<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS GROWTH & INCOME FUND
Dear Investor:
We are pleased to present the semi-annual report for First Investors Growth &
Income Fund for the six months ended April 30, 1997. At April 30, 1997, the
Fund's net asset value per share was $10.12 for Class A shares and $10.05 for
Class B shares. During the period, the Fund declared dividends from net
investment income of 4 cents per share on Class A shares and 1 cent per share on
Class B shares. The Fund also declared a capital gain distribution of 16 cents
per share on both classes. For the same period, the Fund returned on a net asset
value basis 10.0% on Class A shares and 9.6% on Class B shares, compared to a
10.4% return for the Lipper Growth & Income Average.
During the period covered by this report, the U.S. stock market's upward
momentum continued despite rising interest rates, with broad averages gaining
13-14%. Benign inflation reports, strong quarterly earnings releases, and robust
cash flows into mutual funds provided the key underpinnings to the market's
rise. As usual, not all stock market sectors performed uniformly. Leadership was
fairly narrow, with finance and technology the standout performers. While the
Fund's significant position in the finance area (in particular, banks and
insurance companies) contributed favorably to results, its smaller weighting in
technology limited its performance. In addition, several of the Fund's retail
and media holdings suffered price declines in the past six months which hindered
relative overall returns.
Our macroeconomic expectations have not changed materially in the last few
months. After six years of economic expansion, there are few visible signs of
broad based cost pressures. The March increase in short-term interest rates by
the Federal Reserve initially caught investors off guard resulting in an equity
market decline of approximately 10% from its earlier highs. This reaction was
somewhat surprising given Federal Reserve Chairman Greenspan's prior warnings
about the level of the stock market and his desire to preempt an acceleration in
future inflation. We do not believe that a major interest rate cycle will
unfold, as the rise in both long-term interest rates and the U.S. dollar should
restrain economic growth in the second half of the year. Even though stock
prices have strongly recovered in recent months, shifting interest rate
perceptions will likely keep the market on edge over the course of 1997.
While we continue to believe the fundamentals that pushed U.S. stock markets to
new highs remain in place, investors should remain aware of the risks associated
with investing in the stock market. A significant risk to the stock market is
that a too rapidly expanding economy creates inflationary pressures, encouraging
the Federal Reserve to raise interest rates. Investors should also recognize
that certain sectors of the market, such as technology, can be more volatile
than the overall market. Investments in such sectors can create greater
opportunities but also entail greater risk. Finally, on a technical basis the
current bull market is now the longest in history and, according to many market
historians, may be ready for a correction.
In a less certain investment environment, we are comfortable maintaining a
diversified approach in terms of industry weightings. Areas of emphasis in the
Fund include household products, health care, and finance, with a specific focus
on companies that we believe will exhibit strong relative earnings gains this
year and next. In spite of our expectation of higher volatility in the market,
we believe that rigorous attention to earnings trends and valuation disciplines
has the potential to produce good returns in the next twelve to eighteen months.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Laura J. Allen
Portfolio Manager
May 28, 1997
1
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
Dear Investor:
We are pleased to present the semi-annual report for First Investors U.S.A.
Mid-Cap Opportunity Fund for the six months ended April 30, 1997. At April 30,
1997, the Fund's net asset value per share was $14.66 for Class A shares and
$14.45 for Class B shares. During the period, the Fund declared a capital gain
distribution of 68.1 cents per share on Class A and Class B shares and a
dividend from net investment income of 3.7 cents per share on Class A shares.
For the same period, the Fund had a total return on a net asset value basis of
0.4% and 0.01% on Class A and Class B shares, respectively, compared to a total
return of -0.9% for the average mid-cap company growth fund as tracked by Lipper
Analytical Services, Inc.
During the period covered by this report, the U.S. economy continued its
expansion as evidenced by strong GDP growth of 5.6%, up from 3.8% in the fourth
quarter of 1996. This strong growth, however, has not put upward pressure on
prices, as the consumer price index rose 0.1% in both March and April. The
producer price index fell 0.6% in April, the largest drop in almost 4 years, and
the fourth consecutive monthly decline, while the unemployment rate fell to 4.9%
in April. The combination of strong economic growth and declining unemployment
raised the possibility of the Federal Reserve acting to prevent inflation by
raising interest rates at some point during the year. If the Federal Reserve
does act to curb inflation it may mean slower economic growth. If the economy
slows, we expect investors to shift their investment focus away from the
large-cap, slow growth companies to smaller, mid-cap companies with the ability
to grow at a faster rate and thus generate greater returns.
The Fund outperformed the average mid-cap company growth fund with certain
sectors providing superior returns. Real estate investment trusts, a subsector
of consumer cyclicals, generated exceptional performance, with the Fund's
holdings of Ambassador Apartments Inc., Redwood Trust Inc., and Innkeepers USA
Trust all producing substantially better than market returns. The healthcare
sector also generated some top performing stocks. As the "graying of America"
continues, a number of issues have done extremely well, specifically in the
nursing home industry where our holdings include Genesis Health Ventures, Living
Centers of America, and Vencor Inc. We also took the opportunity to selectively
trim some underperforming stocks in the healthcare sector. The energy sector
also yielded solid returns for the Fund, specifically the holdings of Cliffs
Drilling Company and EVI Inc., an oil services company.
The Fund took the opportunity to increase its positions in sectors we felt had
positive future outlooks. These included basic materials companies such as Olin
Corp., Alumax Inc., and IMC Global Inc.; lodging with the addition of Prime
Hospitality Corp.; publishing where Harte-Hankes Communications Inc. was added
to the Fund; as well as Corporate Express Inc., a specialty retailer and Ascend
Communications Inc., a manufacturer of communication network products.
While we continue to believe the fundamentals that pushed U.S. stock markets to
new highs remain in place, investors should remain aware of the risks associated
with investing in the stock market. A significant risk to the stock market is
that a too rapidly expanding economy creates inflationary pressures, encouraging
the Federal Reserve to raise interest rates. Investors should also recognize
that certain sectors of the market, such as technology, can be more volatile
than the overall market. Investments in such sectors can create greater
opportunities but also entail greater risk. Finally, on a technical basis the
current bull market is now the longest in history and, according to many market
historians, may be ready for a correction.
We believe the fundamentals supporting continued moderate economic expansion,
mild inflation, and continued growth in the U.S. stock market are still in
place. U.S. companies, through the continued implementation of new technologies
to improve productivity, should remain highly competitive domestically and
internationally.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Patricia D. Poitra
Director of Equities
and Portfolio Manager
May 28, 1997
2
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS UTILITIES INCOME FUND
Dear Investor:
We are pleased to present the semi-annual report for First Investors Utilities
Income Fund for the six months ended April 30, 1997. At April 30, 1997, the
Fund's net asset value per share was $6.44 for Class A shares and $6.38 for
Class B shares. During the period, dividends from net investment income were 9.8
cents per share on Class A shares and 7.6 cents per share on Class B shares. For
the same period, the Fund returned on a net asset value basis 2.0% on Class A
shares and 1.7% on Class B shares compared to 4.4% for the average utility fund
as tracked by Lipper Analytical Services, Inc.
During the period covered by this report, the U.S. economy continued its
expansion as evidenced by strong GDP growth of 5.6% up from 3.8% in the fourth
quarter of 1996. This strong growth, however, has not put upward pressure on
prices, as the consumer price index rose .1% in both March and April. The
producer price index fell .6% in April, the largest drop in almost four years,
and the fourth consecutive monthly decline, while the unemployment rate fell to
4.9% in April. The combination of strong economic growth and declining
unemployment raised the possibility of the Federal Reserve acting to prevent
inflation by raising interest rates at some point during the year. If the
Federal Reserve does act to curb inflation it may mean slower economic growth.
During the past six months, the Fund increased its exposure to the telephone
segment of the utility market. Regulatory uncertainty with respect to
competition diminished significantly, and earnings growth continued to be above
average. The Fund decreased its weighting in the natural gas area of the market
due to declining natural gas commodity prices that resulted from a very mild
winter. The Fund maintained its electric company weighting during this time
period. Finally, the Fund increased its foreign utility holdings, via American
Depository Receipts (ADRs). The foreign utility holdings contributed positively
to performance and we expect this trend to continue.
The Fund's electric utility holdings caused most of the Fund's relative
underperformance. Higher interest rates, nuclear problems at several electric
companies, and ongoing investor concerns with respect to deregulation and
competition negatively impacted electric company stocks. Examples of electric
company stocks that had a negative impact on Fund performance include: Texas
Utilities, Houston Industries, Carolina Power & Light, Duke Power, and Central
and Southwest Corp. This trend of underperformance should diminish as investors
focus on the relative undervaluation and defensiveness of electric company
stocks. The Fund's holdings in the natural gas area of the market showed signs
of weakness after outperforming the telephone and electric areas of the market
in 1996. Mild winter weather, rising interest rates, and falling natural gas
commodity prices were the main reasons for the poor performance of natural gas
company stocks. Examples of natural gas companies that performed poorly include:
Enron Corp., Southwest Gas Corp., Consolidated Natural Gas and AGL Resources.
While we continue to believe the fundamentals that pushed U.S. stock markets to
new highs remain in place, investors should remain aware of the risks associated
with investing in the stock market. A significant risk to the stock market is
that a too rapidly expanding economy creates inflationary pressures, encouraging
the Federal Reserve to raise interest rates. While we continue to believe that
the utility sector of the market is undervalued relative to the broader stock
market, utility stocks do face interest rate and industry specific risks. A
rising interest rate environment does not bode well for utility stocks, which
are often viewed as bond substitutes. In addition, electric, natural gas and
telephone utilities are regulated at the state and federal level. Any changes
with respect to regulation also have an impact on these stocks.
Going forward, the Fund will remain diversified among all three sectors of the
utility market. This strategy has worked well in the past and we believe it will
continue to work well. Stock selection will remain focused on utility companies
that have proven track records of earnings and dividend growth, are competitive
and innovative, and are located in robust and growing geographic areas.
As always, we appreciate the opportunity to serve your investment needs.
Sincerely,
[SIGNATURE]
Margaret R. Haggerty
Vice President
and Portfolio Manager
May 28, 1997
3
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--89.5%
AEROSPACE/DEFENSE--2.4%
22,000 Boeing Company $ 2,169,750 $ 133
24,000 United Technologies Corporation 1,815,000 111
- ---------------------------------------------------------------------------------------
3,984,750 244
- ---------------------------------------------------------------------------------------
BANKS--6.3%
20,000 Citicorp 2,252,500 138
38,000 First Bank System, Inc. 2,916,500 178
33,000 First Union Corporation 2,772,000 169
40,000 Wachovia Corporation 2,340,000 143
- ---------------------------------------------------------------------------------------
10,281,000 628
- ---------------------------------------------------------------------------------------
BUSINESS SERVICES--1.2%
35,000 Fluor Corporation 1,925,000 118
- ---------------------------------------------------------------------------------------
CHEMICALS--3.8%
30,000 Air Products and Chemicals, Inc. 2,152,500 132
27,000 Dow Chemical Company 2,291,625 140
17,000 Du Pont (E.I.) de Nemours & Company 1,804,125 110
- ---------------------------------------------------------------------------------------
6,248,250 382
- ---------------------------------------------------------------------------------------
COMMUNICATION EQUIPMENT--2.2%
38,000 *Cisco Systems, Inc. 1,966,500 120
30,000 Motorola, Inc. 1,717,500 105
- ---------------------------------------------------------------------------------------
3,684,000 225
- ---------------------------------------------------------------------------------------
COMPUTER SOFTWARE/SERVICES--3.3%
40,000 *BMC Software, Inc. 1,730,000 106
25,000 *Computer Sciences Corporation 1,562,500 95
60,000 First Data Corporation 2,070,000 126
- ---------------------------------------------------------------------------------------
5,362,500 327
- ---------------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMPUTERS & OFFICE EQUIPMENT--4.0%
33,000 Hewlett-Packard Company $ 1,732,500 $ 106
16,500 International Business Machines Corporation 2,652,375 162
35,000 Xerox Corporation 2,152,500 132
- ---------------------------------------------------------------------------------------
6,537,375 400
- ---------------------------------------------------------------------------------------
DRUGS--10.0%
40,000 American Home Products Corporation 2,650,000 162
40,000 Bristol-Myers Squibb Company 2,620,000 160
30,000 Johnson & Johnson 1,837,500 112
25,000 Pfizer, Inc. 2,400,000 147
60,000 Pharmacia & Upjohn, Inc. 1,777,500 109
30,000 Warner-Lambert Company 2,940,000 180
23,238 Zeneca Group PLC (ADR) 2,100,134 128
- ---------------------------------------------------------------------------------------
16,325,134 998
- ---------------------------------------------------------------------------------------
ELECTRIC UTILITIES--.8%
40,000 Texas Utilities Company 1,350,000 82
- ---------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--2.4%
36,000 General Electric Company 3,991,500 244
- ---------------------------------------------------------------------------------------
ELECTRONICS--.8%
35,000 AMP, Inc. 1,255,625 77
- ---------------------------------------------------------------------------------------
ENERGY--1.0%
15,000 Schlumberger, Ltd. 1,661,250 101
- ---------------------------------------------------------------------------------------
ENERGY SOURCES--6.3%
30,000 Amoco Corporation 2,508,750 153
33,000 Chevron Corporation 2,260,500 138
44,000 Exxon Corporation 2,491,500 152
58,632 Union Pacific Resources, Inc. 1,590,393 97
37,000 Unocal Corporation 1,410,625 86
- ---------------------------------------------------------------------------------------
10,261,768 626
- ---------------------------------------------------------------------------------------
</TABLE>
5
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL--1.6%
65,000 Federal National Mortgage Association $ 2,673,125 $ 163
- ---------------------------------------------------------------------------------------
FINANCIAL SERVICES--1.8%
45,000 American Express Company 2,964,375 181
- ---------------------------------------------------------------------------------------
FOOD/BEVERAGE/TOBACCO--2.7%
65,000 PepsiCo, Inc. 2,266,875 138
50,000 Sara Lee Corporation 2,100,000 128
- ---------------------------------------------------------------------------------------
4,366,875 266
- ---------------------------------------------------------------------------------------
HEALTH SERVICES--1.9%
40,000 Columbia HCA Health 1,400,000 86
35,000 United Healthcare Corporation 1,701,875 104
- ---------------------------------------------------------------------------------------
3,101,875 190
- ---------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--7.6%
15,000 Colgate-Palmolive Company 1,665,000 102
45,900 Estee Lauder Companies - Class "A" 2,099,925 128
21,696 Gillette Company 1,844,160 113
50,000 Kimberly-Clark Corporation 2,562,500 157
20,000 Procter & Gamble Company 2,515,000 154
45,800 *Revlon, Inc. - Class "A" 1,683,150 103
- ---------------------------------------------------------------------------------------
12,369,735 757
- ---------------------------------------------------------------------------------------
INSURANCE--6.9%
50,000 Ace, Ltd. 3,000,000 183
50,000 Allstate Corporation 3,275,000 200
22,000 American International Group 2,827,000 173
18,000 Marsh & McLennan 2,169,000 133
- ---------------------------------------------------------------------------------------
11,271,000 689
- ---------------------------------------------------------------------------------------
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
MACHINERY & MANUFACTURING--3.8%
30,000 Caterpillar, Inc. $ 2,670,000 $ 163
20,000 Illinois Tool Works, Inc. 1,827,500 112
20,000 Minnesota Mining & Manufacturing Company 1,740,000 106
- ---------------------------------------------------------------------------------------
6,237,500 381
- ---------------------------------------------------------------------------------------
MEDIA--3.3%
33,000 Gannett Company 2,879,250 176
40,000 Knight-Ridder, Inc. 1,555,000 95
35,000 *Viacom, Inc. - Class "B" 936,250 57
- ---------------------------------------------------------------------------------------
5,370,500 328
- ---------------------------------------------------------------------------------------
MEDICAL PRODUCTS--1.5%
41,000 Abbott Laboratories 2,501,000 153
- ---------------------------------------------------------------------------------------
METALS & MINERALS--1.4%
30,000 Phelps Dodge Corporation 2,302,500 141
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--.8%
32,000 International Paper Company 1,352,000 83
- ---------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--.3%
13,300 Storage USA, Inc. 500,412 31
- ---------------------------------------------------------------------------------------
RESTAURANTS--2.0%
60,000 McDonald's Corporation 3,217,500 197
- ---------------------------------------------------------------------------------------
RETAIL--5.3%
36,000 Mercantile Stores Company, Inc. 1,773,000 108
30,000 Nike, Inc. 1,687,500 103
55,000 *Saks Holdings, Inc. 1,051,875 64
42,000 Sears, Roebuck and Company 2,016,000 123
75,000 Wal-Mart Stores, Inc. 2,118,750 129
- ---------------------------------------------------------------------------------------
8,647,125 527
- ---------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<S> <S> <C> <C>
TELEPHONE--2.8%
31,000 A T & T Corporation $ 1,038,500 $ 63
40,000 SBC Communications, Inc. 2,220,000 136
40,000 US West Communications Group 1,405,000 86
- ---------------------------------------------------------------------------------------
4,663,500 285
- ---------------------------------------------------------------------------------------
TRANSPORTATION--1.3%
33,000 Union Pacific Corporation 2,103,750 129
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $114,138,801) 146,510,924 8,953
- ---------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--2.2%
COMPUTER SOFTWARE/SERVICES--1.1%
20,000 Microsoft Corp., $2.196 1,712,500 105
- ---------------------------------------------------------------------------------------
MEDIA--.8%
70,000 Merrill Lynch Structured Yield Product
(exchangeable into Cox Communication, Inc.
Common Stock), 6% 1,382,500 85
- ---------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS--.3%
18,000 Security Capital Pacific Trust "A", 7% 546,750 33
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE PREFERRED STOCKS (cost
$3,675,465) 3,641,750 223
- ---------------------------------------------------------------------------------------
CONVERTIBLE BONDS--2.3%
ELECTRONICS--1.3%
$ 1,500M Analog Devices, 3.50%, 2000 2,111,250 129
- ---------------------------------------------------------------------------------------
RETAIL--1.0%
1,600M Home Depot, Inc., 3.25%, 2001 1,642,000 100
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE BONDS (cost
$3,714,071) 3,753,250 229
- ---------------------------------------------------------------------------------------
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<S> <S> <C> <C>
REPURCHASE AGREEMENTS--4.5%
$ 7,320M Paine Webber, Inc. (collateralized by U.S.
Treasury Note, 5.625%, 11/30/00, valued at
$7,466,800) (cost $7,320,000) $ 7,320,000 $ 447
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $128,848,337) 98.5% 161,225,924 9,852
OTHER ASSETS, LESS LIABILITIES 1.5 2,430,066 148
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $163,655,990 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
9
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
April 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--82.5%
BASIC MATERIALS--5.4%
1,700 *Alumax, Inc. $ 62,050 $ 33
4,000 IMC Global, Inc. 147,500 78
7,000 Louisiana-Pacific Corporation 130,375 69
5,300 Nucor Corporation 263,675 140
1,800 Olin Corporation 74,025 39
6,000 Schulman (A.), Inc. 114,000 61
3,600 Universal Corporation 100,800 54
2,000 Willamette Industries, Inc. 127,500 68
- --------------------------------------------------------------------------------------
1,019,925 542
- --------------------------------------------------------------------------------------
CAPITAL GOODS--11.2%
7,000 AGCO Corporation 181,125 96
2,000 Case Corporation 110,750 59
11,400 *Checkpoint Systems, Inc. 156,750 83
3,300 Corning, Inc. 159,225 85
13,700 *Corporate Express, Inc. 137,000 73
4,900 Foster Wheeler Corporation 189,262 100
4,000 Johnson Controls, Inc. 153,500 82
18,000 *Miller Industries, Inc. 213,750 113
4,000 Millipore Corporation 151,000 80
4,000 Thomas & Betts Corporation 181,500 96
4,500 *U.S. Office Products Company 114,750 61
6,400 *USA Waste Services, Inc. 209,600 111
3,500 York International Corporation 157,062 83
- --------------------------------------------------------------------------------------
2,115,274 1,122
- --------------------------------------------------------------------------------------
COMMUNICATION SERVICES--1.5%
6,100 *360 Communications Company 105,987 56
6,000 Century Telephone Enterprises 179,250 95
- --------------------------------------------------------------------------------------
285,237 151
- --------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS--14.2%
9,800 *Bed Bath & Beyond, Inc. $ 268,275 $ 142
15,300 *Checkfree Corporation 212,287 113
10,000 *Coldwater Creek, Inc. 140,000 74
10,000 *CUC International, Inc. 211,250 112
2,400 *Fred Meyer, Inc. 98,700 52
7,000 Harte-Hanks Communications 190,750 101
34,000 *Homegate Hospitality, Inc. 221,000 117
17,400 Innkeepers USA Trust 243,600 129
4,300 Masco Corporation 162,325 86
6,000 *Mirage Resorts, Inc. 120,750 64
4,700 *OfficeMax, Inc. 58,162 31
9,700 Ogden Corporation 203,700 108
2,500 Pep Boys - Manny, Moe & Jack 81,562 43
15,000 *Prime Hospitality Corporation 249,375 132
1,900 *Saks Holdings, Inc. 36,337 19
5,800 *Staples, Inc. 104,400 55
21,800 *USCI, Inc. 64,037 34
- --------------------------------------------------------------------------------------
2,666,510 1,412
- --------------------------------------------------------------------------------------
CONSUMER STAPLES--8.7%
6,000 Dole Food Company 244,500 130
4,500 *Evergreen Media Corporation - Class "A" 145,687 77
20,900 *Four Media Corporation 114,950 61
3,675 Gaylord Entertainment Company - Class "A" 77,634 41
6,000 McCormick & Company, Inc. 141,750 75
10,000 *Pegasus Communications Corporation 103,750 55
7,500 Richfood Holdings, Inc. 152,813 81
6,900 *Tele-Communications, Inc. Liberty Media Group -
Class "A" 129,806 69
3,200 Time Warner, Inc. 144,000 76
8,100 *US West Media Group 139,725 74
10,600 Whitman Corporation 245,125 130
- --------------------------------------------------------------------------------------
1,639,740 869
- --------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
April 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
ENERGY--6.7%
4,400 Apache Corporation $ 149,600 $ 79
2,100 *Cliffs Drilling Company 128,100 68
1,300 *Energy Ventures, Inc. 86,938 46
4,300 *Global Industires Ltd. 90,300 48
2,000 *Input/Output, Inc. 28,000 15
6,700 *Nabors Industries, Inc. 125,625 67
5,000 *Oryx Energy Company 100,000 53
5,500 *Patterson Energy, Inc. 158,125 84
9,300 Quaker State Corporation 139,500 74
4,400 Ultramar Diamond Shamrock Corporation 141,350 75
6,300 *Veritas DGC, Inc. 121,275 64
- --------------------------------------------------------------------------------------
1,268,813 673
- --------------------------------------------------------------------------------------
FINANCIAL--12.2%
9,000 Aames Financial Corporation 138,375 73
7,400 Ambassador Apartments, Inc. 180,375 96
7,000 American Financial Group, Inc. 244,125 130
7,154 Conseco, Inc. 295,997 157
5,200 Federal National Mortgage Association 213,850 114
9,200 *Imperial Credit Industries, Inc. 133,975 71
2,142 Mercantile Bancorporation 124,236 66
4,900 Ohio Casualty Corporation 190,488 101
4,000 Redwood Trust, Inc. 188,000 100
8,000 The Money Store, Inc. 173,000 92
3,100 Torchmark Corporation 192,588 102
11,200 USF&G Corporation 224,000 119
- --------------------------------------------------------------------------------------
2,299,009 1,221
- --------------------------------------------------------------------------------------
HEALTHCARE--4.9%
10,000 *Alfacell Corporation 51,875 28
1,700 *Centocor Company 47,813 25
4,200 Dentsply International, Inc. 207,900 110
5,900 *Genesis Health Ventures, Inc. 176,263 94
4,200 *Living Centers of America, Inc. 150,150 80
- --------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
HEALTHCARE (continued)
4,400 *Vencor, Inc. $ 183,150 $ 97
16,200 *VidaMed, Inc. 111,375 59
- --------------------------------------------------------------------------------------
928,526 493
- --------------------------------------------------------------------------------------
TECHNOLOGY--15.3%
5,900 *Adaptec, Inc. 218,300 116
3,000 Adobe Systems, Inc. 117,375 62
2,600 *Altera Corporation 128,863 68
5,600 *Analog Devices, Inc. 149,800 80
1,500 *Ascend Communications, Inc. 68,625 36
10,000 *ATL Products, Inc. 76,250 41
3,300 *Atmel Corporation 82,088 44
8,000 AVX Corporation 179,000 95
1,400 *Cisco Systems, Inc. 72,450 39
8,600 *Credence Systems Corporation 136,525 72
5,900 *EMC Corporation 214,613 114
3,000 Equifax, Inc. 86,250 46
2,900 *Fore Systems, Inc. 44,225 24
800 Intel Corporation 122,500 65
6,000 *Kent Electronics 150,000 80
3,400 *LSI Logic Corporation 130,050 69
2,500 Micron Technology, Inc. 88,125 47
1,500 *Microsoft Corporation 182,250 97
2,000 Motorola, Inc. 114,500 61
6,200 *Network General Corporation 85,250 45
2,900 *Octel Communications Corporation 47,125 25
2,900 *Quantum Corporation 120,894 64
2,100 *SMART Modular Technologies, Inc. 70,350 37
2,800 *Sterling Commerce, Inc. 72,450 39
16,600 *SystemSoft Corporation 126,575 67
- --------------------------------------------------------------------------------------
2,884,433 1,533
- --------------------------------------------------------------------------------------
TRANSPORTATION--1.5%
10,000 *Swift Transportation Company, Inc. 285,000 151
- --------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
April 30, 1997
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
UTILITIES--0.9%
5,600 Sierra Pacific Resources $ 158,900 $ 84
- --------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $14,681,603) 15,551,367 8,251
- --------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--12.0%
$ 775M Dupont (E.I) de Nemours & Co., 5.51%, 5/21/97 772,628 410
700M Ford Motor Credit, 5.49%, 5/28/97 697,140 370
500M PPG Industries, 5.50%, 5/30/97 497,785 264
300M Southern California Edison Co., 5.48%, 5/22/97 299,041 159
- --------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$2,266,594) 2,266,594 1,203
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $16,948,197) 94.5% 17,817,961 9,454
OTHER ASSETS, LESS LIABILITIES 5.5 1,029,663 546
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $18,847,624 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
14
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS UTILITIES INCOME FUND
April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--89.8%
ELECTRIC POWER--41.6%
8,500 *AES Corporation $ 554,625 $ 52
40,000 Allegheny Power Systems, Inc. 1,050,000 98
52,000 American Electric Power Company, Inc. 2,106,000 196
38,000 Baltimore Gas and Electric Company 969,000 90
30,000 Boston Edison Company 765,000 71
55,000 Carolina Power & Light Company 1,870,000 174
60,000 CINergy Corporation 1,995,000 186
40,000 CMS Energy Corporation 1,270,000 118
25,000 Consolidated Edison Company of New York 693,750 65
65,000 DPL, Inc. 1,535,625 143
60,000 DQE, Inc. 1,657,500 154
60,000 Duke Power Company 2,632,500 245
60,000 Edison International, Inc. 1,260,000 117
9,700 Empresa Nacional de Electricidad S.A. (ADR) 677,787 63
14,000 Enersis S.A. (ADR) 441,000 41
55,000 FPL Group, Inc. 2,454,375 229
40,000 General Public Utilities Corporation 1,290,000 120
30,000 Ipalco Enterprise, Inc. 915,000 85
25,000 Kansas City Power & Light Company 706,250 66
29,000 KU Energy Corporation 880,875 82
46,000 LG&E Energy Corporation 1,109,750 103
30,000 MDU Resources Group, Inc. 697,500 65
14,000 National Power PLC (ADR) 490,000 46
52,000 NIPSCO Industries, Inc. 2,054,000 191
37,000 OGE Energy Corporation 1,535,500 143
70,000 PacifiCorp 1,391,250 130
55,000 Public Service Company of Colorado 2,131,250 198
66,400 Puget Sound Energy, Inc. 1,626,800 151
60,000 Scana Corporation 1,447,500 135
70,000 Sierra Pacific Resources 1,986,250 185
50,000 Southern Company 1,018,750 95
54,000 TECO Energy, Inc. 1,289,250 120
- ---------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS UTILITIES INCOME FUND
April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRIC POWER (continued)
30,000 Union Electric Company $ 1,068,750 $ 99
41,000 UtiliCorp United, Inc. 1,066,000 99
- ---------------------------------------------------------------------------------------
44,636,837 4,155
- ---------------------------------------------------------------------------------------
ENERGY--0.4%
9,500 Louisiana Land & Exploration Company 475,000 44
- ---------------------------------------------------------------------------------------
NATURAL GAS--25.5%
40,000 AGL Resources, Inc. 770,000 72
25,000 CMS Energy Corporation - Class "G" 453,125 42
32,000 Coastal Corporation 1,520,000 141
20,000 Columbia Gas System, Inc. 1,237,500 115
20,000 Consolidated Natural Gas Company 1,007,500 94
16,200 Eastern Enterprises 548,775 51
31,500 El Paso Natural Gas Company 1,830,937 170
17,000 Energen Corporation 537,625 50
42,000 Enron Corporation 1,580,250 147
28,000 Enron Global Power & Pipelines, L.L.C. 826,000 77
30,000 Equitable Resources, Inc. 888,750 83
29,000 KN Energy, Inc. 1,080,250 101
40,000 MCN Corporation 1,145,000 107
27,000 National Fuel Gas Company 1,123,875 105
30,000 New Jersey Resources Corporation 866,250 81
26,000 NICOR, Inc. 880,750 82
29,000 Oneok, Inc. 862,750 80
30,000 Pacific Enterprises 918,750 86
16,000 Peoples Energy Corporation 540,000 50
25,000 Piedmont Natural Gas Company, Inc. 587,500 55
30,000 Questar Corporation 1,140,000 106
20,000 Sonat, Inc. 1,142,500 106
40,000 Southwest Gas Corporation 665,000 62
27,000 TransCanada Pipelines Ltd. 492,750 46
35,000 UGI Corporation 796,250 74
30,000 Washington Gas & Light Company 690,000 64
- ---------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
NATURAL GAS (continued)
30,000 WICOR, Inc. $ 1,053,750 $ 98
50,000 Williams Companies, Inc. 2,193,750 204
- ---------------------------------------------------------------------------------------
27,379,587 2,549
- ---------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST--1.6%
6,600 Duke Realty Investments, Inc. 242,550 23
5,800 Equity Residential Properties Trust 253,750 24
14,000 Meditrust Corporation 511,000 48
14,600 Patriot American Hospitality, Inc. 313,900 29
15,000 Simon De Bartolo Group, Inc. 429,375 40
- ---------------------------------------------------------------------------------------
1,750,575 164
- ---------------------------------------------------------------------------------------
TELECOMMUNICATIONS/LONG DISTANCE--1.6%
27,000 MCI Communications Corporation 1,029,375 96
15,000 Sprint Corporation 658,125 61
- ---------------------------------------------------------------------------------------
1,687,500 157
- ---------------------------------------------------------------------------------------
TELEPHONE/UTILITIES--19.1%
36,000 Ameritech Corporation 2,200,500 205
38,000 Bell Atlantic Corporation 2,574,500 240
53,000 BellSouth Corporation 2,358,500 220
16,000 Cia de Telecomunicaciones de Chile S.A. 518,000 48
51,000 GTE Corporation 2,339,625 218
28,000 NYNEX Corporation 1,449,000 135
59,749 SBC Communications, Inc. 3,316,070 309
9,300 Stet Societa' Finanziaria Telefonica S.p.A. 440,588 41
6,000 Telecomunicacoes Brasileiras S/A-Telebras 688,500 64
18,000 Telefonica de Argentina S.A. (ADR) 598,500 56
15,000 Telefonica de Espana S.A. (ADR) 1,155,000 108
12,000 Telefonica del Peru S.A. 288,000 27
10,000 Telefonos de Mexico S.A. 412,500 38
13,000 Telephone and Data Systems, Inc. 481,000 45
49,000 US West Communications Group 1,721,125 160
- ---------------------------------------------------------------------------------------
20,541,408 1,914
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $85,394,631) $ 96,470,907 $ 8,983
- ---------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS UTILITIES INCOME FUND
April 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
SHARES OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
PREFERRED STOCKS--0.8%
TELEPHONE/UTILITIES
10,000 Pacific Telesis 8.50% $ 262,500 $ 24
10,000 Pacific Telesis Finance 7.56% 242,500 23
5,000 US West Financing 7.96% 123,750 12
10,000 US West Financing 8.25% 251,250 23
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $875,000) 880,000 82
- ---------------------------------------------------------------------------------------
CORPORATE BONDS--4.8%
ELECTRIC & GAS UTILITIES--3.4%
$ 500M Baltimore Gas & Electric Co., 7.52%, 2000 506,560 47
500M Consolidated Edison Co. of New York, 6.625%, 2002 492,572 46
500M Duke Power Co., 5.875%, 2003 470,891 44
500M Idaho Power Co., 6.40%, 2003 485,552 45
700M Pennsylvania Power & Light Co., 6.875%, 2003 690,830 64
500M SCE Capital Corp., 7.375%, 2003 495,962 46
500M Union Electric Co., 6.75%, 2008 484,097 45
- ---------------------------------------------------------------------------------------
3,626,464 337
- ---------------------------------------------------------------------------------------
TELEPHONE--1.4%
500M A T & T Corp., 7.50%, 2006 511,561 48
500M BellSouth Telecommunications, Inc., 6.375%, 2004 482,677 45
500M United Telephone of Florida, 6.25%, 2003 480,417 45
- ---------------------------------------------------------------------------------------
1,474,655 138
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $5,285,706) 5,101,119 475
- ---------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--3.5%
$ 1,300M CIT Group Holdings, 5.52%, 5/22/97 $ 1,295,880 $ 121
1,000M MetLife Funding, 5.51%, 6/3/97 994,949 93
600M PPG Industries, 5.50%, 5/30/97 597,342 56
900M Republic NY Corp., 5.48%, 5/30/97 896,027 83
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$3,784,198) 3,784,198 353
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $95,339,535) 98.9% 106,236,224 9,893
OTHER ASSETS, LESS LIABILITIES 1.1 1,152,449 107
- ---------------------------------------------------------------------------------------
NET ASSETS 100.0% $107,388,673 $10,000
- ---------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
19
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS SERIES FUND II, INC.
April 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
GROWTH & U.S.A. MID-CAP UTILITIES
INCOME OPPORTUNITY INCOME
FUND FUND FUND
- -----------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment in securities:
At identified cost................... $128,848,337 $ 16,948,197 $ 95,339,535
------------ -------------- ------------
------------ -------------- ------------
At value (Note 1A)................... $161,225,924 $ 17,817,961 $106,236,224
Cash (overdraft)....................... (38,255) 1,008,223 1,271,148
Receivables:
Capital shares sold.................. 1,492,959 159,449 275,896
Investment securities sold........... 1,192,957 -- --
Dividends and interest............... 246,514 7,713 564,464
Deferred organization expenses (Note
1E).................................. 4,750 -- 2,750
------------ -------------- ------------
Total Assets........................... 164,124,849 18,993,346 108,350,482
------------ -------------- ------------
LIABILITIES
Payables:
Capital shares redeemed.............. 325,601 50,974 423,234
Investment securities purchased...... -- 63,516 429,730
Accrued advisory fees.................. 97,070 11,490 66,448
Accrued expenses....................... 46,188 19,742 42,397
------------ -------------- ------------
Total Liabilities...................... 468,859 145,722 961,809
------------ -------------- ------------
NET ASSETS............................. $163,655,990 $ 18,847,624 $107,388,673
------------ -------------- ------------
------------ -------------- ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $128,536,411 $ 17,489,765 $ 94,836,553
Undistributed net investment income
(deficit)............................ (19,870) (8,629) 459,899
Accumulated net realized gain on
investment transactions.............. 2,761,862 496,724 1,195,532
Net unrealized appreciation in value of
investments.......................... 32,377,587 869,764 10,896,689
------------ -------------- ------------
Total.................................. $163,655,990 $ 18,847,624 $107,388,673
------------ -------------- ------------
------------ -------------- ------------
CAPITAL SHARES OUTSTANDING (Note 4):
Class A.............................. 14,395,052 1,177,942 15,402,119
Class B.............................. 1,785,449 109,635 1,292,790
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 10.12 $ 14.66 $ 6.44
------ ------ -----
------ ------ -----
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A
(Net asset value/.9375)*............. $ 10.79 $ 15.64 $ 6.87
------ ------ -----
------ ------ -----
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B...................... $ 10.05 $ 14.45 $ 6.38
------ ------ -----
------ ------ -----
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
20
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS SERIES FUND II, INC.
Six Months Ended April 30, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
GROWTH & U.S.A. MID-CAP UTILITIES
INCOME OPPORTUNITY INCOME
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends............................ $ 1,313,749 $ 77,571 $ 2,305,912
Interest............................. 248,372 51,152 240,354
------------ -------------- -----------
Total income........................... 1,562,121 128,723 2,546,266
------------ -------------- -----------
Expenses (Notes 1 and 3):
Advisory fee......................... 545,593 88,972 420,052
Shareholder servicing costs.......... 241,510 45,102 190,475
Distribution plan expenses - Class
A.................................. 195,246 24,670 156,266
Distribution plan expenses - Class
B.................................. 75,832 6,703 39,485
Professional fees.................... 25,713 17,569 24,804
Reports and notices to
shareholders....................... 23,439 3,552 12,630
Custodian fees....................... 11,675 4,260 7,741
Amortization of organization
expenses........................... 1,500 -- 1,500
Other expenses....................... 10,806 2,014 12,488
------------ -------------- -----------
Total expenses......................... 1,131,314 192,842 865,441
Less: Expenses waived or assumed....... (70,218) (50,443) (83,835)
Custodian fees paid indirectly.... (2,002) (4,260) (7,741)
------------ -------------- -----------
Net expenses........................... 1,059,094 138,139 773,865
------------ -------------- -----------
Net investment income (loss)........... 503,027 (9,416) 1,772,401
------------ -------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 2,770,021 518,886 2,649,562
Net unrealized appreciation
(depreciation) of investments........ 9,822,148 (595,629) (2,211,028)
------------ -------------- -----------
Net gain (loss) on investments......... 12,592,169 (76,743) 438,534
------------ -------------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............ $ 13,095,196 $ (86,159) $ 2,210,935
------------ -------------- -----------
------------ -------------- -----------
</TABLE>
See notes to financial statements
21
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS SERIES FUND II, INC.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
GROWTH &
INCOME FUND
--------------------------
11/1/96 TO 11/1/95 TO
4/30/97 10/31/96
- ---------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss)........................................ $ 503,027 $ 1,064,411
Net realized gain on investments.................................... 2,770,021 2,338,223
Net unrealized appreciation (depreciation) of investments........... 9,822,148 14,282,176
------------ ------------
Net increase (decrease) in net assets resulting from operations... 13,095,196 17,684,810
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A..................................... (520,132) (1,124,492)
Net investment income - Class B..................................... (14,650) (56,261)
Net realized gains - Class A........................................ (2,000,522) --
Net realized gains - Class B........................................ (234,403) --
------------ ------------
Total distributions............................................... (2,769,707) (1,180,753)
------------ ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold........................................... 32,211,458 44,537,868
Value of distributions reinvested................................... 2,489,650 1,102,988
Cost of shares redeemed............................................. (10,141,911) (12,479,680)
------------ ------------
24,559,197 33,161,176
------------ ------------
Class B:
Proceeds from shares sold........................................... 5,480,182 7,730,826
Value of distributions reinvested................................... 246,352 54,999
Cost of shares redeemed............................................. (991,962) (509,452)
------------ ------------
4,734,572 7,276,373
------------ ------------
Net increase (decrease) from capital share transactions............. 29,293,769 40,437,549
------------ ------------
Net increase (decrease) in net assets............................. 39,619,258 56,941,606
NET ASSETS
Beginning of period................................................. 124,036,732 67,095,126
------------ ------------
End of period+...................................................... $163,655,990 $124,036,732
------------ ------------
------------ ------------
+Includes undistributed net investment income (deficit) of............ $ (19,870) $ 11,885
------------ ------------
------------ ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold................................................................ 3,238,985 5,098,974
Issued for distributions reinvested................................. 258,143 125,569
Redeemed............................................................ (1,016,560) (1,437,840)
------------ ------------
Net increase (decrease) in Class A capital shares outstanding....... 2,480,568 3,786,703
------------ ------------
------------ ------------
Class B:
Sold................................................................ 557,346 891,261
Issued for distributions reinvested................................. 25,769 6,317
Redeemed............................................................ (99,645) (58,752)
------------ ------------
Net increase in Class B capital shares outstanding.................. 483,470 838,826
------------ ------------
------------ ------------
</TABLE>
See notes to financial statements
22
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
U.S.A. MID-CAP UTILITIES
OPPORTUNITY FUND INCOME FUND
------------------------ --------------------------
11/1/96 TO 11/1/95 TO 11/1/96 TO 11/1/95 TO
4/30/97 10/31/96 4/30/97 10/31/96
- ---------------------------------------------------------------------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income (loss)........................................ $ (9,416) $ 37,706 $ 1,772,401 $ 3,539,164
Net realized gain on investments.................................... 518,886 704,468 2,649,562 3,348,109
Net unrealized appreciation (depreciation) of investments........... (595,629) 492,864 (2,211,028) 4,512,594
----------- ----------- ------------ ------------
Net increase (decrease) in net assets resulting from operations... (86,159) 1,235,038 2,210,935 11,399,867
----------- ----------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A..................................... (36,607) (34,589) (1,552,236) (3,356,371)
Net investment income - Class B..................................... -- (1,319) (93,209) (175,052)
Net realized gains - Class A........................................ (673,761) (500,576) -- --
Net realized gains - Class B........................................ (52,869) (20,889) -- --
----------- ----------- ------------ ------------
Total distributions............................................... (763,237) (557,373) (1,645,445) (3,531,423)
----------- ----------- ------------ ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold........................................... 4,405,003 6,237,390 7,747,331 28,533,238
Value of distributions reinvested................................... 696,970 526,859 1,490,364 3,227,282
Cost of shares redeemed............................................. (1,534,990) (1,744,626) (14,662,525) (18,917,320)
----------- ----------- ------------ ------------
3,566,983 5,019,623 (5,424,830) 12,843,200
----------- ----------- ------------ ------------
Class B:
Proceeds from shares sold........................................... 543,087 1,021,499 1,490,678 4,829,402
Value of distributions reinvested................................... 52,869 22,208 89,658 168,900
Cost of shares redeemed............................................. (112,264) (210,746) (1,031,480) (910,784)
----------- ----------- ------------ ------------
483,692 832,961 548,856 4,087,518
----------- ----------- ------------ ------------
Net increase (decrease) from capital share transactions............. 4,050,675 5,852,584 (4,875,974) 16,930,718
----------- ----------- ------------ ------------
Net increase (decrease) in net assets............................. 3,201,279 6,530,249 (4,310,484) 24,799,162
NET ASSETS
Beginning of period................................................. 15,646,345 9,116,096 111,699,157 86,899,995
----------- ----------- ------------ ------------
End of period+...................................................... $18,847,624 $15,646,345 $107,388,673 $111,699,157
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
+Includes undistributed net investment income (deficit) of............ $ (8,629) $ 37,394 $ 459,899 $ 332,943
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold................................................................ 285,401 424,011 1,186,417 4,588,232
Issued for distributions reinvested................................. 45,613 37,986 230,293 516,114
Redeemed............................................................ (100,181) (119,786) (2,242,880) (3,050,042)
----------- ----------- ------------ ------------
Net increase (decrease) in Class A capital shares outstanding....... 230,833 342,211 (826,170) 2,054,304
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
Class B:
Sold................................................................ 35,988 69,762 230,116 781,947
Issued for distributions reinvested................................. 3,501 1,612 13,986 27,217
Redeemed............................................................ (7,239) (14,524) (158,663) (148,928)
----------- ----------- ------------ ------------
Net increase in Class B capital shares outstanding.................. 32,250 56,850 85,439 660,236
----------- ----------- ------------ ------------
----------- ----------- ------------ ------------
</TABLE>
See notes to financial statements
23
<PAGE>
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 operates as a series Fund, issuing shares of
beneficial interest in the Growth & Income Fund, U.S.A. Mid-Cap Opportunity Fund
and Utilities Income Fund (each a "Fund"), and accounts separately for the
assets, liabilities and operations of each Fund. The objective of each Fund 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 Stock Market is valued at its last sale price on the
exchange where the security is principally traded, and lacking any sales, the
security is valued at the mean between the closing bid and asked prices. Each
security traded in the over-the-counter market (including securities listed on
exchanges whose primary market is believed to be over-the-counter) is valued at
the mean between the last bid and asked prices based upon quotes furnished by a
market maker for such securities. Securities may also be priced by a pricing
service. The pricing service uses quotations obtained from investment dealers or
brokers, and other available information in determining value. Short-term
corporate notes which are purchased at a discount are valued at amortized cost.
Securities for which market quotations are not readily available and other
assets are valued on a consistent basis at fair value as determined in good
faith by or under the supervision of the Series Fund II'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 it from
all, or substantially all, such taxes. At April 30, 1997, the Utilities Income
Fund had capital loss carryovers of $1,454,031 of which $717,765 expires in 2002
and $736,266 expires in 2003.
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 U.S.A. Mid-Cap Opportunity Fund
are declared and paid annually. Distributions from net realized capital gains
are normally declared and
24
<PAGE>
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 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. Repurchase Agreements--Securities pledged as collateral for repurchase
agreements are held by the Fund's custodian until maturity of the repurchase
agreement. The agreements provide that the Fund will receive, as collateral,
securities with a market value which will at all times be at least equal to 100%
of the amount invested by the Fund.
G. Use of Estimates--The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expense during the reporting period. Actual results could differ
from those estimates.
H. Other--Security transactions are accounted for on the date the securities are
purchased or sold. Cost is determined, and gains and losses are based, on the
identified cost basis for both financial statement and federal income tax
purposes. Dividend income is recorded on the ex-dividend date. Interest income
and estimated expenses are accrued daily. The Bank of New York, custodian for
the Funds, has provided credits in the amount of $14,003 against custodian
charges based on the uninvested cash balances of these Funds.
2. PURCHASES AND SALES OF SECURITIES--For the six months ended April 30, 1997,
purchases and sales of securities, excluding repurchase agreements and
short-term corporate notes, were as follows:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases of Sales
----------- -----------
<S> <C> <C>
Growth & Income Fund................... $45,533,958 $21,832,367
U.S.A. Mid-Cap Opportunity Fund........ 11,553,401 8,518,457
Utilities Income Fund.................. 32,282,971 39,096,016
</TABLE>
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS SERIES FUND II, INC.
At April 30, 1997, 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................... $128,848,337 $ 36,304,478 $ 3,926,891 $ 32,377,587
U.S.A. Mid-Cap Opportunity Fund........ 16,948,197 2,088,698 1,218,934 869,764
Utilities Income Fund.................. 95,339,535 12,183,271 1,286,582 10,896,689
</TABLE>
3. ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES--Certain officers and
directors of 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 Series Fund II's individual
retirement accounts. Officers and directors of Series Fund II received no
remuneration from Series Fund II for serving in such capacities. Their
remuneration (together with certain other expenses of 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 1/4 of the 1% annual fee of the U.S.A. Mid-Cap Opportunity Fund's average
daily net assets for a minimum period ending October 31, 1997. For the six
months ended April 30, 1997, total advisory fees accrued to FIMCO were
$1,054,617 of which $149,309 was waived. In addition, expenses of $55,187 were
assumed by FIMCO.
For the six months ended April 30, 1997, FIC, as underwriter, received
$1,747,720 in commissions from the sale of shares of the Series Fund II, after
allowing $6,346 to other dealers. Shareholder servicing costs included $374,976
in transfer agent fees and out of pocket expenses accrued to ADM and $102,111 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. Total distribution plan
fees accrued to FIC amounted to $498,202.
Wellington Management Company serves as an investment subadviser to the Growth &
Income Fund. The subadviser is paid by FIMCO and not by the 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
26
<PAGE>
expense levels. Class A shares are sold with an initial sales charge of up to
6.25% of the amount invested and together with the Class B shares are subject to
distribution plan fees as described in Note 3. Class B shares are sold without
an initial sales charge, but are generally subject to a contingent deferred
sales charge which declines in steps from 4% to 0% 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 distribution plan 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 to each Fund,
Series Fund II has classified 50,000,000 shares as Class A and 50,000,000 shares
as Class B.
27
<PAGE>
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
NET ASSET -------------------------------------- FROM
VALUE NET REALIZED --------------------
--------- NET AND UNREALIZED TOTAL FROM NET NET
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
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 10/31/96..................... 7.81 .102 1.593 1.695 .115 -- .115
11/1/96 to 4/30/97...................... 9.39 .038 .892 .930 .040 .160 .200
CLASS B
1/12/95* to 10/31/95.................... 6.43 .084 1.372 1.456 .106 -- .106
11/1/95 to 10/31/96..................... 7.78 .066 1.555 1.621 .071 -- .071
11/1/96 to 4/30/97...................... 9.33 .011 .879 .890 .010 .160 .170
- --------------------------------------------------------------------------------------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
8/24/92* to 10/31/92.................... $ 11.64 $ .036 $ .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 10/31/96..................... 14.58 .042 1.564 1.606 .058 .838 .896
11/1/96 to 4/30/97...................... 15.29 (.006) .094 .088 .037 .681 .718
CLASS B
1/12/95* to 10/31/95.................... 12.03 (.011) 2.491 2.480 -- -- --
11/1/95 to 10/31/96..................... 14.51 .013 1.468 1.481 .053 .838 .891
11/1/96 to 4/30/97...................... 15.10 (.031) .062 .031 -- .681 .681
- --------------------------------------------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93.................... $ 5.59 $ .118 $ .317 $ .435 $ .105 $ -- $ .105
11/1/93 to 10/31/94..................... 5.92 .239 (.839) (.600) .227 .013 .240
11/1/94 to 10/31/95..................... 5.08 .233 .822 1.055 .235 -- .235
11/1/95 to 10/31/96..................... 5.90 .214 .512 .726 .216 -- .216
11/1/96 to 4/30/97...................... 6.41 .107 .021 .128 .098 -- .098
CLASS B
1/12/95* to 10/31/95.................... 4.95 .144 .930 1.074 .164 -- .164
11/1/95 to 10/31/96..................... 5.86 .185 .489 .674 .184 -- .184
11/1/96 to 4/30/97...................... 6.35 .082 .024 .106 .076 -- .076
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* 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
++ Net of expenses waived or assumed (Note 3).
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in fiscal year 1996.
See notes to financial statements
28
<PAGE>
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>
- ----------------------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
----------------------------------------------------------------------------
---------
RATIO TO AVERAGE NET
ASSETS BEFORE
RATIO TO AVERAGE NET EXPENSES WAIVED OR
ASSETS++ ASSUMED
NET ASSET -------------------- --------------------
VALUE NET NET
--------- TOTAL RETURN NET ASSETS INVESTMENT INVESTMENT
END ** END OF PERIOD EXPENSES INCOME EXPENSES INCOME
OF PERIOD (%) (IN THOUSANDS) (%) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93.................... $ 6.56 .99+ $ 3,407 -- 1.02+ 1.37+ (.35)+
11/1/93 to 10/31/94..................... 6.69 3.67 34,489 .67 2.26 1.83 1.11
11/1/94 to 10/31/95..................... 7.81 19.51 63,493 .98 2.34 1.59 1.74
11/1/95 to 10/31/96..................... 9.39 21.82 111,896 1.31 1.20 1.49 1.02
11/1/96 to 4/30/97...................... 10.12 10.01 145,720 1.39+ .77+ 1.48+ .68+
CLASS B
1/12/95* to 10/31/95.................... 7.78 22.73 3,602 1.90+ 2.23+ 2.61+ 1.52+
11/1/95 to 10/31/96..................... 9.33 20.92 12,141 2.03 .48 2.19 .31
11/1/96 to 4/30/97...................... 10.05 9.63 17,936 2.09+ .07+ 2.18+ (.02)+
- ----------------------------------------------------------------------------------------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
8/24/92* to 10/31/92.................... $ 11.70 3.86+ $ 8,150 .06+ 1.87+ 2.64+ (.72)+
11/1/92 to 10/31/93..................... 12.15 4.23 15,586 .81 .96 2.03 (.26)
11/1/93 to 10/31/94..................... 11.78 (2.05) 7,651 .90 .45 2.32 (.97)
11/1/94 to 10/31/95..................... 14.58 24.59 8,818 1.34 .48 2.36 (.55)
11/1/95 to 10/31/96..................... 15.29 11.64 14,478 1.57 .36 2.15 (.21)
11/1/96 to 4/30/97...................... 14.66 .38 17,263 1.50+ (.05)+ 2.12+ (.62)+
CLASS B
1/12/95* to 10/31/95.................... 14.51 20.62 298 2.29+ (.03)+ 3.79+ (1.53)+
11/1/95 to 10/31/96..................... 15.10 10.80 1,168 2.30 (.37) 3.03 (1.10)
11/1/96 to 4/30/97...................... 14.45 .01 1,584 2.20+ (.75)+ 2.82+ (1.32)+
- ----------------------------------------------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93.................... $ 5.92 11.28+ $ 58,373 .35+ 3.84+ 1.80+ 2.39+
11/1/93 to 10/31/94..................... 5.08 (10.15) 62,671 .80 4.59 1.59 3.80
11/1/94 to 10/31/95..................... 5.90 21.35 83,691 1.04 4.37 1.57 3.84
11/1/95 to 10/31/96..................... 6.41 12.45 104,029 1.20 3.49 1.49 3.19
11/1/96 to 4/30/97...................... 6.44 2.00 99,144 1.34+ 3.21+ 1.49+ 3.06+
CLASS B
1/12/95* to 10/31/95.................... 5.86 21.99 3,209 1.82+ 4.93+ 2.53+ 4.21+
11/1/95 to 10/31/96..................... 6.35 11.61 7,670 1.91 2.77 2.28 2.40
11/1/96 to 4/30/97...................... 6.38 1.67 8,245 2.04+ 2.51+ 2.19+ 2.36+
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PORTFOLIO AVERAGE
TURNOVER COMMISSION
RATE RATE
(%) +++
- -------------------------------------------------------------------------
<S> <C> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93.................... 0 $ --
11/1/93 to 10/31/94..................... 6 --
11/1/94 to 10/31/95..................... 19 --
11/1/95 to 10/31/96..................... 25 .0530
11/1/96 to 4/30/97...................... 16 .0530
CLASS B
1/12/95* to 10/31/95.................... 19 --
11/1/95 to 10/31/96..................... 25 .0530
11/1/96 to 4/30/97...................... 16 .0530
- -------------------------------------------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
8/24/92* to 10/31/92.................... 0 $ --
11/1/92 to 10/31/93..................... 52 --
11/1/93 to 10/31/94..................... 29 --
11/1/94 to 10/31/95..................... 106 --
11/1/95 to 10/31/96..................... 118 .0704
11/1/96 to 4/30/97...................... 56 .0690
CLASS B
1/12/95* to 10/31/95.................... 106 --
11/1/95 to 10/31/96..................... 118 .0704
11/1/96 to 4/30/97...................... 56 .0690
- -------------------------------------------------------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93.................... 17 $ --
11/1/93 to 10/31/94..................... 58 --
11/1/94 to 10/31/95..................... 16 --
11/1/95 to 10/31/96..................... 38 .0706
11/1/96 to 4/30/97...................... 30 .0697
CLASS B
1/12/95* to 10/31/95.................... 16 --
11/1/95 to 10/31/96..................... 38 .0706
11/1/96 to 4/30/97...................... 30 .0697
- -------------------------------------------------------------------------------------------------------------
</TABLE>
* 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
++ Net of expenses waived or assumed (Note 3).
+++ Average commission rate (per share of security) as required by amended
disclosure requirements effective in fiscal year 1996.
See notes to financial statements
29
<PAGE>
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 Growth & Income Fund, U.S.A. Mid-Cap
Opportunity Fund (formerly known as Made In The U.S.A. Fund) and Utilities
Income Fund (comprising First Investors Series Fund II, Inc.), as of April 30,
1997, 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, 1997 and
the year ended October 31, 1996, 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, 1997, 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 Growth
& Income Fund, U.S.A. Mid-Cap Opportunity Fund and Utilities Income Fund
(comprising First Investors Series Fund II, Inc.) at April 30, 1997, 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 29, 1997
30
<PAGE>
FIRST INVESTORS SERIES FUND II, INC.
DIRECTORS
- -------------------------------------------
JAMES J. COY (Emeritus)
ROGER L. GRAYSON
GLENN O. HEAD
KATHRYN S. HEAD
REX R. REED
HERBERT RUBINSTEIN
NANCY S. SCHAENEN
JAMES M. SRYGLEY
JOHN T. SULLIVAN
ROBERT F. WENTWORTH
OFFICERS
- -------------------------------------------
GLENN O. HEAD
President
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
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, N.Y. 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 19102-1707
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.
31
<PAGE>
FIRST
INVESTORS
SERIES FUND II, INC.
Growth & Income Fund
U.S.A. Mid-Cap Opportunity Fund
Utilities Income Fund
SEMI-
ANNUAL
REPORT
April 30, 1997
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
right hand side.
The following language appears on the left hand side:
FIRST INVESTORS SERIES FUND II, INC.
95 WALL STREET
NEW YORK, NY 10005
The following appears on the bottom left hand side:
First Investors logo
A MEMBER OF THE
FIRST INVESTORS
FINANCIAL NETWORK
FIUSA03
