<PAGE>
CHIEF INVESTMENT OFFICER'S MARKET OVERVIEW LETTER
FIRST INVESTORS SERIES FUND
BLUE CHIP FUND, INSURED INTERMEDIATE TAX EXEMPT FUND,
INVESTMENT GRADE FUND, SPECIAL SITUATIONS FUND
and TOTAL RETURN FUND
Dear Investor:
We are pleased to present the semi-annual report for the funds of First
Investors Series Fund for the six months ended June 30, 1998. Although both the
bond and stock markets suffered setbacks at times during the first six months of
the year, the combination of moderate growth, low inflation, and respectable
corporate earnings reports helped provide a positive environment for investors
in most types of funds.
The U.S. economy remained strong for the first half of 1998, with sustained,
moderate growth and low levels of inflation and unemployment. Inflation remained
low, as the Consumer Price Index rose just 1.7% for the twelve months ended June
30. The unemployment rate continued to be low, at 4.5% as of June 30, 1998.
Consumer confidence remained high, encouraged by the robust domestic economy and
rising income levels.
In general, our long-term outlook for the financial markets continues to be
positive. The economy appears to be growing moderately, inflation remains
subdued and the Federal Reserve appears unlikely to tolerate unsustainably fast
economic growth. In regard to the stock market, we are encouraged by the
underlying fundamentals of the U.S. economy. However, we are cautioned by a
number of situations, including the struggles in Asia. We are concerned about
the effect this region's difficulties may have on U.S. growth and corporate
earnings. We are also concerned about the relative lack of pricing power and the
prospects that the lofty level of gains posted year-to-date can continue into
the second half of 1998.
With regard to the bond market, interest rates continue to remain in a tight
range; we believe the Federal Reserve is likely to maintain current interest
rates. Continued weak Asian markets, low inflation in the U.S. and the Federal
budget surplus should support an environment of low interest rates and high bond
prices. However, the continued strength of the U.S. economy could result in
higher interest rates and inflation, notwithstanding Asia. In this event, bond
fund values would decline.
Thank you for your continued confidence in First Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Clark D. Wagner
Chief Investment Officer
First Investors Management Company, Inc.
July 31, 1998
1
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--94.5%
BASIC MATERIALS--2.7%
44,600 Allegheny Teledyne, Inc. $ 1,020,225 $ 22
81,500 *Bethlehem Steel Corporation 1,013,656 22
49,600 Bowater, Inc. 2,343,600 50
61,200 Du Pont (E.I.) de Nemours & Company 4,567,050 98
42,500 Ecolab, Inc. 1,317,500 28
42,100 Monsanto Company 2,352,337 51
- ---------------------------------------------------------------------------------------
12,614,368 271
- ---------------------------------------------------------------------------------------
CAPITAL GOODS--9.3%
60,200 AMP, Inc. 2,069,375 44
53,600 Avery Dennison Corporation 2,881,000 62
39,500 Corning, Inc. 1,372,625 29
23,900 Emerson Electric Company 1,442,962 31
151,700 General Electric Company 13,804,700 297
89,700 Ingersoll-Rand Company 3,952,406 85
10,600 Lockheed Martin Corporation 1,122,275 24
21,000 Minnesota Mining and Manufacturing Company 1,725,937 37
35,400 Pitney-Bowes, Inc. 1,703,625 37
39,200 Textron, Inc. 2,810,150 60
63,300 Tyco International, Ltd. 3,987,900 86
12,500 United Technologies Corporation 1,156,250 25
103,500 *Waste Management, Inc. 5,110,312 110
- ---------------------------------------------------------------------------------------
43,139,517 927
- ---------------------------------------------------------------------------------------
COMMUNICATION SERVICES--5.2%
98,100 *AirTouch Communications, Inc. 5,732,719 123
84,000 Bell Atlantic Corporation 3,832,500 82
24,800 Century Telephone Enterprises, Inc. 1,137,700 24
52,300 GTE Corporation 2,909,187 63
17,700 MCI Communications Corporation 1,028,812 22
99,459 *Qwest Communications International, Inc. 3,468,633 75
- ---------------------------------------------------------------------------------------
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMUNICATION SERVICES (continued)
95,600 SBC Communications, Inc. $ 3,824,000 $ 82
49,700 *WorldCom, Inc. 2,407,344 52
- ---------------------------------------------------------------------------------------
24,340,895 523
- ---------------------------------------------------------------------------------------
CONSUMER CYCLICALS--9.8%
35,400 *CompUSA, Inc. 639,412 14
68,600 *Costco Companies, Inc. 4,326,087 93
24,800 Federal-Mogul Corporation 1,674,000 36
64,400 *Federated Department Stores, Inc. 3,465,525 74
60,300 Hilton Hotels Corporation 1,718,550 37
39,450 Home Depot, Inc. 3,276,816 70
92,300 *Lear Corporation 4,736,144 102
60,300 Masco Corporation 3,648,150 78
71,200 Mattel, Inc. 3,012,650 65
35,500 McGraw-Hill Companies, Inc. 2,895,469 62
61,000 New York Times Company - Class "A" 4,834,250 104
52,600 Ogden Corporation 1,456,362 31
56,600 Omnicom Group, Inc. 2,822,925 61
116,000 Wal-Mart Stores, Inc. 7,047,000 151
- ---------------------------------------------------------------------------------------
45,553,340 978
- ---------------------------------------------------------------------------------------
CONSUMER STAPLES--13.9%
69,600 Anheuser-Busch Companies, Inc. 3,284,250 71
80,250 *Apollo Group, Inc. 2,653,266 57
64,800 Bestfoods 3,762,450 81
53,000 *Chancelor Media Corporation 2,631,784 57
63,900 Coca-Cola Company 5,463,450 117
32,400 Comcast Corporation - Special Class "A" 1,315,239 28
35,600 Fort James Corporation 1,584,200 34
91,900 General Mills, Inc. 6,283,663 135
100,000 *Host Marriott Corporation 1,781,250 38
28,800 Kimberly-Clark Corporation 1,321,200 28
70,900 *Outback Steakhouse, Inc. 2,765,100 59
65,900 Procter & Gamble Company 6,001,019 129
- ---------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES (continued)
72,500 Rite Aid Corporation $ 2,723,281 $ 59
35,400 Rubbermaid, Inc. 1,174,838 25
49,590 *Safeway, Inc. 2,017,693 43
67,500 Sara Lee Corporation 3,775,781 81
62,830 *Tele-Communications, Inc. Liberty Media Group -
Series "A" 2,438,589 52
57,300 Time Warner, Inc. 4,895,569 105
46,400 Unilever, N.V. 3,662,700 79
72,400 *USA Networks, Inc. 1,819,050 39
30,800 Walt Disney Company 3,235,925 70
- ---------------------------------------------------------------------------------------
64,590,297 1,387
- ---------------------------------------------------------------------------------------
ENERGY--7.0%
49,200 Amoco Corporation 2,047,950 44
33,300 Chevron Corporation 2,765,981 59
71,000 ENSCO International, Inc. 1,233,625 27
124,600 Exxon Corporation 8,885,538 191
12,300 Kerr-McGee Corporation 711,863 15
56,600 Mobil Corporation 4,336,975 93
105,400 Royal Dutch Petroleum Company 5,777,238 124
24,500 Schlumberger, Ltd. 1,673,656 36
31,900 Texaco, Inc. 1,904,031 41
106,700 Tosco Corporation 3,134,313 67
- ---------------------------------------------------------------------------------------
32,471,170 697
- ---------------------------------------------------------------------------------------
FINANCIAL--16.9%
37,000 Allstate Corporation 3,387,813 73
23,500 American Express Company 2,679,000 58
36,200 American International Group, Inc. 5,285,200 114
34,800 Banc One Corporation 1,942,275 42
21,200 Bank of New York Company, Inc. 1,286,575 28
34,800 BankAmerica Corporation 3,008,025 65
105,600 BankBoston Corporation 5,874,000 126
63,600 Chase Manhattan Corporation 4,801,800 103
24,800 Citicorp 3,701,400 80
- ---------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
71,400 Conseco, Inc. $ 3,337,950 $ 72
59,200 Fannie Mae 3,596,400 77
44,200 Fifth Third Bancorp 2,784,600 60
16,300 First Chicago NBD Corporation 1,444,588 31
88,900 First Union Corporation 5,178,425 111
79,300 Freddie Mac 3,732,056 80
24,800 Golden West Financial Corporation 2,636,550 57
45,900 Jefferson-Pilot Corporation 2,659,331 57
38,200 Merrill Lynch & Company, Inc. 3,523,950 76
24,900 Morgan Stanley, Dean Witter, Discover and Company 2,275,238 49
36,700 NationsBank Corporation 2,807,550 60
141,400 Norwest Corporation 5,284,825 114
53,200 TIG Holdings, Inc. 1,223,600 26
71,200 Travelers Group, Inc. 4,316,500 93
21,300 Wachovia Corporation 1,799,850 39
- ---------------------------------------------------------------------------------------
78,567,501 1,691
- ---------------------------------------------------------------------------------------
HEALTHCARE--11.0%
65,400 Abbott Laboratories 2,673,225 57
48,200 American Home Products Corporation 2,494,350 54
30,000 Baxter International, Inc. 1,614,375 35
53,200 Bristol-Myers Squibb Company 6,114,675 131
35,600 *Genentech, Inc. 2,416,350 52
60,450 *Health Management Associates, Inc. - Class "A" 2,021,297 43
74,800 *Healthsouth Corporation 1,996,225 43
63,600 Johnson & Johnson 4,690,500 101
53,200 Medtronic, Inc. 3,391,500 73
64,900 Merck & Company, Inc. 8,680,375 187
40,300 Pfizer, Inc. 4,380,106 94
27,900 *Tenet Healthcare Corporation 871,875 19
100,700 *Total Renal Care Holdings, Inc. 3,474,150 75
30,200 United Healthcare Corporation 1,917,700 41
65,400 Warner-Lambert Company 4,537,125 97
- ---------------------------------------------------------------------------------------
51,273,828 1,102
- ---------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS BLUE CHIP FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--14.8%
85,100 Advanced-Micro Devices, Inc. $ 1,452,019 $ 31
71,600 *Altera Corporation 2,116,675 45
21,200 *ASM Lithography Holding, N.V. 616,125 13
35,400 *Bay Networks, Inc. 1,141,650 25
106,700 *Cadence Design Systems, Inc. 3,334,375 72
54,100 *Cisco Systems, Inc. 4,980,581 107
142,200 Comdisco, Inc. 2,701,800 58
85,000 Compaq Computer Corporation 2,411,875 52
17,700 *Dell Computer Corporation 1,642,781 35
140,000 First Data Corporation 4,663,750 100
70,900 *Fore Systems, Inc. 1,878,850 40
30,000 Grainger (W.W.), Inc. 1,494,375 32
70,800 HBO & Company 2,495,700 54
72,100 Intel Corporation 5,344,413 115
50,500 International Business Machines Corporation 5,798,031 125
65,200 Lucent Technologies, Inc. 5,423,825 117
51,500 *Microsoft Corporation 5,581,313 120
31,200 Northern Telecom, Ltd. 1,770,600 38
19,200 Raytheon Company - Class "B" 1,135,200 24
70,900 *Seagate Technology, Inc. 1,688,306 36
82,700 *Sterling Commerce, Inc. 4,010,950 86
35,600 *Tellabs, Inc. 2,549,850 55
46,700 Xerox Corporation 4,745,888 102
- ---------------------------------------------------------------------------------------
68,978,932 1,482
- ---------------------------------------------------------------------------------------
UTILITIES--3.9%
42,500 *AES Corporation 2,233,906 48
44,400 Duke Energy Corporation 2,630,700 57
88,800 Enron Corporation 4,800,750 103
55,300 FPL Group, Inc. 3,483,900 75
143,600 Williams Companies, Inc. 4,846,500 104
- ---------------------------------------------------------------------------------------
17,995,756 387
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $303,686,653) 439,525,604 9,445
- ---------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--5.1%
$ 5,700M Associates Corp. of North America, 5.51%, 7/14/98 $ 5,688,659 $ 122
2,000M Bell Atlantic Financial Corp., 5.51%, 7/10/98 1,997,245 43
5,400M Carolina Power & Light Co., 5.51%, 7/7/98 5,395,041 116
6,000M Dupont (E.I.) de Nemours & Co., 5.50%, 7/8/98 5,993,595 129
2,750M General Electric Capital Corp., 5.60%, 7/28/98 2,738,450 59
700M Merrill Lynch & Co., Inc., 5.55%, 7/30/98 696,870 15
1,400M National Rural Utilities Coop. Fin. Corp., 5.50%,
7/17/98 1,396,578 30
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$23,906,438) 23,906,438 514
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $327,593,091) 99.6% 463,432,042 9,959
OTHER ASSETS, LESS LIABILITIES .4 1,920,213 41
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $465,352,255 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
7
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INSURED INTERMEDIATE TAX EXEMPT FUND
June 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
MUNICIPAL BONDS--102.7%
ALABAMA--3.9%
$ 500M Mobile General Obligation, Zero Coupon, 2/15/2008 $ 317,575 $ 387
- -------------------------------------------------------------------------------------
ALASKA--2.7%
200M Anchorage General Obligation, 6.50%, 7/1/2004 223,224 272
- -------------------------------------------------------------------------------------
ARIZONA--21.1%
255M Apache Junction Water Utils. Cmnty. Fac. Dist.
Rev., 5%, 7/1/2003 264,088 322
275M Maricopa County Uni. Sch. Dist. #216 (Aqua Fria),
4.30%, 7/1/2006 272,973 333
275M Maricopa County Uni. Sch. Dist. Gen. Oblig. #44
(Avondale), 4.375%, 7/1/2008 273,127 333
250M Maricopa County Uni. Sch. Dist. Gen. Oblig. #80
(Chandler), 6.60%, 7/1/2006 287,420 350
250M Phoenix Civic Impt. Corp. Mun. Facs. Excise Tax
Rev., 6.75%, 7/1/2004 282,585 344
350M Yuma County Sch. Dist. #13 (Crane), 4.40%,
7/1/2007 349,734 426
- -------------------------------------------------------------------------------------
1,729,927 2,108
- -------------------------------------------------------------------------------------
CALIFORNIA--2.0%
150M Pittsburg Pub. Fing. Auth. Wastewater Rev.,
6.80%, 6/1/2001* 164,250 200
- -------------------------------------------------------------------------------------
ILLINOIS--21.5%
Cook County High School District General
Obligation #205:
250M 5.40%, 12/1/2001 260,372 317
200M 5.90%, 12/1/2003 211,750 258
250M Chicago Board of Education, 6%, 12/1/2007 278,680 340
250M Chicago General Obligation, 6.25%, 10/31/2001 266,662 325
250M Northwest Subn. Mun. Jt. Action Water Agy.,
6.35%, 5/1/2006 282,645 344
400M Regional Transportation Authority, 7.75%,
6/1/2003 460,388 561
- -------------------------------------------------------------------------------------
1,760,497 2,145
- -------------------------------------------------------------------------------------
INDIANA--2.0%
150M Valparaiso Indpt. Multi-Schools Bldg. Corp.,
6.625%, 7/1/2002* 166,313 203
- -------------------------------------------------------------------------------------
KENTUCKY--3.1%
200M Louisville & Jefferson County Met. Sewer
District, 10%, 5/15/2004 258,344 315
- -------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
LOUISIANA--2.3%
$ 175M Louisiana General Obligation, 7%, 5/1/2001 $ 188,344 $ 229
- -------------------------------------------------------------------------------------
MICHIGAN--13.5%
300M Allegan Pub. Schl. Dist. Gen. Oblig., 6.50%,
5/1/2007 344,670 420
1,000M Brighton Area Schl. Dist. Gen. Oblig., Zero
Coupon, 5/1/2005* 366,250 446
350M Greater Detroit Resources Recovery Authority
Revenue, 6.25%, 12/13/2007 394,359 480
- -------------------------------------------------------------------------------------
1,105,279 1,346
- -------------------------------------------------------------------------------------
NEW JERSEY--2.8%
200M New Jersey Econ. Dev. Auth. Mkt. Transition Fac.
Rev., 7%, 7/1/2004* 228,250 278
- -------------------------------------------------------------------------------------
NEW YORK--7.7%
New York City General Obligation:
150M 6.625%, 8/1/2002* 166,125 202
250M 8%, 8/1/2005 302,188 368
150M Niagara Falls Bridge Commission, 6.30%,
10/1/2002* 165,375 202
- -------------------------------------------------------------------------------------
633,688 772
- -------------------------------------------------------------------------------------
OHIO--2.7%
200M Columbus City Sch. Dist. Gen. Oblig., 6.65%,
12/1/2002* 224,000 273
- -------------------------------------------------------------------------------------
OKLAHOMA--3.1%
250M Oklahoma State Cap. Impt. Auth. Lease Rev.,
4.50%, 5/1/2007 253,620 309
- -------------------------------------------------------------------------------------
OREGON--1.9%
150M Tillamook General Obligation, 5.75%, 1/15/2002 158,699 193
- -------------------------------------------------------------------------------------
PENNSYLVANIA--2.8%
200M Pennsylvania Intergovernmental Coop. Auth. Spec.
Tax Rev., 7%, 6/15/2004 228,500 278
- -------------------------------------------------------------------------------------
RHODE ISLAND--2.7%
200M Rhode Island Depositors Econ. Protection Corp.,
7.10%, 8/1/2001* 221,000 269
- -------------------------------------------------------------------------------------
TEXAS--4.0%
300M Harris County Toll Road Gen. Oblig., 6.50%,
8/15/2002* 331,875 404
- -------------------------------------------------------------------------------------
</TABLE>
9
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INSURED INTERMEDIATE TAX EXEMPT FUND
June 30, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -------------------------------------------------------------------------------------
<C> <S> <C> <C>
WASHINGTON--2.9%
$ 200M Snohomish & Island Counties Schl. Dist. Gen.
Oblig. #401 (Stanwood), 7%, 12/15/2005 $ 234,348 $ 286
- -------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $8,047,584) 102.7% 8,427,733 10,267
EXCESS OF LIABILITIES OVER OTHER ASSETS (2.7) (219,300) (267)
- -------------------------------------------------------------------------------------
NET ASSETS 100.0% $8,208,433 $10,000
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
</TABLE>
* Municipal bonds which have been prerefunded are shown maturing at the
prerefunded call date.
See notes to financial statements
10
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
June 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CORPORATE BONDS--93.4%
AEROSPACE/DEFENSE--4.5%
$ 750M Lockheed Martin Corp., 7.25%, 2006 $ 797,532 $ 157
750M Rockwell International Corp., 8.375%, 2001 793,172 157
700M Thiokol Corp., 6.625%, 2008 705,013 139
- --------------------------------------------------------------------------------------
2,295,717 453
- --------------------------------------------------------------------------------------
APPAREL/TEXTILES--2.0%
250M VF Corp., 9.50%, 2001 272,727 54
740M Westpoint Stevens, Inc., 7.875%, 2008 (Note 5) 748,325 148
- --------------------------------------------------------------------------------------
1,021,052 202
- --------------------------------------------------------------------------------------
AUTOMOTIVE--1.5%
750M Navistar International, Inc., 7%, 2003 751,875 148
- --------------------------------------------------------------------------------------
CHEMICALS--3.2%
750M Du Pont (E.I.) de Nemours & Co., 8.125%, 2004 828,334 164
700M Lubrizol Corp., 7.25%, 2025 771,984 152
- --------------------------------------------------------------------------------------
1,600,318 316
- --------------------------------------------------------------------------------------
CONGLOMERATES--3.1%
700M Hanson Overseas BV, 7.375%, 2003 737,351 146
750M Tenneco, Inc., 7.875%, 2027 843,078 166
- --------------------------------------------------------------------------------------
1,580,429 312
- --------------------------------------------------------------------------------------
CONSUMER PRODUCTS--2.0%
1,000M Mattel, Inc., 6.75%, 2000 1,011,112 200
- --------------------------------------------------------------------------------------
CONSUMER STAPLES--1.4%
700M Kroger Co., 7%, 2018 719,708 142
- --------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--11.9%
750M Baltimore Gas and Electric Co., 6.50%, 2003 765,553 151
735M Consumers Energy Co., 6.375%, 2008 (Note 5) 732,768 145
1,000M Duke Energy Corp., 5.875%, 2003 997,979 197
800M Kansas Gas & Electric Co., 7.60%, 2003 851,765 168
- --------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
June 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRIC & GAS UTILITIES (continued)
$ 350M Niagara Mohawk Power Corp., 7.625%, 2005 $ 357,000 $ 70
525M Old Dominion Electric Cooperative, 7.97%, 2002 549,540 108
750M Philadelphia Electric Co., 8%, 2002 795,433 157
925M Southwestern Electric Power Co., 7%, 2007 981,406 194
- --------------------------------------------------------------------------------------
6,031,444 1,190
- --------------------------------------------------------------------------------------
ENERGY--5.7%
700M Baroid Corp., 8%, 2003 756,318 149
500M Mobil Corp., 8.625%, 2021 643,896 127
725M Occidental Petroleum Corp., 6.50%, 2005 730,683 144
750M Phillips Petroleum Co., 7.20%, 2023 758,383 150
- --------------------------------------------------------------------------------------
2,889,280 570
- --------------------------------------------------------------------------------------
ENTERTAINMENT/LEISURE--1.4%
700M Walt Disney Company, 6.75%, 2006 732,130 145
- --------------------------------------------------------------------------------------
FINANCIAL SERVICES--17.2%
660M BankAmerica Corp., 9.50%, 2001 717,656 142
700M Chemical Bank, Inc., 7%, 2005 732,548 145
800M Citicorp, 8%, 2003 859,910 170
800M First Union Corp., 8.125%, 2002 857,538 169
750M Fleet Capital, 7.92%, 2026 812,972 161
700M Key Corp., 7.50%, 2006 752,520 149
750M Mellon Bank NA, 6.50%, 2005 767,612 152
550M Meridian Bancorp, 7.875%, 2002 584,784 115
925M Morgan Guaranty Trust Co., 7.375%, 2002 965,486 191
875M NationsBank Corp., 8.50%, 1999 889,488 176
700M NationsBank Corp., 8.125%, 2002 752,109 148
- --------------------------------------------------------------------------------------
8,692,623 1,718
- --------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--7.2%
750M Anheuser-Busch Cos., Inc., 7%, 2005 770,672 152
500M Coca-Cola Enterprises, Inc., 7.875%, 2002 528,772 104
700M Hershey Foods Corp., 6.70%, 2005 727,815 144
- --------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
FOOD/BEVERAGE/TOBACCO (continued)
$ 900M Philip Morris Cos., Inc., 7.125%, 2002 $ 926,468 $ 183
650M Universal Corp., 9.25%, 2001 696,828 138
- --------------------------------------------------------------------------------------
3,650,555 721
- --------------------------------------------------------------------------------------
GAS TRANSMISSION--2.9%
700M Columbia Gas System, Inc., 6.80%, 2005 720,388 142
700M Enron Corp., 7.125%, 2007 733,333 145
- --------------------------------------------------------------------------------------
1,453,721 287
- --------------------------------------------------------------------------------------
HEALTHCARE--1.4%
700M Warner Lambert Co., 6%, 2008 701,265 138
- --------------------------------------------------------------------------------------
INVESTMENT/FINANCE COMPANIES--5.0%
700M Associates Corp. of North America, 7.875%, 2001 739,552 146
700M General Electric Capital Corp., 7.875%, 2006 787,370 155
700M General Motors Acceptance Corp., 6.625%, 2005 721,388 142
250M International Lease Finance Corp., 8.875%, 2001 268,371 53
- --------------------------------------------------------------------------------------
2,516,681 496
- --------------------------------------------------------------------------------------
MEDIA (CABLE TV/BROADCASTING)--4.5%
700M New York Times Co., Inc., 7.625%, 2005 761,162 150
750M News America Holdings, Inc., 8.50%, 2005 831,691 164
700M PanAmSat Corp., 6.375%, 2008 (Note 5) 696,858 138
- --------------------------------------------------------------------------------------
2,289,711 452
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.6%
750M Temple Inland, Inc., 9%, 2001 808,160 160
- --------------------------------------------------------------------------------------
RETAIL - GENERAL MERCHANDISE--3.1%
700M Federated Department Stores, Inc., 7.45%, 2017 754,456 149
700M Wal-Mart Stores, Inc., 8%, 2006 790,887 156
- --------------------------------------------------------------------------------------
1,545,343 305
- --------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS INVESTMENT GRADE FUND
June 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY--3.7%
$ 750M International Business Machines Corp., 7%, 2025 $ 802,954 $ 159
300M Raytheon Co., 6.55%, 2010 303,317 60
725M Xerox Corp., 7.20%, 2016 788,310 156
- --------------------------------------------------------------------------------------
1,894,581 375
- --------------------------------------------------------------------------------------
TELECOMMUNICATIONS--8.6%
850M MCI Communication Corp., 7.50%, 2004 904,546 179
700M New York Telephone Co., 7.25%, 2024 725,865 143
1,000M Pacific Bell Telephone Co., 7%, 2004 1,046,127 207
700M TCI Communications Inc., 6.375%, 2003 706,318 139
700M Teleport Communications Group, Inc., 0%-11.125%,
2007 598,500 118
368M WorldCom, Inc., 8.875%, 2006 400,200 79
- --------------------------------------------------------------------------------------
4,381,556 865
- --------------------------------------------------------------------------------------
TRANSPORTATION--1.5%
700M Norfolk Southern Corp., 7.35%, 2007 751,836 148
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $45,482,044) 47,319,097 9,343
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--4.4%
2,200M U.S. Treasury Note, 5.50%, 2003 (cost $2,194,672) 2,200,689 435
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--.6%
300M Ford Motor Credit Corp., 5.61%, 7/2/98 (cost
$299,953) 299,953 59
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $47,976,669) 98.4% 49,819,739 9,837
OTHER ASSETS, LESS LIABILITIES 1.6 827,677 163
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $50,647,416 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
14
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--89.8%
BASIC MATERIALS--4.2%
68,000 Birmingham Steel Corporation $ 841,500 $ 37
48,600 Boise Cascade Corporation 1,591,650 70
41,000 *ChiRex, Inc. 720,062 32
39,800 *Corn Products International, Inc. 1,348,225 59
20,300 Crompton & Knowles Corporation 511,306 22
17,100 Dexter Corporation 543,994 24
90,600 *Gaylord Container Corporation - Class "A" 696,487 30
34,300 Lilly Industries, Inc. - Class "A" 741,737 32
51,800 Louisiana-Pacific Corporation 945,350 41
22,800 Schulman (A.), Inc. 446,025 20
17,100 Southdown, Inc. 1,220,512 53
- ---------------------------------------------------------------------------------------
9,606,848 420
- ---------------------------------------------------------------------------------------
CAPITAL GOODS--4.5%
55,800 *Checkpoint Systems, Inc. 788,175 34
35,800 Columbus McKinnon Corporation 930,800 41
27,600 *Eastern Environmental Services, Inc. 938,400 41
74,900 Gleason Corporation 2,106,562 92
69,000 *ITEQ, Inc. 513,187 22
16,300 JLG Industries, Inc. 330,075 14
120,900 *Newpark Resources, Inc. 1,345,012 59
38,568 *Sanmina Corporation 1,672,887 73
50,100 Titan International, Inc. 851,700 37
18,700 *Tower Automotive, Inc. 801,762 35
- ---------------------------------------------------------------------------------------
10,278,560 448
- ---------------------------------------------------------------------------------------
COMMUNICATION SERVICES--5.5%
40,000 Cincinnati Bell, Inc. 1,145,000 50
47,200 *Commonwealth Telephone Enterprises, Inc. 1,244,900 54
67,800 ECI Telecommunications, Ltd. (ADR) 2,567,925 112
47,200 *ICG Communications, Inc. 1,725,750 76
41,100 *IXC Communications, Inc. 1,993,350 87
46,300 *Tel-Save Holdings, Inc. 682,925 30
- ---------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMUNICATION SERVICES (continued)
30,200 *Western Wireless Corporation - Class "A" $ 602,112 $ 26
54,760 *WorldCom, Inc. 2,652,437 116
- ---------------------------------------------------------------------------------------
12,614,399 551
- ---------------------------------------------------------------------------------------
CONSUMER CYCLICALS--16.1%
34,000 *American Skiing Company 442,000 19
16,000 *Budget Group, Inc. - Class "A" 511,000 22
53,300 *Building Materials Holding Corporation 736,206 32
13,000 *Champion Enterprises, Inc. 381,875 17
18,500 *Children's Place Retail Stores, Inc. 181,531 8
5,100 Dover Downs Entertainment, Inc. 158,100 7
54,200 *Eagle Hardware & Garden, Inc. 1,253,375 55
36,000 Ethan Allen Interiors, Inc. 1,797,750 79
30,450 *Fossil, Inc. 757,444 33
33,700 Fred's, Inc. 859,350 38
33,600 Interface, Inc. 678,300 30
81,500 *International Comfort Products Corporation 988,187 43
37,500 *Just For Feet, Inc. 1,068,750 47
13,600 Kellwood Company 486,200 21
10,200 *Lamar Advertising Company 365,925 16
37,250 *NCO Group, Inc. 819,500 36
70,100 Oakwood Homes Corporation 2,103,000 92
64,300 *OfficeMax, Inc. 1,060,950 46
88,900 Ogden Corporation 2,461,419 108
70,600 *PETsMART, Inc. 706,000 31
16,800 Pillowtex Corporation 674,100 29
79,583 *Prime Hospitality Corporation 1,387,729 61
27,400 *Proffitt's, Inc. 1,106,275 48
78,500 *Royal Group Technologies, Ltd. 2,276,500 100
101,200 *Saks Holdings, Inc. 2,795,650 122
41,700 St. John Knits, Inc. 1,610,662 70
35,400 *StaffMark, Inc. 1,296,525 57
36,300 *Stage Stores, Inc. 1,642,575 72
33,600 Talbots, Inc. 879,900 38
- ---------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
12,000 *Tech Data Corporation $ 514,500 $ 23
20,600 *Tractor Supply Company 512,425 22
64,700 *Travis Boats & Motors, Inc. 1,585,150 69
17,329 *U.S. Office Products Company 337,915 15
108,500 Wolverine World Wide, Inc. 2,353,094 103
- ---------------------------------------------------------------------------------------
36,789,862 1,609
- ---------------------------------------------------------------------------------------
CONSUMER STAPLES--13.5%
61,400 Apple South, Inc. 802,037 35
28,600 *Beringer Wine Estates Holdings, Inc. - Class "B" 1,260,187 55
30,400 *Chancelor Media Corporation 1,509,552 66
128,000 *Cinar Films, Inc. - Class "B" 2,496,000 109
9,045 *Clear Channel Communications 987,036 43
22,000 Comcast Corporation - Special Class "A" 893,064 39
30,700 Earthgrains Company 1,715,362 75
30,600 *Emmis Broadcasting Corporation - Class "A" 1,463,062 64
166,400 *Four Media Company 1,456,000 64
103,400 Global-Tech Appliances, Inc. 1,486,375 65
54,300 *Jones Intercable, Inc. - Class "A" 1,357,500 59
137,700 *Metromedia International Group, Inc. 1,643,794 72
28,100 *Pre-Paid Legal Services, Inc. 886,906 39
59,400 Richfood Holdings, Inc. 1,228,837 54
103,000 Rite Aid Corporation 3,868,937 169
54,000 *Sinclair Broadcast Group, Inc. - Class "A" 1,552,500 68
53,550 *Steiner Leisure, Ltd. 1,619,887 71
119,675 *Tele-Communications, Inc. Liberty Media Group -
Series "A" 4,644,886 203
- ---------------------------------------------------------------------------------------
30,871,922 1,350
- ---------------------------------------------------------------------------------------
ENERGY--3.4%
22,800 *EVI Weatherford, Inc. 846,450 37
62,300 *Nabors Industries, Inc. 1,234,319 54
76,400 *Precision Drilling Corporation - Class "A" 1,499,350 66
49,800 *R&B Falcon Corporation 1,126,725 49
- ---------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENERGY (continued)
20,700 *Stolt Comex Seaway SA $ 401,062 $ 18
10,350 *Stolt Comex Seaway SA (ADR) 181,125 8
31,300 Tosco Corporation 919,437 40
33,200 *Veritas DGC, Inc. 1,657,925 73
- ---------------------------------------------------------------------------------------
7,866,393 345
- ---------------------------------------------------------------------------------------
FINANCIAL--14.0%
17,000 Astoria Financial Corporation 909,500 40
129,200 Cash America International, Inc. 1,970,300 86
27,600 Centura Banks, Inc. 1,725,000 75
66,990 Charter One Financial, Inc. 2,256,726 99
51,750 Commercial Federal Corporation 1,636,594 72
34,060 Conseco, Inc. 1,592,305 70
31,100 Dime Bancorp, Inc. 931,056 41
33,700 ESG Re, Ltd. 728,763 32
50,556 Excel Realty Trust, Inc. 1,456,645 64
30,500 First Tennessee National Corporation 962,656 42
37,400 GreenPoint Financial Corporation 1,407,175 62
34,800 *HealthCare Financial Partners, Inc. 2,133,675 93
89,100 *Imperial Credit Industries, Inc. 2,093,850 92
65,100 Innkeepers USA Trust 821,888 36
47,700 *LINC Capital, Inc. 843,694 37
67,700 Manufactured Home Communities, Inc. 1,633,263 71
16,900 Medallion Financial Corporation 464,750 20
45,462 Mercantile Bancorporation, Inc. 2,290,148 100
40,800 Peoples Heritage Financial Group, Inc. 963,900 42
64,075 Resource Bancshares Mortgage Group, Inc. 1,193,397 52
16,000 *Sunterra Corporation 264,000 12
54,400 TCF Financial Corporation 1,604,800 70
30,250 Washington Federal, Inc. 835,656 37
69,100 Westfield America, Inc. 1,269,713 56
- ---------------------------------------------------------------------------------------
31,989,454 1,401
- ---------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE--10.3%
130,800 *American Oncology Resources, Inc. $ 1,598,219 $ 70
67,200 *CardioVascular Dynamics, Inc. 373,800 16
23,900 *Centocor, Inc. 866,375 38
70,300 *Dura Pharmaceuticals, Inc. 1,572,963 69
15,100 *Epix Medical, Inc. 154,775 7
51,100 *Gilead Sciences, Inc. 1,638,394 72
25,000 *Health Care and Retirement Corporation 985,938 43
71,800 *Health Systems Design Corporation 513,815 22
121,900 *IDEXX Laboratories, Inc. 3,032,263 133
13,400 *IMPATH, Inc. 325,788 14
69,500 Jones Pharma, Inc. 2,302,188 101
80,100 *Kensey Nash Corporation 760,950 33
60,500 *Medicis Pharmaceutical Corporation - Class "A" 2,208,250 97
73,600 Mylan Laboratories, Inc. 2,212,600 97
41,700 *Pediatric Services of America, Inc. 646,350 28
143,800 *PharMerica, Inc. 1,734,588 76
33,600 *Quorum Health Group, Inc. 890,400 39
67,200 *Simione Central Holdings, Inc. 457,800 20
115,200 *Vysis, Inc. 1,152,000 50
- ---------------------------------------------------------------------------------------
23,427,456 1,025
- ---------------------------------------------------------------------------------------
TECHNOLOGY--16.3%
24,100 *Altera Corporation 712,456 31
21,300 *Ascend Communications, Inc. 1,055,681 46
28,200 *Cisco Systems, Inc. 2,596,163 114
75,100 *Condor Technology Solutions, Inc. 1,107,725 48
87,100 *EMC Corporation 3,903,169 171
26,900 *Envoy Corporation 1,274,388 56
34,700 *Etec Systems, Inc. 1,221,006 53
17,500 *Exodus Communications, Inc. 783,125 34
67,100 *Fore Systems, Inc. 1,778,150 78
55,050 *Information Management Resources, Inc. 1,861,378 81
12,100 Intel Corporation 896,913 39
6,700 *Lycos, Inc. 505,013 22
- ---------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS SPECIAL SITUATIONS FUND
June 30, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
34,260 National Data Corporation $ 1,498,875 $ 66
35,600 *Network Appliance, Inc. 1,386,175 61
89,300 *PairGain Technologies, Inc. 1,557,169 68
48,600 *Platinum Technology, Inc. 1,388,138 61
40,400 *Powerwave Technologies, Inc. 676,700 30
46,200 *PRI Automation, Inc. 788,288 34
27,200 *Rambus, Inc. 1,662,600 73
61,200 *Remedy Corporation 1,040,400 46
35,600 *Saville Systems Ireland PLC (ADR) 1,784,450 78
65,500 *Sterling Commerce, Inc. 3,176,750 139
28,600 *Synopsys, Inc. 1,308,450 57
169,100 *TCSI Corporation 993,463 43
57,100 *Verilink Corporation 471,075 21
22,100 *Wind River Systems, Inc. 792,838 35
30,100 *Xilinx, Inc. 1,023,400 45
- ---------------------------------------------------------------------------------------
37,243,938 1,630
- ---------------------------------------------------------------------------------------
TRANSPORTATION--1.1%
12,400 *FDX Corporation 778,100 34
167,000 *Transportacion Maritima Mexicana SA de C.V. -
Class "L" (ADR) 1,106,375 48
41,900 *U S Xpress Enterprises, Inc. 701,825 31
- ---------------------------------------------------------------------------------------
2,586,300 113
- ---------------------------------------------------------------------------------------
UTILITIES--.9%
69,000 Houston Industries, Inc. 2,130,375 93
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $165,903,741) 205,405,507 8,985
- ---------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--10.6%
$ 500M Avnet, Inc., 5.53%, 8/17/98 $ 496,390 $ 22
700M Bell Atlantic Financial Corp., 5.51%, 7/10/98 699,037 31
1,100M Dupont (E.I.) de Nemours & Co., 5.50%, 7/8/98 1,098,823 48
1,400M Eastman Kodak, Co., 5.49%, 7/17/98 1,396,584 61
1,000M Emerson Electric Co., 5.50%, 7/27/98 996,028 43
2,600M Ford Motor Credit Corp., 5.51%, 7/8/98 2,597,214 114
1,000M Ford Motor Credit Corp., 5.52%, 7/9/98 998,773 44
1,700M General Motors Acceptance Corp., 5.52%, 7/15/98 1,696,351 74
4,600M Merrill Lynch & Co., Inc., 5.55%, 7/30/98 4,579,434 200
3,255M Sharp Electronics Corp., 5.60%, 8/13/98 3,233,228 141
6,400M Winn Dixie Stores, Inc., 5.51%, 7/28/98 6,373,552 279
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$24,165,414) 24,165,414 1,057
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $190,069,155) 100.4% 229,570,921 10,042
EXCESS OF LIABILITIES OVER OTHER ASSETS (.4) (969,098) (42)
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $228,601,823 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
21
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
June 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--65.1%
BASIC MATERIALS--3.5%
14,000 Air Products and Chemicals, Inc. $ 560,000 $ 71
5,400 Dow Chemical Company 522,112 67
11,500 Du Pont (E.I.) de Nemours & Company 858,187 109
11,200 International Paper Company 481,600 61
6,000 Phelps Dodge Corporation 343,125 44
- --------------------------------------------------------------------------------------
2,765,024 352
- --------------------------------------------------------------------------------------
CAPITAL GOODS--4.0%
15,400 General Electric Company 1,401,400 179
10,000 Illinois Tool Works, Inc. 666,875 85
6,000 Minnesota Mining and Manufacturing Company 493,125 63
6,200 United Technologies Corporation 573,500 73
- --------------------------------------------------------------------------------------
3,134,900 400
- --------------------------------------------------------------------------------------
COMMUNICATION SERVICES--3.5%
7,200 Bell Atlantic Corporation 328,500 42
12,300 Cincinnati Bell, Inc. 352,087 45
6,600 GTE Corporation 367,125 47
17,200 SBC Communications, Inc. 688,000 88
20,760 *WorldCom, Inc. 1,005,562 128
- --------------------------------------------------------------------------------------
2,741,274 350
- --------------------------------------------------------------------------------------
CONSUMER CYCLICALS--7.4%
7,200 *Bed Bath & Beyond, Inc. 373,050 48
11,000 E.W. Scripps Company 602,937 77
16,400 Gannett Company, Inc. 1,165,425 149
12,400 Gap, Inc. 764,150 97
6,450 Home Depot, Inc. 535,753 68
10,500 Knight-Ridder, Inc. 578,156 74
9,300 Nordstrom, Inc. 718,425 92
10,000 Sears, Roebuck and Company 610,625 78
6,800 Wal-Mart Stores, Inc. 413,100 53
- --------------------------------------------------------------------------------------
5,761,621 736
- --------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER STAPLES--9.0%
5,500 Comcast Corporation - Special Class "A" $ 223,266 $ 28
19,200 CVS Corporation 747,600 95
4,600 Estee Lauder Companies, Inc. - Class "A" 320,562 41
15,900 Fort James Corporation 707,550 90
9,400 General Mills, Inc. 642,725 82
13,200 McDonald's Corporation 910,800 116
5,800 Procter & Gamble Company 528,162 67
12,100 *Revlon, Inc. - Class "A" 621,638 79
9,500 Rubbermaid, Inc. 315,281 40
9,300 Sara Lee Corporation 520,219 66
6,600 Storage USA, Inc. 231,000 29
8,700 *Tele-Communications, Inc. Liberty Media Group -
Series "A" 337,669 43
6,000 Unilever N.V. 473,625 60
4,700 Walt Disney Company 493,794 63
- --------------------------------------------------------------------------------------
7,073,891 899
- --------------------------------------------------------------------------------------
ENERGY--4.6%
12,000 Amoco Corporation 499,500 64
6,200 Chevron Corporation 514,988 66
9,700 Exxon Corporation 691,731 88
13,200 Royal Dutch Petroleum Company 723,525 92
5,600 Schlumberger, Ltd. 382,550 49
10,500 Ultramar Diamond Shamrock Corporation 331,406 42
12,600 Unocal Corporation 450,450 57
- --------------------------------------------------------------------------------------
3,594,150 458
- --------------------------------------------------------------------------------------
FINANCIAL--12.8%
31,500 Ace, Ltd. 1,228,500 157
10,000 Allstate Corporation 915,625 117
6,000 American Express Company 684,000 87
4,800 American International Group, Inc. 700,800 89
16,000 Fannie Mae 972,000 124
11,300 First Union Corporation 658,225 84
14,100 Hertz Corporation - Class "A" 624,806 80
- --------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
June 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL (continued)
12,400 Kimco Realty Corporation $ 508,400 $ 65
14,250 Marsh & McLennan Companies, Inc. 861,234 110
16,300 Reliance Group Holdings, Inc. 285,250 36
5,700 Travelers Group, Inc. 345,563 44
21,900 U.S. Bancorp 941,700 120
9,500 Wachovia Corporation 802,750 102
12,000 Washington Mutual Savings Bank 521,250 66
- --------------------------------------------------------------------------------------
10,050,103 1,281
- --------------------------------------------------------------------------------------
HEALTHCARE--8.1%
23,000 Abbott Laboratories 940,125 120
13,000 American Home Products Corporation 672,750 86
6,000 Bristol-Myers Squibb Company 689,625 88
6,000 Guidant Corporation 427,875 55
9,600 Johnson & Johnson 708,000 90
4,600 Merck & Company, Inc. 615,250 78
4,500 Pfizer, Inc. 489,094 62
13,200 Warner-Lambert Company 915,750 117
21,000 Zeneca Group PLC (ADR) 921,375 117
- --------------------------------------------------------------------------------------
6,379,844 813
- --------------------------------------------------------------------------------------
TECHNOLOGY--9.4%
9,600 *ADC Telecommunications, Inc. 350,700 45
5,500 Automatic Data Processing, Inc. 400,813 51
10,650 *Cisco Systems, Inc. 980,466 125
18,400 Compaq Computer Corporation 522,100 67
8,000 *Compuware Corporation 409,000 52
19,800 *EMC Corporation 887,288 113
12,100 First Data Corporation 403,081 51
6,800 Intel Corporation 504,050 64
6,600 International Business Machines Corporation 757,763 97
6,000 *Microsoft Corporation 650,250 83
19,200 *PairGain Technologies, Inc. 334,800 43
- --------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
5,500 Xerox Corporation $ 558,938 $ 71
18,600 *Xilinx, Inc. 632,400 81
- --------------------------------------------------------------------------------------
7,391,649 943
- --------------------------------------------------------------------------------------
TRANSPORTATION--.4%
2,300 Delta Air Lines, Inc. 297,275 38
- --------------------------------------------------------------------------------------
UTILITIES--2.4%
6,150 Connectiv, Inc. 126,075 16
12,000 Enron Corporation 648,750 83
17,300 Williams Companies, Inc. 583,875 74
16,300 Wisconsin Energy Corporation 495,113 63
- --------------------------------------------------------------------------------------
1,853,813 236
- --------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $40,174,433) 51,043,544 6,506
- --------------------------------------------------------------------------------------
CORPORATE BONDS--21.7%
APPAREL/TEXTILES--.6%
$ 500M Westpoint Stevens, Inc., 7.875%, 2008 (Note 5) 505,625 64
- --------------------------------------------------------------------------------------
AUTOMOTIVE--.7%
500M Titan International, Inc., 8.75%, 2007 517,500 66
- --------------------------------------------------------------------------------------
BUILDING MATERIALS--1.3%
1,000M Interface, Inc., 7.30%, 2008 1,001,250 128
- --------------------------------------------------------------------------------------
CHEMICALS--.9%
650M Huntsman Polymers Corp., 11.75%, 2004 711,750 91
- --------------------------------------------------------------------------------------
CONTAINERS/PACKAGING--.7%
500M PrintPack, Inc., 9.875%, 2004 525,000 67
- --------------------------------------------------------------------------------------
ELECTRIC & GAS UTILITIES--.6%
500M Niagara Mohawk Power Corp., 7.625%, 2005 510,000 65
- --------------------------------------------------------------------------------------
ENERGY EXPLORATION/PRODUCTS--1.4%
1,000M Gulf Canada Resources, Ltd., 8.35%, 2006 1,096,923 140
- --------------------------------------------------------------------------------------
</TABLE>
25
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS TOTAL RETURN FUND
June 30, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENTERTAINMENT/LEISURE--1.3%
$ 1,000M AMC Entertainment, Inc., 9.50%, 2009 $ 1,002,500 $ 128
- --------------------------------------------------------------------------------------
FINANCIAL--1.2%
1,000M IBJ Preferred Capital Co., 8.79%, 2008 (Note 5) 912,500 116
- --------------------------------------------------------------------------------------
FINANCIAL SERVICES--.7%
500M NationsBank Corp., 8.125%, 2002 537,221 69
- --------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--.8%
600M Universal Corp., 9.25%, 2001 643,226 82
- --------------------------------------------------------------------------------------
GAS TRANSMISSION--1.3%
1,000M Enron Corp., 7.125%, 2007 1,047,618 134
- --------------------------------------------------------------------------------------
HEALTHCARE--.8%
600M Healthsouth Rehabilitation Corp., 9.50%, 2001 625,500 80
- --------------------------------------------------------------------------------------
INSURANCE--1.3%
1,000M First Colony Corp., 6.625%, 2003 1,029,289 131
- --------------------------------------------------------------------------------------
INVESTMENT/FINANCE COMPANIES--2.6%
1,000M Ford Motor Credit Co., 6.625%, 2003 1,022,685 130
1,000M International Lease Finance Corp., 6.375%, 2002 1,012,494 129
- --------------------------------------------------------------------------------------
2,035,179 259
- --------------------------------------------------------------------------------------
MISCELLANEOUS--.3%
250M Iron Mountain, Inc., 10.125%, 2006 270,000 34
- --------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--1.1%
843M Fort Howard Corp., 11%, 2002 872,112 111
- --------------------------------------------------------------------------------------
RETAIL-GENERAL MERCHANDISE--1.4%
1,000M Federated Department Stores, Inc., 7.45%, 2017 1,077,794 137
- --------------------------------------------------------------------------------------
TELECOMMUNICATIONS--1.4%
500M TCI Communications, Inc., 6.375%, 2003 504,512 64
553M WorldCom, Inc., 8.875%, 2006 601,387 77
- --------------------------------------------------------------------------------------
1,105,899 141
- --------------------------------------------------------------------------------------
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRANSPORTATION--1.3%
$ 1,000M Norfolk Southern Corp., 6.95%, 2002 $ 1,031,079 $ 131
- --------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $16,724,254) 17,057,965 2,174
- --------------------------------------------------------------------------------------
MUNICIPAL BONDS--3.1%
TRANSPORTATION
2,500M Metropolitan Washington D.C. Airports Auth. Gen.
Rev., 5.00%, 2018 (cost $2,434,625) 2,428,125 310
- --------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS--7.0%
5,500M Federal National Mortgage Association, 5.75%,
2008 (cost $5,411,223) 5,502,569 701
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--4.8%
2,500M Ford Motor Credit Corp., 5.53%, 7/7/98 2,497,696 318
1,000M Narragansett Electric Co., 5.75%, 7/6/98 999,201 128
300M Texaco, Inc., 5.52%, 7/2/98 299,955 38
- --------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$3,796,852) 3,796,852 484
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $68,541,387) 101.7% 79,829,055 10,175
EXCESS OF LIABILITIES OVER OTHER ASSETS (1.7) (1,370,886) (175)
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $78,458,169 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
27
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS SERIES FUND
June 30, 1998
<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................... $327,593,091 $ 8,047,584 $47,976,669 $190,069,155 $ 68,541,387
------------ ------------ ----------- ------------ ------------
------------ ------------ ----------- ------------ ------------
At value (Note 1A)................... $463,432,042 $ 8,427,733 $49,819,739 $229,570,921 $ 79,829,055
Cash................................... 868,069 69,921 160,719 249,936 580,028
Receivables:
Interest and dividends............... 285,409 102,113 866,455 178,712 527,733
Trust shares sold.................... 1,003,901 526 134,751 584,877 184,770
Investment securities sold........... 899,970 -- -- 2,167,666 142,747
------------ ------------ ----------- ------------ ------------
Total Assets........................... 466,489,391 8,600,293 50,981,664 232,752,112 81,264,333
------------ ------------ ----------- ------------ ------------
LIABILITIES
Payables:
Trust shares redeemed................ 773,884 33,927 58,168 475,028 30,685
Investment securities purchased...... -- 317,357 -- 3,460,933 2,702,152
Dividends payable.................... -- 33,134 231,803 -- --
Accrued advisory fee................... 282,209 2,768 25,287 140,005 48,027
Accrued expenses....................... 81,043 4,674 18,990 74,323 25,300
------------ ------------ ----------- ------------ ------------
Total Liabilities...................... 1,137,136 391,860 334,248 4,150,289 2,806,164
------------ ------------ ----------- ------------ ------------
NET ASSETS............................. $465,352,255 $ 8,208,433 $50,647,416 $228,601,823 $ 78,458,169
------------ ------------ ----------- ------------ ------------
------------ ------------ ----------- ------------ ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $304,774,809 $ 7,928,324 $48,457,068 $181,416,611 $ 60,385,940
Undistributed net investment income
(deficit)............................ 268,096 3,443 5,971 (436,739) 493,148
Accumulated net realized gain (loss) on
investment transactions.............. 24,470,399 (103,483) 341,307 8,120,185 6,291,413
Net unrealized appreciation in value of
investments.......................... 135,838,951 380,149 1,843,070 39,501,766 11,287,668
------------ ------------ ----------- ------------ ------------
Total.................................. $465,352,255 $ 8,208,433 $50,647,416 $228,601,823 $ 78,458,169
------------ ------------ ----------- ------------ ------------
------------ ------------ ----------- ------------ ------------
NET ASSETS:
Class A.............................. $414,823,562 $ 7,362,510 $46,440,706 $209,136,683 $ 74,833,972
Class B.............................. $ 50,528,693 $ 845,923 $ 4,206,710 $ 19,465,140 $ 3,624,197
TRUST SHARES OUTSTANDING (Note 4):
Class A.............................. 16,079,429 1,244,215 4,528,296 9,026,547 4,968,043
Class B.............................. 1,982,831 142,777 409,924 862,397 242,983
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 25.80 $ 5.92 $ 10.26 $ 23.17 $ 15.06
------ ----- ----------- ------ ------
------ ----- ----------- ------ ------
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A (Net asset
value/.9375)*........................ $ 27.52 $ 6.31 $ 10.94 $ 24.71 $ 16.06
------ ----- ----------- ------ ------
------ ----- ----------- ------ ------
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B (Note 4)............. $ 25.48 $ 5.92 $ 10.26 $ 22.57 $ 14.92
------ ----- ----------- ------ ------
------ ----- ----------- ------ ------
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
28
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS SERIES FUND
Six Months Ended June 30, 1998
<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............................. $ 791,568 $ 226,572 $1,725,051 $ 677,846 $ 970,288
Dividends............................ 2,576,228 -- -- 617,321 312,473
----------- ------------ ---------- ---------- ----------
Total income........................... 3,367,796 226,572 1,725,051 1,295,167 1,282,761
----------- ------------ ---------- ---------- ----------
Expenses (Notes 1 and 3):
Advisory fee......................... 1,860,154 24,766 185,560 1,090,519 369,414
Shareholder servicing costs.......... 544,056 5,334 69,094 433,017 108,032
Distribution plan expenses - Class
A.................................. 578,202 11,102 68,534 308,678 106,281
Distribution plan expenses - Class
B.................................. 219,533 4,266 18,961 91,767 15,148
Reports and notices to
shareholders....................... 30,397 190 1,600 24,286 3,613
Professional fees.................... 17,740 2,850 5,541 12,037 4,307
Custodian fees....................... 27,961 1,268 5,399 15,008 8,756
Other expenses....................... 14,877 3,155 8,772 21,602 1,110
----------- ------------ ---------- ---------- ----------
Total expenses......................... 3,292,920 52,931 363,461 1,996,914 616,661
Less: Expenses waived or assumed....... (250,000) (26,757) (76,081) (250,000) (92,354)
Custodian fees paid indirectly.... (19,938) (1,268) (1,912) (15,008) (7,367)
----------- ------------ ---------- ---------- ----------
Net expenses........................... 3,022,982 24,906 285,468 1,731,906 516,940
----------- ------------ ---------- ---------- ----------
Net investment income (loss)........... 344,814 201,666 1,439,583 (436,739) 765,821
----------- ------------ ---------- ---------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 23,522,244 71,366 347,871 8,123,225 6,324,561
Net unrealized appreciation
(depreciation) of investments........ 27,732,083 (82,902) 131,420 1,634,400 25,101
----------- ------------ ---------- ---------- ----------
Net gain (loss) on investments......... 51,254,327 (11,536) 479,291 9,757,625 6,349,662
----------- ------------ ---------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $51,599,141 $ 190,130 $1,918,874 $9,320,886 $7,115,483
----------- ------------ ---------- ---------- ----------
----------- ------------ ---------- ---------- ----------
</TABLE>
See notes to financial statements
29
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS SERIES FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
INSURED
BLUE CHIP INTERMEDIATE
FUND TAX EXEMPT FUND
-------------------------- ----------------------
1/1/98 TO 1/1/97 TO 1/1/98 TO 1/1/97 TO
6/30/98 12/31/97 6/30/98 12/31/97
- --------------------------------------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss)......... $ 344,814 $ 1,132,054 $ 201,666 $ 398,687
Net realized gain on investments..... 23,522,244 26,645,071 71,366 50,171
Net unrealized appreciation
(depreciation) of investments...... 27,732,083 44,536,413 (82,902) 137,858
------------ ------------ ---------- ----------
Net increase in net assets
resulting from operations........ 51,599,141 72,313,538 190,130 586,716
------------ ------------ ---------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A...... (235,496) (1,008,850) (184,110) (369,696)
Net investment income - Class B...... -- -- (16,906) (28,946)
Net realized gains - Class A......... -- (23,224,732) -- --
Net realized gains - Class B......... -- (2,472,186) -- --
------------ ------------ ---------- ----------
Total distributions................ (235,496) (26,705,768) (201,016) (398,642)
------------ ------------ ---------- ----------
TRUST SHARE TRANSACTIONS(a)
Class A:
Proceeds from shares sold............ 43,280,080 83,933,830 545,465 1,296,789
Reinvestment of distributions........ 232,082 23,979,379 100,700 252,840
Cost of shares redeemed.............. (25,700,205) (39,561,111) (618,408) (1,789,778)
------------ ------------ ---------- ----------
17,811,957 68,352,098 27,757 (240,149)
------------ ------------ ---------- ----------
Class B:
Proceeds from shares sold............ 11,643,246 17,001,914 103,772 280,224
Reinvestment of distributions........ -- 2,448,261 9,779 18,802
Cost of shares redeemed.............. (3,219,306) (2,520,555) (74,031) (123,256)
------------ ------------ ---------- ----------
8,423,940 16,929,620 39,520 175,770
------------ ------------ ---------- ----------
Net increase (decrease) from trust
share transactions................. 26,235,897 85,281,718 67,277 (64,379)
------------ ------------ ---------- ----------
Net increase (decrease) in net
assets........................... 77,599,542 130,889,488 56,391 123,695
NET ASSETS
Beginning of period.................. 387,752,713 256,863,225 8,152,042 8,028,347
------------ ------------ ---------- ----------
End of period+....................... $465,352,255 $387,752,713 $8,208,433 $8,152,042
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
+Includes undistributed net investment
income (deficit) of................... $ 268,096 $ 158,778 $ 3,443 $ 2,793
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
(a)TRUST SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 1,766,786 3,767,172 92,163 223,924
Issued for distributions
reinvested......................... 9,123 1,051,211 17,044 43,437
Redeemed............................. (1,052,057) (1,783,673) (104,392) (308,527)
------------ ------------ ---------- ----------
Net increase (decrease) in Class A
shares outstanding................. 723,852 3,034,710 4,815 (41,166)
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
Class B:
Sold................................. 477,229 764,680 17,456 48,220
Issued for distributions
reinvested......................... -- 108,187 1,653 3,220
Redeemed............................. (131,061) (114,584) (12,493) (21,066)
------------ ------------ ---------- ----------
Net increase in Class B shares
outstanding........................ 346,168 758,283 6,616 30,374
------------ ------------ ---------- ----------
------------ ------------ ---------- ----------
</TABLE>
See notes to financial statements
30
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE SPECIAL SITUATIONS TOTAL RETURN
FUND FUND FUND
------------------------ -------------------------- ------------------------
1/1/98 TO 1/1/97 TO 1/1/98 TO 1/1/97 TO 1/1/98 TO 1/1/97 TO
6/30/98 12/31/97 6/30/98 12/31/97 6/30/98 12/31/97
- --------------------------------------- ----------- ----------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss)......... $ 1,439,583 $ 2,902,275 $ (436,739) $ (937,036) $ 765,821 $ 1,214,000
Net realized gain on investments..... 347,871 145,546 8,123,225 17,709,890 6,324,561 5,053,532
Net unrealized appreciation
(depreciation) of investments...... 131,420 1,059,248 1,634,400 10,188,540 25,101 3,974,842
----------- ----------- ------------ ------------ ----------- -----------
Net increase in net assets
resulting from operations........ 1,918,874 4,107,069 9,320,886 26,961,394 7,115,483 10,242,374
----------- ----------- ------------ ------------ ----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A...... (1,352,813) (2,740,532) -- -- (319,117) (1,227,991)
Net investment income - Class B...... (99,707) (148,190) -- -- (8,584) (26,544)
Net realized gains - Class A......... -- (145,340) -- (15,341,882) -- (4,841,852)
Net realized gains - Class B......... -- (10,710) -- (1,322,522) -- (184,600)
----------- ----------- ------------ ------------ ----------- -----------
Total distributions................ (1,452,520) (3,044,772) -- (16,664,404) (327,701) (6,280,987)
----------- ----------- ------------ ------------ ----------- -----------
TRUST SHARE TRANSACTIONS(a)
Class A:
Proceeds from shares sold............ 4,295,602 6,253,282 23,082,009 41,394,544 6,023,637 9,720,765
Reinvestment of distributions........ 867,076 2,236,906 -- 14,688,933 316,055 6,023,569
Cost of shares redeemed.............. (4,160,560) (10,870,685) (16,781,433) (30,181,586) (4,733,107) (9,501,874)
----------- ----------- ------------ ------------ ----------- -----------
1,002,118 (2,380,497) 6,300,576 25,901,891 1,606,585 6,242,460
----------- ----------- ------------ ------------ ----------- -----------
Class B:
Proceeds from shares sold............ 1,096,973 1,206,438 3,693,395 6,513,410 1,015,792 1,430,563
Reinvestment of distributions........ 57,211 110,137 -- 1,315,908 8,461 207,161
Cost of shares redeemed.............. (300,722) (402,070) (1,404,589) (1,904,821) (194,614) (169,088)
----------- ----------- ------------ ------------ ----------- -----------
853,462 914,505 2,288,806 5,924,497 829,639 1,468,636
----------- ----------- ------------ ------------ ----------- -----------
Net increase (decrease) from trust
share transactions................. 1,855,580 (1,465,992) 8,589,382 31,826,388 2,436,224 7,711,096
----------- ----------- ------------ ------------ ----------- -----------
Net increase (decrease) in net
assets........................... 2,321,934 (403,695) 17,910,268 42,123,378 9,224,006 11,672,483
NET ASSETS
Beginning of period.................. 48,325,482 48,729,177 210,691,555 168,568,177 69,234,163 57,561,680
----------- ----------- ------------ ------------ ----------- -----------
End of period+....................... $50,647,416 $48,325,482 $228,601,823 $210,691,555 $78,458,169 $69,234,163
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
+Includes undistributed net investment
income (deficit) of.................. $ 5,971 $ 18,908 $ (436,739) $ -- $ 493,148 $ 55,028
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
(a)TRUST SHARES ISSUED AND REDEEMED
Class A:
Sold................................. 420,433 628,030 1,001,205 1,821,611 418,418 683,584
Issued for distributions
reinvested......................... 85,041 224,425 -- 662,260 21,486 437,106
Redeemed............................. (407,345) (1,095,164) (727,975) (1,367,038) (327,736) (680,904)
----------- ----------- ------------ ------------ ----------- -----------
Net increase (decrease) in Class A
shares outstanding................. 98,129 (242,709) 273,230 1,116,833 112,168 439,786
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
Class B:
Sold................................. 107,397 120,858 163,876 287,155 71,093 100,991
Issued for distributions
reinvested......................... 5,606 11,021 -- 60,669 580 15,167
Redeemed............................. (29,438) (40,307) (62,391) (87,818) (13,564) (12,388)
----------- ----------- ------------ ------------ ----------- -----------
Net increase in Class B shares
outstanding........................ 83,565 91,572 101,485 260,006 58,109 103,770
----------- ----------- ------------ ------------ ----------- -----------
----------- ----------- ------------ ------------ ----------- -----------
</TABLE>
See notes to financial statements
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS SERIES FUND
1. SIGNIFICANT ACCOUNTING POLICIES--First Investors Series Fund ("Series 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 Series 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 (each a "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.
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 Stock Market is valued at its last sale price on the
exchange or market 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 services uses quotations
obtained from investment dealers or brokers and other available information in
determining value. Short-term debt securities that mature in 60 days or less are
valued on the amortized cost method which approximates market value. 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 Series Fund's officers in a manner specifically
authorized by the Board of Trustees of the Series 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 at their fair value 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. "When-issued securities" are
reflected in the assets of the Funds 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. The Fund may retain any
insured municipal bond which is in default in the payment of principal or
interest until the default has been cured, or the principal and interest
outstanding are paid by an insurer or the issuer of any letter of credit or
other guarantee supporting such municipal bond. In such case, it is the Fund's
policy to value
32
<PAGE>
the defaulted bond daily based upon the value of a comparable bond which is
insured and not in default. In selecting a comparable bond, the Fund will
consider security type, rating, market condition and yield. The Fund may invest
up to 35% of its assets in portfolio securities not covered by the insurance
feature.
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 June 30, 1998, the Insured
Intermediate Tax Exempt Fund had capital loss carryovers of $174,849, of which
$109,885 expires in 2002, $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 generally declared daily and paid monthly. Dividends from net
investment income of the Blue Chip Fund and Total Return Fund are generally
declared and paid quarterly. Dividends from net investment income, if any, of
the Special Situations Fund are generally declared and paid annually.
Distributions from net realized capital gains, if any, are generally 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 capital losses.
D. Expense Allocation--Expenses directly charged or attributable to a Fund are
paid from the assets of that Fund. General expenses of the 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. For the six months ended June 30,
1998, the Funds' custodian has provided credits in the amount of $45,493 against
custodian charges based on the uninvested cash balances of the Funds.
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS SERIES FUND
2. SECURITY TRANSACTIONS--For the six months ended June 30, 1998, purchases and
sales of securities and long-term U.S. Government obligations, excluding U.S.
Treasury bills and short-term securities, 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......................... $171,678,954 $145,897,895 $ -- $ --
Insured Intermediate Tax Exempt Fund... 6,811,266 6,561,650 -- --
Investment Grade Fund.................. 17,070,536 13,364,855 4,285,883 5,961,133
Special Situations Fund................ 80,678,546 71,782,406 -- --
Total Return Fund...................... 50,111,018 44,250,566 11,426,615 9,425,350
</TABLE>
At June 30, 1998, 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......................... $327,593,091 $141,388,304 $ 5,549,353 $135,838,951
Insured Intermediate Tax Exempt Fund... 8,047,584 421,205 41,056 380,149
Investment Grade Fund.................. 47,976,669 1,952,238 109,168 1,843,070
Special Situations Fund................ 190,069,898 49,036,209 9,535,186 39,501,023
Total Return Fund...................... 68,542,453 12,068,665 782,063 11,286,602
</TABLE>
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
trustees of the Series 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 Funds' Individual Retirement Accounts. Trustees of the Series
Fund who are not "interested persons" of the Series Fund as defined in the 1940
Act are remunerated by the Funds. For the six months ended June 30, 1998, total
trustees fees accrued by the Funds amounted to $15,150.
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 Fund's average
34
<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 Fund's average
daily net assets, .72% on the next $200 million, .69% on the next $250 million,
and .66% on average daily net assets over $750 million. Total advisory fees
accrued to FIMCO for the six months ended June 30, 1998 were $3,530,413 of which
$637,722 was waived. In addition, expenses of $46,368 were assumed by FIMCO.
For the six months ended June 30, 1998, FIC, as underwriter, received $3,122,284
in commissions from the sale of shares of the Funds, after allowing $26,680 to
other dealers. Shareholder servicing costs included $718,296 in transfer agent
fees accrued to ADM and $237,366 in IRA custodian fees accrued to FFS.
Pursuant to Distribution Plans adopted under Rule 12b-1 of the 1940 Act, each
Fund is authorized to pay FIC a fee equal to .30% of the average daily net
assets of the Class A shares and 1% of the average daily 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. For the six months ended
June 30, 1998, total distribution plan fees accrued to FIC amounted to
$1,422,472 (of which $11,102 was waived).
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
distribution plan fees as described in Note 3. Class B shares are sold without
an initial sales charge, but are generally subject to a contingent deferred
sales charge which declines in steps from 4% to 0% over a six-year period. Class
B shares automatically convert into Class A shares after eight years. Realized
and unrealized gains or losses, investment income and expenses (other than
distribution plan fees) are allocated daily to each class of shares based upon
the relative proportion of net assets of each class. The Series 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 June 30, 1998, the
Investment Grade and Total Return Funds held three and two 144A securities,
respectively, with aggregate values of $2,177,951 and $1,418,125, respectively.
The securities represent 4.3% and 1.8%, respectively, of the Funds' net assets
and are valued as set forth in Note 1A.
35
<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
VALUE NET REALIZED --------------------
--------- NET AND UNREALIZED TOTAL FROM NET NET
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
CLASS A
1993........................ $ 15.29 $ .10 $ 1.08 $ 1.18 $ .10 $ .79 $ .89
1994........................ 15.58 .11 (.58) (.47) .09 1.56 1.65
1995........................ 13.46 .19 4.37 4.56 .20 .60 .80
1996........................ 17.22 .14 3.39 3.53 .17 1.11 1.28
1997........................ 19.47 .09 4.98 5.07 .08 1.62 1.70
1/1/98 to 6/30/98........... 22.84 .03 2.95 2.98 .02 -- .02
CLASS B
1/12/95* to 12/31/95........ 13.51 .10 4.31 4.41 .16 .60 .76
1996........................ 17.16 .06 3.32 3.38 .06 1.11 1.17
1997........................ 19.37 (.03) 4.91 4.88 -- 1.62 1.62
1/1/98 to 6/30/98........... 22.63 (.04) 2.89 2.85 -- -- --
- --------------------------------------------------------------------------------------------------------------------
INSURED INTERMEDIATE TAX EXEMPT FUND
CLASS A
11/22/93* to 12/31/93....... $ 5.79 $ -- $ -- $ -- $ -- $ -- $ --
1994........................ 5.79 .24 (.36) (.12) .24 -- .24
1995........................ 5.43 .30 .42 .72 .30 -- .30
1996........................ 5.85 .29 (.06) .23 .29 -- .29
1997........................ 5.79 .29 .14 .43 .29 -- .29
1/1/98 to 6/30/98........... 5.93 .15 (.01) .14 .15 -- .15
CLASS B
1/12/95* to 12/31/95........ 5.45 .25 .41 .66 .26 -- .26
1996........................ 5.85 .23 (.05) .18 .23 -- .23
1997........................ 5.80 .23 .13 .36 .23 -- .23
1/1/98 to 6/30/98........... 5.93 .12 (.01) .11 .12 -- .12
- --------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
CLASS A
1993........................ $ 9.90 $ .65 $ .50 $ 1.15 $ .65 $ .07 $ .72
1994........................ 10.33 .62 (1.09) (.47) .62 -- .62
1995........................ 9.24 .64 1.10 1.74 .64 -- .64
1996........................ 10.34 .62 (.39) .23 .62 .02 .64
1997........................ 9.93 .62 .25 .87 .61 .03 .64
1/1/98 to 6/30/98........... 10.16 .30 .10 .40 .30 -- .30
CLASS B
1/12/95* to 12/31/95........ 9.26 .54 1.10 1.64 .55 -- .55
1996........................ 10.35 .55 (.39) .16 .55 .02 .57
1997........................ 9.94 .55 .26 .81 .55 .03 .58
1/1/98 to 6/30/98........... 10.17 .27 .09 .36 .27 -- .27
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<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
RATIO TO AVERAGE ASSETS BEFORE EXPENSES
NET ASSETS++ WAIVED OR ASSUMED
NET ASSET NET ASSETS ------------------------ ------------------------
VALUE TOTAL END OF NET NET PORTFOLIO
--------- RETURN PERIOD INVESTMENT INVESTMENT TURNOVER
END ** (IN EXPENSES INCOME EXPENSES INCOME RATE
OF PERIOD (%) THOUSANDS) (%) (%) (%) (%) (%)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BLUE CHIP FUND
CLASS A
1993........................ $ 15.58 7.77 $ 117,929 1.48 .66 1.73 .41 39
1994........................ 13.46 (3.02) 123,694 1.54 .80 1.79 .55 82
1995........................ 17.22 34.01 170,271 1.49 1.23 1.74 .98 25
1996........................ 19.47 20.55 239,851 1.44 .78 1.67 .55 45
1997........................ 22.84 26.05 350,721 1.39 .40 1.64 .15 63
1/1/98 to 6/30/98........... 25.80 13.03 414,824 1.35+ .23+ 1.46+ .12+ 37
CLASS B
1/12/95* to 12/31/95........ 17.16 32.76 5,481 2.20+ .52+ 2.46+ .26+ 25
1996........................ 19.37 19.71 17,012 2.22 -- 2.37 (.16) 45
1997........................ 22.63 25.19 37,032 2.09 (.30) 2.34 (.55) 63
1/1/98 to 6/30/98........... 25.48 12.59 50,529 2.05+ (.47)+ 2.16+ (.58)+ 37
- ---------------------------------------------------------------------------------------------------------------------------------
INSURED INTERMEDIATE TAX EXEMPT FUND
CLASS A
11/22/93* to 12/31/93....... $ 5.79 .00 $ 1,615 -- .54+ 1.78+ (1.24)+ 0
1994........................ 5.43 (2.05) 5,688 .14 4.52 .96 3.70 210
1995........................ 5.85 13.50 7,017 .35 5.32 1.22 4.45 47
1996........................ 5.79 4.07 7,415 .49 5.05 1.24 4.30 82
1997........................ 5.93 7.68 7,344 .53 5.02 1.21 4.34 91
1/1/98 to 6/30/98........... 5.92 2.36 7,363 .50+ 5.02+ 1.18+ 4.34+ 79
CLASS B
1/12/95* to 12/31/95........ 5.85 12.27 378 1.35+ 4.32+ 1.92+ 3.75+ 47
1996........................ 5.80 3.17 613 1.49 4.05 1.94 3.60 82
1997........................ 5.93 6.39 808 1.53 4.02 1.91 3.64 91
1/1/98 to 6/30/98........... 5.92 1.84 846 1.50+ 4.02+ 1.88+ 3.64+ 79
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
CLASS A
1993........................ $ 10.33 11.82 $ 48,507 .86 6.27 1.40 5.73 38
1994........................ 9.24 (4.62) 46,179 .95 6.46 1.47 5.94 17
1995........................ 10.34 19.40 49,997 1.10 6.43 1.43 6.10 27
1996........................ 9.93 2.39 46,396 1.11 5.96 1.42 5.65 22
1997........................ 10.16 9.14 45,007 1.11 6.18 1.43 5.86 34
1/1/98 to 6/30/98........... 10.26 4.03 46,441 1.10+ 5.88+ 1.41+ 5.57+ 40
CLASS B
1/12/95* to 12/31/95........ 10.35 18.08 1,167 1.80+ 5.73+ 2.13+ 5.40+ 27
1996........................ 9.94 1.64 2,333 1.81 5.26 2.12 4.95 22
1997........................ 10.17 8.40 3,318 1.81 5.48 2.13 5.16 34
1/1/98 to 6/30/98........... 10.26 3.58 4,207 1.80+ 5.18+ 2.11+ 4.87+ 40
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
FIRST INVESTORS SERIES FUND
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
--------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS
NET ASSET -------------------------------------- FROM
VALUE NET REALIZED --------------------
--------- NET AND UNREALIZED TOTAL FROM NET NET
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SPECIAL SITUATIONS FUND
CLASS A
1993................................... $ 15.62 $ (.08) $ 3.29 $ 3.21 $ -- $ .83 $ .83
1994................................... 18.00 (.04) (.62) (.66) -- .91 .91
1995................................... 16.43 (.01) 3.94 3.93 -- .73 .73
1996................................... 19.63 (.01) 2.28 2.27 -- 1.17 1.17
1997................................... 20.73 (.09) 3.44 3.35 -- 1.90 1.90
1/1/98 to 6/30/98...................... 22.18 (.04) 1.03 .99 -- -- --
CLASS B
1/12/95* to 12/31/95................... 16.40 (.01) 3.85 3.84 -- .73 .73
1996................................... 19.51 (.14) 2.25 2.11 -- 1.17 1.17
1997................................... 20.45 (.15) 3.29 3.14 -- 1.90 1.90
1/1/98 to 6/30/98...................... 21.69 (.09) .97 .88 -- -- --
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN FUND
CLASS A
1993................................... $ 12.49 $ .26 $ .63 $ .89 $ .26 $ 1.24 $ 1.50
1994................................... 11.88 .21 (.62) (.41) .19 .39 .58
1995................................... 10.89 .39 2.50 2.89 .37 .44 .81
1996................................... 12.97 .39 .97 1.36 .41 1.12 1.53
1997................................... 12.80 .26 2.04 2.30 .28 1.08 1.36
1/1/98 to 6/30/98...................... 13.74 .15 1.24 1.39 .07 -- .07
CLASS B
1/12/95* to 12/31/95................... 10.90 .25 2.54 2.79 .33 .44 .77
1996................................... 12.92 .32 .94 1.26 .34 1.12 1.46
1997................................... 12.72 .21 1.97 2.18 .19 1.08 1.27
1/1/98 to 6/30/98...................... 13.63 .11 1.22 1.33 .04 -- .04
- -------------------------------------------------------------------------------------------------------------------------------
</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 by the investment adviser (Note 3)
See notes to financial statements
38
<PAGE>
<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++
NET ASSET --------------------
VALUE TOTAL NET
--------- RETURN NET ASSETS INVESTMENT
END ** END OF PERIOD EXPENSES INCOME
OF PERIOD (%) (IN THOUSANDS) (%) (%)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SPECIAL SITUATIONS FUND
CLASS A
1993................................... $ 18.00 20.52 $ 59,148 1.55 (.63)
1994................................... 16.43 (3.66) 89,906 1.65 (.26)
1995................................... 19.63 23.92 125,331 1.60 (.08)
1996................................... 20.73 11.56 158,326 1.59 (.13)
1997................................... 22.18 16.15 194,189 1.53 (.45)
1/1/98 to 6/30/98...................... 23.17 4.46 209,137 1.50+ (.33)+
CLASS B
1/12/95* to 12/31/95................... 19.51 23.42 4,566 2.33+ (.81)+
1996................................... 20.45 10.81 10,242 2.38 (.92)
1997................................... 21.69 15.34 16,503 2.23 (1.15)
1/1/98 to 6/30/98...................... 22.57 4.06 19,465 2.20+ (1.03)+
- ------------------------------------------------------------------------------------------------
TOTAL RETURN FUND
CLASS A
1993................................... $ 11.88 7.18 $ 58,176 1.45 2.00
1994................................... 10.89 (3.45) 50,714 1.63 1.91
1995................................... 12.97 26.71 55,442 1.58 3.08
1996................................... 12.80 10.62 56,530 1.53 2.93
1997................................... 13.74 18.08 66,714 1.49 1.94
1/1/98 to 6/30/98...................... 15.06 10.09 74,834 1.39+ 2.10+
CLASS B
1/12/95* to 12/31/95................... 12.92 25.74 270 2.41+ 2.24+
1996................................... 12.72 9.86 1,032 2.32 2.14
1997................................... 13.63 17.24 2,520 2.19 1.24
1/1/98 to 6/30/98...................... 14.92 9.77 3,624 2.09+ 1.40+
- ------------------------------------------------------------------------------------------------
<CAPTION>
RATIO TO AVERAGE NET
ASSETS BEFORE EXPENSES
WAIVED OR ASSUMED
----------------------
NET PORTFOLIO
INVESTMENT TURNOVER
EXPENSES INCOME RATE
(%) (%) (%)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
SPECIAL SITUATIONS FUND
CLASS A
1993................................... 1.89 (.96) 71
1994................................... 1.90 (.51) 53
1995................................... 1.85 (.33) 80
1996................................... 1.84 (.38) 99
1997................................... 1.78 (.70) 84
1/1/98 to 6/30/98...................... 1.71+ (.54)+ 36
CLASS B
1/12/95* to 12/31/95................... 2.59+ (1.07)+ 80
1996................................... 2.55 (1.09) 99
1997................................... 2.48 (1.40) 84
1/1/98 to 6/30/98...................... 2.41+ (1.24)+ 36
- ------------------------------------------------------------------------------------------------
TOTAL RETURN FUND
CLASS A
1993................................... 1.83 1.62 131
1994................................... 1.88 1.66 124
1995................................... 1.83 2.83 135
1996................................... 1.78 2.68 146
1997................................... 1.74 1.69 138
1/1/98 to 6/30/98...................... 1.62+ 1.87+ 77
CLASS B
1/12/95* to 12/31/95................... 2.67+ 1.98+ 135
1996................................... 2.49 1.97 146
1997................................... 2.44 .99 138
1/1/98 to 6/30/98...................... 2.32+ 1.17+ 77
- ------------------------------------------------------------------------------------------------
</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 by the investment adviser (Note 3)
See notes to financial statements
39
<PAGE>
INDEPENDENT AUDITORS' 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 June 30, 1998, the related statement of
operations for the six months then ended, the statement of changes in net assets
for the six months ended June 30, 1998 and the year ended December 31, 1997 and
financial highlights for each of the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of June
30, 1998, 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 at June 30, 1998, 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
July 31, 1998
40
<PAGE>
This page intentionally left blank
41
<PAGE>
FIRST INVESTORS SERIES FUND
DIRECTORS
- ------------------------------------------------
JAMES J. COY (Emeritus)
ROGER L. GRAYSON
GLENN O. HEAD
KATHRYN S. HEAD
REX R. REED
HERBERT RUBINSTEIN
NANCY S. SCHAENEN
JAMES M. SRYGLEY
JOHN T. SULLIVAN
ROBERT F. WENTWORTH
OFFICERS
- ------------------------------------------------
GLENN O. HEAD
President
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
42
<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
TRANSFER AGENT
ADMINISTRATIVE DATA MANAGEMENT CORP.
581 Main Street
Woodbridge, NJ 07095-1198
LEGAL COUNSEL
KIRKPATRICK & LOCKHART LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
AUDITORS
TAIT, WELLER & BAKER
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Fund will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Fund's prospectus.
43
<PAGE>
FIRST INVESTORS SERIES FUND
95 WALL STREET
NEW YORK, NY 10005
First Investors Logo
Logo is described as follows: The arabic numeral one separated into seven
vertical segments followed by the words "First Investors."
A MEMBER OF THE
FIRST INVESTORS FINANCIAL NETWORK
FIBC-103
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" appear in a box to the
right of a circle containing the words "MAILED FROM ZIP CODE 11201" which
appears to the right of the above language in the printed piece.
Vertically reading from bottom to top in the center of the page the words "FIRST
INVESTORS" appear in the printed piece.
FIRST
INVESTORS
SERIES FUND
Blue Chip Fund
Insured Intermediate
Tax Exempt Fund
Investment Grade Fund
Special Situations Fund
Total Return Fund
SEMI-
ANNUAL
REPORT
JUNE 30, 1998
