Portfolio Manager's Letter
FIRST INVESTORS GROWTH & INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
Dear Investor:
We are pleased to present the semi-annual report of the First Investors
Growth & Income Fund. For the six months ended April 30, 1996, dividends
from net investment income were 6.5 cents per share on Class A shares
and 4.7 cents per share on Class B shares.
The U.S. stock market's upward momentum continued during the past six
months. Investors ignored the rise in interest rates earlier this year,
with share prices benefiting from good first quarter earnings reports
and continued strong cash flows into equity mutual funds. For the six
months ended April 30, 1996, the First Investors Growth & Income Fund
returned on a net asset value basis 13.6% on Class A shares and 13.0% on
Class B shares.
Stock market group and industry rotation remained at a high level in the
past six months. Many of the traditional defensive groups, including
consumer non-durables, and some interest rate-sensitive areas, such as
finance and utilities, reversed course and underperformed the market
averages. Conversely, the industrial and consumer cyclical areas,
including energy, papers, chemicals, and retailers responded to signs of
economic strengthening and were the market leaders. Technology was as
erratic as ever, marked by wide swings in individual stock price
performance. The Fund's holdings in energy services companies,
chemicals, and software providers contributed to the investment results.
However, the Fund's exposure to the finance and utility areas limited
its returns.
While the U.S. equity market has performed well in the face of
increasing bond yields, trading action has clearly been more volatile.
This is not surprising as investors sort out conflicting economic trends
and the impact on corporate profits. Our expectation is that worldwide
economies will pick up later this year, which should result in 5-10%
earnings growth for U.S. corporations for both 1996 and 1997. Expanding
earnings coupled with reasonable valuations are positive underpinnings
for further gains in stocks. Counterbalancing these factors is the
higher level of interest rates which may provide a stiff head wind for
equity investors in the months ahead. Until the direction of the economy
becomes more visible and sustainable, increased volatility may well be a
lingering feature of this market.
With profit comparisons expected to be more difficult as the year
progresses, our strategy is to emphasize those industries and companies
with solid and/or improving long-term earnings dynamics. The current
areas of emphasis in the Fund include health care, media, household
products and financial services, as well as selected cyclical and
capital goods companies. Within the broad industrial category, near-term
earnings will be soft. However, our emphasis remains on well managed,
cost efficient leaders like General Electric, restructuring candidates
such as DuPont, and companies with dominant market and/or product niches
including Boeing and Air Products & Chemicals. Since our last report, we
have modestly increased the Fund's technology weighting, an area in
which we had been under-represented. We have also focused on the leading
participants in "outsourcing" (Automatic Data Processing; First Data),
computer hardware (Hewlett-Packard), and wireless communications
(Motorola).
As always we appreciate the opportunity to serve your investment needs.
Sincerely,
/S/ Laura J. Allen
Laura J. Allen
Portfolio Manager
June 1, 1996
Portfolio Manager's Letter
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
(A Series of First Investors Series Fund II, Inc.)
Dear Investor:
We are pleased to present the semi-annual report of the First Investors
U.S.A. Mid-Cap Opportunity Fund. For the six month period ended April
30, 1996, dividends from net investment income were 5.8 cents per share
on Class A shares and 5.3 cents per share on Class B shares. The Fund
also declared a capital gain distribution of 83.8 cents per share on
both classes. During this period, your Fund had a total return on a net
asset value basis of 8.6% on Class A shares and 8.2% on Class B shares.
The last few months have been a period of transition for the Fund as it
underwent a change in name and investment strategy. As you are probably
aware, the name of the Fund was changed to First Investors U.S.A. Mid-
Cap Opportunity Fund from First Investors Made In The U.S.A. Fund. While
the Fund's objective remains long-term capital growth, the means of
achieving the objective has been modified.
As its new name indicates, the Fund now concentrates on investing in
mid-cap stocks, defined as companies with a market capitalization of
$750 million to $5 billion. Market capitalization is calculated by
multiplying a company's number of shares outstanding by its stock price.
The new mid-cap orientation of the Fund provides an opportunity to
invest in companies that are more established than smaller companies,
but still small enough to achieve attractive growth in their business
without the difficulties larger companies often encounter. A more subtle
change requires the Fund to invest in companies that are headquartered
in the U.S., regardless of where their products are made, their services
are provided or their employees are located.
While the Fund was undergoing these changes, the U.S. stock market took
on multiple personalities. After a strong rally from mid-January to mid-
February, the market became very choppy as uncertainty emerged from
conflicting economic data. Those market conditions often create exciting
opportunities as well as pitfalls.
In an effort to navigate the turbulent market, the Mid-Cap Opportunity
Fund focused on companies that we believed would continue to report
strong earnings, offer potential for above-average earnings growth and
were valued at reasonable levels.
We continued to have plenty of exposure in the technology sector, where
we have seen excellent performance from companies like Atmel Corp. and
Adaptec Inc., and disappointments such as National Semiconductor. Our
weighting in the financial sector and consumer non-durable sectors
increased as we added companies such as Richfood Holdings and USF&G
Corp. As a result of our new strategy, the Fund was able to more fully
invest its cash position.
As always we appreciate the opportunity to serve your investment needs.
Sincerely,
/S/ Patricia D. Poitra
Patricia D. Poitra
Director of Equities and Portfolio Manager
June 1, 1996
Portfolio Manager's Letter
FIRST INVESTORS UTILITIES INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
Dear Investor:
Your Fund ended its semi-annual reporting period on April 30, 1996.
During this period, dividends from net investment income were 11.3 cents
per share on Class A shares and 10.0 cents per share on Class B shares.
For the six months ended April 30, 1996, the Fund returned on a net
asset value basis 5.8% on Class A shares and 5.4% on Class B shares.
So far in 1996 utility stocks have underperformed the broader stock
market. Economic indicators suggesting that the U.S. economy is growing
strongly caused weakness in both the bond market and interest rate-
sensitive stocks such as utilities. As a result, stock valuations for
many utilities have become rather attractive versus the overall stock
market. For example, electric utilities are currently trading at
approximately three times the market's yield and two-thirds of the
market's price-to-projected earnings ratio. Historically, this valuation
level is low for electric utility stocks.
The Fund remains well diversified among all sectors of the utility
market. Year-to-date, natural gas stocks have performed very well. An
improved pricing environment for commodity natural gas and a return to a
normal winter weather pattern are the main reasons for the improved
performance by natural gas stocks. Both telephone and electric company
stocks have underperformed the broader stock market year-to-date.
Fundamentals and earnings results, however, remain strong for telephone
and electric companies owned by the Fund. With respect to telephone
companies, volume growth, both in terms of access lines and minutes-of-
use, was higher than expected in the first quarter. Also, many telephone
companies reported strong growth in second lines due to growth of data
applications (e.g., Internet). Electric companies experienced increased
first quarter earnings attributed to favorable weather conditions across
much of the U.S. and cost cutting measures.
For the remainder of fiscal 1996, the Fund will continue to be
diversified and invested in utility companies that offer attractive
earnings and dividend growth prospects. Current valuation levels suggest
that in the coming months investors are likely to view utility stocks as
attractively valued and as a defensive haven for those concerned about a
stock market correction.
As always we appreciate the opportunity to serve your investment needs.
Sincerely,
/S/ Margaret R. Haggerty
Margaret R. Haggerty
Portfolio Manager
June 1, 1996
Portfolio of Investments
FIRST INVESTORS GROWTH & INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
April 30, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--90.6%
Aerospace/Defense--1.6%
19,000 Boeing Company $1,560,375 $165
- ------------------------------------------------------------------------------------------------
Automotive--.7%
19,592 Ford Motor Company 702,862 74
- ------------------------------------------------------------------------------------------------
Banks--6.6%
20,000 Crestar Financial Corporation 1,127,500 119
25,000 First Bank System, Inc. 1,506,250 160
25,000 First Union Corporation 1,537,500 163
11,500 J.P. Morgan & Company, Inc. 967,437 102
25,000 Wachovia Corporation 1,100,000 116
- ------------------------------------------------------------------------------------------------
6,238,687 660
- ------------------------------------------------------------------------------------------------
Business Services--.6%
17,000 Sysco Corporation 546,125 58
- ------------------------------------------------------------------------------------------------
Chemicals--6.2%
22,000 Air Products and Chemicals, Inc. 1,256,750 133
15,000 Dow Chemical Company 1,333,125 141
17,000 Du Pont (E.I.) de Nemours & Company 1,366,375 145
45,000 Engelhard Corporation 1,130,625 120
15,000 Loctite Corporation 757,500 80
- ------------------------------------------------------------------------------------------------
5,844,375 619
- ------------------------------------------------------------------------------------------------
Communication Equipment--1.5%
23,000 Motorola, Inc. 1,408,750 149
- ------------------------------------------------------------------------------------------------
Computers & Office Equipment--2.5%
10,000 Hewlett-Packard Company 1,058,750 112
12,000 International Business Machines Corporation 1,290,000 137
- ------------------------------------------------------------------------------------------------
2,348,750 249
- ------------------------------------------------------------------------------------------------
Drugs--8.6%
12,000 American Home Products Corporation $1,266,000 $134
18,000 Bristol-Myers Squibb Company 1,480,500 157
12,000 Johnson & Johnson 1,110,000 118
21,000 Pfizer, Inc. 1,446,375 153
12,000 Warner-Lambert Company 1,341,000 142
23,238 Zeneca Group PLC (ADR) 1,458,185 154
- ------------------------------------------------------------------------------------------------
8,102,060 858
- ------------------------------------------------------------------------------------------------
Electric Utilities--2.9%
30,000 Baltimore Gas and Electric Company 791,250 84
40,000 Pacific Gas and Electric Company 910,000 96
26,000 Texas Utilities Company 1,046,500 111
- ------------------------------------------------------------------------------------------------
2,747,750 291
- ------------------------------------------------------------------------------------------------
Electrical Equipment--3.2%
26,000 General Electric Company 2,015,000 213
20,000 York International Corporation 960,000 102
- ------------------------------------------------------------------------------------------------
2,975,000 315
- ------------------------------------------------------------------------------------------------
Electronics--1.3%
28,000 AMP, Inc. 1,253,000 133
- ------------------------------------------------------------------------------------------------
Energy Services--2.6%
35,000 Dresser Industries, Inc. 1,115,625 118
15,000 Schlumberger, Ltd. 1,323,750 140
- ------------------------------------------------------------------------------------------------
2,439,375 258
- ------------------------------------------------------------------------------------------------
Energy Sources--4.1%
20,000 Amoco Corporation 1,460,000 155
15,000 Exxon Corporation 1,275,000 135
37,000 Unocal Corporation 1,188,625 125
- ------------------------------------------------------------------------------------------------
3,923,625 415
- ------------------------------------------------------------------------------------------------
Entertainment Products--1.1%
24,000 Duracell International, Inc. $1,086,000 $115
- ------------------------------------------------------------------------------------------------
Financial Services--1.5%
30,000 American Express Company 1,455,000 154
- ------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--1.4%
43,000 Sara Lee Corporation 1,333,000 141
- ------------------------------------------------------------------------------------------------
Household Products--8.3%
15,000 Avon Products, Inc. 1,333,125 141
20,000 Colgate-Palmolive Company 1,532,500 162
25,900 Estee Lauder Companies - Class "A" 948,588 100
15,000 Kimberly-Clark Corporation 1,089,375 115
20,000 Procter & Gamble Company 1,690,000 180
45,800 *Revlon, Inc. 1,236,600 131
- ------------------------------------------------------------------------------------------------
7,830,188 829
- ------------------------------------------------------------------------------------------------
Insurance--4.0%
21,000 Ace, Ltd. 924,000 98
33,000 Allstate Corporation 1,282,875 136
17,000 American International Group, Inc. 1,553,375 164
- ------------------------------------------------------------------------------------------------
3,760,250 398
- ------------------------------------------------------------------------------------------------
Machinery & Manufacturing--2.9%
15,000 Illinois Tool Works, Inc. 1,008,750 107
12,000 Ingersoll-Rand Company 465,000 49
19,000 Minnesota Mining & Manufacturing Company 1,249,250 132
- ------------------------------------------------------------------------------------------------
2,723,000 288
- ------------------------------------------------------------------------------------------------
Media--5.4%
23,000 Gannett Company 1,572,625 167
16,000 Knight-Ridder, Inc. 1,158,000 123
35,000 *Viacom, Inc. - Class "B" 1,435,000 152
22,000 Vodafone Group PLC (ADR) 882,750 93
- ------------------------------------------------------------------------------------------------
5,048,375 535
- ------------------------------------------------------------------------------------------------
Medical Products--2.8%
41,000 Abbott Laboratories $1,665,625 $177
28,000 Bard (C.R.), Inc. 1,022,000 108
- ------------------------------------------------------------------------------------------------
2,687,625 285
- ------------------------------------------------------------------------------------------------
Paper & Forest Products--1.6%
6,600 Georgia-Pacific Corporation 513,150 54
25,000 International Paper Company 996,875 106
- ------------------------------------------------------------------------------------------------
1,510,025 160
- ------------------------------------------------------------------------------------------------
Real Estate Investment Trusts--.5%
13,300 Storage USA, Inc. 440,563 47
- ------------------------------------------------------------------------------------------------
Retail--5.4%
30,000 May Department Stores Company 1,420,200 150
20,000 Mercantile Stores Company, Inc. 1,247,500 132
35,000 Talbots, Inc. 1,006,250 107
60,000 Wal-Mart Stores, Inc. 1,432,500 152
- ------------------------------------------------------------------------------------------------
5,106,450 541
- ------------------------------------------------------------------------------------------------
Software & Services--4.6%
33,000 Automatic Data Processing, Inc. 1,282,875 136
25,000 BMC Software, Inc. 1,521,875 161
20,000 First Data Corporation 1,520,000 161
- ------------------------------------------------------------------------------------------------
4,324,750 458
- ------------------------------------------------------------------------------------------------
Telephone--4.8%
31,000 A T & T Corp. 1,898,750 200
18,000 NYNEX Corporation 884,250 94
20,000 SBC Communications, Inc. 1,000,000 106
24,500 US West Communications Group 802,375 85
- ------------------------------------------------------------------------------------------------
4,585,375 485
- ------------------------------------------------------------------------------------------------
Transportation--2.2%
40,000 Canadian Pacific, Ltd. $ 815,000 $86
18,000 Union Pacific Corporation 1,226,250 130
- ------------------------------------------------------------------------------------------------
2,041,250 216
- ------------------------------------------------------------------------------------------------
Travel & Leisure--1.7%
33,000 McDonald's Corporation 1,579,875 167
- ------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $69,667,897) 85,602,460 9,063
- ------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--.8%
Energy Sources--.3%
5,000 Unocal Corporation 7% (Note 5) 280,000 30
- ------------------------------------------------------------------------------------------------
Real Estate Investment Trusts--.5%
18,000 Security Capital Pacific Trust "A" 7% 461,250 48
- ------------------------------------------------------------------------------------------------
Total Value of Convertible Preferred Stocks (cost $741,289) 741,250 78
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
- ------------------------------------------------------------------------------------------------
Amount
Shares Invested
or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONVERTIBLE BONDS--3.1%
Communications Equipment--.9%
$600 General Instrument Corporation, 5%, 6/15/00 $834,000 $88
Energy Sources--1.1%
1,000 Noble Affiliates, 4-1/4% 11/1/03 1,055,000 112
Travel & Leisure--1.1%
900 AMR Corporation, 6-1/8% 11/1/24 1,019,250 108
- ------------------------------------------------------------------------------------------------
Total Value of Convertible Bonds (cost $2,617,713) 2,908,250 308
- ------------------------------------------------------------------------------------------------
EQUITY-LINKED SECURITIES--.1%
Computers & Office Equipment
1,000 Salomon Inc. (Hewlett-Packard), 5-1/4%, 1/1/97 (cost $76,375) 103,000 11
REPURCHASE AGREEMENTS--4.4%
$4,114M Lehman Brothers, 5.33%, 5/1/96 (collateralized by
$3,790M U.S. Treasury Note, 8-1/8%, 8/15/21) (cost $4,114,000) 4,114,000 436
- ------------------------------------------------------------------------------------------------
Total Value of Investments (cost $77,217,274) 99.0% 93,468,960 9,896
Other Assets, Less Liabilities 1.0 980,474 104
- ------------------------------------------------------------------------------------------------
Net Assets 100.0% $94,449,434 $10,000
================================================================================================
</TABLE>
*Non-income producing
See notes to financial statements
Portfolio of Investments
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
(A Series of First Investors Series Fund II, Inc.)
April 30, 1996
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--86.9%
Basic Industry--6.7%
6,000 *American Buildings Company $152,437 $136
2,100 Asarco, Inc. 69,562 62
10,000 Interpool, Inc. 180,000 160
6,000 Schulman (A), Inc. 130,500 116
6,400 *USA Waste Services, Inc. 166,400 148
2,000 Wellman, Inc. 48,000 43
- ------------------------------------------------------------------------------------------------
746,899 665
- ------------------------------------------------------------------------------------------------
Capital Goods--1.8%
2,200 Kennametal, Inc. 83,325 74
2,800 *Varity Corporation 119,350 106
- ------------------------------------------------------------------------------------------------
202,675 180
- ------------------------------------------------------------------------------------------------
Consumer Durables--2.1%
2,600 Harley-Davidson, Inc. 114,725 102
4,300 Masco Corporation 117,175 104
- ------------------------------------------------------------------------------------------------
231,900 206
- ------------------------------------------------------------------------------------------------
Consumer Non-Durables--6.5%
3,600 Coca-Cola Enterprises, Inc. 106,200 95
4,800 Newell Company 136,800 122
5,000 Richfood Holdings, Inc. 163,125 145
6,200 *Tenet Healthcare Corporation 127,100 113
3,600 Universal Corporation 86,400 77
4,200 Whitman Corporation 106,050 94
- ------------------------------------------------------------------------------------------------
725,675 646
- ------------------------------------------------------------------------------------------------
Consumer Services--16.7%
2,300 ADVO, Inc. $23,287 $21
2,700 *Barnes & Noble, Inc. 93,487 83
8,900 *Brinker International, Inc. 155,750 139
5,000 Equifax, Inc. 122,500 109
3,000 *Evergreen Media Corporation - Class "A" 117,750 105
1,400 *Fila Holding S.p.A. (ADR) 95,550 85
3,800 *Franklin Electronic Publishers, Inc. 95,475 85
3,500 Gaylord Entertainment Company - Class "A" 92,750 83
8,500 *Home Shopping Network, Inc. 99,875 89
3,450 *Infinity Broadcasting Corporation 100,050 89
3,700 *Kroger Company 152,161 135
1,700 Talbots, Inc. 48,875 44
4,600 *Tele-Communications, Inc. Liberty Media Group - Class "A" 125,925 112
7,000 *Tele-Communications, Inc. TCI Group - Class "A" 133,875 119
3,200 Time Warner, Inc. 130,800 116
4,100 US West Media Group 79,950 71
2,500 *Viacom, Inc. - Class "B" 102,500 91
3,300 Walgreen Company 105,600 94
- ------------------------------------------------------------------------------------------------
1,876,160 1,670
- ------------------------------------------------------------------------------------------------
Financial--8.7%
3,000 American Financial Group, Inc. 91,875 82
2,000 American Re Corporation 83,000 74
7,500 *American Travellers Corporation 146,250 130
1,100 Boatmen's Bankshares, Inc. 42,625 38
2,900 *Cal Fed Bancorp, Inc. 51,837 46
5,200 Federal National Mortgage Association 159,250 142
700 Innkeepers USA Trust 6,738 6
1,200 Mark Twain Bancshares, Inc. 45,300 40
1,000 Mercantile Bancorporation 44,500 40
1,000 The Money Store, Inc. 25,250 22
2,100 State Street Boston Corporation 104,737 93
11,200 USF&G Corporation 177,800 159
- ------------------------------------------------------------------------------------------------
979,162 872
- ------------------------------------------------------------------------------------------------
Health Care/Miscellaneous--10.0%
4,200 Dentsply International, Inc. $175,350 $157
3,700 *Humana, Inc. 91,113 81
4,200 *Living Centers of America, Inc. 155,400 138
2,000 Medpartners/Mullikin, Inc. 57,750 51
2,000 *Nellcor Puritan Bennett, Inc. 98,000 87
2,900 Stryker Corporation 140,288 125
3,900 *Vencor, Inc. 131,625 117
6,700 *VidaMed, Inc. 72,863 65
4,600 *VISX, Inc. 157,550 141
1,000 *Watson Pharmaceuticals, Inc. 47,500 42
- ------------------------------------------------------------------------------------------------
1,127,439 1,004
- ------------------------------------------------------------------------------------------------
Technology--30.3%
3,800 *Adaptec, Inc. 218,500 195
1,000 *Affinity Technology Group 23,500 21
5,400 *Atmel Corporation 216,000 192
3,800 Automatic Data Processing, Inc. 147,725 132
6,800 AVX Corporation 161,500 144
1,400 *Cisco Systems, Inc. 72,625 65
2,600 Computer Associates International, Inc. 190,775 170
7,300 *EMC Corporation 149,650 133
3,100 *Filenet Corporation 173,600 155
3,000 *GT Interactive Software Corporation 58,875 52
600 HBO & Company 71,250 63
1,500 *HMT Technology Corporation 33,188 30
3,300 *IMNET Systems, Inc. 108,900 97
2,700 *Informix Corporation 71,213 63
4,800 *Intersolv 52,200 46
3,400 *LSI Logic Corporation 122,400 109
2,000 *Microsoft Corporation 226,750 202
6,200 *National Semiconductor Corporation 97,650 87
1,800 *Optical Data Systems, Inc. 49,275 44
6,800 *Quantum Corporation 144,500 129
- ------------------------------------------------------------------------------------------------
Amount
Shares Invested
or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Technology (continued)
2,400 Reynolds & Reynolds Company $111,000 $99
1,800 *Seagate Technology, Inc. 104,400 93
4,900 *Silicon Graphics, Inc. 145,163 129
1,000 *Sterling Software, Inc. 77,750 69
4,000 *Sungard Data Systems, Inc. 133,000 118
6,800 *Symantec Corporation 109,650 98
11,900 *SystemSoft Corporation 331,713 295
- ------------------------------------------------------------------------------------------------
3,402,752 3,030
- ------------------------------------------------------------------------------------------------
Telecommunications--3.1%
3,000 Frontier Corporation 94,875 84
3,300 *Octel Communications Corporation 147,675 132
13,300 *USCI, Inc. 108,063 96
- ------------------------------------------------------------------------------------------------
350,613 312
- ------------------------------------------------------------------------------------------------
Transportation--1.0%
3,200 *Fritz Companies, Inc. 117,600 105
- ------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $8,388,817) 9,760,875 8,690
- ------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--3.1%
$350M Chevron Oil Finance Company, 5-1/4% 5/2/96 (cost $349,949) 349,949 312
- ------------------------------------------------------------------------------------------------
Total Value of Investments (cost $8,738,766) 90.0% 10,110,824 9,002
Other Assets, Less Liabilities 10.0 1,120,748 998
- ------------------------------------------------------------------------------------------------
Net Assets 100.0% $11,231,572 $10,000
================================================================================================
*Non-income producing
See notes to financial statements
Portfolio of Investments
FIRST INVESTORS GROWTH & INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
April 30, 1996
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--90.1%
Electric Power--43.5%
60,000 Allegheny Power Systems, Inc. $1,755,000 $166
51,000 American Electric Power Company 2,071,875 197
50,000 Baltimore Gas & Electric Company 1,318,750 125
60,000 Boston Edison Company 1,462,500 139
41,000 Carolina Power & Light Company 1,476,000 140
45,000 Central & South West Corporation 1,226,250 116
55,000 Cinergy Corporation 1,595,000 151
30,000 Dominion Resources, Inc. 1,155,000 110
65,000 DPL, Inc. 1,486,875 141
55,000 DQE, Inc. 1,457,500 138
50,000 DTE Energy Company 1,550,000 147
48,500 Duke Power Company 2,279,500 216
10,000 Empresa Nacional De Electricidad S.A. (ADR) 626,250 59
10,000 Enersis S.A. (ADR) 297,500 28
59,000 FPL Group, Inc. 2,544,375 242
50,000 General Public Utilities Corporation 1,587,500 151
50,000 Houston Industries, Inc. 1,068,750 101
50,000 Illinova Corporation 1,275,000 121
25,000 Kansas City Power & Light Company 656,250 62
30,000 New England Electric System 1,057,500 100
45,000 NIPSCO Industries, Inc. 1,614,375 153
30,000 Northern States Power Company 1,402,500 133
60,000 Ohio Edison Company 1,252,500 119
70,000 PacifiCorp 1,400,000 133
40,000 Pinnacle West Capital Corporation 1,065,000 101
60,000 Portland General Corporation 1,762,500 167
40,000 PP&L Resources, Inc. 905,000 86
50,000 Public Service Company of Colorado 1,656,250 157
60,000 Southern Company 1,320,000 125
65,000 TECO Energy, Inc. 1,511,250 143
61,000 Texas Utilities Company 2,455,250 234
20,000 TNP Enterprises, Inc. 475,000 45
40,000 Wisconsin Energy Corporation 1,065,000 101
- ------------------------------------------------------------------------------------------------
45,832,000 4,347
- ------------------------------------------------------------------------------------------------
Energy--6.5%
42,000 Enron Corporation $1,690,500 $160
6,000 Exxon Corporation 510,000 48
8,100 Kerr-McGee Corporation 517,388 49
40,000 NICOR, Inc. 1,115,000 106
55,000 Pacific Enterprises 1,416,250 134
48,000 PanEnergy Corporation 1,566,000 149
- ------------------------------------------------------------------------------------------------
6,815,138 646
- ------------------------------------------------------------------------------------------------
Natural Gas--19.4%
60,000 AGL Resources, Inc. 1,132,500 107
22,000 Atmos Energy Corporation 544,500 52
35,000 Brooklyn Union Gas Company 918,750 87
13,000 Coastal Corporation 515,125 49
30,000 Consolidated Natural Gas Company 1,402,500 133
36,000 El Paso Natural Gas Company 1,332,000 126
65,000 MCN Corporation 1,600,625 153
30,000 National Fuel Gas Company 1,053,750 100
40,000 New Jersey Resources Corporation 1,135,000 108
27,000 NorAm Energy Corporation 297,000 28
20,000 Oneok, Inc. 515,000 49
35,000 Piedmont Natural Gas Company, Inc. 756,875 72
35,000 Questar Corporation 1,225,000 116
36,000 Sonat, Inc. 1,570,500 149
30,000 Southwest Gas Corporation 498,750 47
20,000 Tenneco, Inc. 1,097,500 104
45,000 UGI Corporation 1,006,875 96
35,000 Washington Energy Company 678,125 64
39,700 Washington Gas Light Company 833,700 79
30,000 WICOR, Inc. 1,031,250 98
25,000 Williams Companies, Inc. 1,278,125 121
- ------------------------------------------------------------------------------------------------
20,423,450 1,938
- ------------------------------------------------------------------------------------------------
Telecommunications\Long Distance--2.6%
20,000 A T & T Corp. $1,225,000 $117
17,000 *MCI Communications Corporation 500,437 47
25,000 Sprint Corporation 1,053,125 100
- ------------------------------------------------------------------------------------------------
2,778,562 264
- ------------------------------------------------------------------------------------------------
Telephone/Utilities--18.1%
40,000 Ameritech Corporation 2,335,000 221
40,000 Bell Atlantic Corporation 2,600,000 247
60,000 BellSouth Corporation 2,400,000 228
5,000 British Telecommunication PLC (ADR) 275,000 26
15,000 Cincinnati Bell, Inc. 738,750 70
45,000 Frontier Corporation 1,423,125 135
65,000 GTE Corporation 2,819,375 267
25,000 NYNEX Corporation 1,228,125 116
40,000 SBC Communications, Inc. 2,000,000 190
26,000 Southern New England Telecommunications Corporation 1,157,000 110
15,000 Telefonica De Espana S.A. (ADR) 789,375 75
40,000 US West Communications Group 1,310,000 124
- ------------------------------------------------------------------------------------------------
19,075,750 1,809
- ------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $83,511,874) 94,924,900 9,004
- ------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.4%
Telephone/Utilities
10,000 Pacific Telesis Finance 7.56% 245,000 23
5,000 US West Financing 7.96% 125,625 12
- ------------------------------------------------------------------------------------------------
Total Value of Preferred Stocks (cost $375,000) 370,625 35
- ------------------------------------------------------------------------------------------------
CORPORATE BONDS--4.8%
Electric & Gas Utilities--3.4%
$500 Baltimore Gas & Electric Co., 7.52%, 2000 $509,645 $48
500 Consolidated Edison Co. of New York, 6-5/8%, 2002 491,235 47
500 Duke Power Co., 5-7/8%, 2003 464,949 44
500 Idaho Power Co., 6.4%, 2003 477,503 45
700 Pennsylvania Power & Light Co., 6-7/8%, 2003 686,795 65
500 SCE Capital Corp., 7-3/8%, 2003 510,854 48
500 Union Electric Co., 6-3/4%, 2008 480,421 46
- ------------------------------------------------------------------------------------------------
3,621,402 343
- ------------------------------------------------------------------------------------------------
Telecommunications/Long Distance--.5%
500 A T & T Corp., 7-1/2%, 2006 512,781 49
- ------------------------------------------------------------------------------------------------
Telephone--.9%
500 BellSouth Telecommunications, Inc., 6-3/8%, 2004 479,401 46
500 United Telephone Company of Florida, 6-1/4%, 2003 476,526 45
- ------------------------------------------------------------------------------------------------
955,927 91
- ------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $5,284,000) 5,090,110 483
- ------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--4.3%
500 A T & T Corp., 5.27%, 5/2/96 499,926 47
450 BellSouth Telecommunications, Inc., 5.22%, 5/15/96 449,086 43
300 Chevron Oil Finance Company, 5-1/4%, 5/2/96 299,957 28
1,000 GTE Northwest, Inc., 5.31%, 5/7/96 999,115 95
340 Northern Illinois Gas Corporation, 5.27%, 5/7/96 339,702 32
796 U.S. Central Credit Union, 5.26%, 5/20/96 793,790 75
1,200 U.S. Central Credit Union, 5.26%, 5/22/96 1,196,318 114
- ------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $4,577,894) 4,577,894 434
- ------------------------------------------------------------------------------------------------
Total Value of Investments (cost $93,748,828) 99.6% 10,110,824 9,956
Other Assets, Less Liabilities .4 461,579 44
- ------------------------------------------------------------------------------------------------
Net Assets 100.0% $105,425,108 $10,000
================================================================================================
*Non-income producing
Statement of Assets and Liabilities
FIRST INVESTORS SERIES FUND II, INC.
April 30, 1996
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
FIRST INVESTORS
-----------------------------------------
GROWTH & U.S.A. MID-CAP UTILITIES
INCOME OPPORTUNITY INCOME
FUND FUND FUND
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost $77,217,274 $8,738,766 $93,748,828
=========== =========== ============
At value (Note 1A) $93,468,960 $10,110,824 $104,963,529
Cash 126,873 907,722 936,840
Receivables:
Capital shares sold 748,804 99,154 361,667
Dividends and interest 191,143 5,065 517,937
Investment securities sold 579,596 157,472 --
Deferred organization expenses (Note 1E) 7,750 -- 5,750
----------- ----------- ------------
Total Assets 95,123,126 11,280,237 106,785,723
----------- ----------- ------------
Liabilities
Payables:
Investment securities purchased 479,400 13,000 892,889
Capital shares redeemed 93,552 17,029 342,882
Accrued expenses 55,084 12,124 64,647
Accrued advisory fee 45,656 6,512 60,197
----------- ----------- ------------
Total Liabilities 673,692 48,665 1,360,615
----------- ----------- ------------
Net Assets $94,449,434 $11,231,572 $105,425,108
=========== =========== ============
Net Assets Consist of:
Capital paid in $76,933,306 $ 9,415,567 $ 98,194,579
Undistributed net investment income 71,778 21,097 246,540
Accumulated net realized gain (loss)
on investment transactions 1,192,664 422,850 (4,230,712)
Net unrealized appreciation in value of
investments 16,251,686 1,372,058 11,214,701
----------- ----------- ------------
Total $94,449,434 $11,231,572 $105,425,108
=========== =========== ============
Capital shares outstanding (Note 4):
Class A 9,860,545 718,778 16,133,432
Class B 874,316 36,929 1,061,867
Net asset value and redemption price per share
--Class A $8.80 $14.87 $6.13
=========== =========== ============
Maximum offering price per share--Class A
(Net asset value/.9375)* $9.39 $15.86 $6.54
=========== =========== ============
Net asset value and offering price per share
--Class B $8.74 $14.74 $6.08
=========== =========== ============
</TABLE>
*On purchases of $25,000 or more, the sales charge is reduced.
Statement of Operations
FIRST INVESTORS SERIES FUND II, INC.
Six Months Ended April 30, 1996
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
FIRST INVESTORS
-----------------------------------------
GROWTH & U.S.A. MID-CAP UTILITIES
INCOME OPPORTUNITY INCOME
FUND FUND FUND
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income
Income:
Dividends $865,134 $48,756 $1,987,506
Interest 223,081 45,206 309,496
----------- ----------- ------------
Total income 1,088,215 93,962 2,297,002
----------- ----------- ------------
Expenses (Notes 1E and 3):
Advisory fee 300,899 47,438 368,304
Shareholder servicing costs 129,593 23,110 153,219
Distribution plan expenses-Class A 112,266 13,891 140,108
Distribution plan expenses-Class B 26,978 1,681 24,048
Reports and notices to shareholders 33,238 7,577 34,626
Professional fees 15,698 12,448 19,825
Custodian fees 9,383 3,408 7,494
Amortization of organization expenses 1,500 -- 1,500
Other expenses 8,008 2,895 11,680
----------- ----------- ------------
Total expenses 637,563 112,448 760,804
Less: Expenses waived or assumed (100,771) (36,542) (162,372)
Custodian fees paid indirectly (1,225) (3,408) (7,478)
----------- ----------- ------------
Net expenses 535,567 72,498 590,954
----------- ----------- ------------
Net investment income 552,648 21,464 1,706,048
----------- ----------- ------------
Realized and Unrealized Gain (Loss) on Investments
(Note 2):
Net realized gain on investments 1,304,121 422,796 571,427
Net unrealized appreciation of investments 7,978,423 399,529 2,619,578
----------- ----------- ------------
Net gain on investments 9,282,544 822,325 3,191,005
----------- ----------- ------------
Net Increase in Net Assets Resulting from
Operations $9,835,192 $843,789 $4,897,053
=========== =========== ============
</TABLE>
Statement of Changes in Net Assets
FIRST INVESTORS SERIES FUND II, INC.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
FIRST INVESTORS
-----------------------
GROWTH &
INCOME FUND
-----------------------
11/1/95 to 11/1/94 to
4/30/96 10/31/95
- ------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations
Net investment income $ 552,648 $1,150,915
Net realized gain (loss) on investments 1,304,121 59,975
Net unrealized appreciation of investments 7,978,423 7,741,415
---------- ----------
Net increase in net assets resulting from
operations 9,835,192 8,952,305
---------- ----------
Distributions to Shareholders from:
Net investment income--Class A (576,601) (1,115,624)
Net investment income--Class B (29,496) (25,337)
Net realized gains--Class A -- --
Net realized gains--Class B -- --
---------- ----------
Total distributions (606,097) (1,140,961)
---------- ----------
Capital Share Transactions(a)
Class A:
Proceeds from shares sold 20,417,255 27,027,606
Value of distributions reinvested 565,749 1,092,153
Cost of shares redeemed (6,315,675) (6,745,463)
---------- ----------
14,667,329 21,374,296
---------- ----------
Class B:
Proceeds from shares sold 3,637,994 3,403,974
Value of distributions reinvested 28,666 25,204
Cost of shares redeemed (208,776) (9,090)
---------- ---------
3,457,884 3,420,088
---------- ----------
Net increase (decrease) from capital share
transactions 18,125,213 24,794,384
---------- ----------
Net increase in net assets 27,354,308 32,605,728
Net Assets
Beginning of period 67,095,126 34,489,398
---------- ----------
End of period+ $94,449,434 $67,095,126
========== ==========
+Includes undistributed net investment income of $71,778 $125,227
========== ==========
(a) Capital Shares Issued and Redeemed
Class A:
Sold 2,415,834 3,750,649
Issued for distributions reinvested 66,885 151,589
Redeemed (749,955) (932,605)
---------- ----------
Net increase (decrease) in Class A capital shares
outstanding 1,732,764 2,969,633
========== ==========
Class B:
Sold 432,456 461,042
Issued for distributions reinvested 3,424 3,305
Redeemed (24,717) (1,194)
---------- ----------
Net increase in Class B capital shares
outstanding 411,163 463,153
========== ==========
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------
I N V E S T O R S
- ---------------------------------------------------
U.S.A. MID-CAP UTILITIES
OPPORTUNITY FUND INCOME FUND
- ------------------------ -----------------------
11/1/95 to 11/1/94 to 11/1/95 to 11/1/94 to
4/30/96 10/31/95 4/30/96 10/31/95
- ---------------------------------------------------
<S> <C> <C> <C>
21,464 43,381 1,706,048 3,178,531
422,796 1,220,064 571,427 (725,427)
399,529 460,706 2,619,578 12,245,737
- ------------ ---------- ----------- -----------
843,789 1,724,151 4,897,053 14,698,841
- ------------ ---------- ----------- -----------
(34,642) (47,512) (1,702,488) (3,123,462)
(1,321) -- (79,222) (49,998)
(500,524) -- -- --
(20,887) -- -- --
- ------------ ---------- ----------- -----------
(557,374) (47,512) (1,781,710) (3,173,460)
- ------------ ---------- ----------- -----------
2,088,191 1,771,094 18,920,101 19,911,865
526,859 47,031 1,635,237 2,975,959
(1,018,219) 460,706 (8,333,484) (13,152,876)
- ------------ ---------- ----------- -----------
1,596,831 (494,511) 12,221,854 9,734,948
- ------------ ---------- ----------- -----------
360,853 297,505 3,361,017 2,987,201
22,208 -- 76,482 48,361
(150,831) (15,000) (249,583) (66,853)
- ------------ ---------- ----------- -----------
232,230 282,505 3,187,916 2,968,709
- ------------ ---------- ----------- -----------
1,829,061 (212,006) 15,409,770 12,703,657
- ------------ ---------- ----------- -----------
2,115,476 1,464,633 18,525,113 24,229,038
9,116,096 7,651,463 86,899,995 62,670,957
- ------------ ---------- ----------- -----------
11,231,572 9,116,096 105,425,108 86,899,995
============ ========== =========== ===========
21,097 35,596 246,540 322,202
============ ========== =========== ===========
147,427 130,597 3,042,463 3,733,022
37,986 3,962 261,826 557,233
(71,533) (179,150) (1,344,842) (2,460,412)
- ------------ ---------- ----------- -----------
113,880 (44,591) 1,959,447 1,829,843
============ ========== =========== ===========
25,271 21,568 543,287 550,886
1,612 -- 12,334 8,714
(10,489) (1,033) (40,869) (12,485)
- ------------ ---------- ----------- -----------
16,394 20,535 514,752 547,115
============ ========== =========== ===========
</TABLE>
Notes to Financial Statements
FIRST INVESTORS SERIES FUND II, INC.
1. Significant Accounting Policies--First Investors Series Fund II, Inc.
("Series Fund II"), a Maryland corporation, is registered under the
Investment Company Act of 1940 (the "1940 Act") as a diversified, open-
end management investment company. The Fund offers three separate
investment series, First Investors Growth & Income Fund, First Investors
U.S.A. Mid-Cap Opportunity Fund and First Investors Utilities Income
Fund (each a "Fund"), and accounts separately for the assets,
liabilities and operations of each Fund. The objective of these Funds is
as follows:
Growth & Income Fund seeks long-term growth of capital and current
income by investing, under normal market conditions, at least 65% of its
total assets in securities that provide the potential for growth and
offer income, such as dividend-paying stocks and securities convertible
into common stocks.
U.S.A. Mid-Cap Opportunity Fund seeks long-term capital growth by
investing, under normal market conditions, at least 75% of its total
assets in common and preferred stocks of companies that its investment
adviser considers to have potential for capital growth. In addition,
under normal market conditions, at least 65% of the Fund's total assets
will be invested in securities of companies that have a medium market
capitalization and are incorporated and have their principal place of
business in the United States.
Utilities Income Fund primarily seeks high current income. Long-term
capital appreciation is a secondary objective. The Fund seeks to achieve
its objectives by investing, under normal market conditions, at least
65% of its total assets in equity and debt securities issued by
companies primarily engaged in the public utilities industry.
A. Security Valuation--Except as provided below, a security listed or
traded on an exchange or the NASDAQ National Market System is valued at
its last sale price on the exchange or system where the security is
principally traded, and lacking any sales, the security is valued at the
mean between the closing bid and asked prices. Each security traded in
the over-the-counter market (including securities listed on exchanges
whose primary market is believed to be over-the-counter) is valued at
the mean between the last bid and asked prices based upon quotes
furnished by a market maker for such securities. Securities may also be
priced by a pricing service. The pricing service uses quotations
obtained from investment dealers or brokers, information with respect to
market transactions in comparable securities and other available
information in determining value. Short-term corporate notes which are
purchased at a discount are valued at amortized cost. Securities for
which market quotations are not readily available and other assets are
valued on a consistent basis at fair value as determined in good faith
by or under the supervision of the Fund's officers in a manner
specifically authorized by the Board of Directors.
B. Federal Income Taxes--No provision has been made for federal income
taxes on net income or capital gains, since it is the policy of each
Fund to continue to comply with the special provisions of the Internal
Revenue Code applicable to investment companies and to make sufficient
distributions of income and capital gains (in excess of any available
capital loss carryovers) to relieve each Fund from all, or substantially
all, such taxes.
At April 30, 1996, capital loss carryovers were as follows:
Year Capital
Loss Carryovers Expire
-------------------------------
Total 2002 2003
------------- ------------- -------------
GROWTH &
INCOME FUND $ 111,457 $ 111,457 $ --
UTILITIES
INCOME FUND 4,727,380 3,991,114 736,266
C. Distributions to Shareholders--Dividends from net investment income
of the Growth & Income and Utilities Income Funds are declared and paid
quarterly and dividends from net investment income of the U.S.A. Mid-Cap
Opportunity Fund are declared and paid annually. Distributions from net
realized capital gains of all Funds are normally 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 capital loss carryforwards,
deferral of wash sales and amortization of deferred organization
expenses.
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 II 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. Deferred Organization Expenses-- Organization expenses are being
amortized over a five year period. Investors purchasing shares of a Fund
bear such expenses only as they are amortized. First Investors
Management Company, Inc. ("FIMCO"), Series Fund II's investment
adviser, has agreed that in the event any of the initial Class A shares
of a Fund purchased by FIMCO are redeemed during the amortization
period, the redemption proceeds will be reduced by a pro rata portion of
any unamortized organization expenses in the same proportion as the
number of initial Class A shares of the Fund being redeemed bears to the
number of initial Class A shares of the Fund outstanding at the time of
redemption.
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 and
distributions to shareholders are recorded on the ex-dividend date.
Interest income and estimated expenses are accrued daily.
2. Purchases and Sales of Securities--For the six months ended April 30,
1996, purchases and sales of securities, excluding repurchase agreements
and short-term corporate notes, were as follows:
Cost of Proceeds
Purchases of Sales
----------- -----------
GROWTH & INCOME FUND $30,865,537 $10,985,008
U.S.A. MID-CAP OPPORTUNITY FUND 6,177,993 3,827,693
UTILITIES INCOME FUND 24,478,818 9,829,296
At April 30, 1996, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
<TABLE>
<CAPTION>
Gross Gross Net
Aggregate Unrealized Unrealized Unrealized
Cost Appreciation Depreciation Appreciation
-------------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
GROWTH & INCOME FUND $77,217,274 $16,678,894 $427,208 $16,251,686
U.S.A. MID-CAP
OPPORTUNITY FUND 8,738,766 1,734,112 362,054 1,372,058
UTILITIES INCOME FUND 93,823,587 11,950,292 810,350 11,139,942
</TABLE>
3. Advisory Fee and Other Transactions With Affiliates--Certain officers
and directors of the Series Fund II are officers and directors of its
investment adviser, 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 Series Fund II's Individual Retirement Accounts. Officers and
directors of the Series Fund II received no remuneration from the Series
Fund II for serving in such capacities. Their remuneration (together
with certain other expenses of the Series Fund II) is paid by FIMCO or
FIC.
The Investment Advisory Agreement provides as compensation to FIMCO for
each Fund other than the U.S.A. Mid-Cap Opportunity Fund, an annual fee,
payable monthly, at the rate of .75% on the first $300 million of each
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. The annual fee for the U.S.A. Mid-Cap Opportunity Fund is
payable monthly, at the rate of 1% on the first $200 million of the
Fund's average daily net assets, .75% on the next $300 million,
declining by .03% on each $250 million thereafter, down to .66% on
average daily net assets over $1 billion. The investment adviser has
agreed to waive .25% of the annual fee for the U.S.A. Mid-Cap
Opportunity Fund for a minimum period ending October 31, 1996. For the
six months ended April 30, 1996, total advisory fees accrued to FIMCO
were $716,641 of which $160,871 was waived. In addition, expenses of
$116,165 were assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse
each Fund if and to the extent that the Fund's aggregate operating
expenses, including advisory fees but generally excluding interest,
taxes, brokerage commissions and extraordinary expenses, exceed any
limitation on expenses applicable to that Fund in those states (unless
waivers of such limitations have been obtained). The amount of any such
reimbursement is limited to the Fund's yearly advisory fee. For the six
months ended April 30, 1996, no reimbursement was required pursuant to
these provisions.
For the six months ended April 30, 1996, FIC, as underwriter, received
$1,761,421 in commissions from the sale of shares of the Funds, after
allowing $7,821 to other dealers. Shareholder servicing costs included
$191,302 in transfer agent fees accrued to ADM and $80,885 in custodian
fees paid to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940
Act, each Fund is authorized to pay FIC a fee equal to .30% of the
average net assets of the Class A shares and 1% of the average net
assets of the Class B shares on an annualized basis each fiscal 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 April 30, 1996,
these fees on the Class A shares amounted to $266,265 (of which $22,649
was waived by FIC) and $52,707 on the Class B shares.
Wellington Management Company serves as an investment subadviser to the
Growth & Income Fund. The subadviser is paid by FIMCO and not by the
Fund.
The Funds' Custodian has provided credits in the amount of $12,111
against custodian charges based on the uninvested cash balances of each
Fund.
4. Capital--Each Fund sells two classes of shares, Class A and Class B,
each with a public offering price that reflects different sales charges
and expense levels. Class A shares are sold with an initial sales charge
of up to 6.25% of the amount invested and together with the Class B
shares are subject to 12b-1 fees as described in Note 3. Class B shares
are sold without an initial sales charge, but are generally subject to a
contingent deferred sales charge which declines in steps from 4% to 0%
during a six-year period. Class B shares automatically convert into
Class A shares after eight years. Realized and unrealized gains or
losses, investment income and expenses (other than 12b-1 fees and
certain other class expenses) are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
Of the 100,000,000 shares originally designated, the Series Fund II
has classified 50,000,000 shares as Class A and 50,000,000 shares as
Class B.
5. Rule 144A Securities--Rule 144A provides a non-exclusive safe harbor
exemption from the registration requirements of the Securities Act of
1933 for specified resales of restricted securities to qualified
investors. At April 30, 1996, the Growth & Income Fund held one 144A
security with a value of $280,000 representing less than .3% of that
Fund's net assets. This security is valued as disclosed in Note 1A.
Financial Highlights
FIRST INVESTORS SERIES FUND II, INC.
The following table sets forth the per share operating performance data
for a share outstanding, total return,
ratios to average net assets and other supplemental data for each period
indicated.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
P E R S H A R E D A T A
--------------------------------------------------------------------------------------
Income from Investment Operations Less Distributions from
-------------------------------------- -----------------------
Net Asset Net
Value Realized and
--------- Net 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>
GROWTH & INCOME FUND
- ---------------------
CLASS A
- -------
10/4/93* to 10/31/93 $6.56 $.005 $ -- $.005 $.005 $ -- $.005
11/1/93 to 10/31/94 6.56 .128 .109 .237 .107 -- .107
11/1/94 to 10/31/95 6.69 .163 1.125 1.288 .168 -- .168
11/1/95 to 4/30/96 7.81 .058 .997 1.055 .065 -- .065
CLASS B
- -------
1/12/95* to 10/31/95 6.43 .084 1.372 1.456 .106 -- .106
11/1/95 to 4/30/96 7.78 .040 .967 1.007 .047 -- .047
- --------------------------------------------------------------------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
- -------------------------------
CLASS A
- -------
8/24/92* to 10/31/92 $11.64 $0.04 $.050 $.086 $.026 $ -- $.026
11/1/92 to 10/31/93 11.70 .122 .373 .495 .045 -- .045
11/1/93 to 10/31/94 12.15 .078 (.326) (.248) .122 -- .122
11/1/94 to 10/31/95 11.78 .083 2.796 2.879 .079 -- .079
11/1/95 to 4/30/96 14.58 .031 1.155 1.186 .058 .838 .896
CLASS B
- -------
1/12/95* to 10/31/95 12.03 (.011) 2.491 2.480 -- -- --
11/1/95 to 4/30/96 14.51 .004 1.117 1.121 .053 .838 .891
- --------------------------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
- ---------------------
CLASS A
- -------
2/22/93* to 10/31/93 $5.59 $0.12 $.317 $.435 $.105 $ -- $.105
11/1/93 to 10/31/94 5.92 .239 (.839) (.600) .227 .013 .24
11/1/94 to 10/31/95 5.08 .233 .822 1.055 .235 -- .235
11/1/95 to 4/30/96 5.90 .106 .237 .343 .113 -- .113
CLASS B
- -------
1/12/95* to 10/31/95 4.95 .144 .930 1.074 .164 -- .164
11/1/95 to 4/30/96 5.86 .098 .222 .320 .100 -- .100
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<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
Ratio to Before Expenses
Average Net Assets++ Waived or Assumed
Net Asset -------------------- --------------------
Value Net Net Portfolio
- --------- Total Net Assets Investment Investment Turnover
End Return** End of Period Expenses Income Expenses Income Rate
of Period (%) (in thousands) (%) (%) (%) (%) (%)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME FUND
- ---------------------
CLASS A
- -------
$ 6.56 .99+ $3,407 -- 1.02+ 1.37+ (.35)+ 0
6.69 3.67 34,489 .67 2.26 1.83 1.11 6
7.81 19.51 63,493 .98 2.34 1.59 1.74 19
8.80 13.55 86,804 1.29+ 1.43+ 1.54+ 1.18+ 15
CLASS B
- -------
7.78 22.73 3,602 1.90+ 2.23+ 2.61+ 1.52+ 19
8.74 12.97 7,646 2.06+ .65+ 2.28+ .43+ 15
- --------------------------------------------------------------------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
- -------------------------------
CLASS A
- -------
$11.70 3.86+ $8,150 .06+ 1.87+ 2.64+ (.72)+ 0
12.15 4.23 15,586 .81 .96 2.03 (.26) 52
11.78 (2.05) 7,651 .90 .45 2.32 (.97) 29
14.58 24.59 8,818 1.34 .48 2.36 (.55) 106
14.87 8.58 10,687 1.57+ .48+ 2.33+ (.28)+ 49
CLASS B
- -------
14.51 20.62 298 2.29+ (.03)+ 3.79+ (1.53)+ 106
14.74 8.15 544 2.30+ (.25)+ 3.30+ (1.25)+ 49
- ------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
- -------
$ 5.92 11.28+ 58,373 .35+ 3.84+ 1.80+ 2.39+ 17
5.08 (10.15) 62,671 .80 4.59 1.59 3.80 58
5.90 21.35 83,691 1.04 4.37 1.57 3.84 16
6.13 5.79 98,966 1.18+ 3.51+ 1.51+ 3.18+ 11
CLASS B
- -------
5.86 21.99 3,209 1.82+ 4.93+ 2.53+ 4.21+ 16
6.08 5.43 6,459 1.90+ 2.79+ 2.31+ 2.38+ 11
- ------------------------------------------------------------------------------------------
* Commencement of operations of Class A or date Class B shares first offered
** Calculated without sales charges
*** Prior to February 15, 1996, known as Made In The U.S.A. Fund
+ Annualized
++ Some or all expenses have been waived or assumed from commencement of operations
through April 30, 1996 (Note 3)
</TABLE>
Independent Auditor's Report
To the Shareholders and Board of Directors of
First Investors Series Fund II, Inc.
We have audited the accompanying statement of assets and liabilities,
including the portfolios of investments, of First Investors Growth &
Income Fund, First Investors U.S.A. Mid-Cap Opportunity Fund (formerly
First Investors Made In The U.S.A. Fund) and First Investors Utilities
Income Fund (comprising First Investors Series Fund II, Inc.), as of
April 30, 1996, and the related statement of operations for the six
months then ended, the statement of changes in net assets for the six
months ended April 30, 1996 and the year ended October 31, 1995 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 April 30, 1996, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of First Investors Growth & Income Fund, First
Investors U.S.A. Mid-Cap Opportunity Fund and First Investors Utilities
Income Fund as of April 30, 1996, and the results of their operations,
changes in their net assets and financial highlights for the periods
presented, in conformity with generally accepted accounting principles.
Tait, Weller & Baker
Philadelphia, Pennsylvania
May 31, 1996
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FIRST INVESTORS SERIES FUND II, INC.
Directors
- ---------------------------------------------------------------
James J. Coy
Roger L. Grayson
Glenn O. Head
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- ---------------------------------------------------------------
Glenn O. Head
President
Margaret R. Haggerty
Vice President
Patricia D. Poitra
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
FIRST INVESTORS SERIES FUND II, INC.
Shareholder Information
- ---------------------------------------------------------------
Investment Adviser
First Investors Management Company, Inc.
95 Wall Street
New York, NY 10005
Subadviser (Growth & Income Fund only)
Wellington Management Company
75 State Street
Boston, MA 02109
Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
48 Wall Street
New York, NY 10286
Transfer Agent
Administrative Data Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Fund's practice to mail only one copy of its annual and semi-
annual reports to any address at which more than one shareholder with
the same last name has indicated that mail is to be delivered.
Additional copies of the reports will be mailed if requested by any
shareholder in writing or by calling 800-423-4026. Each 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.
FIRST INVESTORS SERIES FUND II, INC.
Growth & Income Fund
U.S.A. Mid-Cap Opportunity Fund
Utilities Income Fund
SEMI-
ANNUAL
REPORT
APRIL 30, 1996
Vertically reading from bottom to top in the center of the page the words
"FIRST INVESTORS" appear.
The following language appears to the left of the above language:
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box to the right
of a circle containing the words "MAILED FROM ZIP CODE 11201" appears on the
righthand side.
The following language appears on the lefthand side:
FIRST INVESTORS SERIES FUND II, INC.
95 WALL STREET
NEW YORK, NY 10005
The following appears on the bottom lefthand side:
First Investors logo
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
FIUSA03
