital on line quickly, controlled unit labor costs and
productivity gains. Investors became comfortable with the notion of the
internationalization of the U.S. economy shielding it from recessions by
diversifying its supply lines and its revenue base. Outsourcing and the use of
temporary workers also contributed to the bottom line, containing costs and
contributing to a low inflationary environment.
For the year ended December 31, 1996, First Investors Blue Chip Fund Class A
shares returned on a net asset value basis 20.6%, compared to a 20.8% return for
the Lipper Growth and Income Average while Class B shares returned 19.7%. The
First Investors Blue Chip Fund benefited from solid gains in the energy sector,
specifically the oil and gas drilling and exploration sector (Dresser
Industries, Schlumberger and Halliburton). The technology sector (Microsoft, IBM
and Intel) and money center bank sector (Citicorp and Chase Manhattan) were also
major contributors to your Fund's performance for the year. The Fund also
benefited from a year end rally in the pharmaceutical sector (Eli Lilly and
Merck). Telecommunications, specifically the long distance (AT&T, MCI
Communications and Sprint) and regional carriers (BellSouth, NYNEX and Bell
Atlantic), construction (Fluor) and consumer cyclical (Heinz, General Mills and
Kellogg) sectors hindered the Fund's performance for 1996.
While we continue to believe the fundamentals that pushed U.S. stock markets to
new highs remain in place, investors should remain aware of the risks associated
with investing in the stock market. A significant risk to the stock market is
that a too rapidly expanding economy creates inflationary pressures, leading the
Federal Reserve to raise interest rates. Investors should also recognize that
certain sectors of the market, such as technology, can be more volatile than the
overall market. Investments in such sectors can create greater opportunities but
also entail greater risk. Finally, on a technical basis the current bull market
is now the longest in history and, according to many market historians, may be
ready for a correction.
We believe the fundamentals supporting continued moderate economic expansion,
mild inflation, and continued growth in the U.S. stock market are still in
place. U.S. companies, through the continued implementation of new technologies
to improve productivity, should remain highly competitive domestically and
internationally. Through a sector neutral, bottom up investment strategy we will
continue to identify those companies we believe are positioning themselves to
remain competitive and generate above average growth. While our main focus will
remain on the long term, we will take advantage of short-term trading
opportunities as they arise.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Portfolio Manager
January 31, 1997
1
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS BLUE CHIP FUND
Comparison of change in value of $10,000 investment in the First Investors Blue
Chip Fund (Class A shares) and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C> <C>
Blue Chip Fund Standard
Jan-89 $9,375.00 $10,000.00
Dec-89 10,813 12,261
Dec-90 10,435 11,885
Dec-91 13,308 15,460
Dec-92 14,181 16,554
Dec-93 15,283 18,155
Dec-94 14,821 18,388
Dec-95 19,862 25,908
Dec-96 23,945 31,856
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A shares
One Year 20.55% 13.01%
Five Years 12.47% 11.03%
Since Inception (1/3/89) 12.44% 11.54%
Class B shares
One Year 19.71% 14.89%
Since Inception
(1/12/95) 26.54% 23.95%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS BLUE CHIP FUND
(CLASS A SHARES) BEGINNING 1/3/89 (INCEPTION DATE) WITH A THEORETICAL INVESTMENT
IN THE STANDARD & POOR'S 500 INDEX. THE STANDARD & POOR'S 500 INDEX IS AN
UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO MEASURE
PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE AGGREGATE
MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. IT IS NOT
POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES NOT TAKE
INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE ACCOMPANYING
TABLE, UNLESS OTHERWISE INDICATED, IT HAD 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
12/4/89, THE MAXIMUM SALES CHARGES WERE 6.9% AND 7.25%, 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 SINCE INCEPTION WOULD HAVE BEEN 12.71%, 10.68% AND 10.91%,
RESPECTIVELY. THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN
FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN 14.55% AND 23.51%,
RESPECTIVELY. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. STANDARD & POOR'S 500 INDEX FIGURES FROM STANDARD & POOR'S
AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
2
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS INSURED INTERMEDIATE TAX EXEMPT FUND
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 in 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.
Long-term municipal bond yields rose approximately 30 basis points (.30%) during
1996. The municipal bond market's performance compares very favorably to the
Treasury bond market where long-term yields rose approximately 70 basis points
(.70%). The municipal bond market's relatively strong performance during 1996
was attributable to the comparatively cheap levels at which the market began the
year, due to concerns over potential tax reform. As those concerns disappeared,
demand for tax-exempt bonds increased and municipal bonds appreciated versus
Treasury bonds. In fact, broad based demand throughout the year from individuals
and insurance companies was sufficient to absorb $183 billion of the new issue
supply.
During 1996, First Investors Insured Intermediate Tax Exempt Fund Class A shares
had a total return on a net asset value basis of 4.1%. The return compares
favorably to the average return of 3.7% for intermediate maturity municipal bond
funds reported by Lipper Analytical Services, Inc. Class B shares returned 3.2%.
For 1996, the Fund declared dividends from investment income of 29 cents per
Class A share and 23 cents per Class B share. In particular, the Fund benefited
from good management of interest rate risk and success with relative value
trading opportunities. The Fund maintained a high level of current income by
remaining fully invested throughout the year, primarily in high coupon bonds.
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, while the Fund's municipal
bonds are insured as to timely payment of principal and interest, this insurance
does not protect the bonds against changes in market value. Investors should be
aware of these risks and recognize that successful investing generally requires
a long-term commitment to the 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. The primary 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. As always, we will be
alert to events that may affect the value of your investments.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Clark D. Wagner
Chief Investment Officer
and Portfolio Manager
January 31, 1997
3
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS INSURED INTERMEDIATE TAX EXEMPT FUND
Comparison of change in value of $10,000 investment in the First Investors
Insured Intermediate Tax Exempt Fund (Class A shares) and the Lehman Brothers
Municipal Bond Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996 INSURED INTERMEDIATE LEHMAN BROTHERS MUNICIPAL
<S> <C> <C> <C>
Tax Exempt Fund Bond Index
Nov-93 $9,375.00 $10,000.00
Dec-93 9,375 10,211
Dec-94 9,177 9,683
Dec-95 10,416 11,373
Dec-96 10,840 11,856
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A shares
One Year 4.07% (2.44%)
Since Inception
(11/22/93) 4.80% 2.63%
S.E.C. 30-Day Yield 4.33%
Class B shares
One Year 3.17% (0.89%)
Since Inception (1/12/95) 7.75% 5.51%
S.E.C. 30-Day Yield 3.63%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS INSURED
INTERMEDIATE TAX EXEMPT FUND (CLASS A SHARES) BEGINNING 11/23/93 (INCEPTION
DATE) WITH A THEORETICAL INVESTMENT IN THE LEHMAN BROTHERS MUNICIPAL BOND INDEX.
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX IS A TOTAL RETURN PERFORMANCE BENCHMARK
FOR THE LONG-TERM INVESTMENT GRADE TAX EXEMPT BOND MARKET. RETURNS AND
ATTRIBUTES FOR THE INDEX ARE CALCULATED SEMI-MONTHLY USING APPROXIMATELY 21,000
MUNICIPAL BONDS WHICH ARE PRICED BY MULLER DATA CORP. THE INDEX DOES NOT TAKE
INTO ACCOUNT FEES AND EXPENSES OR COST OF INSURANCE OF THE BONDS HELD BY AN
INSURED TAX-EXEMPT BOND FUND. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THE
LEHMAN BROTHERS MUNICIPAL BOND INDEX. 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 1/12/95 THE
MAXIMUM SALES CHARGE WAS 3.5%). 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 AND SINCE INCEPTION WOULD HAVE BEEN (3.14)%
AND 1.65%, RESPECTIVELY, AND THE CLASS A S.E.C. 30-DAY YIELD FOR DECEMBER 1996
WOULD HAVE BEEN 3.69%. THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL
RETURN FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN (1.36)% AND 4.83%,
RESPECTIVELY, AND THE CLASS B S.E.C. 30-DAY YIELD FOR DECEMBER 1996 WOULD HAVE
BEEN 3.25%. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE
RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE
SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN
THE ORIGINAL COST. LEHMAN BROTHERS MUNICIPAL BOND INDEX FIGURES FROM LEHMAN
BROTHERS INC. AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY,
INC.
4
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS INVESTMENT GRADE FUND
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 in 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.
While the investment grade corporate bond market modestly outperformed
Treasuries, prices in both sectors fell throughout most of 1996. Investment
grade bond issuance outpaced 1995's levels and strong demand met the increased
supply. As a result, corporate spreads remained at historically tight levels. In
addition to reflecting market technical factors, a corporate bond's yield
premium to Treasury bonds of similar maturity reflects the market's judgment of
the financial risk facing the issuer. An important factor in the narrow spreads
of recent years has been strong company fundamentals due to cost cutting,
productivity increases and revenue gains from the growing economy. Our economic
outlook and our analysis of supply and demand trends do not call for any large
changes in spreads.
In 1996, the Investment Grade Fund returned 2.4% on a net asset value basis on
Class A shares. In comparison, the average investment grade bond fund returned
3.2% as measured by Lipper Analytical Services, Inc. and ten year Treasury notes
returned 0.1%. Class B shares returned 1.6%. Dividends paid from net investment
income amounted to 62.2 cents per Class A share and 54.8 cents per Class B
share. The Fund also declared a capital gain distribution of 1.7 cents per share
on both classes.
Duration is a measurement of interest rate sensitivity and is an important
factor in performance. Throughout most of the year, the Investment Grade Fund
held bonds with a shorter duration than the average investment grade bond fund.
This duration position worked well for the first nine months of the year. Then
as fears of a strengthening economy and inflation abated, the market rallied and
the Fund's performance lagged its peer group slightly. As a result we have
brought the Fund's duration more in line with its peers.
Credit quality weighting and sector selection also affected performance. In
1996, the Fund took a more conservative stance than other funds, which reduced
performance. Some other funds increased the risk of their portfolios by moving
into lower rated corporate investments to obtain incremental yield. We felt that
the yield pickup was not worth the heightened credit risk.
Acquisitions, consolidations, spin-offs and asset sales increased in frequency
during 1996 and became a greater consideration in the evaluation of individual
bonds in the corporate marketplace. For example, the Fund owns Enron Corp.,
which recently reached an agreement to acquire Portland General Electric in a
stock-for-stock transaction. The new company will be more diversified, have
higher earnings and cash flow, and be less leveraged than before. The Fund's
performance was enhanced by selecting companies which engaged in this kind of
credit-enhancing deal. In addition, some positions were upgraded, others were
tendered for attractive prices and relatively few were downgraded.
Investors who buy bond funds -- whether for income or total return -- should be
aware that the value of
5
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
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. Investors should be aware of
these risks and recognize that successful investing generally requires a
long-term commitment to the 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 would lead the
Federal Reserve to raise interest rates which could hurt 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 could affect the value of
your investments.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Nancy W. Jones
Vice President
and Portfolio Manager
January 31, 1997
6
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS INVESTMENT GRADE FUND
Comparison of change in value of $10,000 investment in the First Investors
Investment Grade Fund (Class A shares) and the Lehman Brothers Corporate Bond
Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996 LEHMAN BROTHERS CORPORATE
IVESTMENT GRADE FUND BOND INDEX
<S> <C> <C> <C>
Feb-91 $9,375.00 $10,000.00
Dec-91 10,623 11,702
Dec-92 11,501 12,719
Dec-93 12,859 14,266
Dec-94 12,265 13,705
Dec-95 14,645 16,754
Dec-96 14,996 17,304
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A shares
One Year 2.39% (4.01%)
Five Year 6.94% 5.56%
Since Inception (2/19/91) 8.32% 7.14%
S.E.C. 30-Day Yield 5.41%
Class B shares
One Year 1.64% (2.42%)
Since Inception (1/12/95) 9.71% 7.44%
S.E.C. 30-Day Yield 5.08%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS INVESTMENT GRADE
FUND (CLASS A SHARES) BEGINNING 2/19/91 (INCEPTION DATE) WITH A THEORETICAL
INVESTMENT IN THE LEHMAN BROTHERS CORPORATE BOND INDEX. THE LEHMAN BROTHERS
CORPORATE BOND INDEX INCLUDES ALL PUBLICLY ISSUED, FIXED RATE, NONCONVERTIBLE
INVESTMENT GRADE DOLLAR-DENOMINATED, S.E.C.-REGISTERED CORPORATE DEBT. ALL
ISSUES HAVE AT LEAST ONE YEAR TO MATURITY AND AN OUTSTANDING PAR VALUE OF AT
LEAST $100 MILLION. IT IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN
ADDITION, THE INDEX DOES NOT TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES
OF THE GRAPH AND THE ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN
ASSUMED THAT THE MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000
INVESTMENT IN THE FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED.
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, THE
MAXIMUM SALES CHARGE WAS 6.9%). 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 SINCE INCEPTION WOULD HAVE
BEEN (4.31)%, 4.86% AND 6.36%, RESPECTIVELY, AND THE CLASS A S.E.C. 30-DAY
YIELD FOR DECEMBER 1996 WOULD HAVE BEEN 5.13%. THE CLASS B "S.E.C.
STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE INCEPTION
WOULD HAVE BEEN (2.69)% AND 6.96%, RESPECTIVELY, AND THE CLASS B S.E.C. 30-DAY
YIELD FOR DECEMBER WOULD HAVE BEEN 4.78%. RESULTS REPRESENT PAST PERFORMANCE
AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF
AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY
BE WORTH MORE OR LESS THAN THE ORIGINAL COST. LEHMAN BROTHERS CORPORATE BOND
INDEX FIGURES FROM LEHMAN BROTHERS INC. AND ALL OTHER FIGURES FROM FIRST
INVESTORS MANAGEMENT COMPANY, INC.
7
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS SPECIAL SITUATIONS FUND
Dear Investor:
The current economic expansion extended into its fifth year in 1996. The economy
grew by 3.4% during the year while the core rate of consumer price inflation
increased 2.6%, its slowest growth since the mid 1960's. The combination of
moderate growth and low inflation provided a positive background for the
financial markets and generated strong demand for U.S. equity securities in
particular. The healthy demand was evidenced by the 16.6% total return generated
by the Russell 2000 Index, a proxy for small company stocks.
Investors remained comfortable with the earnings outlook for U.S. based
companies, recognizing that deregulation and internationalization had generated
fundamental changes in the U.S. economy. Supported by a continuing revolution in
technology, profit margins were bolstered by management tools such as just-
in-time inventory, the ability to bring labor and capital on-line quickly,
controlled unit labor costs and productivity gains. Investors became comfortable
with the notion of the internationalization of the U.S. economy shielding it
from recessions by diversifying its supply lines and its revenue base.
Outsourcing and the use of temporary workers also contributed to the focus on
the bottom line, containing costs and contributing to a low inflationary
environment.
For the year ended December 31, 1996, the First Investors Special Situations
Fund Class A shares returned 11.6%, on a net asset value basis, compared to a
20.2% return for the Lipper Small Company Growth Fund Index average. Class B
shares returned 10.8%. For 1996, the Fund declared a capital gain distribution
of $1.17 on both classes.
The Financial sector with holdings in Boatman's Bancshares, Imperial Credit
Industries, and Redwood Trust Inc., as well as the Retail sector with Travis
Boats & Motors, Inc., Kroger, TJX Companies, Inc. and Rite Aid Corp. did well on
a stock specific basis, but a general underweighting in these sectors, relative
to our peers, handicapped our performance. The Fund was also underweighted in
the Energy sector which was one of the top performing areas in 1996. The
Consumer Staples sector was a drag on the Fund's performance, in particular the
restaurant holdings of Buffet's, Inc., Quality Dining, Inc., and Outback
Steakhouse Inc. In addition, our conservative investment style resulted in a
comparatively high level of cash throughout the year which also held back
performance. The Fund benefited from solid gains in the Computer Software &
Services group with positions in Microsoft Corp., SystemSoft Corp., Network
General Corp., and Oracle Systems Corp. Our holdings in the Computer Peripherals
group comprised of EMC Corp., Network Appliance Corp., and Komag, Inc. also
performed well. The Telecommunications Equipment group also attained solid
results for the Fund with holdings of Ericsson, Saville Systems, and Ace
Communications.
While we continue to believe the fundamentals that pushed the U.S. stock market
to new highs remain in place, investors should remain aware of the risks
associated with investing in the stock market. A significant risk to the stock
market is that a too rapidly expanding economy creates inflationary pressures,
leading the Federal Reserve to raise interest rates. Investors should also
recognize that the small cap market in general and certain market sectors such
as technology, can be more volatile than the overall stock market. These
investments can create greater opportunities but also entail greater risk.
Finally, on a technical basis the current bull market is now the longest in
history and, according to many market historians, may be ready for a correction.
We believe the fundamentals supporting continued moderate economic expansion,
mild inflation, and continued growth in the U.S. stock market are still in
place. Through a bottom up investment strategy we will continue to identify
those companies we believe are positioning themselves to remain competitive and
generate above average growth. While our main focus will remain on the long
term, we will take advantage of the short-term trading opportunities as they
arise.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Portfolio Manager
January 31, 1997
8
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS SPECIAL SITUATIONS FUND
Comparison of change in value of $10,000 investment in the First Investors
Special Situations Fund (Class A shares) and the Lipper Small Company Growth
Fund Index and the Russell 2000 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996 SPECIAL SITUATIONS LIPPER SMALL COMPANY RUSSELL 2000
FUND GROWTH FUND INDEX INDEX
<S> <C> <C> <C>
Sep-90 $9,375.00 $10,000.00 $10,000.00
Dec-90 9741 10,050 10,754
Dec-91 14657 15,326 16,214
Dec-92 17186 18,155 17,853
Dec-93 20714 21,606 20,776
Dec-94 19955 20,919 20,624
Dec-95 24730 27,106 26,401
Dec-96 27588 30,232 31,107
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A shares
One Year 11.56% 4.58%
Five Years 13.48% 12.03%
Since Inception (9/18/90) 18.72% 17.51%
Class B shares
One Year 10.81% 6.39%
Since Inception (1/12/95) 17.24% 14.84%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS SPECIAL
SITUATIONS FUND (CLASS A SHARES) BEGINNING 9/18/90 (INCEPTION DATE) WITH
THEORETICAL INVESTMENTS IN THE LIPPER SMALL COMPANY GROWTH FUND INDEX AND THE
RUSSELL 2000 INDEX. THE LIPPER SMALL COMPANY GROWTH FUND INDEX IS A NET VALUE
WEIGHTED INDEX OF THE 30 LARGEST SMALL COMPANY GROWTH FUNDS. IT IS CALCULATED
WITH ADJUSTMENTS FOR INCOME DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS AS OF
EX-DIVIDEND DATES. THE RUSSELL 2000 INDEX CONSISTS OF THE SMALLEST 2,000
COMPANIES IN THE RUSSELL 3000 INDEX (WHICH REPRESENTS APPROXIMATELY 98% OF THE
INVESTABLE U.S. EQUITY MARKET). THE RUSSELL 2000 INDEX IS AN UNMANAGED INDEX
GENERALLY CONSIDERED AS THE PREMIER OF SMALL CAPITALIZATION STOCKS. IT IS NOT
POSSIBLE TO INVEST DIRECTLY IN THESE INDICES. IN ADDITION, THE INDICES DO NOT
TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE
ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE
MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE
FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED. CLASS B SHARES
PERFORMANCE MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH ABOVE
BASED ON DIFFERENCES IN THE 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, THE
MAXIMUM SALES CHARGE WAS 6.9%). 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 SINCE INCEPTION WOULD HAVE
BEEN 4.34%, 11.68% AND 16.83%, RESPECTIVELY. THE CLASS B "S.E.C. STANDARDIZED"
AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN
6.15% AND 14.58%, RESPECTIVELY. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT
INDICATE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. LIPPER SMALL COMPANY GROWTH FUND
INDEX FIGURES FROM LIPPER ANALYTICAL SERVICES, INC., RUSSELL 2000 INDEX
FIGURES FROM FRANK RUSSELL AND COMPANY AND ALL OTHER FIGURES FROM FIRST
INVESTORS MANAGEMENT COMPANY, INC.
9
<PAGE>
CHIEF INVESTMENT OFFICER'S LETTER
FIRST INVESTORS TOTAL RETURN FUND
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 in 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.
Strong demand for stocks, high quality corporate earnings and a sound economy
provided another year of good stock market performance. In contrast, the bond
market fell substantially during the first half of the year due to concern that
the economy was growing too fast. When economic data indicated both low
inflation and slowing growth in the third quarter of the year, the market
recouped roughly half its losses. A notable exception to the bond market's
lackluster performance was the performance of the high yield debt market, which,
according to the First Boston High Yield Index, returned 12.4% in 1996.
During 1996, the Total Return Fund Class A shares returned on a net asset value
basis 10.6%. In comparison, the average return for flexible funds, such as the
Total Return Fund, was 14.1% according to Lipper Analytical Services, Inc. Class
B shares returned 9.9%. The Fund declared dividends from net investment income
of 41 cents per Class A share and 34 cents per Class B share as well as a
capital gain distribution of $1.12 on both classes.
The Total Return Fund began 1996 with 51% of its assets in stocks, 42% in bonds,
and 7% in cash and short-term corporate notes. Within a 5% variance, the Fund
maintained these asset weightings throughout the first nine months of the year.
With the stock market rising and the bond market falling during that time
period, the Fund underperformed its peer group, which had larger weightings in
stocks and smaller holdings in bonds and cash. As a result, in October, the
Fund's asset allocation was substantially altered with a target allocation of
78% of assets in stocks, 17% in bonds and 5% in cash. In terms of asset class
composition, the stock portion of the Fund is currently split between mid and
large capitalization stocks. The bond investments comprise primarily corporate
debt, including high yield securities. Since making these adjustments, the Fund
has performed in line with its peers.
The recent bull market in stocks has lasted 76 months, the longest bull market
in the history of the U.S. stock market. While investors have enjoyed these
gains, it is important to remember that the stock market tends to be cyclical
with periods when stock prices generally rise and periods when stock prices
generally decline. As well, certain sectors of the market, such as technology
stocks, can be more volatile than the general market, creating greater
opportunities but also greater risks. The bond market can also be volatile. 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 bond can
fluctuate based on changes in its credit quality. Investors should be aware of
these risks and recognize that successful investing generally requires a
long-term commitment to the 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 would lead the
Federal Reserve to raise interest rates which could hurt both
10
<PAGE>
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 could affect
the value of your investments.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Clark D. Wagner
Chief Investment Officer
January 31, 1997
11
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS TOTAL RETURN FUND
Comparison of change in value of $10,000 investment in the First Investors Total
Return Fund (Class A shares), Lehman Brothers Government/Corporate Bond Index
and the Standard & Poor's 500 Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996 TOTAL RETURN LEHMAN BROTHERS GOVERNMENT/ STANDARD
FUND CORPORATE BOND INDEX 500 INDEX
<S> <C> <C> <C>
Apr-90 $9,375.00 $10,000.00 $10,000.00
Dec-90 9,543 10,829 10,242
Dec-91 11,606 12,576 13,367
Dec-92 11,489 13,528 14,326
Dec-93 12,314 15,024 15,727
Dec-94 11,879 14,497 15,929
Dec-95 15,065 17,286 22,443
Dec-96 16,665 17,787 27,596
Average Annual Total Return*
N.A.V. Only S.E.C. Standardized
Class A shares
One Year 10.62% 3.74%
Five Years 7.50% 6.13%
Since Inception (4/24/90) 8.97% 7.93%
Class B shares
One Year 9.86% 5.45%
Since Inception (1/12/95) 17.83% 15.43%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS TOTAL RETURN FUND
(CLASS A SHARES) BEGINNING 4/24/90 (INCEPTION DATE) WITH THEORETICAL INVESTMENTS
IN THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX AND THE STANDARD & POOR'S
500 INDEX. THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX COMBINES THE
LEHMAN BROTHERS GOVERNMENT BOND INDEX WITH THE LEHMAN BROTHERS CORPORATE BOND
INDEX. THE GOVERNMENT BOND INDEX IS MADE UP OF THE TREASURY BOND INDEX (ALL
PUBLIC OBLIGATIONS OF THE U.S. TREASURY) AND THE AGENCY BOND INDEX (ALL PUBLICLY
ISSUED DEBT OF U.S. GOVERNMENT AGENCIES AND QUASI-FEDERAL CORPORATIONS, AND
CORPORATE DEBT GUARANTEED BY THE U.S. GOVERNMENT). THE CORPORATE BOND INDEX
INCLUDES ALL PUBLICLY ISSUED, FIXED RATE, NONCONVERTIBLE INVESTMENT GRADE
DOLLAR-DENOMINATED S.E.C.-REGISTERED CORPORATE DEBT. THE STANDARD & POOR'S 500
INDEX IS AN UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 500 STOCKS DESIGNED TO
MEASURE PERFORMANCE OF THE BROAD DOMESTIC ECONOMY THROUGH CHANGES IN THE
AGGREGATE MARKET VALUE OF SUCH STOCKS, WHICH REPRESENT ALL MAJOR INDUSTRIES. IT
IS NOT POSSIBLE TO INVEST DIRECTLY IN THESE INDICES. IN ADDITION, THE INDICES DO
NOT TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE
ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE
MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE
FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED. 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, THE
MAXIMUM SALES CHARGE WAS 6.9%). 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 SINCE INCEPTION WOULD HAVE
BEEN 3.46%, 5.77% AND 7.32%, RESPECTIVELY. THE CLASS B "S.E.C. STANDARDIZED"
AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE INCEPTION WOULD HAVE BEEN
5.13% AND 15.02%, RESPECTIVELY. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT
INDICATE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. LEHMAN BROTHERS
GOVERNMENT/CORPORATE BOND INDEX FIGURES FROM LEHMAN BROTHERS INC., STANDARD &
POOR'S 500 INDEX FIGURES FROM STANDARD & POOR'S AND ALL OTHER FIGURES FROM
FIRST INVESTORS MANAGEMENT COMPANY, INC.
12
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--91.0%
BASIC MATERIALS--5.0%
16,300 *Alumax, Inc. $ 544,012 $ 21
10,200 Aluminum Company of America 650,250 25
27,000 Barrick Gold Corporation 776,250 30
23,600 Cabot Corporation 592,950 23
14,900 Dow Chemical Company 1,167,787 45
20,200 Du Pont (E.I.) de Nemours & Company 1,906,375 74
23,700 Freeport-McMoRan Copper & Gold, Inc. - Class "B" 708,037 28
21,100 IMC Global, Inc. 825,538 32
31,800 International Paper Company 1,283,925 50
10,400 Mead Corporation 604,500 24
38,800 Monsanto Company 1,508,350 59
20,300 Morton International, Inc. 827,225 32
9,500 Nucor Corporation 484,500 19
3,700 Pioneer Hi-Bred International, Inc. 259,000 10
12,100 Sigma-Aldrich Corporation 755,494 29
- ---------------------------------------------------------------------------------------
12,894,193 501
- ---------------------------------------------------------------------------------------
CAPITAL GOODS--11.4%
17,500 AlliedSignal, Inc. 1,172,500 46
33,800 Avery Dennison Corporation 1,195,675 47
15,300 Boeing Company 1,627,537 63
17,000 Caterpillar, Inc. 1,279,250 50
32,400 Corning, Inc. 1,498,500 58
13,500 Cummins Engine Company, Inc. 621,000 24
8,200 Emerson Electric Company 793,350 31
49,900 General Electric Company 4,933,862 192
30,200 General Signal Corporation 1,291,050 50
23,000 Harnischfeger Industries, Inc. 1,106,875 43
18,600 Ingersoll-Rand Company 827,700 32
13,600 Johnson Controls, Inc. 1,127,100 44
21,500 Kennametal, Inc. 835,812 33
49,000 Laidlaw, Inc. - Class "B" 563,500 22
8,700 Lockheed Martin Corporation 796,050 31
- ---------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CAPITAL GOODS (continued)
16,100 Minnesota Mining & Manufacturing Company $ 1,334,287 $ 52
42,700 *Philip Environmental, Inc. 619,150 24
8,900 Raychem Corporation 713,112 28
10,700 Textron, Inc. 1,008,475 39
17,800 Thomas & Betts Corporation 789,875 31
26,400 *Tyco International, Ltd. 1,395,900 54
23,600 United Technologies Corporation 1,557,600 61
45,700 *USA Waste Services, Inc. 1,456,687 57
23,200 WMX Technologies, Inc. 756,900 29
- ---------------------------------------------------------------------------------------
29,301,747 1,141
- ---------------------------------------------------------------------------------------
COMMUNICATION SERVICES--2.0%
24,000 *Airtouch Communications, Inc. 606,000 24
23,200 BellSouth Corporation 936,700 36
35,600 GTE Corporation 1,619,800 63
26,100 MCI Communications Corporation 853,144 33
12,900 SBC Communications, Inc. 667,575 26
13,400 Sprint Corporation 534,325 21
- ---------------------------------------------------------------------------------------
5,217,544 203
- ---------------------------------------------------------------------------------------
CONSUMER CYCLICALS--9.0%
25,700 Adidas AG (GDR) (Note 5) 1,108,970 43
28,400 Chrysler Corporation 937,200 36
13,000 Danaher Corporation 606,125 24
14,200 Eastman Kodak Company 1,139,550 44
64,400 *Federated Department Stores, Inc. 2,197,650 86
26,400 General Motors Corporation 1,471,800 57
13,350 Goodyear Tire & Rubber Company 685,856 27
18,000 Hasbro, Inc. 699,750 27
38,000 Hilton Hotels Corporation 992,750 39
31,900 Home Depot, Inc. 1,598,987 62
64,300 *Host Marriott Corporation 1,028,800 40
50,400 *Lear Corporation 1,719,900 67
19,600 Masco Corporation 705,600 27
- ---------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
15,200 McGraw-Hill Companies, Inc. $ 701,100 $ 27
20,400 Nike, Inc. 1,218,900 47
45,700 Ogden Corporation 856,875 33
33,300 *Price/Costco, Inc. 836,662 33
14,100 Sears, Roebuck and Company 650,362 25
45,000 *Staples, Inc. 812,812 32
24,000 Tribune Company 1,893,000 74
60,800 Wal-Mart Stores, Inc. 1,390,800 54
- ---------------------------------------------------------------------------------------
23,253,449 904
- ---------------------------------------------------------------------------------------
CONSUMER STAPLES--13.4%
40,000 Anheuser-Busch Cos., Inc. 1,600,000 62
63,900 Coca-Cola Company 3,362,737 131
15,300 CPC International, Inc. 1,185,750 46
20,000 Dole Food Company 677,500 26
10,600 General Mills, Inc. 671,775 26
42,100 Gillette Company 3,273,275 127
26,250 Heinz (H.J.) Company 938,437 37
51,600 *Infinity Broadcasting Corporation - Class "A" 1,735,050 68
15,600 Kimberly-Clark Corporation 1,485,900 58
15,700 *Kroger Company 730,050 28
107,400 PepsiCo, Inc. 3,141,450 122
30,100 Procter & Gamble Company 3,235,750 126
107,300 *Steiner Leisure, Ltd. 2,159,412 84
30,000 Sysco Corporation 978,750 38
27,925 *Tele-Communications, Inc. Liberty Media Group -
Class "A" 797,608 31
14,200 Time Warner, Inc. 532,500 21
10,200 Unilever N.V. 1,787,550 70
13,300 *Viacom, Inc. - Class "B" 463,837 18
17,400 *Vons Companies, Inc. 1,041,825 41
13,500 Walgreen Company 540,000 21
43,600 Walt Disney Company 3,035,650 118
- ---------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
27,000 Wendy's International, Inc. $ 553,500 $ 22
20,100 Whitman Corporation 459,787 18
- ---------------------------------------------------------------------------------------
34,388,093 1,339
- ---------------------------------------------------------------------------------------
ENERGY--7.3%
18,900 Amoco Corporation 1,521,450 59
28,200 Baker Hughes, Inc. 972,900 38
7,100 Burlington Resources, Inc. 357,663 14
16,000 Dresser Industries, Inc. 496,000 19
35,700 Exxon Corporation 3,498,600 136
8,600 Halliburton Company 518,150 20
12,300 Kerr-McGee Corporation 885,600 34
18,900 Mobil Corporation 2,310,525 90
20,600 Royal Dutch Petroleum Company 3,517,450 137
15,100 Schlumberger, Ltd. 1,508,113 59
9,400 Texaco, Inc. 922,375 36
15,600 Union Pacific Corporation 937,950 37
13,212 Union Pacific Resources Group, Inc. 386,451 15
23,500 Unocal Corporation 954,688 37
- ---------------------------------------------------------------------------------------
18,787,915 731
- ---------------------------------------------------------------------------------------
FINANCIAL--13.5%
20,100 Allstate Corporation 1,163,288 45
23,500 American Express Company 1,327,750 52
22,700 American International Group, Inc. 2,457,275 96
20,800 Bank of Boston Corporation 1,336,400 52
17,400 BankAmerica Corporation 1,735,650 68
31,200 Charles Schwab Corporation 998,400 39
36,400 Chase Manhattan Corporation 3,248,700 126
24,200 Citicorp 2,492,600 97
20,700 Dean Witter Discover and Company 1,371,375 53
66,800 Federal National Mortgage Association 2,488,300 97
8,200 Fifth Third Bancorp 515,063 20
25,800 First Union Corporation 1,909,200 74
- ---------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
4,000 General Re Corporation $ 631,000 $ 25
13,600 ITT Hartford Group, Inc. 918,000 36
24,000 Marshall & Ilsley Corporation 831,000 32
10,800 Merrill Lynch & Company, Inc. 880,200 34
28,200 National City Corporation 1,265,475 49
15,900 NationsBank Corporation 1,554,225 61
36,700 Norwest Corporation 1,596,450 62
23,400 Salomon, Inc. 1,102,725 43
14,200 Student Loan Marketing Association 1,322,375 51
42,900 The Money Store, Inc. 1,185,113 46
15,000 Torchmark Corporation 757,500 29
73,200 USF&G Corporation 1,528,050 59
- ---------------------------------------------------------------------------------------
34,616,114 1,346
- ---------------------------------------------------------------------------------------
HEALTHCARE/MISCELLANEOUS--9.7%
32,700 Abbott Laboratories 1,659,525 65
26,500 American Home Products Corporation 1,553,563 60
11,100 *Amgen, Inc. 603,563 24
15,000 Baxter International, Inc. 615,000 24
23,800 Becton Dickinson & Company 1,032,325 40
27,000 *Biogen, Inc. 1,046,250 41
22,700 Bristol-Myers Squibb Company 2,468,625 96
83,100 *Cardiovascular Dynamics, Inc. 1,080,300 42
24,900 Columbia/HCA Healthcare Corporation 1,014,675 40
33,800 Eli Lilly & Company 2,467,400 96
10,300 Guidant Corporation 587,100 23
49,600 Johnson & Johnson 2,467,600 96
32,000 Merck & Company, Inc. 2,536,000 99
48,300 Pharmacia & Upjohn, Inc. 1,913,888 75
11,400 SmithKline Beecham PLC 775,200 30
22,200 *St. Jude Medical, Inc. 946,275 37
23,500 *Tenet Healthcare Corporation 514,063 20
21,800 Warner-Lambert Company 1,635,000 64
- ---------------------------------------------------------------------------------------
24,916,352 972
- ---------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--15.4%
39,600 *Adaptec, Inc. $ 1,584,000 $ 62
20,700 *Andrew Corporation 1,098,394 43
11,000 *Cascade Communications Corporation 606,375 24
34,700 *Cisco Systems, Inc. 2,207,788 86
8,400 Computer Associates International, Inc. 417,900 16
30,000 *Dell Computer Corporation 1,593,750 62
52,300 Ericsson (L.M.) Telephone Co. (ADR) - Class "B" 1,578,806 61
44,300 *ESS Technology, Inc. 1,245,938 49
44,400 First Data Corporation 1,620,600 63
15,000 Grainger (W.W.), Inc. 1,203,750 47
40,800 Hewlett-Packard Company 2,050,200 80
42,900 *Informix Corporation 874,088 34
30,600 Intel Corporation 4,006,688 156
11,800 International Business Machines Corporation 1,781,800 69
56,400 *Loral Space & Communications 1,036,350 40
20,000 *LSI Logic Corporation 535,000 21
26,200 Lucent Technologies, Inc. 1,211,750 47
45,000 *Microsoft Corporation 3,718,125 145
35,800 Motorola, Inc. 2,197,225 86
29,700 Nokia Corporation (ADR) - Class "A" 1,711,463 67
21,700 *Oracle Corporation 905,975 35
19,200 Raytheon Company 924,000 36
41,700 *Sterling Commerce, Inc. 1,469,925 57
46,800 *Sun Microsystems, Inc. 1,202,175 47
71,500 *SystemSoft Corporation 1,063,563 41
25,700 Texas Instruments, Inc. 1,638,375 64
- ---------------------------------------------------------------------------------------
39,484,003 1,538
- ---------------------------------------------------------------------------------------
TRANSPORTATION--.8%
7,200 *AMR Corporation 634,500 25
6,200 Burlington Northern Santa Fe 535,525 21
34,300 Ryder System, Inc. 964,688 38
- ---------------------------------------------------------------------------------------
2,134,713 84
- ---------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
UTILITIES--3.5%
23,000 Carolina Power & Light Company $ 839,500 $ 33
40,000 CINergy Corporation 1,335,000 52
27,600 Duke Power Company 1,276,500 50
26,900 Enron Corporation 1,160,063 45
33,200 FPL Group, Inc. 1,527,200 59
26,000 PacifiCorp 533,000 21
20,700 Sonat, Inc. 1,066,050 42
28,000 Texas Utilities Company 1,141,000 44
- ---------------------------------------------------------------------------------------
8,878,313 346
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $170,301,981) 233,872,436 9,105
- ---------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--5.9%
$ 6,000M J.P. Morgan, 5.36%, 1/6/97 5,995,532 233
3,000M Madison Gas & Electric, 5.47%, 1/15/97 2,993,619 117
3,500M Nestle Capital Corp., 5.49%, 1/21/97 3,489,775 136
1,500M South Carolina Gas & Electric, 5.45%, 1/23/97 1,495,004 58
1,175M Texaco, Inc., 5.57%, 1/10/97 1,173,364 46
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$15,147,294) 15,147,294 590
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $185,449,275) 96.9% 249,019,730 9,695
OTHER ASSETS, LESS LIABILITIES 3.1 7,843,495 305
- ----------------------------------------------------------------------------------------------
NET ASSETS 100.0% $256,863,225 $10,000
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
19
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INSURED INTERMEDIATE TAX EXEMPT FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MUNICIPAL BONDS--99.0%
ALASKA--2.8%
$ 200M Anchorage General Obligation, 6.50%, 7/1/2004 $ 222,750 $ 277
- -------------------------------------------------------------------------------------
ARIZONA--10.2%
250M Maricopa County Uni. Sch. Dist. Gen. Oblig. #80
(Chandler), 6.60%, 7/1/2006 283,125 353
250M Phoenix Civic Impt. Corp. Mun. Facs. Excise Tax
Rev., 6.75%, 7/1/2004 283,437 353
250M Yuma County Jail Dist. Rev., 5%, 7/1/2006 251,875 314
- -------------------------------------------------------------------------------------
818,437 1,020
- -------------------------------------------------------------------------------------
CALIFORNIA--2.1%
150M Pittsburgh Pub. Fing. Auth. Wastewater Rev.,
6.80%, 6/1/2001* 167,062 208
- -------------------------------------------------------------------------------------
GEORGIA--2.5%
200M Chatham County Hospital Auth. Rev (Mem. Med.
Ctr.), 5%, 1/1/2006 199,750 249
- -------------------------------------------------------------------------------------
ILLINOIS--21.9%
250M Chicago Board of Education, 6%, 12/1/2007 270,938 338
250M Chicago General Obligation, 6.25%, 10/31/2001 270,000 336
Cook County High School District General
Obligation #205:
200M 5.90%, 12/1/2003 211,750 264
250M 5.40%, 12/1/2001 259,687 323
250M Northwest Subn. Mun. Jt. Action Water Agy.,
6.35%, 5/1/2006 276,563 345
400M Regional Transportation Authority, 7.75%,
6/1/2003 467,000 582
- -------------------------------------------------------------------------------------
1,755,938 2,188
- -------------------------------------------------------------------------------------
INDIANA--2.1%
150M Valparaiso Indpt. Multi-Schools Bldg. Corp.,
6.625%, 7/1/2002* 166,875 208
- -------------------------------------------------------------------------------------
KENTUCKY--3.2%
200M Louisville & Jefferson County Met. Sewer
District, 10%, 5/15/2004 261,250 325
- -------------------------------------------------------------------------------------
LOUISIANA--2.4%
175M Louisiana General Obligation, 7%, 5/1/2001 191,406 238
- -------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MICHIGAN--13.0%
$ 300M Allegan Mich. Public School District, 6.50%,
5/1/2007 $ 337,500 $ 420
1,000M Brighton Area School District General Obligation,
Zero Coupon 5/1/2005* 326,250 406
350M Greater Detroit Resources Recovery Authority
Revenue, 6.25%, 12/13/2007 383,250 477
- -------------------------------------------------------------------------------------
1,047,000 1,303
- -------------------------------------------------------------------------------------
MISSOURI--3.1%
250M Missouri St. Health & Edl. Facs. Auth. (St.
Lukes), 4.75%, 11/15/2006 246,563 307
- -------------------------------------------------------------------------------------
NEW JERSEY--5.3%
200M New Jersey Economic Dev. Auth. Mkt. Transition
Fac. Rev., 7%, 7/1/2004 229,000 285
200M North Hudson Sewer Authority, 4.75%, 8/1/2003 201,250 251
- -------------------------------------------------------------------------------------
430,250 536
- -------------------------------------------------------------------------------------
NEW YORK--11.7%
New York City General Obligation:
150M 6.625%, 8/1/2002 166,875 208
250M 8%, 8/1/2005 303,750 378
300M New York State Dorm. Auth. Revs. (Barnard
College), 5%, 7/1/2005 301,500 376
150M Niagara Falls Bridge Commission, 6.30%,
10/1/2002* 165,375 206
- -------------------------------------------------------------------------------------
937,500 1,168
- -------------------------------------------------------------------------------------
OHIO--2.8%
200M Columbus City Sch. Dist. General Obligation,
6.65%, 12/1/2002* 225,250 281
- -------------------------------------------------------------------------------------
OREGON--3.3%
250M Tillamook General Obligation, 5.75%, 1/15/2002 263,750 329
- -------------------------------------------------------------------------------------
PENNSYLVANIA--2.8%
200M Pennsylvania Intergovernmental Coop. Auth.
Special Tax Rev., 7%, 6/15/2004 227,250 283
- -------------------------------------------------------------------------------------
RHODE ISLAND--2.8%
200M Rhode Island Depositors Econ. Protection Corp.,
7.10%, 8/1/2001* 224,500 280
- -------------------------------------------------------------------------------------
</TABLE>
21
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INSURED INTERMEDIATE TAX EXEMPT FUND
December 31, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
TEXAS--4.1%
$ 300M Harris County Toll Road General Obligation,
6.50%, 8/15/2002* $ 332,625 $ 414
- -------------------------------------------------------------------------------------
WASHINGTON--2.9%
200M Snohomish & Island Counties School District
General Obligation #401 (Stanwood), 7%,
12/15/2005 230,750 287
- -------------------------------------------------------------------------------------
TOTAL VALUE OF MUNICIPAL BONDS (cost $7,623,713) 7,948,906 9,901
- -------------------------------------------------------------------------------------
SHORT-TERM TAX EXEMPT INVESTMENTS--2.5%
200M New York City General Obligation Adjustable Rate
Note, 4.50%, (cost $200,000)** 200,000 249
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $7,823,713) 101.5% 8,148,906 10,150
EXCESS OF LIABILITIES OVER OTHER ASSETS (1.5) (120,559) (150)
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $8,028,347 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Municipal Bonds which have been prerefunded are shown at the prerefunded call
date.
** Interest rates on Adjustable Rate Notes are determined and reset daily by the
issuer. Interest rate shown is the rate in effect at December 31, 1996.
See notes to financial statements
22
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--88.4%
AEROSPACE/DEFENSE--4.6%
$ 700M Boeing Co., 6.35%, 2003 $ 687,964 $ 141
750M Lockheed Martin Corporation, 7.25%, 2006 763,099 157
750M Rockwell International Corp., 8.375%, 2001 800,659 164
- --------------------------------------------------------------------------------------
2,251,722 462
- --------------------------------------------------------------------------------------
AGRICULTURAL PRODUCTS--1.4%
700M Archer Daniels Midland, Inc., 7.125%, 2013 697,516 143
- --------------------------------------------------------------------------------------
APPAREL/TEXTILES--.6%
250M VF Corp., 9.50%, 2001 277,427 57
- --------------------------------------------------------------------------------------
BUILDING MATERIALS--1.3%
600M Masco Corporation, 9%, 2001 654,666 134
- --------------------------------------------------------------------------------------
CHEMICALS--3.7%
250M Arco Chemical Co., 9.90%, 2000 277,839 57
750M Du Pont (E.I.) de Nemours & Co., 8.125%, 2004 811,634 167
700M Lubrizol Corp., 7.25%, 2025 692,099 142
- --------------------------------------------------------------------------------------
1,781,572 366
- --------------------------------------------------------------------------------------
CONGLOMERATES--3.1%
700M Hanson Overseas, B.V., 7.375%, 2003 719,607 148
750M Tenneco, Inc., 8.075%, 2002 797,669 164
- --------------------------------------------------------------------------------------
1,517,276 312
- --------------------------------------------------------------------------------------
CONSUMER NON-DURABLES--1.5%
700M American Home Products Corporation, 7.90%, 2005 747,389 153
- --------------------------------------------------------------------------------------
CONSUMER PRODUCTS--2.6%
1,250M Mattel, Inc., 6.75%, 2000 1,255,864 258
- --------------------------------------------------------------------------------------
CONSUMER SERVICES--1.4%
700M Walt Disney Company, 6.75%, 2006 695,006 143
- --------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRIC & GAS UTILITIES--9.9%
$ 750M Baltimore Gas & Electric Co., 6.50%, 2003 $ 743,029 $ 153
1,000M Duke Power Co., 5.875%, 2003 951,944 195
800M Kansas Gas & Electric Co., 7.60%, 2003 832,234 171
525M Old Dominion Electric Cooperative, 7.97%, 2002 548,595 113
750M Philadelphia Electric Co., 8%, 2002 789,094 162
925M Southwestern Electric Power Co., 7%, 2007 937,184 192
- --------------------------------------------------------------------------------------
4,802,080 986
- --------------------------------------------------------------------------------------
ENERGY--2.7%
700M Baroid Corp., 8%, 2003 745,564 153
500M Mobil Corp., 8.625%, 2021 583,409 120
- --------------------------------------------------------------------------------------
1,328,973 273
- --------------------------------------------------------------------------------------
FINANCIAL--16.5%
660M BankAmerica Corp., 9.50%, 2001 730,011 150
875M Barnett Banks, Inc., 8.50%, 1999 913,501 187
700M Chemical Bank, Inc., 7%, 2005 701,840 144
800M Citicorp, 8%, 2003 847,336 174
250M Corestates Capital Corp., 9.375%, 2003 281,776 58
800M First Union Corp., 8.125%, 2002 848,946 174
700M Key Corp., 7.50%, 2006 719,218 148
750M Mellon Bank N.A., 6.50%, 2005 726,210 149
550M Meridian Bancorp, 7.875%, 2002 577,831 119
925M Morgan Guaranty Trust Co., 7.375%, 2002 954,513 196
700M Nationsbank Corporation., 8.125%, 2002 743,028 152
- --------------------------------------------------------------------------------------
8,044,210 1,651
- --------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--7.4%
750M Anheuser-Busch Cos., Inc., 7%, 2005 754,015 155
500M Coca-Cola Enterprises, Inc., 7.875%, 2002 527,230 108
700M Hershey Foods Corp., 6.70%, 2005 695,800 143
900M Philip Morris Cos., Inc., 7.125%, 2002 908,717 187
650M Universal Corp., 9.25%, 2001 705,866 145
- --------------------------------------------------------------------------------------
3,591,628 738
- --------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
GAS TRANSMISSION--2.9%
$ 700M Columbia Gas System, Inc., 6.80%, 2005 $ 689,112 $ 141
700M Enron Corporation, 7.125%, 2007 705,393 145
- --------------------------------------------------------------------------------------
1,394,505 286
- --------------------------------------------------------------------------------------
HEALTHCARE/MISCELLANEOUS--1.5%
700M Columbia/HCA Healthcare Corp., 7.69%, 2025 720,478 148
- --------------------------------------------------------------------------------------
INVESTMENT/FINANCE COMPANIES--5.1%
700M Associates Corp. of North America, 7.875%, 2001 734,912 151
700M General Electric Capital Corp., 7.875%, 2006 749,386 154
700M General Motors Acceptance Corp., 7.125%, 1999 712,837 146
250M International Lease Finance Corp., 8.875%, 2001 270,250 55
- --------------------------------------------------------------------------------------
2,467,385 506
- --------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--4.8%
700M New York Times Co., Inc., 7.625%, 2005 738,763 152
750M News America, 8.50%, 2005 805,816 165
750M PanAmSat Capital Corp., 9.75%, 2000 806,250 165
- --------------------------------------------------------------------------------------
2,350,829 482
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--5.3%
500M MacMillan & Bloedel, Ltd., 8.50%, 2004 533,250 109
500M S.D. Warren Co., Inc., 12%, 2004 542,500 111
650M Stone Container Corp., 10.75%, 2002 689,000 141
750M Temple Inland, Inc., 9%, 2001 814,114 167
- --------------------------------------------------------------------------------------
2,578,864 528
- --------------------------------------------------------------------------------------
RETAIL-GENERAL MERCHANDISE--3.0%
750M Penney (J.C.) & Co., 6.125%, 2003 719,312 148
700M Wal-Mart Stores, Inc., 8%, 2006 756,325 155
- --------------------------------------------------------------------------------------
1,475,637 303
- --------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--3.1%
$ 750M International Business Machines Corp., 6.375%,
2000 $ 749,990 $ 154
725M Xerox Corp., 7.15%, 2004 737,499 151
- --------------------------------------------------------------------------------------
1,487,489 305
- --------------------------------------------------------------------------------------
TELEPHONE--6.0%
850M MCI Communication Corp., 7.50%, 2004 887,757 182
500M MFS Communications Co., Inc., 0%-8 7/8%, 2006 367,500 75
700M New York Telephone Co., 7.25%, 2024 669,375 137
1,000M Pacific Bell Telephone Co., 7%, 2004 1,012,113 208
- --------------------------------------------------------------------------------------
2,936,745 602
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $42,353,793) 43,057,261 8,836
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--7.7%
700M Federal Home Loan Mortgage Corp., 7.88%, 2004 702,371 144
1,500M United States Treasury Note, 6.375%, 2002 1,510,313 310
1,500M United States Treasury Note, 7%, 2006 1,559,531 320
- --------------------------------------------------------------------------------------
TOTAL VALUE OF U.S. GOVERNMENT OBLIGATIONS (cost
$3,823,281) 3,772,215 774
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.4%
350M Brown-Forman Corp., 5.55%, 1/9/97 349,568 72
500M S.C. Johnson & Son, Inc., 7%, 1/2/97 499,903 103
300M Texaco, Inc., 6%, 1/3/97 299,900 61
- --------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$1,149,371) 1,149,371 236
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $47,326,445) 98.5% 47,978,847 9,846
OTHER ASSETS, LESS LIABILITIES 1.5 750,330 154
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $48,729,177 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
26
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--94.1%
BASIC MATERIALS--1.2%
21,300 *Alyn Corporation $ 231,637 $ 14
75,000 *Repap Enterprises, Inc. 208,597 12
22,800 Schulman (A.), Inc. 558,600 33
70,900 Stone Container Corporation 1,054,637 63
- ---------------------------------------------------------------------------------------
2,053,471 122
- ---------------------------------------------------------------------------------------
CAPITAL GOODS--9.0%
69,400 AGCO Corporation 1,986,575 118
46,200 *American Buildings Company 1,103,025 65
43,200 *American Residential Services, Inc. 1,171,800 70
35,800 Columbus McKinnon Corporation 559,375 33
40,600 Corning, Inc. 1,877,750 111
42,700 *Jacobs Engineering Group, Inc. 1,008,787 60
21,600 Millipore Corporation 893,700 53
56,100 *Philip Environmental, Inc. 813,450 48
16,600 Raychem Corporation 1,330,075 79
64,200 Reynolds & Reynolds Company 1,669,200 99
116,400 *Superior Services, Inc. 2,371,650 141
25,200 Titan Wheel International, Inc. 321,300 19
- ---------------------------------------------------------------------------------------
15,106,687 896
- ---------------------------------------------------------------------------------------
COMMUNICATION SERVICES--2.3%
88,900 ECI Telecommunications Limited Designs 1,889,125 112
17,700 *Intermedia Communications, Inc. 455,775 27
30,700 *Octel Communications Corporation 537,250 32
173,900 *USCI, Inc. 934,712 55
- ---------------------------------------------------------------------------------------
3,816,862 226
- ---------------------------------------------------------------------------------------
CONSUMER CYCLICALS--13.5%
42,700 Adidas AG (GDR) (Note 5) 1,842,531 109
51,000 *Bell Sports Corporation 306,000 18
53,300 *BMC West Corporation 652,925 39
35,800 *Checkfree Corporation 613,075 36
- ---------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
8,500 *Copart, Inc. $ 111,562 $ 7
66,000 *CUC International, Inc. 1,567,500 93
52,000 Equifax, Inc. 1,592,500 94
27,000 *Federated Department Stores, Inc. 921,375 55
35,400 *Franklin Electronic Publishers, Inc. 429,225 25
67,300 *Friedman's, Inc. 992,675 59
21,100 *Hibbett Sporting Goods, Inc. 305,950 18
33,300 La Quinta Inns, Inc. 636,862 38
112,700 *Lithia Motors, Inc. 1,253,787 74
53,000 Oakwood Homes Corporation 1,212,375 72
49,800 *OfficeMax, Inc. 529,125 31
88,900 Ogden Corporation 1,666,875 99
49,500 *PIA Merchandising Services, Inc. 519,750 31
20,000 *Saks Holdings, Inc. 540,000 32
27,000 *Scientific Games Holdings Corporation 722,250 43
59,800 *Silicon Gaming, Inc. 964,275 57
28,400 TJ International, Inc. 660,300 39
71,300 *Travis Boats & Motors, Inc. 917,987 54
74,600 *U.S. Office Products Company 2,545,725 151
35,200 *Vans, Inc. 440,000 26
35,500 *Wet Seal, Inc. 758,812 45
- ---------------------------------------------------------------------------------------
22,703,441 1,345
- ---------------------------------------------------------------------------------------
CONSUMER STAPLES--10.2%
17,800 *American Radio Systems Corporation 485,050 29
53,300 *Buffets, Inc. 486,362 29
19,513 Cardinal Health, Inc. 1,136,632 67
60,200 *Cinar Films, Inc. - Class "B" 1,565,200 93
21,600 *Evergreen Media Corporation - Class "A" 540,000 32
31,100 First Brands Corporation 882,462 52
37,800 Gaylord Entertainment Company - Class "A" 864,675 51
33,400 *Outback Steakhouse, Inc. 893,450 53
48,800 *Perrigo Company 445,300 26
35,500 *Quality Dining, Inc. 634,562 38
- ---------------------------------------------------------------------------------------
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
59,400 Richfood Holdings, Inc. $ 1,440,450 $ 85
51,500 Rite Aid Corporation 2,047,125 121
46,300 Rival Company 1,151,712 68
88,600 *Steiner Leisure, Ltd. 1,783,075 106
61,500 *Tele-Communications, Inc. Liberty Media Group -
Class "A" 1,756,594 104
33,000 *Viacom, Inc. - Class "B" 1,150,875 68
- ---------------------------------------------------------------------------------------
17,263,524 1,022
- ---------------------------------------------------------------------------------------
ENERGY--2.3%
14,100 *Falcon Drilling Company, Inc. 553,425 33
33,000 *Input/Output, Inc. 610,500 36
90,500 PacifiCorp 1,855,250 110
17,800 *Trico Marine Services, Inc. 854,400 51
- ---------------------------------------------------------------------------------------
3,873,575 230
- ---------------------------------------------------------------------------------------
FINANCIAL--11.1%
16,900 Aames Financial Corporation 606,288 36
89,000 Ambassador Apartments, Inc. 2,102,625 125
41,000 *Cal Fed Bancorp, Inc. 1,004,500 60
38,780 Conseco, Inc. 2,472,225 147
66,200 *Glendale Federal Bank FSB 1,539,150 91
89,100 *Imperial Credit Industries, Inc. 1,871,100 111
52,500 Independent Bank Corporation 551,250 33
71,000 Innkeepers USA Trust 985,125 58
52,900 Integon Corporation 938,975 56
16,500 Mark Twain Bancshares, Inc. 804,375 48
14,600 Mercantile Bancorporation 750,075 45
64,900 *NHP, Inc. 1,005,950 60
15,900 Redwood Trust, Inc. 592,275 35
43,550 Reliance Group Holdings, Inc. 397,394 24
28,600 The Money Store, Inc. 790,075 47
56,700 Titan Holdings, Inc. 935,550 56
- ---------------------------------------------------------------------------------------
</TABLE>
29
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
29,000 USF&G Corporation $ 605,375 $ 36
64,000 Willis Corroon Group PLC (ADR) 736,000 44
- ---------------------------------------------------------------------------------------
18,688,307 1,112
- ---------------------------------------------------------------------------------------
HEALTHCARE/MISCELLANEOUS--13.2%
53,800 *Atrix Laboratories, Inc. 578,350 34
21,500 *Cardiovascular Dynamics, Inc. 279,500 17
49,900 *CIMA Labs, Inc. 305,638 18
35,900 *Coventry Corporation 332,635 20
28,000 Dentsply International, Inc. 1,330,000 79
21,200 *EndoSonics Corporation 323,300 19
86,500 *Ethical Holdings PLC (ADR) 502,781 30
38,200 Fisher Scientific International 1,800,175 107
17,700 *FPA Medical Management, Inc. 396,038 24
33,000 *Genesis Health Ventures, Inc. 1,027,125 61
13,900 HBO & Company 825,313 49
17,800 *HCIA, Inc. 614,100 36
39,000 *Health Care and Retirement Corporation 1,116,375 66
71,800 *Health Systems Design Corporation 637,225 38
17,700 *HealthCare Financial Partners, Inc. 225,675 13
63,900 *Kensey Nash Corporation 958,500 57
36,000 *Ligand Pharmaceuticals - Class "B" 535,500 32
31,600 *Living Centers of America, Inc. 876,900 52
28,300 *Pediatric Services of America, Inc. 548,313 33
56,000 *Physician Support Systems, Inc. 1,078,000 64
28,400 *Physicians Resource Group, Inc. 504,100 30
24,600 *RoTech Medical Corporation 516,600 31
18,500 *Rural/Metro Corporation 666,000 40
33,300 *St. Jude Medical, Inc. 1,419,413 84
46,500 *Sunquest Information Systems, Inc. 662,625 39
21,700 Teva Pharmaceutical Industries, Ltd. (ADR) 1,090,425 65
108,200 *VidaMed, Inc. 1,393,075 83
36,600 *Watson Pharmaceuticals, Inc. 1,644,713 98
- ---------------------------------------------------------------------------------------
22,188,394 1,319
- ---------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--29.6%
53,300 *ACE*COMM Corporation $ 799,500 $ 47
60,200 *Adaptec, Inc. 2,408,000 143
23,200 *Adtran, Inc. 962,800 57
13,300 *Altera Corporation 966,744 57
44,600 *Analog Devices, Inc. 1,510,825 90
71,800 *Applied Microsystems Corporation 951,350 56
33,100 *Atmel Corporation 1,096,438 65
70,200 AVX Corporation 1,509,300 90
34,500 *BISYS Group, Inc. 1,278,656 76
15,600 *Cascade Communications Corporation 859,950 51
9,900 *Checkpoint Systems, Inc. 245,025 15
28,600 *CHS Electronics, Inc 489,775 29
18,800 *Cisco Systems, Inc. 1,196,150 71
26,550 Computer Associates International, Inc. 1,320,863 78
30,400 *Control Data Systems, Inc. 668,800 40
35,300 *Credence Systems Corporation 710,413 42
37,200 *Cylink Corporation 483,600 29
24,800 *Elexsys International, Inc. 492,900 29
63,400 *EMC Corporation 2,100,125 125
89,600 Ericsson (L.M.) Telephone Co. (ADR) - Class "B" 2,704,800 160
70,300 *ESS Technology, Inc. 1,977,188 117
7,100 *Etec Systems, Inc. 271,575 16
17,700 *Flextronics International, Ltd. 491,175 29
21,800 *Informix Corporation 444,175 26
35,800 *Innotech, Inc. 277,450 16
8,000 Intel Corporation 1,047,500 62
32,200 *Interlink Computer Sciences, Inc. 539,350 32
63,800 *Kent Electronics 1,642,850 97
46,200 *LSI Logic Corporation 1,235,850 73
35,600 *Metromedia International Group 351,550 21
27,200 *Microsoft Corporation 2,247,400 133
21,100 Motorola, Inc. 1,295,013 77
17,800 *Network Appliance, Inc. 905,575 54
- ---------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
December 31, 1996
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
66,700 *Network General Corporation $ 2,017,675 $ 120
15,300 Nokia Corporation (ADR) - Class "A" 881,663 52
13,200 *Novellus Systems, Inc. 715,275 42
35,500 *Object Design, Inc. 417,125 25
31,125 *Oracle Corporation 1,299,469 77
28,000 *Quantum Corporation 801,500 48
61,000 *Saville Systems Ireland (ADR) 2,478,125 147
27,500 *Sterling Commerce, Inc. 969,375 58
154,400 *SystemSoft Corporation 2,296,700 136
6,200 *U.S. Robotics Corporation 446,400 26
24,800 *Versant Object Technology Corporation 461,900 27
31,900 *XcelleNet, Inc. 514,388 31
16,200 *3Com Corporation 1,188,675 71
- ---------------------------------------------------------------------------------------
49,970,935 2,963
- ---------------------------------------------------------------------------------------
TRANSPORTATION--1.7%
67,200 Interpool, Inc. 1,570,800 93
21,500 *Landstar System, Inc. 499,875 30
167,000 Transportacion Maritima Mexicana S.A. de C.V.
(ADR) 876,750 52
- ---------------------------------------------------------------------------------------
2,947,425 175
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $130,933,795) 158,612,621 9,410
- ---------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.7%
$ 1,200M Madison Gas & Electric, 5.47%, 1/15/97 1,197,447 71
1,800M Nestle Capital Corp., 5.49%, 1/21/97 1,794,510 106
1,500M South Carolina Gas & Electric, 5.45%, 1/23/97 1,495,004 89
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$4,486,961) 4,486,961 266
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $135,420,756) 96.8% 163,099,582 9,676
OTHER ASSETS, LESS LIABILITIES 3.2 5,468,595 324
- ----------------------------------------------------------------------------------------------
NET ASSETS 100.0% $168,568,177 $10,000
- ----------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
32
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--74.6%
BASIC MATERIALS--3.1%
2,100 Dow Chemical Company $ 164,587 $ 29
2,900 Du Pont (E.I.) de Nemours & Company 273,687 48
4,500 International Paper Company 181,687 32
5,500 Monsanto Company 213,812 37
6,900 Nucor Corporation 351,900 61
13,000 Schulman (A.), Inc. 318,500 55
4,300 Willamette Industries, Inc. 300,462 52
- --------------------------------------------------------------------------------------
1,804,635 314
- --------------------------------------------------------------------------------------
CAPITAL GOODS--7.4%
15,100 AGCO Corporation 432,237 75
1,500 AlliedSignal, Inc. 100,500 17
3,000 Avery Dennison Corporation 106,125 18
2,200 Boeing Company 234,025 41
7,100 Corning, Inc. 328,375 57
5,600 Cummins Engine Company, Inc. 257,600 45
6,700 General Electric Company 662,462 115
7,300 Laidlaw, Inc. - Class "B" 83,950 15
2,300 Minnesota Mining & Manufacturing Company 190,612 33
10,400 Reynolds & Reynolds Company 270,400 47
8,600 Thomas & Betts Corporation 381,625 66
3,800 *Tyco International, Ltd. 200,925 35
2,200 United Technologies Corporation 145,200 25
13,800 *USA Waste Services, Inc. 439,875 76
7,600 York International Corporation 424,650 74
- --------------------------------------------------------------------------------------
4,258,561 739
- --------------------------------------------------------------------------------------
COMMUNICATION SERVICES--1.5%
5,100 GTE Corporation 232,050 40
6,000 MCI Communications Corporation 196,125 34
7,000 *Octel Communications Corporation 122,500 21
- --------------------------------------------------------------------------------------
</TABLE>
33
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMUNICATION SERVICES (continued)
3,700 SBC Communications, Inc. $ 191,475 $ 33
22,300 *USCI, Inc. 119,862 21
- --------------------------------------------------------------------------------------
862,012 149
- --------------------------------------------------------------------------------------
CONSUMER CYCLICALS--6.8%
3,700 Adidas AG (GDR) (Note 5) 159,657 28
12,900 *CUC International, Inc. 306,375 53
2,000 Eastman Kodak Company 160,500 28
10,800 Equifax, Inc. 330,750 57
9,200 *Federated Department Stores, Inc. 313,950 55
3,800 General Motors Corporation 211,850 37
5,600 Harley-Davidson, Inc. 263,200 46
7,200 *Lear Corporation 245,700 43
9,300 Masco Corporation 334,800 58
3,000 Nike, Inc. 179,250 31
21,000 Ogden Corporation 393,750 68
2,500 Pep Boys - Manny, Moe & Jack 76,875 13
4,100 *Staples, Inc. 74,056 13
3,400 Tribune Company 268,175 47
10,800 *U.S. Office Products Company 368,550 64
8,700 Wal-Mart Stores, Inc. 199,012 35
- --------------------------------------------------------------------------------------
3,886,450 676
- --------------------------------------------------------------------------------------
CONSUMER STAPLES--11.0%
5,200 Anheuser-Busch Cos., Inc. 208,000 36
9,100 Coca-Cola Company 478,887 83
2,000 CPC International, Inc. 155,000 27
10,800 Dole Food Company 365,850 64
9,700 *Evergreen Media Corporation - Class "A" 242,500 42
13,600 First Brands Corporation 385,900 67
4,200 Gillette Company 326,550 57
4,600 *Infinity Broadcasting Corporation - Class "A" 154,675 27
2,600 Kimberly-Clark Corporation 247,650 43
8,000 *Kroger Company 372,000 65
- --------------------------------------------------------------------------------------
</TABLE>
34
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
13,000 McCormick & Company, Inc. $ 306,312 $ 53
14,000 PepsiCo, Inc. 409,500 71
4,300 Procter & Gamble Company 462,250 80
16,200 Richfood Holdings, Inc. 392,850 68
2,700 Sysco Corporation 88,087 15
9,900 *Tele-Communications, Inc. Liberty Media Group -
Class "A" 282,769 49
6,900 Time Warner, Inc. 258,750 45
1,500 Unilever N.V. 262,875 46
6,600 US West Communications Group 212,850 37
10,900 *US West Media Group 201,650 35
4,700 Walt Disney Company 327,238 57
9,100 Whitman Corporation 208,163 36
- --------------------------------------------------------------------------------------
6,350,306 1,103
- --------------------------------------------------------------------------------------
ENERGY--7.5%
3,400 Amoco Corporation 273,700 48
9,500 Apache Corporation 336,063 58
5,100 Exxon Corporation 499,800 87
15,100 Louisiana-Pacific Corporation 318,988 55
2,700 Mobil Corporation 330,075 57
10,800 Pacific Enterprises 328,050 57
12,000 Questar Corporation 441,000 77
2,900 Royal Dutch Petroleum Company 495,175 86
2,150 Schlumberger, Ltd. 214,731 37
10,800 *Tejas Gas Corporation 514,350 89
1,400 Union Pacific Corporation 84,175 15
12,150 Williams Companies, Inc. 455,625 79
- --------------------------------------------------------------------------------------
4,291,732 745
- --------------------------------------------------------------------------------------
FINANCIAL--11.8%
16,000 Ambassador Apartments, Inc. 378,000 66
3,400 American Express Company 192,100 33
15,100 American Financial Group, Inc. 570,025 99
3,200 American International Group, Inc. 346,400 60
- --------------------------------------------------------------------------------------
</TABLE>
35
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
3,000 Bank of Boston Corporation $ 192,750 $ 34
2,500 BankAmerica Corporation 249,375 43
3,700 Chase Manhattan Corporation 330,225 57
3,500 Citicorp 360,500 63
11,200 Federal National Mortgage Association 417,200 73
3,700 First Union Corporation 273,800 48
7,400 *Imperial Credit Industries, Inc. 155,400 27
41,000 Innkeepers USA Trust 568,875 99
2,500 National City Corporation 112,188 20
2,200 NationsBank Corporation 215,050 37
3,300 Norwest Corporation 143,550 25
13,200 Ohio Casualty Corporation 468,600 81
8,600 Redwood Trust, Inc. 320,350 56
2,100 Salomon, Inc. 98,963 17
2,000 Student Loan Marketing Association 186,250 32
13,600 The Money Store, Inc. 375,700 65
6,700 Torchmark Corporation 338,350 59
24,200 USF&G Corporation 505,175 88
- --------------------------------------------------------------------------------------
6,798,826 1,182
- --------------------------------------------------------------------------------------
HEALTHCARE/MISCELLANEOUS--4.9%
4,600 Abbott Laboratories 233,450 41
3,800 American Home Products Corporation 222,775 39
2,400 *Biogen, Inc. 93,000 16
2,800 Bristol-Myers Squibb Company 304,500 53
11,900 *Cardiovascular Dynamics, Inc. 154,700 27
9,100 Dentsply International, Inc. 432,250 75
4,800 Eli Lilly & Company 350,400 61
7,100 Johnson & Johnson 353,225 61
4,600 Merck & Company, Inc. 364,550 63
13,400 *Tenet Healthcare Corporation 293,125 51
- --------------------------------------------------------------------------------------
2,801,975 487
- --------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--15.8%
16,400 *Adaptec, Inc. $ 656,000 $ 114
6,500 Adobe Systems, Inc. 242,938 42
9,100 *Analog Devices, Inc. 308,263 54
28,100 AVX Corporation 604,150 105
4,400 *Cascade Communications Corporation 242,550 42
5,000 *Cisco Systems, Inc. 318,125 55
8,400 Computer Associates International, Inc. 417,900 73
7,600 *Compuware Corporation 380,950 66
4,200 *Dell Computer Corporation 223,125 39
15,800 *EMC Corporation 523,375 91
7,500 Ericsson (L.M.) Telephone Co. (ADR) - Class "B" 226,406 39
6,400 First Data Corporation 233,600 41
2,100 Grainger (W.W.), Inc. 168,525 29
5,800 Hewlett-Packard Company 291,450 51
4,400 Intel Corporation 576,125 100
2,200 International Business Machines Corporation 332,200 58
8,000 *LSI Logic Corporation 214,000 37
2,000 Lucent Technologies, Inc. 92,500 16
8,600 *Microsoft Corporation 710,575 123
5,700 Motorola, Inc. 349,838 61
13,400 *Network General Corporation 405,350 70
4,200 Nokia Corporation (ADR) - Class "A" 242,025 42
3,125 *Oracle Corporation 130,469 23
6,600 *Sun Microsystems, Inc. 169,538 29
26,500 *SystemSoft Corporation 394,188 69
4,700 Texas Instruments, Inc. 299,625 52
1,200 *U.S. Robotics Corporation 86,400 15
3,500 *3Com Corporation 256,813 45
- --------------------------------------------------------------------------------------
9,097,003 1,581
- --------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--1.7%
17,600 Interpool, Inc. $ 411,400 $ 72
3,100 Ryder System, Inc. 87,188 15
21,600 *Swift Transportation Company, Inc. 507,600 88
- --------------------------------------------------------------------------------------
1,006,188 175
- --------------------------------------------------------------------------------------
UTILITIES--3.1%
5,700 CINergy Corporation 190,238 33
3,900 Duke Power Company 180,375 31
3,800 Enron Corporation 163,875 28
4,700 FPL Group, Inc. 216,200 38
18,600 PacifiCorp 381,300 66
12,100 Sierra Pacific Resources 347,875 60
3,000 Sonat, Inc. 154,500 27
4,000 Texas Utilities Company 163,000 28
- --------------------------------------------------------------------------------------
1,797,363 311
- --------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $36,223,161) 42,955,051 7,462
- --------------------------------------------------------------------------------------
CORPORATE BONDS--15.9%
CHEMICALS--1.3%
$ 650M Rexene Corp., 11.75%, 2004 734,500 128
- --------------------------------------------------------------------------------------
CONSUMER STAPLES--1.1%
600M Universal Corp., 9.25%, 2001 651,568 113
- --------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--.9%
500M Printpack, Inc., 9.875%, 2004 (Note 5) 522,500 91
- --------------------------------------------------------------------------------------
DURABLE GOODS MANUFACTURING--.9%
500M Chrysler Corp., 10.95%, 2017 540,508 94
- --------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--1.1%
600M Essex Group, Inc., 10%, 2003 621,000 108
- --------------------------------------------------------------------------------------
FINANCIAL--.9%
500M Nationsbank Corp., 8.125%, 2002 530,735 92
- --------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE--2.3%
$ 600M Healthsouth Rehabilitation Corp., 9.50%, 2001 $ 640,500 $ 111
600M Ornda Healthcorp., 11.375%, 2004 696,000 121
- --------------------------------------------------------------------------------------
1,336,500 232
- --------------------------------------------------------------------------------------
MEDIA/CABLE TELEVISION--1.1%
600M Rogers Communication Inc., 10.875%, 2004 634,500 110
- --------------------------------------------------------------------------------------
MISCELLANEOUS--.5%
250M Iron Mountain, Inc., 10.125%, 2006 266,250 46
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--4.8%
800M Rainy River Forest Products Co., Inc., 10.75%,
2001 872,000 152
800M S.D. Warren Co., Inc., 12%, 2004 868,000 151
1,000M Stone Container Corp., 9.875%, 2001 1,015,000 176
- --------------------------------------------------------------------------------------
2,755,000 479
- --------------------------------------------------------------------------------------
TELECOMMUNICATIONS--1.0%
750M MFS Communications Co., Inc., 0%-8 7/8%, 2006 551,250 96
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $8,603,727) 9,144,311 1,589
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--1.8%
1,000M Federal National Mortgage Association, 8.50%,
2005 (cost $1,036,719) 1,051,970 183
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--7.3%
300M BellSouth Telecomm, Inc., 5.32%, 2/14/97 298,049 52
2,000M Kellogg Company, 5.37%, 1/9/97 1,997,613 347
1,900M S.C. Johnson & Son, Inc., 7%, 1/2/97 1,899,631 330
- --------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$4,195,293) 4,195,293 729
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $50,058,900) 99.6% 57,346,625 9,963
OTHER ASSETS, LESS LIABILITIES .4 215,055 37
- ---------------------------------------------------------------------------------------------
NET ASSETS 100.0% $57,561,680 $10,000
- ---------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
39
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS SERIES FUND
December 31, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
INSURED
INTERMEDIATE INVESTMENT SPECIAL TOTAL
BLUE CHIP TAX EXEMPT GRADE SITUATIONS RETURN
FUND FUND FUND FUND FUND
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $185,449,275 $ 7,823,713 $47,326,445 $135,420,756 $50,058,900
------------ ------------ ---------- ---------- -----------
------------ ------------ ---------- ---------- -----------
At value (Note 1A)................... $249,019,730 $ 8,148,906 $47,978,847 $163,099,582 $57,346,625
Cash................................... 7,764,825 88,818 42,780 6,362,420 61,435
Receivables:
Interest and dividends............... 282,687 104,851 890,921 97,041 296,826
Trust shares sold.................... 650,542 504 31,794 343,561 39,414
Other assets........................... 511 -- 64 32 1,687
------------ ------------ ---------- ---------- -----------
Total Assets........................... 257,718,295 8,343,079 48,944,406 169,902,636 57,745,987
------------ ------------ ---------- ---------- -----------
LIABILITIES
Payables:
Investment securities purchased...... -- 302,270 -- 395,401 --
Cash portion of dividend payable
1/15/97............................ 121,643 9,569 70,158 422,447 33,230
Trust shares redeemed................ 424,540 -- 88,910 264,404 60,418
Accrued advisory fee................... 158,983 2,893 26,497 103,914 35,927
Accrued expenses....................... 149,904 -- 29,664 148,293 54,732
------------ ------------ ---------- ---------- -----------
Total Liabilities...................... 855,070 314,732 215,229 1,334,459 184,307
------------ ------------ ---------- ---------- -----------
NET ASSETS............................. $256,863,225 $ 8,028,347 $48,729,177 $168,568,177 $57,561,680
------------ ------------ ---------- ---------- -----------
------------ ------------ ---------- ---------- -----------
NET ASSETS CONSIST OF:
Capital paid in........................ $193,257,196 $ 7,925,426 $48,067,481 $141,000,842 $50,198,750
Undistributed net investment income.... 35,574 2,748 9,294 -- 101,523
Accumulated net realized loss on
investment transactions.............. -- (225,020) -- (111,491) (26,318)
Net unrealized appreciation in value
of investments....................... 63,570,455 325,193 652,402 27,678,826 7,287,725
------------ ------------ ---------- ---------- -----------
Total.................................. $256,863,225 $ 8,028,347 $48,729,177 $168,568,177 $57,561,680
------------ ------------ ---------- ---------- -----------
------------ ------------ ---------- ---------- -----------
TRUST SHARES OUTSTANDING (Note 4):
Class A.............................. 12,320,868 1,280,566 4,672,876 7,636,483 4,416,089
Class B.............................. 878,380 105,786 234,787 500,906 81,104
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 19.47 $ 5.79 $ 9.93 $ 20.73 $ 12.80
------ ----- ----- ---------- -----------
------ ----- ----- ---------- -----------
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A (Net asset
value/.9375)*........................ $ 20.77 $ 6.18 $ 10.59 $ 22.11 $ 13.65
------ ----- ---------- ---------- -----------
------ ----- ---------- ---------- -----------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B...................... $ 19.37 $ 5.80 $ 9.94 $ 20.45 $ 12.72
------ ----- ----- ---------- -----------
------ ----- ----- ---------- -----------
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
40
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS SERIES FUND
Year Ended December 31, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
INSURED
INTERMEDIATE INVESTMENT SPECIAL TOTAL
BLUE CHIP TAX EXEMPT GRADE SITUATIONS RETURN
FUND FUND FUND FUND FUND
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income:
Interest............................. $ 1,095,042 $ 408,855 $3,580,217 $1,142,207 $1,924,341
Dividends............................ 3,579,679 -- -- 1,023,704 562,359
Consent fees......................... -- -- 6,750 -- 40
----------- ------------ ---------- ---------- ----------
Total income........................... 4,674,721 408,855 3,586,967 2,165,911 2,486,740
----------- ------------ ---------- ---------- ----------
Expenses (Notes 1 and 3):
Advisory fee......................... 2,079,523 44,510 368,771 1,498,308 557,206
Shareholder servicing costs.......... 651,288 8,231 133,949 643,280 185,847
Distribution plan expenses - Class
A.................................. 603,372 20,739 142,304 427,003 165,211
Distribution plan expenses - Class
B.................................. 107,618 5,049 17,349 74,995 6,986
Reports and notices to
shareholders....................... 65,314 1,748 11,322 72,906 17,023
Professional fees.................... 34,069 10,235 15,183 26,468 19,231
Custodian fees....................... 34,419 1,950 7,128 32,179 29,691
Other expenses....................... 37,095 2,977 12,876 30,612 14,778
----------- ------------ ---------- ---------- ----------
Total expenses......................... 3,612,698 95,439 708,882 2,805,751 995,973
Less: Expenses waived or assumed....... (490,381) (54,036) (152,456) (374,577) (139,362)
Custodian fees paid indirectly.... (19,316) (1,950) (3,301) (17,002) --
----------- ------------ ---------- ---------- ----------
Net expenses........................... 3,103,001 39,453 553,125 2,414,172 856,611
----------- ------------ ---------- ---------- ----------
Net investment income (loss)........... 1,571,720 369,402 3,033,842 (248,261) 1,630,129
----------- ------------ ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain (loss) on
investments.......................... 13,853,283 (13,642) 108,990 9,162,648 4,564,414
Net unrealized appreciation
(depreciation) of investments........ 25,028,855 (65,142) (2,054,202) 7,926,160 (470,679)
----------- ------------ ---------- ---------- ----------
Net gain (loss) on investments......... 38,882,138 (78,784) (1,945,212) 17,088,808 4,093,735
----------- ------------ ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $40,453,858 $ 290,618 $1,088,630 $16,840,547 $5,723,864
----------- ------------ ---------- ---------- ----------
----------- ------------ ---------- ---------- ----------
</TABLE>
See notes to financial statements
41
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS SERIES FUND
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
INSURED
BLUE CHIP INTERMEDIATE
FUND TAX EXEMPT FUND
-------------------------- ----------------------
YEAR ENDED DECEMBER 31 1996 1995 1996 1995
- ---------------------------------------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income (loss).......... $ 1,571,720 $ 1,814,505 $ 369,402 $ 337,020
Net realized gain (loss) on
investments......................... 13,853,283 5,979,563 (13,642) (12)
Net unrealized appreciation
(depreciation) of investments....... 25,028,855 34,678,998 (65,142) 454,526
------------ ------------ ---------- ----------
Net increase in net assets resulting
from operations................... 40,453,858 42,473,066 290,618 791,534
------------ ------------ ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income - Class
A................................... (1,797,674) (1,794,647) (348,573) (330,471)
From net investment income - Class
B................................... (32,262) (28,155) (20,249) (5,226)
From net realized gain - Class A...... (12,932,431) (5,794,467) -- --
From net realized gain - Class B...... (920,852) (185,096) -- --
In excess of realized gain on
investments - Class A............... -- -- -- --
In excess of realized gain on
investments - Class B............... -- -- -- --
------------ ------------ ---------- ----------
Total distributions................. (15,683,219) (7,802,365) (368,822) (335,697)
------------ ------------ ---------- ----------
TRUST SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............. 59,240,476 30,855,778 1,414,425 1,707,243
Value of distributions reinvested..... 14,593,546 7,124,835 259,914 251,295
Cost of shares redeemed............... (27,930,727) (25,713,861) (1,203,575) (1,080,698)
------------ ------------ ---------- ----------
45,903,295 12,266,752 470,764 877,840
------------ ------------ ---------- ----------
Class B:
Proceeds from shares sold............. 10,411,903 5,044,595 341,636 372,887
Value of distributions reinvested..... 949,486 211,655 8,017 2,826
Cost of shares redeemed............... (924,914) (134,770) (108,807) (2,000)
------------ ------------ ---------- ----------
10,436,475 5,121,480 240,846 373,713
------------ ------------ ---------- ----------
Net increase (decrease) from trust
share transactions.................. 56,339,770 17,388,232 711,610 1,251,553
------------ ------------ ---------- ----------
Net increase (decrease) in net
assets............................ 81,110,409 52,058,933 633,406 1,707,390
NET ASSETS
Beginning of year..................... 175,752,816 123,693,883 7,394,941 5,687,551
------------ ------------ ---------- ----------
End of year+.......................... $256,863,225 $175,752,816 $8,028,347 $7,394,941
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
+Includes undistributed net investment
income of........................... $ 35,574 $ 293,790 $ 2,748 $ 2,168
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
(a)TRUST SHARES ISSUED AND REDEEMED
Class A:
Sold.................................. 3,180,586 1,958,324 245,693 298,216
Issued for distributions reinvested... 752,243 408,815 45,078 43,763
Redeemed.............................. (1,501,552) (1,667,553) (209,235) (189,523)
------------ ------------ ---------- ----------
Net increase (decrease) in Class A
shares outstanding.................. 2,431,277 699,586 81,536 152,456
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
Class B:
Sold.................................. 559,282 315,310 58,860 64,431
Issued for distributions reinvested... 49,071 11,994 1,391 489
Redeemed.............................. (49,439) (7,838) (19,041) (344)
------------ ------------ ---------- ----------
Net increase in Class B shares
outstanding......................... 558,914 319,466 41,210 64,576
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
</TABLE>
See notes to financial statements
42
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE SPECIAL SITUATIONS TOTAL RETURN
FUND FUND FUND
------------------------ -------------------------- ------------------------
1996 1995 1996 1995 1996 1995
- ---------------------------------------- ----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM OPERATIONS
Net investment income (loss).......... $ 3,033,842 $ 3,137,597 $ (248,261) $ (99,045) $ 1,630,129 $ 1,624,015
Net realized gain (loss) on
investments......................... 108,990 67,631 9,162,648 4,776,742 4,564,414 1,809,004
Net unrealized appreciation
(depreciation) of investments....... (2,054,202) 5,383,848 7,926,160 17,856,965 (470,679) 8,913,490
----------- ----------- ------------ ------------ ----------- -----------
Net increase in net assets resulting
from operations................... 1,088,630 8,589,076 16,840,547 22,534,662 5,723,864 12,346,509
----------- ----------- ------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
From net investment income - Class
A................................... (2,965,537) (3,128,539) -- -- (1,672,752) (1,523,212)
From net investment income - Class
B................................... (95,970) (26,151) -- -- (20,249) (3,901)
From net realized gain - Class A...... (79,969) -- (8,473,398) (4,513,641) (4,504,684) (1,800,205)
From net realized gain - Class B...... (4,021) -- (552,560) (164,734) (82,687) (8,799)
In excess of realized gain on
investments - Class A............... -- (14,684) -- -- -- (3,345)
In excess of realized gain on
investments - Class B............... -- (343) -- -- -- (16)
----------- ----------- ------------ ------------ ----------- -----------
Total distributions................. (3,145,497) (3,169,717) (9,025,958) (4,678,375) (6,280,372) (3,339,478)
----------- ----------- ------------ ------------ ----------- -----------
TRUST SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............. 8,590,879 7,877,385 41,811,559 33,124,063 5,275,595 3,426,577
Value of distributions reinvested..... 2,386,687 2,435,394 8,052,244 4,251,850 6,135,139 3,303,023
Cost of shares redeemed............... (12,567,534) (11,876,289) (24,410,399) (19,660,248) (9,794,345) (10,998,541)
----------- ----------- ------------ ------------ ----------- -----------
(1,589,968) (1,563,510) 25,453,404 17,715,665 1,616,389 (4,268,941)
----------- ----------- ------------ ------------ ----------- -----------
Class B:
Proceeds from shares sold............. 1,459,481 1,166,562 5,717,918 4,418,828 746,950 247,304
Value of distributions reinvested..... 78,964 18,187 551,266 162,263 102,924 12,704
Cost of shares redeemed............... (325,873) (56,045) (865,479) (162,649) (59,781) --
----------- ----------- ------------ ------------ ----------- -----------
1,212,572 1,128,704 5,403,705 4,418,442 790,093 260,008
----------- ----------- ------------ ------------ ----------- -----------
Net increase (decrease) from trust
share transactions.................. (377,396) (434,806) 30,857,109 22,134,107 2,406,482 (4,008,933)
----------- ----------- ------------ ------------ ----------- -----------
Net increase (decrease) in net
assets............................ (2,434,263) 4,984,553 38,671,698 39,990,394 1,849,974 4,998,098
NET ASSETS
Beginning of year..................... 51,163,440 46,178,887 129,896,479 89,906,085 55,711,706 50,713,608
----------- ----------- ------------ ------------ ----------- -----------
End of year+.......................... $48,729,177 $51,163,440 $168,568,177 $129,896,479 $57,561,680 $55,711,706
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
+Includes undistributed net investment
income of........................... $ 9,294 $ 36,959 $ -- $ -- $ 101,523 $ 190,956
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Class A:
Sold.................................. 863,456 798,381 2,056,926 1,771,857 403,915 279,476
Issued for distributions reinvested... 240,179 245,208 388,434 211,325 476,189 252,244
Redeemed.............................. (1,264,529) (1,206,098) (1,193,114) (1,071,368) (737,036) (913,524)
----------- ----------- ------------ ------------ ----------- -----------
Net increase (decrease) in Class A
shares outstanding.................. (160,894) (162,509) 1,252,246 911,814 143,068 (381,804)
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
Class B:
Sold.................................. 147,002 116,443 282,350 234,052 56,645 19,916
Issued for distributions reinvested... 7,948 1,794 26,957 8,109 8,057 954
Redeemed.............................. (32,903) (5,497) (42,387) (8,174) (4,468) --
----------- ----------- ------------ ------------ ----------- -----------
Net increase in Class B shares
outstanding......................... 122,047 112,740 266,920 233,987 60,234 20,870
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
</TABLE>
See notes to financial statements
43
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS SERIES FUND
1. SIGNIFICANT ACCOUNTING POLICIES--The Fund, a Massachusetts business trust, is
registered under the Investment Company Act of 1940 (the "1940 Act") as a
diversified, open-end management investment company. The Fund operates as a
series fund, issuing shares of beneficial interest in the Blue Chip Fund,
Insured Intermediate Tax Exempt Fund, Investment Grade Fund, Special Situations
Fund, and Total Return Fund and accounts separately for the assets, liabilities
and operations of each Fund. The objective of each Fund is as follows:
BLUE CHIP FUND seeks to provide investors with high total investment return
consistent with the preservation of capital.
INSURED INTERMEDIATE TAX EXEMPT FUND seeks to provide a high level of interest
income which is exempt from federal income tax and is not an item of tax
preference for purposes of the federal alternative minimum tax.
INVESTMENT GRADE FUND seeks to generate a maximum level of income consistent
with investment in investment grade debt securities.
SPECIAL SITUATIONS FUND seeks long-term growth of capital.
TOTAL RETURN FUND seeks to provide investors with high long-term total
investment return consistent with moderate investment risk.
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 mean between the closing bid
and asked prices. 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 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 value. Short-term corporate notes which are purchased at a discount
are valued at amortized cost. Securities for which market quotations are not
readily available and 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 trustees of the Fund
The municipal bonds in which the Insured Intermediate Tax Exempt Fund invests
are traded primarily in the over-the-counter markets. Such securities are valued
daily on the basis of valuations provided by a pricing service approved by the
Board of Trustees. The pricing service considers security type, rating, market
condition and yield data, as well as market quotations and prices provided by
market makers in determining value. "When Issued Securities" are reflected in
the assets of the Fund as of the date the securities are purchased.
The municipal bonds held by the Insured Intermediate Tax Exempt Fund are insured
as to payment of principal and interest by the issuer or under insurance
policies written by independent insurance companies. It is the intention of the
Fund to retain any insured securities which are in default or in significant
risk of default and to place a value on the defaulted securities equal to the
value of similar securities which are not in default. The Fund may invest up to
20% of its assets in portfolio securities not covered by the insurance feature.
44
<PAGE>
B. Federal Income Taxes--No provision has been made for federal income taxes on
net income or capital gains since it is the policy of each Fund to continue to
comply with the special provisions of the Internal Revenue Code applicable to
investment companies and to make sufficient distributions of income and capital
gains (in excess of any available capital loss carryovers), to relieve it from
all, or substantially all, federal income taxes. At December 31, 1996, the
Insured Intermediate Tax Exempt Fund had capital loss carryovers of $225,020, of
which $160,056 expires in 2002 and $51,323 expires in 2003 and $13,641 expires
in 2004.
C. Distributions to Shareholders--Dividends from net investment income to
shareholders of the Insured Intermediate Tax Exempt Fund and the Investment
Grade Fund are declared daily and paid monthly. Dividends from net investment
income of the Blue Chip Fund and Total Return Fund are declared and paid
quarterly and dividends, if any, from net investment income of the Special
Situations Fund are declared and paid annually. Distributions from net realized
capital gains are declared and paid annually. Income dividends and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for net operating losses, tax-exempt
interest, capital loss carryforwards, and post October losses.
D. Expense Allocation--Expenses directly charged or attributable to a Fund are
paid from the assets of that Fund. General expenses of the First Investors
Series Fund are allocated among and charged to the assets of each Fund on a fair
and equitable basis, which may be based on the relative assets of each Fund or
the nature of the services performed and relative applicability to each Fund.
E. 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.
F. Other--Security transactions are accounted for on the date the securities are
purchased or sold. Cost is determined, and gains and losses are based, on the
identified cost basis for both financial statement and federal income tax
purposes. Dividend income is recorded on the ex-dividend date. Interest income
and estimated expenses are accrued daily. The Bank of New York, custodian for
the Funds, other than the Total Return Fund, has provided credits in the amount
of $41,569 against custodian charges based on the uninvested cash balances of
these Funds.
45
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS SERIES FUND
2. SECURITY TRANSACTIONS--For the year ended December 31, 1996, purchases and
sales of securities and long-term U.S. Government obligations, excluding U.S.
Treasury bills and short-term corporate notes, were as follows:
<TABLE>
<CAPTION>
Long-Term U.S.
Securities Government Obligations
-------------------------- ------------------------
Cost of Proceeds Cost of Proceeds
Purchases of Sales Purchases of Sales
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Blue Chip Fund......................... $113,556,234 $ 86,066,358 $ -- $ --
Insured Intermediate Tax Exempt Fund... 6,775,826 5,953,292 -- --
Investment Grade Fund.................. 7,330,350 6,965,103 3,123,281 3,166,875
Special Situations Fund................ 159,536,193 128,516,356 -- --
Total Return Fund...................... 57,282,826 53,431,226 15,329,476 22,149,016
</TABLE>
At December 31, 1996, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Aggregate Unrealized Unrealized Unrealized
Cost Appreciation Depreciation Appreciation
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Blue Chip Fund......................... $185,449,275 $ 65,565,561 $ 1,995,106 $ 63,570,455
Insured Intermediate Tax Exempt Fund... 7,823,713 333,874 8,681 325,193
Investment Grade Fund.................. 47,326,445 1,059,667 407,265 652,402
Special Situations Fund................ 135,532,246 36,721,957 9,154,621 27,567,336
Total Return Fund...................... 50,085,218 8,552,528 1,291,121 7,261,407
</TABLE>
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
trustees of the Fund are officers and directors of its investment adviser, First
Investors Management Company, Inc. ("FIMCO"), 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 trustees of the Fund
received no remuneration from the Fund for serving in such capacities. Their
remuneration (together with certain other expenses of the Fund) is paid by FIMCO
or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO for each
Fund other than the Insured Intermediate Tax Exempt Fund and the Investment
Grade Fund, an annual fee, payable monthly, at the rate of 1% on the first $200
million of each Funds' 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. The annual fee for the Insured Intermediate Tax
Exempt Fund is payable monthly, at the rate of .60% of the Funds' average
46
<PAGE>
daily net assets. The annual fee for the Investment Grade Fund is payable
monthly, at the rate of .75% on the first $300 million of the Funds' average
daily net assets, .72% on the next $200 million, .69% on the next $200 million,
and .66% on average daily net assets over $750 million. Total advisory fees
accrued to FIMCO for the year ended December 31, 1996 were $4,548,318 of which
$1,069,264 was waived. In addition, expenses of $120,809 were assumed by FIMCO.
For the year ended December 31, 1996, FIC, as underwriter, received $4,896,284
in commissions from the sale of Fund shares, after allowing $65,260 to other
dealers. Shareholder servicing costs included $1,219,782 in transfer agent fees
and out of pocket expenses accrued to ADM and $402,813 in custodian fees accrued
to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940 Act, each
Fund is authorized to pay FIC a fee equal 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 that Fund. Total 12b-1 fees accrued to FIC
amounted to $1,570,626 (of which $20,739 was waived on the Insured Intermediate
Tax Exempt Fund).
4. CAPITAL--Each 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. The Fund
has established an unlimited number of shares of beneficial interest for both
Class A and Class B shares.
5. RULE 144A SECURITIES--Under Rule 144A, certain restricted securities are
exempt from the registration requirements of the Securities Act of 1933 and may
only be sold to qualified institutional investors. At December 31, 1996, the
Blue Chip, Special Situations and Total Return Funds held one, one and two 144A
securities, respectively, with aggregate values of $1,108,970, $1,842,531 and
$682,157, respectively. These securities represent .4%, 1.1% and 1.2% of the
respective Funds' net assets and are valued as set forth in Note 1A.
47
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS SERIES FUND
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------- LESS DISTRIBUTIONS
NET ASSET FROM NET ASSET
VALUE NET REALIZED -------------------- VALUE
--------- NET AND UNREALIZED TOTAL FROM NET NET ---------
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL END
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
CLASS A
1/3/89* to 12/31/89........... $ 11.13 $ .50 $ 1.18 $ 1.68 $ .40 $ -- $ .40 $ 12.41
1990.......................... 12.41 .32 (.74) (.42) .35 -- .35 11.64
1991.......................... 11.64 .21 2.96 3.17 .22 -- .22 14.59
1992.......................... 14.59 .13 .82 .95 .13 .12 .25 15.29
1993.......................... 15.29 .10 1.08 1.18 .10 .79 .89 15.58
1994.......................... 15.58 .11 (.58) (.47) .09 1.56 1.65 13.46
1995.......................... 13.46 .19 4.37 4.56 .20 .60 .80 17.22
1996.......................... 17.22 .14 3.39 3.53 .17 1.11 1.28 19.47
CLASS B
1/12/95* to 12/31/95.......... 13.51 .10 4.31 4.41 .16 .60 .76 17.16
1996.......................... 17.16 .06 3.32 3.38 .06 1.11 1.17 19.37
- ---------------------------------------------------------------------------------------------------------------------------------
INSURED INTERMEDIATE TAX EXEMPT FUND
CLASS A
11/22/93* to 12/31/93......... 5.79 -- -- -- -- -- -- 5.79
1994.......................... 5.79 .24 (.36) (.12) .24 -- .24 5.43
1995.......................... 5.43 .30 .42 .72 .30 -- .30 5.85
1996.......................... 5.85 .29 (.06) .23 .29 -- .29 5.79
CLASS B
1/12/95* to 12/31/95.......... 5.45 .25 .41 .66 .26 -- .26 5.85
1996.......................... 5.85 .23 (.05) .18 .23 -- .23 5.80
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
CLASS A
2/19/91* to 12/31/91.......... 9.31 .57 .67 1.24 .57 .05 .62 9.93
1992.......................... 9.93 .71 .04 .75 .72 .06 .78 9.90
1993.......................... 9.90 .65 .50 1.15 .65 .07 .72 10.33
1994.......................... 10.33 .62 (1.09) (.47) .62 -- .62 9.24
1995.......................... 9.24 .64 1.10 1.74 .64 -- .64 10.34
1996.......................... 10.34 .62 (.39) .23 .62 .02 .64 9.93
CLASS B
1/12/95* to 12/31/95.......... 9.26 .54 1.10 1.64 .55 -- .55 10.35
1996.......................... 10.35 .55 (.39) .16 .55 .02 .57 9.94
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations of Class A shares or date Class B shares first
offered
** Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed (Note 3)
+++ Average commission rate as required by amended disclosure requirements
effective for fiscal years beginning on or after September 1, 1995.
48
<PAGE>
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
-------------------------------------------------------------------------------------------------
RATIO TO AVERAGE NET
ASSETS BEFORE
RATIO TO AVERAGE EXPENSES WAIVED OR
NET ASSETS++ ASSUMED
-------------------- --------------------
TOTAL NET NET PORTFOLIO AVERAGE
RETURN NET ASSETS INVESTMENT INVESTMENT TURNOVER COMMISSION
** END OF PERIOD EXPENSES INCOME EXPENSES INCOME RATE RATE
(%) (IN THOUSANDS) (%) (%) (%) (%) (%) +++
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
CLASS A
1/3/89* to 12/31/89........... 15.40 $ 27,212 .02 3.72 1.48 2.26 49 $ N/A
1990.......................... (3.50) 55,816 .77 2.57 1.88 1.46 49 N/A
1991.......................... 27.52 79,932 1.28 1.63 1.78 1.14 31 N/A
1992.......................... 6.56 99,501 1.46 .95 1.73 .67 44 N/A
1993.......................... 7.77 117,929 1.48 .66 1.73 .41 39 N/A
1994.......................... (3.02) 123,694 1.54 .80 1.79 .55 82 N/A
1995.......................... 34.01 170,271 1.49 1.23 1.74 .98 25 N/A
1996.......................... 20.55 239,851 1.44 .78 1.67 .55 45 .0689
CLASS B
1/12/95* to 12/31/95.......... 32.76 5,481 2.20+ .52+ 2.46+ .26+ 25 N/A
1996.......................... 19.71 17,012 2.22 -- 2.37 (.16) 45 .0689
- ---------------------------------------------------------------------------------------------------------------------------------
INSURED INTERMEDIATE TAX EXEMPT FUND
CLASS A
11/22/93* to 12/31/93......... .00 1,615 -- .54+ 1.78+ (1.24)+ 0 N/A
1994.......................... (2.05) 5,688 .14 4.52 .96 3.70 210 N/A
1995.......................... 13.50 7,017 .35 5.32 1.22 4.45 47 N/A
1996.......................... 4.07 7,415 .49 5.05 1.24 4.30 82 N/A
CLASS B
1/12/95* to 12/31/95.......... 12.27 378 1.35+ 4.32+ 2.22+ 3.45+ 47 N/A
1996.......................... 3.17 613 1.49 4.05 1.94 3.60 82 N/A
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
CLASS A
2/19/91* to 12/31/91.......... 15.70+ 18,153 -- 7.79+ 1.48+ 6.31+ 51 N/A
1992.......................... 7.83 37,922 .57 7.20 1.41 6.36 44 N/A
1993.......................... 11.82 48,507 .86 6.27 1.40 5.73 38 N/A
1994.......................... (4.62) 46,179 .95 6.46 1.47 5.94 17 N/A
1995.......................... 19.40 49,997 1.10 6.43 1.43 6.10 27 N/A
1996.......................... 2.39 46,396 1.11 5.96 1.42 5.65 22 N/A
CLASS B
1/12/95* to 12/31/95.......... 18.08 1,167 1.80+ 5.73+ 2.13+ 5.40+ 27 N/A
1996.......................... 1.64 2,333 1.81 5.26 2.12 4.95 22 N/A
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations of Class A shares or date Class B shares first
offered
** Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed (Note 3)
+++ Average commission rate as required by amended disclosure requirements
effective for fiscal years beginning on or after September 1, 1995.
49
<PAGE>
FINANCIAL HIGHLIGHTS
FIRST INVESTORS SERIES FUND
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
-------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
-------------------------------------- LESS DISTRIBUTIONS
NET ASSET FROM NET ASSET
VALUE NET REALIZED -------------------- VALUE
--------- NET AND UNREALIZED TOTAL FROM NET NET ---------
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL END
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAINS DISTRIBUTIONS OF PERIOD
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SPECIAL SITUATIONS FUND
CLASS A
9/18/90* to 12/31/90..... $ 9.31 $ .09 $ .27 $ .36 $ .09 $ -- $ .09 $ 9.58
1991..................... 9.58 .10 4.74 4.84 .10 .33 .43 13.99
1992..................... 13.99 -- 2.41 2.41 -- .78 .78 15.62
1993..................... 15.62 (.08) 3.29 3.21 -- .83 .83 18.00
1994..................... 18.00 (.04) (.62) (.66) -- .91 .91 16.43
1995..................... 16.43 (.01) 3.94 3.93 -- .73 .73 19.63
1996..................... 19.63 (.01) 2.28 2.27 -- 1.17 1.17 20.73
CLASS B
1/12/95* to 12/31/95..... 16.40 (.01) 3.85 3.84 -- .73 .73 19.51
1996..................... 19.51 (.14) 2.25 2.11 -- 1.17 1.17 20.45
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN FUND
CLASS A
4/24/90* to 12/31/90..... 11.17 .32 (.12) .20 .32 -- .32 11.05
1991..................... 11.05 .37 1.97 2.34 .34 .12 .46 12.93
1992..................... 12.93 .27 (.41) (.14) .30 -- .30 12.49
1993..................... 12.49 .26 .63 .89 .26 1.24 1.50 11.88
1994..................... 11.88 .21 (.62) (.41) .19 .39 .58 10.89
1995..................... 10.89 .39 2.50 2.89 .37 .44 .81 12.97
1996..................... 12.97 .39 .97 1.36 .41 1.12 1.53 12.80
CLASS B
1/12/95* to 12/31/95..... 10.90 .25 2.54 2.79 .33 .44 .77 12.92
1996..................... 12.92 .32 .94 1.26 .34 1.12 1.46 12.72
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations of Class A shares or date Class B shares first
offered
** Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed (Note 3)
+++ Average commission rate as required by amended disclosure requirements
effective for fiscal years beginning on or after September 1, 1995.
See notes to financial statements
50
<PAGE>
The following table sets forth the per share operating performance data for a
share of beneficial interest outstanding, total return, ratios to average net
assets and other supplemental data for each period indicated.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
-------------------------------------------------------------------------------------------------------
RATIO TO AVERAGE NET
ASSETS BEFORE
RATIO TO AVERAGE EXPENSES WAIVED OR
NET ASSETS++ ASSUMED
--------------------- -----------------------
TOTAL NET NET PORTFOLIO AVERAGE
RETURN NET ASSETS INVESTMENT INVESTMENT TURNOVER COMMISSION
** END OF PERIOD EXPENSES INCOME EXPENSES INCOME RATE RATE
(%) (IN THOUSANDS) (%) (%) (%) (%) (%) +++
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SPECIAL SITUATIONS FUND
CLASS A
9/18/90* to 12/31/90..... 13.58+ $ 1,321 -- 3.93+ 2.74+ 1.19+ 0 $ N/A
1991..................... 50.47 9,183 -- 1.44 2.31 (.87) 86 N/A
1992..................... 17.26 25,814 1.06 (.05) 1.92 (.91) 88 N/A
1993..................... 20.52 59,148 1.55 (.63) 1.89 (.96) 71 N/A
1994..................... (3.66) 89,906 1.65 (.26) 1.90 (.51) 53 N/A
1995..................... 23.92 125,331 1.60 (.08) 1.85 (.33) 80 N/A
1996..................... 11.56 158,326 1.59 (.13) 1.84 (.38) 99 .0689
CLASS B
1/12/95* to 12/31/95..... 23.42 4,566 2.33+ (.81)+ 2.59+ (1.07)+ 80 N/A
1996..................... 10.81 10,242 2.38 (.92) 2.55 (1.09) 99 .0689
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN FUND
CLASS A
4/24/90* to 12/31/90..... 2.67+ 41,499 -- 5.85+ 2.11+ 3.74+ 13 N/A
1991..................... 21.51 60,888 .83 3.20 1.88 2.14 51 N/A
1992..................... (1.00) 65,537 1.29 2.25 1.78 1.76 75 N/A
1993..................... 7.18 58,176 1.45 2.00 1.83 1.62 131 N/A
1994..................... (3.45) 50,714 1.63 1.91 1.88 1.66 124 N/A
1995..................... 26.71 55,442 1.58 3.08 1.83 2.83 135 N/A
1996..................... 10.62 56,530 1.53 2.93 1.78 2.68 146 .0691
CLASS B
1/12/95* to 12/31/95..... 25.74 270 2.41+ 2.24+ 2.67+ 1.98+ 135 N/A
1996..................... 9.86 1,032 2.32 2.14 2.49 1.97 146 .0691
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations of Class A shares or date Class B shares first
offered
** Calculated without sales charges
+ Annualized
++ Net of expenses waived or assumed (Note 3)
+++ Average commission rate as required by amended disclosure requirements
effective for fiscal years beginning on or after September 1, 1995.
See notes to financial statements
51
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Trustees of
First Investors Series Fund
We have audited the accompanying statement of assets and liabilities, including
the portfolios of investments, of the Blue Chip, Insured Intermediate Tax
Exempt, Investment Grade, Special Situations and Total Return Funds (comprising
First Investors Series Fund), as of December 31, 1996, 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 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 the
Blue Chip, Insured Intermediate Tax Exempt, Investment Grade, Special Situations
and Total Return Funds of First Investors Series Fund at December 31, 1996, and
the results of their operations, changes in their net assets and financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 31, 1997
52
<PAGE>
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53
<PAGE>
FIRST INVESTORS SERIES FUND
TRUSTEES
- -------------------------------------------
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
NANCY W. JONES
Vice President
PATRICIA D. POITRA
Vice President
CLARK D. WAGNER
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
54
<PAGE>
FIRST INVESTORS SERIES FUND
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
CUSTODIAN (Total Return Fund Only)
BROWN BROTHERS HARRIMAN & CO.
40 Water Street
Boston, MA 02109
TRANSFER AGENT
ADMINISTRATIVE DATA
MANAGEMENT CORP.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
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.
55
<PAGE>
FIRST
INVESTORS
SERIES FUND
Blue Chip Fund
Insured Intermediate
Tax Exempt Fund
Investment Grade Fund
Special Situations Fund
Total Return Fund
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:
FIBC103
