Portfolio Manager's Letter
FIRST INVESTORS GROWTH & INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
Dear Shareholder:
We are pleased to present the annual report of the First Investors
Growth & Income Fund for the year ended October 31, 1995. During this
period, dividends from net investment income were 16.8 cents per share
on Class A shares and 10.6 cents per share on Class B shares.
The performance of the U.S. equity market has been exceptional in the
past twelve months, surpassing most expectations. Stock prices benefited
from strongly rising earnings and the increasing belief that the Federal
Reserve has "gotten it right" by achieving its goal of sustained,
moderate economic growth with low inflation. For the year ended October
31, 1995, the First Investors Growth & Income Fund returned on a net
asset value basis 19.5% on Class A shares compared to a 20.0% return for
the Lipper Growth and Income Average. Class B shares (first offered for
sale on January 12, 1995) returned 22.7%. Contributing to the Fund's
performance were sharp gains in the stock prices of several bank
holdings, such as Crestar Financial and First Fidelity Bancorp, which is
being acquired by First Union Corporation, along with good positions in
health care and media.
Throughout the course of the year, we have positioned the Fund in areas
that we believe will continue to show above average earnings and
dividend growth. This approach has been successful in some areas, such
as health care, finance and media, but not in others, notably the
industrial, energy and retail sectors. We are maintaining the Fund's
underweighting in technology as we believe the sector's recent choppy
performance is likely to continue for some time as earnings expectations
are lofty and valuations are near peak levels. In addition, the Fund's
industrial position is based on our view that if the economic cycle is
extended for another year or so, which we believe it will be, stocks in
the electrical equipment, paper and chemical areas will do quite well.
We also retain a slight overweight in the retail sector, as we believe
that companies such as Wal-Mart and May Department Stores are the
long-term winners in admittedly tough industry conditions.
Our approach remains a diversified one, which has not been favored by a
market advance led predominately by finance and technology. Currently,
the Fund holds 75 different companies in eleven broad industry groups.
Looking ahead, while we believe this country is entering a more
challenging period for the equity market, the Fund will be well
represented in sectors and companies that we believe will grow earnings
and dividends at double-digit rates next year, and should provide very
competitive results.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
/s/Laura J. Allen
---------------
Laura J. Allen
Portfolio Manager
November 30, 1995
Cumulative Performance Information
FIRST INVESTORS GROWTH & INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
Comparison of change in value of $10,000 investment in the First
Investors Growth & Income Fund (Class A shares) and the Standard &
Poor's 500 Index.
[chart omitted]
As of October 31, 1995
Growth &
Date S&P 500 Income
- -------- --------- ----------
10/4/93 10,000 9,375
10/31/93 10,148 9,375
12/31/93 10,173 9,516
2/28/94 10,234 9,602
4/30/94 9,917 9,365
6/30/94 9,834 9,264
8/31/94 10,557 9,790
10/31/94 10,530 9,723
12/31/94 10,303 9,444
2/28/95 10,958 9,956
4/30/95 11,589 10,514
6/30/95 12,302 11,162
8/31/95 12,724 11,502
10/31/95 13,192 11,620
Average Annual Total Return*
Class A shares N.A.V. Only S.E.C. Standardized
One Year 19.5% 12.0%
Since Inception 10.9% 7.5%
Class B shares
Since Inception 22.7% 17.8%
The graph compares a $10,000 investment made in the First Investors
Growth & Income Fund Class A shares) on 10/4/93 (inception date) with a
similar investment in the S&P 500 Index.For purposes of the graph and
the accompanying table, unless otherwise indicated, it has been assumed
that the maximum sales charge was deducted from the initial $10,000
investment in the Fund and all dividends and distributions were
reinvested. Class B shares performance may be greater than or less than
that shown above based on differences in sales loads and fees paid by
shareholders investing in the different classes.
The S&P 500 Index is an unmanaged capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of such stocks, which
represent all major industries. The Index does not take into account
fees and expenses. It is not possible to invest directly in the Standard
& Poor's 500 Index.
*Average Annual Total Return figures (for the period ended 10/31/95)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
6.25%. Some or all of the expenses of the Fund were waived or assumed.
If such expenses had been paid by the Fund, the Class A shares S.E.C.
Standardized Average Annual Total Return for One Year and Since
Inception would have been 11.2% and 6.8%, respectively. The returns for
Class B shares (first offered for sale on 1/12/95) are for the period
1/12/95 through 10/31/95. The Class B "S.E.C. Standardized" return is
adjusted for the applicable deferred sales charge (maximum of 4% in the
first year).
Results represent past performance and do not indicate future results.
Investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
the original cost. S&P 500 Index figures from Standard & Poor's and all
other figures from First Investors Management Company, Inc.
Portfolio Manager's Letter
FIRST INVESTORS MADE IN THE U.S.A. FUND
(A Series of First Investors Series Fund II, Inc.)
Dear Shareholder:
We are pleased to present the annual report of the First Investors Made
In The U.S.A. Fund. On October 31, 1995, your Fund's net asset value per
share was $14.58 for Class A shares and $14.51 for Class B shares. For
the year ended October 31, 1995, your Fund had a total return on a net
asset value basis of 24.6% on Class A shares compared to a total return
of 23.6% for the average small company growth fund, according to Lipper
Analytical Services. Class B shares (first offered for sale on January
12, 1995) returned 20.6%.
The Fund's objective is long-term capital growth. We continually review
securities to ensure that fundamentals remain sound and that the
criteria established within the investment specifications are being met.
The Fund is well diversified among the various industries and sectors of
the market, with an emphasis on those companies that we believe will
benefit in the current economic environment. We also focus on companies
with above market average earnings growth rates trading at attractive
price-earnings valuations.
Through October 31, 1995, the U.S. equity markets continued their bull
market run begun in late 1990. Stronger earnings results, most notably
in technology, telecommunications and finance, supported by declining
interest rates, drove the equity market to record highs, spurring
continued interest in equities. The interest rate on the 30-year
Treasury bond has fallen to 6.3% from 8.0% during the twelve month
period ended October 31, 1995.
To capitalize on these positive trends, the Made In The U.S.A. Fund
focused on companies that we believed would continue to report strong
earnings, offered above-average earnings growth potential and had
favorable relative valuations. The Fund, in seeking to further diversify
its holdings, added several new companies during the fiscal year.
Exposure to small and mid-capitalization companies, especially in the
technology sector, positively affected performance. Applied Materials,
Electroglas, Inc., Intel Corp., and Microsoft, among others, all showed
tremendous price appreciation. In addition, the rotation into cyclical
stocks, specifically Case Corp., a distributor of agricultural and
construction equipment, and exposure to the generic pharmaceutical
sector with stocks such as Teva Pharmaceuticals and Ivax Corp. enhanced
your Fund's performance.
The Fund's healthcare holdings were adversely affected by the focus on
Medicaid and Medicare reform as well as declines in the value of
healthcare stocks involved in the disease management area, such as
Quantum Health Resources, Inc. and Value Health, Inc.
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
November 30, 1995
Cumulative Performance Information
FIRST INVESTORS MADE IN THE U.S.A.FUND
(A Series of First Investors Series Fund II, Inc.)
Comparison of change in value of $10,000 investment in the First
Investors Made In The U.S.A. Fund (Class A shares) and the Russell
1000 Growth Index.
[chart omitted]
As of October 31, 1995
Russel Made In
Date 1000 Growth The USA
- -------- ------------- ---------
8/24/92 10,000 9,375
10/31/92 10,257 9,441
12/31/92 10,761 9,816
2/28/93 10,902 9,800
4/30/93 10,832 9,557
6/30/93 11,138 9,881
8/31/93 11,480 9,913
10/31/93 11,561 9,840
12/31/93 11,549 9,729
2/28/94 11,540 9,843
4/30/94 11,137 9,172
6/30/94 10,923 8,902
8/31/94 11,703 9,671
10/31/94 11,591 9,639
12/31/94 11,270 9,777
2/28/95 11,981 10,370
4/30/95 12,567 10,806
6/30/95 13,326 11,424
8/31/95 13,884 12,132
10/31/95 14,344 12,009
Average Annual Total Return*
Class A shares N.A.V. Only S.E.C. Standardized
One Year 24.6% 16.8%
Since Inception 8.1% 5.9%
Class B shares
Since Inception 20.6% 15.8%
The graph compares a $10,000 investment made in the First Investors Made
In The U.S.A. Fund (Class A shares) on 8/24/92 (inception date) with a
similar investment in the Russell 1000 Growth Index. For purposes of the
graph and the accompanying table, unless otherwise indicated, it has
been assumed that the maximum sales charge was deducted from the initial
$10,000 investment in the Fund and all dividends and distributions were
reinvested. Class B shares performance may be greater than or less than
that shown above based on differences in sales loads and fees paid by
shareholders investing in the different classes.
The Russell 1000 Growth Index contains those Russell 1000 Index
securities with a greater-than-average growth orientation. The Russell
1000 Index, designed to be a comprehensive representation of the
investable U.S. equity market, is an unmanaged index generally
considered to be representative of the 1,000 largest securities in the
Russell 3000 Index (which represents approximately 98% of the investable
U.S. equity market). The Russell 1000 Growth Index does not take into
account fees and expenses. It is not possible to invest directly in the
Russell 1000 Growth Index.
*Average Annual Total Return figures (for the period ended 10/31/95)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
6.25%. Some or all of the expenses of the Fund were waived or assumed.
If such expenses had been paid by the Fund, the Class A shares S.E.C.
Standardized Average Annual Total Return for One Year and Since
Inception would have been 15.1% and 4.9%, respectively. The returns for
Class B shares (first offered for sale on 1/12/95) are for the period
1/12/95 through 10/31/95. The Class B "S.E.C. Standardized" return is
adjusted for the applicable deferred sales charge (maximum of 4% in the
first year).
Results represent past performance and do not indicate future results.
Investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
the original cost. Russell 1000 Growth Index figures from Frank Russell
and Company and all other figures from First Investors Management
Company, Inc.
Portfolio Manager's Letter
FIRST INVESTORS UTILITIES INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
Dear Shareholder:
Your Fund ended its annual reporting period on October 31, 1995. During
this period, dividends from net investment income were 23.5 cents per
share on Class A shares and 16.4 cents per share on Class B shares.
The Fund's strategy of diversification among all utility sectors
enhanced Fund performance. All sectors of the utility market generated
positive returns during the year, with telephone and electric utilities
dominating performance. Solid performance was exhibited by several of
the Fund's top holdings which include: GTE Corp., SBC Communications,
Ameritech, BellSouth, FPL Group and Houston Industries. For the year
ended October 31, 1995, the Fund's total return on a net asset value
basis was 21.4% on Class A shares compared to a total return of 17.7%
for the average utilities fund, according to Lipper Analytical Services.
Class B shares (first offered for sale on January 12, 1995) returned
22.0%.
During fiscal 1995, the utility sector of the stock market rebounded
from its lackluster 1994 performance. Reasons for the improved
performance included: lower interest rates, improved earnings prospects
for many utility companies and general investor appeal for defensive
utility investments. Electric utilities also benefited from a wave of
mergers and from a more favorable stance from electric regulators.
Electric companies have been cutting costs to prepare for a more
competitive electric market contributing to higher earnings prospects.
Telephone utilities continued to experience strong earnings growth as
they too are approaching a more competitive business environment.
Positive proposed telecommunications legislation allowing regional Bell
operating companies to enter the long distance telephone market earlier
than anticipated also helped the telephone group. The big news in the
telephone industry, however, was the announcement by AT&T that it was
splitting into three separate companies. AT&T stock increased
approximately 15% on the news. Natural gas utilities generated positive
returns during the year. This sector's performance, however, was less
than the performance of the electric and telephone sectors. Weak natural
gas prices caused by a warmer than normal winter was the main reason for
the weaker performance.
The Fund will remain well diversified among all sectors of the utility
market. We believe our natural gas investments should increase in value
as we see a return to cold winter weather and natural gas prices rebound
from current lows. Presently, natural gas storage levels remain below
last year's levels - another factor which favors natural gas stocks.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
/s/Margaret R. Haggerty
---------------------
Margaret R. Haggerty
Portfolio Manager
November 30, 1995
Cumulative Performance Information
FIRST INVESTORS UTILITIES INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
Comparison of change in value of $10,000 investment in the First
Investors Utilities Income Fund (Class A shares), the Standard & Poor's
500 Index and the Standard & Poor's Utilities Index.
[chart omitted]
As of October 31, 1995
S&P Utilities
Date S&P 500 Utilities Income
- -------- --------- ----------- -----------
2/23/93 10,000 10,000 9,375
4/30/93 9,964 9,886 9,327
6/30/93 10,260 10,226 9,663
8/31/93 10,605 10,877 10,189
10/31/93 10,741 10,748 10,112
12/31/93 10,768 10,060 9,794
2/28/94 10,832 9,481 9,363
4/30/94 10,493 9,294 9,316
6/30/94 10,403 8,981 8,879
8/31/94 11,185 9,171 9,193
10/31/94 11,160 8,927 9,085
12/31/94 10,909 8,846 8,962
2/28/95 11,628 9,511 9,541
4/30/95 12,323 9,797 9,666
6/30/95 13,112 10,136 10,069
8/31/95 13,580 10,594 10,305
10/31/95 14,102 11,492 11,025
Average Annual Total Return*
Class A shares N.A.V. Only S.E.C. Standardized
One Year 21.4% 13.7%
Since Inception 6.2% 3.7%
Class B shares
Since Inception 22.0% 17.0%
The graph compares a $10,000 investment made in the First Investors
Utilities Income Fund (Class A shares) on 2/22/93 (inception date) with
a similar investment in the S&P 500 Index and the S&P Utilities Index.
For purposes of the graph and the accompanying table, unless otherwise
indicated, it has been assumed that the maximum sales charge was
deducted from the initial $10,000 investment in the Fund and all
dividends and distributions were reinvested. Class B shares performance
may be greater than or less than that shown above based on differences
in sales loads and fees paid by shareholders investing in the different
classes.
The S&P 500 Index is an unmanaged capitalization-weighted index of 500
stocks designed to measure performance of the broad domestic economy
through changes in the aggregate market value of such stocks
representing all major industries. The Index does not take into account
fees and expenses. It is not possible to invest directly in the Standard
& Poor's 500 Index.
The S&P Utilities Index is an unmanaged capitalization-weighted index of
46 stocks designed to measure the performance of the utility sector of
the Standard & Poor's 500 Index. The Index does not take into account
fees and expenses. It is not possible to invest directly in the Standard
& Poor's Utilities Index.
*Average Annual Total Return figures (for the period ended 10/31/95)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
6.25%. Some or all of the expenses of the Fund were waived or assumed.
If such expenses had been paid by the Fund, the Class A shares S.E.C.
Standardized Average Annual Total Return for One Year and Since
Inception would have been 12.8% and 1.6%, respectively. The returns for
Class B shares (first offered for sale on 1/12/95) are for the period
1/12/95 through 10/31/95. The Class B "S.E.C. Standardized" return is
adjusted for the applicable deferred sales charge (maximum of 4% in the
first year).
Results represent past performance and do not indicate future results.
Investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
the original cost. S&P 500 Index and S&P Utilities Index figures from
Standard & Poor's and all other figures from First Investors Management
Company, Inc.
(This page intentionally left blank.)
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS GROWTH & INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
October 31, 1995
- -------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--83.4%
Automotive--.8%
19,592 Ford Motor Company $ 563,270 $ 84
- -------------------------------------------------------------------------------------
Banks--8.7%
20,000 Crestar Financial Corporation 1,140,000 170
25,000 First Bank System, Inc. 1,243,750 185
12,000 First Fidelity Bancorp. 784,500 117
11,500 J.P. Morgan & Company 886,937 132
12,000 Republic New York Corporation 703,500 105
25,000 Wachovia Corporation 1,103,125 165
- -------------------------------------------------------------------------------------
5,861,812 874
- -------------------------------------------------------------------------------------
Business Services--.8%
17,000 Sysco Corporation 516,375 77
- -------------------------------------------------------------------------------------
Chemicals--5.7%
19,000 Air Products and Chemicals, Inc. 980,875 146
10,000 Du Pont (E.I.) de Nemours & Company 623,750 93
45,000 Engelhard Corporation 1,119,375 167
15,000 Loctite Corporation 708,750 106
15,000 Witco Chemical Corporation 423,750 63
- -------------------------------------------------------------------------------------
3,856,500 575
- -------------------------------------------------------------------------------------
Computers & Office Equipment--1.4%
10,000 Hewlett-Packard Company 926,250 138
- -------------------------------------------------------------------------------------
Drugs--8.2%
9,500 American Home Products Corporation 841,938 125
12,000 Bristol-Myers Squibb Company 915,000 136
12,000 Johnson & Johnson 978,000 146
21,000 Pfizer, Inc. 1,204,875 180
12,000 Smithkline Beecham PLC (ADR) 622,500 93
16,238 Zeneca Group PLC (ADR) 915,417 136
- -------------------------------------------------------------------------------------
5,477,730 816
- -------------------------------------------------------------------------------------
Electric Utilities--3.0%
30,000 Baltimore Gas & Electric Company 802,500 120
15,000 DQE, Inc. 412,500 61
27,000 Pacific Gas & Electric Company 793,125 119
- -------------------------------------------------------------------------------------
2,008,125 300
- -------------------------------------------------------------------------------------
Electrical Equipment--3.2%
15,000 General Electric Company 948,750 141
27,000 York International Corporation 1,181,250 176
- -------------------------------------------------------------------------------------
2,130,000 317
- -------------------------------------------------------------------------------------
Electronics--.8%
13,000 AMP, Inc. 510,250 76
- -------------------------------------------------------------------------------------
Energy Services--2.2%
35,000 Dresser Industries, Inc. 726,250 108
12,000 Schlumberger, Ltd. 747,000 112
- -------------------------------------------------------------------------------------
1,473,250 220
- -------------------------------------------------------------------------------------
Energy Sources--4.8%
17,500 Amoco Corporation 1,117,813 167
15,000 Exxon Corporation 1,145,624 171
35,000 Unocal Corporation 918,750 137
- -------------------------------------------------------------------------------------
3,182,187 475
- -------------------------------------------------------------------------------------
Financial Services--1.6%
27,000 American Express Company 1,096,875 163
- -------------------------------------------------------------------------------------
Food/Beverage/Tobacco--1.0%
20,000 Cadbury Schweppes PLC (ADR) 667,500 99
- -------------------------------------------------------------------------------------
Household Products--5.6%
15,000 Avon Products, Inc. 1,066,875 159
12,000 Colgate-Palmolive Company 831,000 124
20,000 Dial Corporation 487,500 73
19,000 Kimberly-Clark Corporation 1,379,875 206
- -------------------------------------------------------------------------------------
3,765,250 562
- -------------------------------------------------------------------------------------
Insurance--3.8%
21,000 Ace Ltd. 714,000 106
15,000 American International Group, Inc. 1,265,625 190
7,000 Marsh & McLennan Companies, Inc. 573,125 85
- -------------------------------------------------------------------------------------
2,552,750 381
- -------------------------------------------------------------------------------------
Machinery & Manufacturing--3.1%
10,000 Illinois Tool Works, Inc. 581,250 87
12,000 Ingersoll-Rand Company 424,500 63
19,000 Minnesota Mining & Manufacturing Company 1,080,625 161
- -------------------------------------------------------------------------------------
2,086,375 311
- -------------------------------------------------------------------------------------
Media--6.4%
18,000 Gannett Company 978,750 146
16,000 Knight-Ridder, Inc. 888,000 132
10,000 *Scholastic Corporation 617,500 92
24,000 *Viacom, Inc.- Class "B" 1,200,000 179
15,000 Vodafone Group PLC (ADR) 613,125 91
- -------------------------------------------------------------------------------------
4,297,375 640
- -------------------------------------------------------------------------------------
Medical Products--1.8%
30,000 Abbott Laboratories 1,192,500 178
- -------------------------------------------------------------------------------------
Paper & Forest Products--1.8%
6,600 Georgia-Pacific Corporation 544,500 81
18,000 International Paper Company 666,000 99
- -------------------------------------------------------------------------------------
1,210,500 180
- -------------------------------------------------------------------------------------
Real Estate Investment Trusts--1.1%
30,000 Mark Centers Trust 322,500 48
13,300 Storage USA, Inc. 389,025 58
- -------------------------------------------------------------------------------------
711,525 106
- -------------------------------------------------------------------------------------
Retail--5.9%
12,800 Intimate Brands, Inc. 214,400 32
20,000 J.C. Penney Company 842,500 126
27,000 May Department Stores Company 1,059,750 158
35,000 Talbots, Inc. 848,750 126
46,000 Wal-Mart Stores, Inc. 994,750 148
- -------------------------------------------------------------------------------------
3,960,150 590
- -------------------------------------------------------------------------------------
Software & Services--2.4%
10,000 Automatic Data Processing, Inc. 715,000 106
25,000 *BMC Software, Inc. 890,625 133
- -------------------------------------------------------------------------------------
1,605,625 239
- -------------------------------------------------------------------------------------
Telephone--6.7%
22,000 A T & T Corp. 1,408,000 210
10,000 BCE, Inc. 336,250 50
15,000 NYNEX Corporation 705,000 105
16,000 SBC Communications, Inc. 894,000 133
24,500 US West Communications Group 1,166,813 174
- -------------------------------------------------------------------------------------
4,510,063 672
- -------------------------------------------------------------------------------------
Transportation--1.9%
40,000 Canadian Pacific Ltd. 640,000 95
10,000 Union Pacific Corporation 653,750 98
- -------------------------------------------------------------------------------------
1,293,750 193
- -------------------------------------------------------------------------------------
Travel & Leisure--.7%
12,000 McDonald's Corporation 492,000 73
- -------------------------------------------------------------------------------------
Total Value of Common Stocks
(cost $47,435,152) 55,947,987 8,339
- -------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
CONVERTIBLE PREFERRED STOCKS--1.9%
Energy Sources--1.3%
5,000 Unocal Corporation 7% (Note 5) $ 256,250 $ 37
12,000 Valero Energy Corporation 6 1/4% 609,000 91
- -------------------------------------------------------------------------------------
865,250 128
- -------------------------------------------------------------------------------------
Real Estate Investment Trusts--.6%
18,000 Security Capital Pacific Trust "A" 7% 427,500 64
- -------------------------------------------------------------------------------------
Total Value of Convertible
Preferred Stocks (cost $1,315,959) 1,292,750 192
- -------------------------------------------------------------------------------------
CONVERTIBLE BONDS--4.2%
Communications Equipment--.9%
$ 600M General Instrument Corporation,
5%, 6/15/00 603,000 90
- -------------------------------------------------------------------------------------
Energy Sources--1.4%
1,000M Noble Affiliates, 4 1/4%, 11/1/03 947,500 141
- -------------------------------------------------------------------------------------
Household Products--.6%
485M McKesson Corporation, 4 1/2%, 3/1/04 431,650 64
- -------------------------------------------------------------------------------------
Travel & Leisure--1.3%
900M AMR Corporation, 61/8%, 11/1/24 868,500 130
- -------------------------------------------------------------------------------------
Total Value of Convertible Bonds
(cost $3,091,138) 2,850,650 425
- -------------------------------------------------------------------------------------
EQUITY-LINKED SECURITIES--.2%
Computers & Office Equipment
1,000 Salomon Inc. (Hewlett-Packard)
5 1/4%, 1/1/97 (cost $76,375) 100,500 15
- -------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS--9.0%
$ 6,054M Swiss Bank Capital Markets, Inc.,
5.87%, 11/1/95 (collateralized by
$6,140M U.S. Treasury Note,
5 3/4%, 9/30/97) (cost $6,054,000) 6,054,000 902
- -------------------------------------------------------------------------------------
Total Value of Investments (cost $57,972,624) 98.7% 66,245,887 9,873
Other Assets, Less Liabilities 1.3 849,239 127
- -------------------------------------------------------------------------------------
Net Assets 100.0% $67,095,126 $10,000
=====================================================================================
*Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS MADE IN THE U.S.A. FUND
(A Series of First Investors Series Fund II, Inc.)
October 31, 1995
- -------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--72.3%
Basic Industry--2.5%
9,200 *Interpool, Inc. $ 147,200 $ 161
4,400 Schulman (A), Inc. 82,500 91
- -------------------------------------------------------------------------------------
229,700 252
- -------------------------------------------------------------------------------------
Capital Goods--3.0%
4,600 Case Corporation 175,375 192
2,800 *Varity Corporation 101,500 112
- -------------------------------------------------------------------------------------
276,875 304
- -------------------------------------------------------------------------------------
Consumer Durables--3.0%
5,600 Harley-Davidson, Inc. 149,800 164
4,300 Masco Corporation 120,937 133
- -------------------------------------------------------------------------------------
270,737 297
- -------------------------------------------------------------------------------------
Consumer Non-Durables--2.6%
2,000 Eastman Kodak Company 125,250 137
4,800 Newell Company 115,800 127
- -------------------------------------------------------------------------------------
241,050 264
- -------------------------------------------------------------------------------------
Consumer Services--18.2%
2,300 Advo, Inc. 58,650 65
2,700 *Barnes & Noble, Inc. 98,550 108
7,200 *Cannondale Corporation 115,200 126
11,600 *Cinar Films, Inc. - Class "B" 139,200 153
1,300 Dayton Hudson Corporation 89,375 98
4,100 *Franklin Electronic Publishers, Inc. 169,637 186
4,400 *Fred Meyer, Inc. 81,950 90
8,500 *Home Shopping Network, Inc. 69,062 76
9,700 *La Quinta Inns, Inc. 249,775 274
4,600 *Tele-Comm. Liberty Media Group Series "A" 113,275 124
3,200 Time Warner, Inc. 116,800 128
8,100 *US Office Products Company 138,713 152
2,500 *Viacom Inc.-Class "B" 125,000 137
3,300 Walgreen Company 94,050 103
- -------------------------------------------------------------------------------------
1,659,237 1,820
- -------------------------------------------------------------------------------------
Financial--3.7%
5,000 *American Travellers Corporation 111,875 122
1,300 Federal National Mortgage Association 136,337 150
5,500 *Penn Treaty American Corporation 86,625 95
- -------------------------------------------------------------------------------------
334,837 367
- -------------------------------------------------------------------------------------
Health Care/Miscellaneous--8.8%
4,200 Dentsply International, Inc. 144,900 158
4,200 *Living Centers of America, Inc. 108,675 119
6,100 *Mid Atlantic Medical Services, Inc. 121,238 133
6,700 *Pacific Physicians Services, Inc. 106,363 117
5,200 *Quantum Health Resources, Inc. 55,250 61
2,900 Stryker Corporation 130,863 144
3,400 Teva Pharmaceutical Industries Ltd. (ADR) 133,450 146
- -------------------------------------------------------------------------------------
800,739 878
- -------------------------------------------------------------------------------------
Technology--29.6%
2,300 A T & T Corp. 147,200 162
3,800 *Adaptec, Inc. 169,100 185
5,400 *Atmel Corporation 168,750 185
2,000 Autodesk, Inc. 68,000 75
1,900 Automatic Data Processing, Inc. 135,850 149
1,900 *Avid Technology, Inc. 83,125 91
1,800 *Cisco Systems, Inc. 139,500 153
3,000 Computer Associates International, Inc. 165,000 181
2,700 *Concentra Corporation 25,650 28
5,000 *EMC Corporation 77,500 85
3,950 *Filenet Corporation 179,231 197
2,800 *IMNET Systems, Inc. 71,050 78
- -------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Technology (continued)
4,800 *Intersolv $ 75,600 $ 83
2,400 *LSI Logic Corporation 113,100 124
2,000 *Microsoft Corporation 200,000 219
5,000 National Semiconductor Corporation 121,875 134
1,700 *NETCOM On-Line Communication Services, Inc. 99,025 109
2,800 Nokia Corp. AB 156,100 171
6,800 *Quantum Corporation 118,150 130
2,900 *Symantec Corporation 70,506 77
4,100 U.S. West Communications Group 195,263 214
5,000 *VLSI Technology, Inc. 117,500 129
- -------------------------------------------------------------------------------------
2,697,075 2,959
- -------------------------------------------------------------------------------------
Telecommunications--.9%
1,200 *Ascend Communications, Inc. 78,000 86
- -------------------------------------------------------------------------------------
Total Value of Common Stocks
(cost $5,615,721) 6,588,250 7,227
- -------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--25.3%
$ 300M A T & T Corp., 5.65%, 11/14/95 299,388 328
460M A T & T Corp., 5.73%, 11/21/95 458,535 503
450M BellSouth Telecommunications Inc.,
5.70%, 11/3/95 449,858 493
250M Chevron Oil, Inc., 5.68%, 11/16/95 249,408 274
150M Chevron Oil, Inc., 5.65%, 11/30/95 149,318 164
300M GTE North, 5.75%, 11/7/95 299,712 329
400M Nestles Capital, 5.69%, 11/9/95 399,495 438
- -------------------------------------------------------------------------------------
Total Value of Short-Term
Corporate Notes (cost $2,305,714) 2,305,714 2,529
- -------------------------------------------------------------------------------------
Total Value of Investments (cost $7,921,435) 97.6% 8,893,964 9,756
Other Assets, Less Liabilities 2.4 222,132 244
- -------------------------------------------------------------------------------------
Net Assets 100.0% $9,116,096 $10,000
=====================================================================================
*Non-income producing
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Portfolio of Investments
FIRST INVESTORS UTILITIES INCOME FUND
(A Series of First Investors Series Fund II, Inc.)
October 31, 1995
- -------------------------------------------------------------------------------------
Amount
Invested
For Each
$10,000 of
Shares Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMON STOCKS--88.5%
Electric Power--43.8%
35,000 American Electric Power Company $ 1,334,375 $ 154
50,000 Baltimore Gas & Electric Company 1,337,500 154
25,000 Boston Edison Company 684,375 78
35,000 Carolina Power & Light Company 1,146,250 132
55,000 Cinergy Corporation 1,560,625 180
40,000 Detroit Edison Company 1,350,000 155
65,000 DPL, Inc. 1,543,750 177
55,000 DQE, Inc. 1,512,500 174
40,000 Duke Power Company 1,790,000 206
10,000 Empresa Nacional De Electricidad (ADR) 502,500 58
50,000 FPL Group, Inc. 2,093,750 241
45,000 General Public Utilities Corporation 1,406,250 162
40,000 Houston Industries, Inc. 1,855,000 213
40,000 Illinova Corporation 1,135,000 131
30,000 New England Electric System 1,170,000 135
30,000 NIPSCO Industries, Inc. 1,095,000 125
40,000 Northeast Utilities 990,000 114
30,000 Northern States Power Company 1,417,500 163
35,000 Ohio Edison Company 800,625 92
70,000 PacifiCorp 1,321,250 152
30,000 Peco Energy Company 877,500 101
40,000 Pinnacle West Capital Corporation 1,100,000 127
40,000 Portland General Corporation 1,085,000 125
50,000 Public Service Company of Colorado 1,706,250 196
50,000 Public Service Enterprise Group, Inc. 1,468,750 169
45,000 SCE Corporation 765,000 88
60,000 Southern Company 1,432,500 165
55,000 Teco Energy, Inc. 1,299,375 150
30,000 Texas Utilities Company 1,102,500 127
40,000 Wisconsin Energy Corporation 1,180,000 136
- -------------------------------------------------------------------------------------
38,063,125 4,380
- -------------------------------------------------------------------------------------
Energy--4.8%
35,000 Enron Corporation 1,203,125 138
30,000 NICOR, Inc. 806,250 93
55,000 Pacific Enterprises 1,361,250 157
30,000 Panhandle Eastern Corporation 757,500 87
- -------------------------------------------------------------------------------------
4,128,125 475
- -------------------------------------------------------------------------------------
Natural Gas--17.9%
30,000 Atlanta Gas Light Company 1,158,750 133
22,000 Atmos Energy Corporation 401,500 46
20,000 Bangor Hydro-Electric Company 235,000 27
30,000 Brooklyn Union Gas Company 753,750 87
30,000 El Paso Natural Gas Company 810,000 93
25,000 Kansas City Power & Light Company 621,875 72
45,000 MCN Corporation 978,750 113
30,000 National Fuel Gas Company 892,500 103
40,000 New Jersey Resources Corporation 1,000,000 115
35,000 Piedmont Natural Gas Company 770,000 89
35,000 Questar Corporation 1,054,375 121
20,000 Scana Corporation 507,500 58
30,000 Sonat, Inc. 862,500 99
20,000 Tenneco, Inc. 877,500 101
20,000 TNP Enterprises, Inc 362,500 42
45,000 UGI Corporation 945,000 109
35,000 Unicom Corporation 1,146,250 132
35,000 Washington Energy Company 643,125 74
20,000 Wicor, Inc. 592,500 68
25,000 Williams Companies, Inc. 965,625 111
- -------------------------------------------------------------------------------------
15,579,000 1,793
- -------------------------------------------------------------------------------------
Technology--1.2%
2,000 Motorola, Inc. 131,250 15
25,000 Sprint Corporation 962,500 111
- -------------------------------------------------------------------------------------
1,093,750 126
- -------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------
Amount
Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Telephone/Utilities--19.3%
40,000 Ameritech Corporation $ 2,160,000 $ 249
40,000 Bell Atlantic Corporation 2,545,000 293
35,000 BellSouth Corporation 2,677,500 308
30,000 Frontier Corporation 810,000 93
65,000 GTE Corporation 2,681,250 309
25,000 NYNEX Corporation 1,175,000 135
40,000 SBC Communications, Inc. 2,235,000 257
15,000 Telefonica De Espana (ADR) 564,375 65
40,000 US West Communications Group 1,905,000 219
- -------------------------------------------------------------------------------------
16,753,125 1,928
- -------------------------------------------------------------------------------------
Telecommunications/Long Distance--1.5%
20,000 A T & T Corp. 1,280,000 147
- -------------------------------------------------------------------------------------
Total Value of Common Stocks
(cost $68,280,382) 76,897,125 8,849
- -------------------------------------------------------------------------------------
PREFERRED STOCKS--.1%
Financial Services
5,000 US West Financing 7.96% (cost $125,000) 126,875 15
- -------------------------------------------------------------------------------------
CORPORATE BONDS--6.4%
Electric & Gas Utilities--4.3%
$ 500M Baltimore Gas & Electric Co.,
7.52%, 2000 521,845 60
500M Consolidated Edison Co. of New York,
6 5/8%, 2002 505,599 58
500M Duke Power Co., 5 7/8%, 2003 478,709 55
500M Idaho Power Co., 6.4%, 2003 492,620 57
700M Pennsylvania Power & Light Co.,
6 7/8%, 2003 711,931 82
500M SCE Capital Corp., 7 3/8%, 2003 517,339 60
500M Union Electric Co., 6 3/4%, 2008 506,285 58
- -------------------------------------------------------------------------------------
3,734,328 430
- -------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Telephone--1.5%
$ 500M BellSouth Telecommunications Inc.,
6 3/8%, 2004 $ 499,546 $ 56
250M Southern Bell Telephone &
Telegraph Co., Inc., 8 1/8%, 2017 259,561 30
500M United Telephone of Florida,
6 1/4%, 2003 491,305 57
- -------------------------------------------------------------------------------------
1,250,412 143
- -------------------------------------------------------------------------------------
Telecommunications/Long Distance--.6%
500M A T & T Corp., 7 1/2%, 2006 536,368 62
- -------------------------------------------------------------------------------------
Total Value of Corporate Bonds
(cost $5,544,603) 5,521,108 635
- -------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--4.1%
500M Appalachian Power Company,
5 3/4%, 11/7/95 499,521 58
1,500M GTE South, Inc., 5 3/4%, 11/9/95 1,498,083 172
1,600M Nestle Capital Corporation,
5.7%, 11/2/95 1,599,747 184
- -------------------------------------------------------------------------------------
Total Value of Short-Term
Corporate Notes (cost $3,597,351) 3,597,351 414
- -------------------------------------------------------------------------------------
Total Value of Investments (cost $77,547,336) 99.1% 86,142,459 9,913
Other Assets, Less Liabilities .9 757,536 87
- -------------------------------------------------------------------------------------
Net Assets 100.0% $86,899,995 $10,000
=====================================================================================
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
First Investors SERIES Fund II, Inc.
October 31, 1995
- -------------------------------------------------------------------------------------
FIRST INVESTORS
------------------------------------------
GROWTH & MADE IN THE UTILITIES
INCOME FUND U.S.A. FUND INCOME FUND
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in securities:
At identified cost $57,972,624 $7,921,435 $77,547,336
=========== ========== ===========
At value (Note 1A) $66,245,887 $8,893,964 $86,142,459
Cash 188,838 182,162 246,870
Receivables:
Capital shares sold 643,339 56,428 356,231
Dividends and interest 175,294 5,027 496,695
Deferred organization expenses (Note 1E) 9,250 -- 7,250
----------- ---------- -----------
Total Assets 67,262,608 9,137,581 87,249,505
----------- ---------- -----------
Liabilities
Payable for capital shares redeemed 94,360 4,107 255,521
Accrued expenses 40,003 11,739 58,167
Accrued advisory fee 33,119 5,639 35,822
----------- ---------- -----------
Total Liabilities 167,482 21,485 349,510
----------- ---------- -----------
Net Assets $67,095,126 $9,116,096 $86,899,995
=========== =========== ===========
Net Assets Consist of:
Capital paid in $58,808,093 $7,586,506 $82,784,809
Undistributed net investment income 125,227 35,596 322,202
Accumulated net realized gain (loss)
on investment transactions (111,457) 521,465 (4,802,139)
Net unrealized appreciation
in value of investments 8,273,263 972,529 8,595,123
----------- ----------- -----------
Total $67,095,126 $9,116,096 $86,899,995
=========== =========== ===========
Capital shares outstanding (Note 4):
Class A 8,127,781 604,898 14,173,985
Class B 463,153 20,535 547,115
Net asset value and redemption
price per share--Class A $ 7.81 $14.58 $ 5.90
Maximum offering price per share--Class A
(Net asset value/.9375)* $ 8.33 $15.55 $ 6.29
Net asset value and offering
price per share--Class B $ 7.78 $14.51 $ 5.86
*On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
FIRST INVESTORS SERIES FUND II, INC.
Year Ended October 31, 1995
- ---------------------------------------------------------------------------------------
FIRST INVESTORS
- ---------------------------------------------------------------------------------------
GROWTH & MADE IN THE UTILITIES
INCOME FUND U.S.A. FUND INCOME FUND
------------ ----------- -----------
<S> <C> <C> <C>
Investment Income
Income:
Dividends $1,311,468 $ 54,841 $ 3,365,225
Interest 324,373 92,192 562,837
---------- ---------- -----------
Total income 1,635,841 147,033 3,928,062
---------- ---------- -----------
Expenses (Notes 1E and 3):
Advisory fee 367,122 80,837 542,191
Shareholder servicing costs 180,916 41,186 260,465
Distribution plan expenses-Class A 143,005 23,924 213,442
Distribution plan expenses-Class B 12,812 1,096 11,449
Professional fees 27,000 19,388 38,457
Reports and notices to shareholders 30,500 8,413 37,278
Custodian fees 13,655 5,790 12,064
Amortization of organization expenses 3,000 4,055 3,000
Other expenses 11,227 7,838 28,550
---------- ---------- -----------
Total expenses 789,237 192,527 1,146,896
Less: Expenses waived or assumed (299,256) (83,421) (385,381)
Custodian fees paid indirectly (5,055) (5,454) (11,984)
---------- ---------- -----------
Net expenses 484,926 103,652 749,531
---------- ---------- -----------
Net investment income 1,150,915 43,381 3,178,531
---------- ---------- -----------
Realized and Unrealized Gain (Loss)
on Investments (Note 2):
Net realized gain (loss)
on investments 59,975 1,220,064 (725,427)
Net unrealized appreciation
of investments 7,741,415 460,706 12,245,737
---------- ---------- -----------
Net gain on investments 7,801,390 1,680,770 11,520,310
---------- ---------- -----------
Net Increase in Net Assets
Resulting from Operations $8,952,305 $1,724,151 $14,698,841
========== ========== ===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
FIRST INVESTORS SERIES FUND II, INC.
- ------------------------------------------------------------------------
FIRST INVESTORS
- ------------------------------------------------------------------------
GROWTH &
INCOME FUND
--------------------------
Year Ended October 31, 1995 1995 1994
- ------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 1,150,915 $ 472,794
Net realized gain (loss)
on investments 59,975 (171,432)
Net unrealized appreciation
(depreciation) of investments 7,741,415 531,848
----------- -----------
Net increase (decrease) in net
assets resulting from operations 8,952,305 833,210
----------- -----------
Distributions to Shareholders from:
Net investment income--Class A (1,115,624) (363,271)
Net investment income--Class B (25,337) --
Net realized gains--Class A -- --
----------- -----------
Total distributions (1,140,961) (363,271)
----------- -----------
Capital Share Transactions(a)
Class A:
Proceeds from shares sold 27,027,606 32,133,753
Value of distributions reinvested 1,092,153 356,387
Cost of shares redeemed (6,745,463) (1,877,923)
----------- -----------
21,374,296 30,612,217
----------- -----------
Class B:
Proceeds from shares sold 3,403,974 --
Value of distributions reinvested 25,204 --
Cost of shares redeemed (9,090) --
----------- -----------
3,420,088 --
----------- -----------
Net increase (decrease)
from capital share transactions 24,794,384 30,612,217
----------- -----------
Net increase (decrease)
in net assets 32,605,728 31,082,156
Net Assets
Beginning of year 34,489,398 3,407,242
----------- -----------
End of year+ $67,095,126 $34,489,398
=========== ===========
+Includes undistributed
net investment income of $ 125,227 $ 112,273
=========== ===========
(a) Capital Shares Issued
and Redeemed
Class A:
Sold 3,750,649 4,869,140
Issued for distributions
reinvested 151,589 54,795
Redeemed (932,605) (285,184)
----------- -----------
Net increase (decrease)
in Class A capital shares
outstanding 2,969,633 4,638,751
=========== ===========
Class B:
Sold 461,042 --
Issued for distributions
reinvested 3,305 --
Redeemed (1,194) --
----------- -----------
Net increase in Class B
capital shares outstanding 463,153 --
=========== ===========
<CAPTION>
Statement of Changes in Net Assets (cont.)
- ------------------------------------------------------------------------------------------
FIRST INVESTORS
- ------------------------------------------------------------------------------------------
MADE IN THE UTILITIES
U.S.A. FUND INCOME FUND
--------------------------------------------------------
Year Ended October 31 1995 1994 1995 1994
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
from Operations
Net investment income $ 43,381 $ 47,052 $ 3,178,531 $ 2,822,358
Net realized gain (loss)
on investments 1,220,064 78,601 (725,427) (4,076,712)
Net unrealized appreciation
(depreciation) of investments 460,706 (529,046) 12,245,737 (5,288,144)
---------- ----------- ----------- -----------
Net increase (decrease) in net
assets resulting
from operations 1,724,151 (403,393) 14,698,841 (6,542,498)
---------- ----------- ----------- -----------
Distributions to Shareholders from:
Net investment income--Class A (47,512) (133,361) (3,123,462) (2,645,975)
Net investment income--Class B -- -- (49,998) --
Net realized gains--Class A -- -- -- (144,159)
---------- ----------- ----------- -----------
Total distributions (47,512) (133,361) (3,173,460) (2,790,134)
---------- ----------- ----------- -----------
Capital Share Transactions(a)
Class A:
Proceeds from shares sold 1,771,094 690,866 19,911,865 23,969,216
Value of distributions
reinvested 47,031 132,333 2,975,959 2,643,337
Cost of shares redeemed (2,312,636) (8,221,415 (13,152,876) (12,981,948)
---------- ----------- ----------- -----------
(494,511) (7,398,216) 9,734,948 13,630,605
---------- ----------- ----------- -----------
Class B:
Proceeds from shares sold 297,505 -- 2,987,201 --
Value of distributions reinvested -- -- 48,361 --
Cost of shares redeemed (15,000) -- (66,853) --
---------- ----------- ----------- -----------
282,505 -- 2,968,709 --
---------- ----------- ----------- -----------
Net increase (decrease)
from capital share transactions (212,006) (7,398,216) 12,703,657 13,630,605
------------ ------------ ------------ ------------
Net increase (decrease)
in net assets 1,464,633 (7,934,970) 24,229,038 4,297,973
Net Assets
Beginning of year 7,651,463 15,586,433 62,670,957 58,372,984
---------- ----------- ----------- -----------
End of year+ $9,116,096 $ 7,651,463 $86,899,995 $62,670,957
========== =========== =========== ===========
+Includes undistributed
net investment income of $ 35,596 $ 35,672 $ 322,202 $ 314,131
========== =========== =========== ===========
(a) Capital Shares Issued
and Redeemed
Class A:
Sold 130,597 59,608 3,733,022 4,434,791
Issued for distributions
reinvested 3,962 11,130 557,233 509,896
Redeemed (179,150) (703,703) (2,460,412) (2,454,714)
---------- ----------- ----------- -----------
Net increase (decrease)
in Class A capital shares
outstanding (44,591) (632,965) 1,829,843 2,489,973
========== =========== =========== ===========
Class B:
Sold 21,568 -- 550,886 --
Issued for distributions
reinvested -- -- 8,714 --
Redeemed (1,033) -- (12,485) --
---------- ----------- ----------- -----------
Net increase in Class B
capital shares outstanding 20,535 -- 547,115 --
========== =========== =========== ===========
See notes to financial statements
</TABLE>
Notes to Financial Statements
FIRST INVESTORS SERIES FUND II, INC.
1. Significant Accounting Policies--First Investors Series Fund II, Inc.
(the "Fund"), 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 consists of three Series, First
Investors Growth & Income Fund, First Investors Made In The U.S.A. Fund
and First Investors Utilities Income Fund, and accounts separately for
the assets, liabilities and operations of each Series. The objective of
each Series is as follows:
Growth & Income Fund seeks long-term growth of capital and current
income. This Series seeks to achieve its objective by investing 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.
Made In The U.S.A. Fund seeks long-term capital growth. This Series
seeks to achieve its objective by investing 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, at
least 65% of the Series' total assets normally will be invested in
securities of issuers that (1) have at least two-thirds of their
employees located in the United States, or (2) produce in the United
States at least two-thirds of the value of the parts constituting the
products sold by the issuer, or (3) provide in the United States at
least two-thirds of the value of the services provided by the issuer.
Utilities Income Fund primarily seeks high current income. Long-term
capital appreciation is a secondary objective. This Series seeks to
achieve its objectives by investing 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
Series 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,
such taxes.
At October 31, 1995, 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 Fund and Utilities Income Fund are declared and
paid quarterly and dividends from net investment income of the Made In
The U.S.A. Fund are declared and paid annually. Distributions from net
realized capital gains of all Series 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 Series are paid from the assets of that Series.
General expenses of the Fund are allocated among and charged to the
assets of each Series on a fair and equitable basis, which may be based
on the relative assets of each Series or the nature of the services
performed and relative applicability to each Series.
E. Deferred Organization Expenses--The organization expenses of each
Series are being amortized over a five year period. Investors purchasing
shares of a Series bear such expenses only as they are amortized against
the investment income of that Series.
First Investors Management Company,Inc. ("FIMCO"), the Fund's investment
adviser, has agreed that in the event any of the initial Class A shares
of a Series 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 Series being redeemed bears to
the number of initial Class A shares of the Series 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 year ended October 31, 1995, purchases
and sales of securities, excluding U.S. Treasury Bills and short-term
corporate notes, were as follows:
Cost of Proceeds
Purchases of Sales
----------- -----------
GROWTH & INCOME FUND $29,152,887 $ 8,569,978
MADE IN THE U.S.A. FUND 6,735,922 9,162,458
UTILITIES INCOME FUND 23,335,212 11,079,946
<TABLE>
<CAPTION>
At October 31, 1995, aggregate cost and net unrealized appreciation of
securities for federal income tax purposes were as follows:
Gross Gross Net
Aggregate Unrealized Unrealized Unrealized
Cost Appreciation Depreciation Appreciation
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
GROWTH & INCOME FUND $57,972,624 $9,228,364 $955,101 $8,273,263
MADE IN THE U.S.A. FUND 7,921,435 1,409,673 437,144 972,529
UTILITIES INCOME FUND 77,622,095 9,154,206 633,842 8,520,364
</TABLE>
3. Advisory Fee and Other Transactions With Affiliates--Certain officers
and directors of the Fund 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 Fund's
Individual Retirement Accounts. Officers and directors of the Fund
received no remuneration from the Fund for serving in such capacities.
Their remuneration (together with certain other expenses of the Fund) is
paid by FIMCO or FIC.
The Investment Advisory Agreement provides as compensation to FIMCO for
each Series other than the Made In The U.S.A. Fund, an annual fee,
payable monthly, at the rate of .75% on the first $300 million of each
Series' 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 Made In The U.S.A. Fund is payable
monthly, at the rate of 1.00% on the first $200 million of the Series'
average daily net assets, .75% on the next $300 million, declining by
.03% on each $250 million thereafter, down to .66% on average daily net
assets over $1 billion. For the year ended October 31, 1995, total
advisory fees accrued to FIMCO were $990,150 of which $347,111 was
waived. In addition, expenses of $311,716 were assumed by FIMCO.
Pursuant to certain state regulations, FIMCO has agreed to reimburse
each Series if and to the extent that the Series' aggregate operating
expenses, including advisory fees but generally excluding interest,
taxes, brokerage commissions and extraordinary expenses, exceed any
limitation on expenses applicable to that Series in those states (unless
waivers of such limitations have been obtained). The amount of any such
reimbursement is limited to the Series' yearly advisory fee. For the
year ended October 31, 1995, no reimbursement was required pursuant to
these provisions.
For the year ended October 31, 1995, FIC, as underwriter, received
$3,661,053 in commissions from the sale of Fund shares, after allowing
$19,818 to other dealers. Shareholder servicing costs included $351,117
in transfer agent fees and out of pocket expenses accrued to ADM and
$131,450 in custodian fees paid to FFS.
Pursuant to a Distribution Plan adopted under Rule 12b-1 of the 1940
Act, each Series 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 Series. For the year ended October 31, 1995,
these fees on the Class A shares amounted to $380,371 (of which $109,231
was waived by FIC) and $25,357 on the Class B shares.
Wellington Management Company serves as an investment sub-adviser to the
Growth & Income Fund. The subadviser is paid by FIMCO and not by the
Series.
The Fund's Custodian has provided credits in the amount of $22,493
against custodian charges based on the uninvested cash balances of the
Fund. The Fund could possibly have used these cash balances to produce
income for the Fund if they were not used to offset custodian charges of
the Fund.
4. Capital--Each Series 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 Fund 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 October 31, 1995, the Growth & Income Fund held one 144A
security with a value of $256,250, representing less than 1% of the
Series' net assets. This security is valued as disclosed in Note 1A.
<TABLE>
<CAPTION>
Financial Highlights
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.
- ------------------------------------------------------------------------------------------
PER SHARE DATA
- ------------------------------------------------------------------------------------------
Income from Investment Operations
- ------------------------------------------------------------------------------------------
Net Asset Net
Value Realized and
---------- Net Unrealized Total from
Beginning Investment Gain (Loss) on Investment
of Period Income Investments Operations
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93 $ 6.56 $.005 $ --- $ .005
11/1/93 to 10/31/94 6.56 .128 .109 .237
11/1/94 to 10/31/95 6.69 .163 1.125 1.288
CLASS B
1/12/95* to 10/31/95 6.43 .084 1.372 1.456
- ------------------------------------------------------------------------------------------
MADE IN THE U.S.A. FUND
CLASS A
8/24/92* to 10/31/92 $11.64 $.036 $ .050 $ .086
11/1/92 to 10/31/93 11.70 .122 .373 .495
11/1/93 to 10/31/94 12.15 .078 (.326) (.248)
11/1/94 to 10/31/95 11.78 .083 2.796 2.879
CLASS B
1/12/95* to 10/31/95 12.03 (.011) 2.491 2.480
- ------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93 $ 5.59 $ .118 $ .317 $ .435
11/1/93 to 10/31/94 5.92 .239 (.839) (.600)
11/1/94 to 10/31/95 5.08 .233 .822 1.055
CLASS B
1/12/95* to 10/31/95 4.95 .144 .930 1.074
- ------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (cont.)
- ------------------------------------------------------------------------------------------
PER SHARE DATA
- ------------------------------------------------------------------------------------------
Less Distributions from
- ------------------------------------------------------------------------------------------
Net Asset
Value
Net Net ---------
Investment Realized Total End of
Income Gain Distributions Period
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93 $ .005 $ -- $.005 $ 6.56
11/1/93 to 10/31/94 .107 -- .107 6.69
11/1/94 to 10/31/95 .168 -- .168 7.81
CLASS B
1/12/95* to 10/31/95 .106 -- .106 7.78
- ------------------------------------------------------------------------------------------
MADE IN THE U.S.A. FUND
CLASS A
8/24/92* to 10/31/92 $ .026 $ -- $.026 $11.70
11/1/92 to 10/31/93 .045 -- .045 12.15
11/1/93 to 10/31/94 .122 -- .122 11.78
11/1/94 to 10/31/95 .079 -- .079 14.58
CLASS B
1/12/95* to 10/31/95 -- -- -- 14.51
- ------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93 $ .105 $ -- $.105 $ 5.92
11/1/93 to 10/31/94 .227 .013 .240 5.08
11/1/94 to 10/31/95 .235 -- .235 5.90
CLASS B
1/12/95* to 10/31/95 .164 -- .164 5.86
- ------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (cont.)
- ------------------------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
- ------------------------------------------------------------------------------------------
Ratio to Average Net Assets++
- ------------------------------------------------------------------------------------------
Net
Total Net Assets Investment
Return** End of Period Expenses Income
(%) (in thousands) (%) (%)
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93 .99+ $ 3,407 -- 1.02+
11/1/93 to 10/31/94 3.67 34,489 .67 2.26
11/1/94 to 10/31/95 19.51 63,493 .98 2.34
CLASS B
1/12/95* to 10/31/95 22.73 3,602 1.90+ 2.23+
- ------------------------------------------------------------------------------------------
MADE IN THE U.S.A. FUND
CLASS A
8/24/92* to 10/31/92 3.86+ $ 8,150 .06+ 1.87+
11/1/92 to 10/31/93 4.23 15,586 .81 .96
11/1/93 to 10/31/94 (2.05) 7,651 .90 .45
11/1/94 to 10/31/95 24.59 8,818 1.34 .48
CLASS B
1/12/95* to 10/31/95 20.62 298 2.29+ (.03)+
- ------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93 11.28+ $58,373 .35+ 3.84+
11/1/93 to 10/31/94 (10.15) 62,671 .80 4.59
11/1/94 to 10/31/95 21.35 83,691 1.04 4.37
CLASS B
1/12/95* to 10/31/95 21.99 3,209 1.82+ 4.93+
- ------------------------------------------------------------------------------------------
<CAPTION>
Financial Highlights (cont.)
- ---------------------------------------------------------------------------
RATIOS / SUPPLEMENTAL DATA
Ratio to Average Net Assets Before
Expenses Waived or Assumed
- ---------------------------------------------------------------------------
Net Portfolio
Investment Turnover
Expenses Income Rate
(%) (%) (%)
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93 1.37+ (.35)+ 0
11/1/93 to 10/31/94 1.83 1.11 6
11/1/94 to 10/31/95 1.59 1.74 23
CLASS B
1/12/95* to 10/31/95 2.61+ 1.52+ 23
- ---------------------------------------------------------------------------
MADE IN THE U.S.A. FUND
CLASS A
8/24/92* to 10/31/92 2.64+ (.72)+ 0
11/1/92 to 10/31/93 2.03 (.26) 52
11/1/93 to 10/31/94 2.32 (.97) 29
11/1/94 to 10/31/95 2.36 (.55) 107
CLASS B
1/12/95* to 10/31/95 3.79+ (1.53)+ 107
- ---------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93 1.80+ 2.39+ 17
11/1/93 to 10/31/94 1.59 3.80 58
11/1/94 to 10/31/95 1.57 3.84 18
CLASS B
1/12/95* to 10/31/95 2.53+ 4.21+ 18
- ---------------------------------------------------------------------------
* Commencement of operations or date shares first offered
** Calculated without sales charges
+ Annualized
++ Some or all expenses have been waived or assumed from commencement of
operations through October 31, 1995 (Note 3).
See notes to financial statements
</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 Made In The U.S.A. Fund and First Investors
Utilities Income Fund (comprising First Investors Series Fund II, Inc.),
as of October 31, 1995, the related statement of operations for the year
then ended, the statement of changes in net assets for each of the two
years in the period then ended, and financial highlights for each of the
periods indicated thereon. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of October 31, 1995, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of First Investors Growth & Income Fund, First
Investors Made In The U.S.A. Fund and First Investors Utilities Income
Fund as of October 31, 1995, 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
November 30, 1995
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
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 M Street, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
Two Penn Center Plaza
Philadelphia, PA 19102
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Fund will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Fund's prospectus.
FIRST INVESTORS SERIES FUND II, INC.
95 WALL STREET
NEW YORK, NY 10005
The words "BULK RATE U.S. POSTAGE PAID PERMIT NO. 7379" in a box t
the right of a circle containing the words "MAILED FROM ZIP CODE
11201" appears on the right side.
The following appears on the bottom left hand side
First Investors Logo, which is described as follows: the Arabic
numeral one separated into seven segments followed gy the
word "First Investors.
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
FIUSA03
Vertically reading from the bottom to top in the center of the page the
words "FIRST INVESTORS" appear.
FIRST
INVESTORS
SERIES FUND II, INC.
GROWTH & INCOME FUND
MADE IN THE U.S.A. FUND
UTILITIES INCOME FUND
ANNUAL
REPORT
OCTOBER 31, 1995
