<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS GROWTH & INCOME FUND
Dear Investor:
We are pleased to present the annual report for the First Investors Growth &
Income Fund for the fiscal year ended October 31, 1997. As of October 31, 1997,
the Fund's net asset value per share was $11.59 for Class A shares and $11.48
for Class B shares. For the same period, the Fund returned on a net asset value
basis 26.2% on Class A shares and 25.2% on Class B shares, compared to a 28.1%
total return for the Lipper Growth & Income Average.
The U.S. stock market powered ahead in the past year fueled by healthy economic
growth, benign inflation, and continued positive corporate earnings. Despite the
stunning performance of U.S. equities, market action was quite erratic during
the year, marked by three episodes of 7-10% price declines followed quickly by
strong recoveries. The trigger for the market's most recent volatility has been
the dramatic currency devaluations in Southeast Asia. These events along with
earlier profit warnings from several high profile consumer multinationals
precipitated a significant reversal in market leadership in recent months
favoring small-sized companies at the expense of large-cap stocks.
Returns for the Growth & Income Fund, while slightly behind the Lipper Growth &
Income Average were excellent on an absolute basis. The Fund's large-cap focus
and exposure to several multi-nationals in the areas of household products,
health care, energy, and basic industry limited the Fund's returns. In addition,
a few of the Fund's retail holdings were disappointing performers in the past
year.
INVESTMENT OUTLOOK
U.S. economic conditions remain quite favorable underpinned by healthy real
growth and remarkably few signs of inflationary pressures despite tight labor
markets. In fact, recent global developments, i.e., the turbulence in Asia, are
positive for inflation and increase the prospects for continuing low interest
rates. We have been concerned for some time with the market's historically high
valuation, leaving stock prices vulnerable to even the slightest shifts in
investor sentiment. So far the U.S. equity market has proved to be fairly
resilient in the face of turmoil in Asia. Looking ahead, we believe that further
negative news from this region could affect U.S. stock prices as investors sort
out the impact on earnings. In the past few months, sharp exchange rate declines
in the Pacific Rim coupled with a steadily rising U.S. dollar versus European
currencies have resulted in reduced earnings projections for selected companies
and industries. Nevertheless, the overall profit outlook for most U.S.
corporations remains quite favorable.
Concerning investment strategy, the Fund retains significant holdings in the
household products and health care sectors, as global demand trends for these
areas remain attractive longer term. In both industries, our focus is on
companies that have established brand name products that are unique and not
easily substitutable. Examples include Estee Lauder and Kimberly-Clark in
consumer goods and Pfizer in pharmaceuticals. Other areas of importance include
finance, where the Fund has sizable commitments to insurance and diversified
services firms such as Ace and American Express. In technology, the Fund has
emphasized companies that offer consistent mid-teens earnings growth, including
Automatic Data Processing and BMC Software, rather than the more volatile
PC-related and semiconductor companies. While this has not been the correct
strategy in the past year, earnings expectations are very high for the PC and
electronics sectors, leaving little room for potential disappointments. In
particular, we believe these two areas are most at risk from slowing Asian
economies. Finally, the Fund maintains exposure to retail, basic industry, and
energy reflecting inexpensive valuations and recovering fundamentals.
1
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS GROWTH & INCOME FUND
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. Stock markets tend to be cyclical requiring
a long term time-horizon when investing. Additionally, on a technical basis, the
current U.S. bull market is now the longest in history. Providing positive
economic support is the convergence of stable economic growth, low inflation and
constructive interest rates. Also supportive are the demographic trends that are
propelling "baby boomers" savings and investment rates to continue at high
levels. However, one of the risks to U.S. equity investors is the impact which
lower global growth, caused by the turmoil in Asian economies, will have on U.S.
companies' profits and therefore stock market prices.
We have been pleased to be able to serve as subadviser to the Fund. Effective
January 1, 1998, management of the Fund will be assumed by the Fund's adviser,
First Investors Management Company, Inc.
Sincerely,
/s/ Laura J. Allen
Laura J. Allen
Portfolio Manager
November 28, 1997
2
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS GROWTH & INCOME FUND
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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1997
GROWTH & INCOME FUND STANDARD & POOR'S 500 INDEX
<S> <C> <C>
Oct 93 $9,375 $10,000
Apr 94 $9,365 $9,917
Oct 94 $9,723 $10,530
Apr 95 $10,514 $11,589
Oct 95 $11,635 $13,192
Apr 96 $13,194 $15,007
Oct 96 $14,155 $16,369
Apr 97 $15,572 $18,777
Oct 97 $17,864 $21,624
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 26.20% 18.26%
Since Inception (10/4/93) 17.14% 15.29%
Class B Shares
One Year 25.23% 20.21%
Since Inception (1/12/95) 24.77% 23.43%
</TABLE>
The graph compares a $10,000 investment in the First Investors Growth &
Income Fund (Class A shares) beginning 10/4/93 (inception date) with a
theoretical investment in the Standard & Poor's 500 Index. The Standard &
Poor's 500 Index is an unmanaged capitalization-weighted index of 500 stocks
designed to measure performance of the broad domestic economy through changes
in the aggregate market value of such stocks, which represent all major
industries. It is not possible to invest directly in this Index. In addition,
the Index does not take into account fees and expenses. For purposes of the
graph and the accompanying table, unless otherwise indicated, it 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.
THE PERFORMANCE OF CLASS B SHARES MAY BE GREATER THAN OR LESS THAN THAT SHOWN
IN THE LINE GRAPH ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN SALES
LOADS AND FEES PAID BY SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 10/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25%. THE CLASS B "S.E.C.
STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE
(MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND
WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS
A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE
INCEPTION WOULD HAVE BEEN 18.14% AND 14.62%, RESPECTIVELY. THE CLASS B "S.E.C.
STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE INCEPTION
WOULD HAVE BEEN
3
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS GROWTH & INCOME FUND
20.13% AND 22.70%, RESPECTIVELY. RESULTS REPRESENT PAST PERFORMANCE AND DO NOT
INDICATE FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THE ORIGINAL COST. STANDARD & POOR'S 500 INDEX FIGURES
FROM STANDARD & POOR'S AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT
COMPANY, INC.
4
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
Dear Investor:
We are pleased to present the annual report for the First Investors U.S.A.
Mid-Cap Opportunity Fund for the fiscal year ended October 31, 1997. At October
31, 1997, the Fund's net asset value per share was $18.56 for Class A shares and
$18.23 for Class B shares. For the same period, the Fund had a total return on a
net asset value basis of 27.1% and 26.2% on Class A and Class B shares,
respectively, outperforming the average mid-cap company growth fund's total
return of 22.8% as tracked by Lipper Analytical Services, Inc.
The performance of the United States economy over the past year has not
conformed to the traditional expectations of many professional and amateur
economists and market strategists. With the civilian unemployment rate declining
to 4.7% and Gross Domestic Product expanding at 4.0%, for the twelve months
ended September 30, 1997, consumer confidence high and manufacturing capacity
utilization approaching 85%, the traditional economic expectation would be for
prices to rise. However, inflation, as measured by the Consumer Price Index is
up only 2.2% on a year over year basis as of September 30, 1997. The Producer
Price Index for the same period is flat.
With inflation apparently in check and the economy expanding, the financial
markets have prospered. Proponents of the new paradigm claim technology and
productivity are the key drivers of this unheralded economic performance. The
traditional view is that inflation remains a threat in a high-growth environment
and there will always be a trade-off between lower unemployment and higher
prices. Proponents of both views seem to agree that United States' exports to
South East Asian countries will slow as a result of recent economic events
there. This slowing should be followed by higher imports from the region as the
South East Asian economies attempt to improve performance through export driven
industries. At this point, it is quite difficult to determine the lasting impact
the Asian situation will have on the United States economy.
The Fund's strong performance was aided by its holdings in the oilfield services
industry, which has generated excellent returns for the Fund. During the 1980's
and early 1990's, this industry experienced a difficult period characterized by
overcapacity, falling prices, and very limited capital expenditure resulting in
a depleted industry. As exploration and development activity increased in the
past few years, driven by the ever growing worldwide need for energy, the demand
for services, equipment, and trained personnel outpaced the sector's ability to
supply it. Therefore, oilfield service companies now find themselves in the
enviable position of demand substantially outstripping supply, thus allowing
them to increase pricing and sign very favorable short-term and long-term
contracts for their equipment. Capacity should remain constrained in the near
future because shipyards and manufacturers cannot build new equipment fast
enough. Also, much of the new equipment being built has already been contracted
out.
The Fund's holdings in this industry included: Patterson Energy, Inc., which
conducts onshore contract drilling and explores, develops, and produces oil and
natural gas; Nabors Industries, Inc. which is the largest land drilling company
in the country; EVI, Inc., a leading supplier of oil well drillpipe and the
casings that carry oil and gas up to the surface; and Maverick Tube Corporation,
one of the largest U.S. producers of the pipe used in the completion of oil and
gas wells and for transporting oil and gas.
The Technology sector, led by electronic design automation ("EDA") companies,
also posted solid returns. EDA companies provide products which enhance and
accelerate the design and verification of integrated circuits and electronic
systems. End-users of these systems include computer manufacturers, consumer
4
<PAGE>
electronics companies, defense electronics companies, merchant semiconductor
manufacturers and telecommunications companies throughout the world. The Fund
has a position in Cadence Design Systems, Inc., which is the largest EDA company
and whose tools are used to automate, implement and verify electronic designs.
Summit Design, Inc., another EDA company held by the Fund, provides software
solutions to help engineers design and test systems rapidly and lower production
cost.
The Fund's above average performance was hindered by specific sectors. In
addition to certain Financial sector companies, the Healthcare sector, namely
nursing home companies, was a drag on performance. We have maintained our
holdings in certain underperforming companies, since in our view, the business
fundamentals are in place for better performance in the future. However, we have
sold positions in other less attractive companies.
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. Stock markets tend to follow cycles and the
current upward cycle or bull market is now the longest in history. On a
technical basis, the length of the cycle could present some pressure against
continued gains in the short term, but the current economic environment of
stable growth, low inflation and low interest rates provides positive support
for continued long-term gains. The aging population, with its emphasis on saving
and investing for retirement, adds another level of support for continued
positive trends in the financial markets. However, the impact of lower global
economic growth, due to the turmoil in the Asian economies and the possible
impact on U.S. companies' profits, could present a risk to U.S. equity
investors.
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,
/s/ Patricia D. Poitra
Patricia D. Poitra
Director of Equities
and Portfolio Manager
November 28, 1997
5
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
Comparison of change in value of $10,000 investment in the First Investors
U.S.A. Mid-Cap Opportunity Fund (Class A shares) and the Standard & Poor's 400
Midcap Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1997
U.S.A. MID-CAP OPPORTUNITY FUND STANDARD & POOR'S 400 MIDCAP INDEX
<S> <C> <C>
Aug 92 $9,375 $10,000
Oct 92 9,441 10,462
Apr 93 9,521 11,440
Oct 93 9,840 12,659
Apr 94 9,172 12,552
Oct 94 9,639 11,373
Apr 95 10,806 13,782
Oct 95 12,009 15,707
Apr 96 13,021 17,884
Oct 96 13,407 18,432
Apr 97 13,459 19,700
Oct 97 17,039 24,450
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 27.09% 19.14%
Five Years 12.54% 11.09%
Since Inception (8/24/92) 12.21% 10.82%
Class B Shares
One Year 26.17% 21.12%
Since Inception (1/12/95) 20.51% 19.20%
</TABLE>
THE GRAPH COMPARES A $10,000 INVESTMENT IN THE FIRST INVESTORS U.S.A. MID-CAP
OPPORTUNITY FUND (CLASS A SHARES) BEGINNING 8/24/92 (INCEPTION DATE) WITH A
THEORETICAL INVESTMENT IN THE STANDARD & POOR'S 400 MIDCAP INDEX. THE STANDARD &
POOR'S 400 MIDCAP INDEX IS AN UNMANAGED CAPITALIZATION-WEIGHTED INDEX OF 400
STOCKS DESIGNED TO MEASURE PERFORMANCE OF THE MID-RANGE SECTOR OF THE U.S. STOCK
MARKET WHERE THE MEDIAN MARKET CAPITALIZATION IS APPROXIMATELY $700 MILLION. IT
IS NOT POSSIBLE TO INVEST DIRECTLY IN THIS INDEX. IN ADDITION, THE INDEX DOES
NOT TAKE INTO ACCOUNT FEES AND EXPENSES. FOR PURPOSES OF THE GRAPH AND THE
ACCOMPANYING TABLE, UNLESS OTHERWISE INDICATED, IT HAS BEEN ASSUMED THAT THE
MAXIMUM SALES CHARGE WAS DEDUCTED FROM THE INITIAL $10,000 INVESTMENT IN THE
FUND AND ALL DIVIDENDS AND DISTRIBUTIONS WERE REINVESTED. THE PERFORMANCE OF
CLASS B SHARES MAY BE GREATER THAN OR LESS THAN THAT SHOWN IN THE LINE GRAPH
ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN SALES LOADS AND FEES PAID BY
SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 10/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25%. THE CLASS B "S.E.C.
STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE
(MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND
WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE CLASS
A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR, FIVE YEARS
AND SINCE INCEPTION WOULD HAVE BEEN 18.39%, 10.34% AND 10.02%, RESPECTIVELY.
THE CLASS B "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND
SINCE INCEPTION WOULD HAVE BEEN 20.23% AND 18.11%, RESPECTIVELY. RESULTS
REPRESENT PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT
RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN
INVESTOR'S SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL
COST. STANDARD & POOR'S 400 MIDCAP INDEX FIGURES FROM STANDARD & POOR'S AND
ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
6
<PAGE>
PORTFOLIO MANAGER'S LETTER
FIRST INVESTORS UTILITIES INCOME FUND
Dear Investor:
We are pleased to present the annual report for the First Investors Utilities
Income Fund for the fiscal year ended October 31, 1997. At October 31, 1997, the
Fund's net asset value per share was $7.03 for Class A shares and $6.96 for
Class B shares. For the same period, the Fund had a total return on a net asset
value basis of 12.9% and 12.1% for the Class A and Class B shares, respectively,
compared to a total return of 17.8% for the average utility fund as tracked by
Lipper Analytical Services, Inc.
The performance of the United States economy over the past year has not
conformed to the traditional expectations of many professional and amateur
economists and market strategists. With the civilian unemployment rate declining
to 4.7% and Gross Domestic Product expanding at 4.0%, for the twelve months
ended September 30, 1997, consumer confidence high and manufacturing capacity
utilization approaching 85%, the traditional economic expectation would be for
prices to rise. However, inflation, as measured by the Consumer Price Index is
up only 2.2% on a year over year basis as of September 30, 1997. The Producer
Price Index for the same period is flat.
With inflation apparently in check and the economy expanding, the financial
markets have prospered. Proponents of the new paradigm claim technology and
productivity are the key drivers of this unheralded economic performance. The
traditional view is that inflation remains a threat in a high-growth environment
and there will always be a trade-off between lower unemployment and higher
prices. Proponents of both views seem to agree that United States' exports to
South East Asian countries will slow as a result of recent economic events
there. This slowing should be followed by higher imports from the region as the
South East Asian economies attempt to improve performance through export driven
industries. At this point, it is quite difficult to determine the lasting impact
the Asian situation will have on the United States economy.
The Fund's positive performance was attributable in part to the strong
performance of the telephone sector of the utilities industry. This sector
performed well as investors became more comfortable with the Baby Bells' ability
to weather industry changes. Bell Atlantic and US West Communications Group were
two companies whose shares benefited from the brighter view. Additionally, the
shares of certain foreign phone companies in the form of American Depository
Receipts (ADRs) showed strong gains, as did shares of companies such as Century
Telephone Enterprises, a rural local exchange carrier, and Teleport
Communications Group, a competitive local exchange carrier. Finally, the Fund's
energy service stocks, though only a small portion of assets, helped overall
performance with strong gains posted by Schlumberger, Baker-Hughes and Dresser
Industries.
The Fund's performance was hampered by its investments in the electric utility
segment. Electric utility performance was hurt by continued regulatory turmoil
and generally low growth prospects. Illinova, Texas Utilities and Houston
Industries were among the poorest performing stocks. The natural gas segment of
the Fund fared poorly, primarily reflecting the performance of companies that
have substantial energy marketing and exploration and production businesses
aside from their traditional transmission and distribution business. Enron,
Sonat and Questar were among the laggards in the gas sector.
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. Stock markets tend to follow cycles and the
current upward cycle or bull market is now the longest in history. On a
technical basis, the length of the cycle could present
7
<PAGE>
PORTFOLIO MANAGER'S LETTER (continued)
FIRST INVESTORS UTILITIES INCOME FUND
some pressure against continued gains in the short term, but the current
economic environment of stable growth, low inflation and low interest rates
provides positive support for continued long-term gains. The aging population,
with its emphasis on saving and investing for retirement, adds another level of
support for continued positive trends in the financial markets. However, the
impact of lower global economic growth, due to the turmoil in the Asian
economies and the possible impact on U.S. companies' profits, could present a
risk to U.S. equity investors.
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,
/s/ Patricia D. Poitra
Patricia D. Poitra
Director of Equities
and Portfolio Manager
November 28, 1997
8
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS UTILITIES INCOME FUND
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.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1997
UTILITIES INCOME FUND STANDARD & POOR'S 500 INDEX
<S> <C> <C>
Feb 93 $9,375 $10,000
Apr 93 9,327 9,964
Oct 93 10,112 10,741
Apr 94 9,316 10,493
Oct 94 9,085 11,160
Apr 95 9,666 12,323
Oct 95 10,909 14,102
Apr 96 11,540 16,042
Oct 96 12,267 17,498
Apr 97 12,512 20,072
Oct 97 13,845 23,115
Average Annual Total Return*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 12.86% 5.77%
Since Inception (2/22/93) 8.66% 7.18%
Class B Shares
One Year 12.08% 7.57%
Since Inception (1/12/95) 16.29% 15.02%
<CAPTION>
AS OF OCTOBER 31, 1997
STANDARD & POOR'S UTILITIES INDEX
<S> <C>
Feb 93 $10,000
Apr 93 9,886
Oct 93 10,748
Apr 94 9,294
Oct 94 8,927
Apr 95 9,797
Oct 95 11,492
Apr 96 12,019
Oct 96 12,658
Apr 97 12,214
Oct 97 13,912
Class A Shares
One Year
Since Inception (2/22/93)
Class B Shares
One Year
Since Inception (1/12/95)
</TABLE>
The graph compares a $10,000 investment in the First Investors Utilities
Income Fund (Class A shares) beginning 2/22/93 (inception date) with
theoretical investments in the Standard & Poor's 500 Index and the Standard &
Poor's Utilities Index. The Standard & Poor's 500 Index is an unmanaged
capitalization-weighted index of 500 stocks designed to measure performance of
the broad domestic economy through changes in the aggregate market value of
such stocks, which represent all major industries. The Standard & Poor's
Utilities Index is a capitalization-weighted index of 37 stocks designed to
measure the performance of the utility sector of the Standard & Poor's 500
Index. It is not possible to invest directly in these Indices. In addition,
the Indices do not take into account fees and expenses. For purposes of the
graph and the accompanying table, unless otherwise indicated, it has been
assumed that the maximum sales charge was deducted from the initial $10,000
investment in the Fund and all dividends and distributions were reinvested.
THE PERFORMANCE OF CLASS B SHARES PERFORMANCE MAY BE GREATER THAN OR LESS THAN
THAT SHOWN IN THE LINE GRAPH ABOVE FOR CLASS A SHARES BASED ON DIFFERENCES IN
SALES LOADS AND FEES PAID BY SHAREHOLDERS INVESTING IN THE DIFFERENT CLASSES.
* AVERAGE ANNUAL TOTAL RETURN FIGURES (FOR THE PERIOD ENDED 10/31/97) INCLUDE
THE REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS. "N.A.V. ONLY" RETURNS ARE
CALCULATED WITHOUT SALES CHARGES. THE CLASS A "S.E.C. STANDARDIZED" RETURNS
SHOWN ARE BASED ON THE MAXIMUM SALES CHARGE OF 6.25%. THE CLASS B "S.E.C.
STANDARDIZED" RETURNS ARE ADJUSTED FOR THE APPLICABLE DEFERRED SALES CHARGE
(MAXIMUM OF 4% IN THE FIRST YEAR). SOME OR ALL OF THE EXPENSES OF THE FUND
WERE WAIVED OR ASSUMED. IF SUCH EXPENSES HAD BEEN PAID BY THE FUND, THE
9
<PAGE>
CUMULATIVE PERFORMANCE INFORMATION
FIRST INVESTORS UTILITIES INCOME FUND
CLASS A "S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND
SINCE INCEPTION WOULD HAVE BEEN 5.70% AND 5.90%, RESPECTIVELY. THE CLASS B
"S.E.C. STANDARDIZED" AVERAGE ANNUAL TOTAL RETURN FOR ONE YEAR AND SINCE
INCEPTION WOULD HAVE BEEN 7.51% AND 14.41%, RESPECTIVELY. RESULTS REPRESENT
PAST PERFORMANCE AND DO NOT INDICATE FUTURE RESULTS. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THE ORIGINAL COST. STANDARD &
POOR'S 500 INDEX AND STANDARD & POOR'S UTILITIES INDEX FIGURES FROM STANDARD &
POOR'S AND ALL OTHER FIGURES FROM FIRST INVESTORS MANAGEMENT COMPANY, INC.
10
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
October 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--90.2%
AEROSPACE/DEFENSE--2.0%
44,000 Boeing Company $ 2,106,500 $ 95
33,000 United Technologies Corporation 2,310,000 105
- ---------------------------------------------------------------------------------------
4,416,500 200
- ---------------------------------------------------------------------------------------
AUTOMOTIVE--1.0%
63,000 Hertz Corporation - Class "A" 2,177,437 99
- ---------------------------------------------------------------------------------------
BANKS--6.6%
30,000 Citicorp 3,751,875 170
66,000 First Union Corporation 3,238,125 147
38,000 U.S. Bancorp 3,864,125 175
50,000 Wachovia Corporation 3,765,625 171
- ---------------------------------------------------------------------------------------
14,619,750 663
- ---------------------------------------------------------------------------------------
BUSINESS SERVICES--0.6%
35,000 Fluor Corporation 1,439,375 65
- ---------------------------------------------------------------------------------------
CHEMICALS--3.4%
35,000 Air Products and Chemicals, Inc. 2,660,000 120
22,000 Dow Chemical Company 1,996,500 90
50,000 Du Pont (E.I.) de Nemours & Company 2,843,750 129
- ---------------------------------------------------------------------------------------
7,500,250 339
- ---------------------------------------------------------------------------------------
COMMUNICATIONS EQUIPMENT--2.5%
38,000 *Cisco Systems, Inc. 3,117,189 141
40,000 Motorola, Inc. 2,470,000 112
- ---------------------------------------------------------------------------------------
5,587,189 253
- ---------------------------------------------------------------------------------------
COMPUTERS & OFFICE EQUIPMENT--5.1%
50,000 *EMC Corporation 2,800,000 127
40,000 Hewlett-Packard Company 2,467,500 112
- ---------------------------------------------------------------------------------------
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMPUTERS & OFFICE EQUIPMENT (continued)
33,000 International Business Machines Corporation $ 3,236,062 $ 147
35,000 Xerox Corporation 2,775,937 126
- ---------------------------------------------------------------------------------------
11,279,499 512
- ---------------------------------------------------------------------------------------
DRUGS--9.3%
40,000 American Home Products Corporation 2,965,000 134
31,500 Bristol-Myers Squibb Company 2,764,125 125
50,000 Johnson & Johnson 2,868,750 130
50,000 Pfizer, Inc. 3,537,500 160
60,000 Pharmacia & Upjohn, Inc. 1,905,000 86
22,000 Warner-Lambert Company 3,150,125 143
35,238 Zeneca Group PLC (ADR) 3,360,824 152
- ---------------------------------------------------------------------------------------
20,551,324 930
- ---------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT--2.8%
95,000 General Electric Company 6,133,437 278
- ---------------------------------------------------------------------------------------
ENERGY SERVICES--1.2%
30,000 Schlumberger, Ltd. 2,625,000 119
- ---------------------------------------------------------------------------------------
ENERGY SOURCES--6.5%
30,000 Amoco Corporation 2,750,625 125
33,000 Chevron Corporation 2,736,938 124
44,000 Exxon Corporation 2,703,250 122
66,000 Royal Dutch Petroleum Company 3,473,250 157
63,000 Unocal Corporation 2,598,750 118
- ---------------------------------------------------------------------------------------
14,262,813 646
- ---------------------------------------------------------------------------------------
FINANCIAL SERVICES--3.3%
45,000 American Express Company 3,510,000 159
80,000 Fannie Mae 3,875,000 176
- ---------------------------------------------------------------------------------------
7,385,000 335
- ---------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
October 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
FOOD/BEVERAGE/TOBACCO--2.1%
65,000 PepsiCo, Inc. $ 2,392,813 $ 108
46,000 Sara Lee Corporation 2,351,750 106
- ---------------------------------------------------------------------------------------
4,744,563 214
- ---------------------------------------------------------------------------------------
HEALTH SERVICES--0.8%
60,000 Columbia/HCA Healthcare Corporation 1,695,000 77
- ---------------------------------------------------------------------------------------
HOUSEHOLD PRODUCTS--5.7%
50,900 Estee Lauder Companies - Class "A" 2,261,869 102
21,696 Gillette Company 1,932,300 87
70,000 Kimberly-Clark Corporation 3,635,625 165
36,000 Procter & Gamble Company 2,448,000 111
60,800 *Revlon, Inc. - Class "A" 2,234,400 101
- ---------------------------------------------------------------------------------------
12,512,194 566
- ---------------------------------------------------------------------------------------
INSURANCE--8.4%
50,000 Ace, Ltd. 4,646,875 210
50,000 Allstate Corporation 4,146,875 188
33,000 American International Group, Inc. 3,368,063 153
45,000 Marsh & McLennan Companies, Inc. 3,195,000 145
45,000 Travelers Group, Inc. 3,150,000 143
- ---------------------------------------------------------------------------------------
18,506,813 839
- ---------------------------------------------------------------------------------------
MACHINERY & MANUFACTURING--3.2%
52,000 Caterpillar, Inc. 2,665,000 121
50,000 Illinois Tool Works, Inc. 2,459,375 111
21,000 Minnesota Mining and Manufacturing Company 1,921,500 87
- ---------------------------------------------------------------------------------------
7,045,875 319
- ---------------------------------------------------------------------------------------
MEDIA--4.8%
75,000 E.W. Scripps Company - Class "A" 3,145,313 142
86,000 Gannett Company, Inc. 4,520,375 205
55,000 Knight-Ridder, Inc. 2,873,750 130
- ---------------------------------------------------------------------------------------
10,539,438 477
- ---------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
MEDICAL PRODUCTS--1.7%
60,000 Abbott Laboratories $ 3,678,750 $ 167
- ---------------------------------------------------------------------------------------
METALS & MINERALS--1.0%
30,000 Phelps Dodge Corporation 2,231,250 101
- ---------------------------------------------------------------------------------------
PAPER/FOREST PRODUCTS--0.6%
32,000 International Paper Company 1,440,000 65
- ---------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST--0.2%
13,300 Storage USA, Inc. 504,569 23
- ---------------------------------------------------------------------------------------
RETAIL--5.0%
50,000 CVS Corporation 3,065,625 139
60,000 Gap, Inc. 3,191,250 145
50,000 Sears, Roebuck and Company 2,093,750 95
75,000 Wal-Mart Stores, Inc. 2,634,375 119
- ---------------------------------------------------------------------------------------
10,985,000 498
- ---------------------------------------------------------------------------------------
SOFTWARE/SERVICES--6.2%
65,000 Automatic Data Processing, Inc. 3,323,125 151
50,000 *BMC Software, Inc. 3,018,750 137
30,000 *Computer Sciences Corporation 2,128,125 96
66,000 First Data Corporation 1,918,125 87
25,000 *Microsoft Corporation 3,250,000 147
- ---------------------------------------------------------------------------------------
13,638,125 618
- ---------------------------------------------------------------------------------------
TELEPHONE--2.5%
45,000 SBC Communications, Inc. 2,863,125 130
80,000 *WorldCom, Inc. 2,690,000 122
- ---------------------------------------------------------------------------------------
5,553,125 252
- ---------------------------------------------------------------------------------------
TRANSPORTATION--1.1%
40,000 Union Pacific Corporation 2,450,000 111
- ---------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS GROWTH & INCOME FUND
October 31, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C>
TRAVEL & LEISURE--2.6%
27,000 Delta Air Lines, Inc. $ 2,720,250 $ 123
66,000 McDonald's Corporation 2,957,625 134
- ---------------------------------------------------------------------------------------
5,677,875 257
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $146,702,920) 199,180,151 9,023
- ---------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS--2.3%
MEDIA--0.9%
70,000 Merrill Lynch Structured Yield Product
(exchangeable into Cox Communications, Inc.
Common Stock), 6% 1,898,750 86
- ---------------------------------------------------------------------------------------
REAL ESTATE INVESTMENT TRUST--0.2%
18,000 Security Capital Pacific Trust "A", $1.75 551,250 25
- ---------------------------------------------------------------------------------------
SOFTWARE/SERVICES--1.2%
30,000 Microsoft Corp. "A", $2.196 2,647,500 120
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE PREFERRED STOCKS (cost
$4,557,965) 5,097,500 231
- ---------------------------------------------------------------------------------------
CONVERTIBLE BONDS--2.0%
ELECTRONICS--1.1%
$ 1,500M Analog Devices, Inc., 3.50%, 2000 2,291,250 104
- ---------------------------------------------------------------------------------------
RETAIL--0.9%
1,600M Home Depot, Inc., 3.25%, 2001 2,062,000 93
- ---------------------------------------------------------------------------------------
TOTAL VALUE OF CONVERTIBLE BONDS (cost
$3,714,071) 4,353,250 197
- ---------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
AMOUNT
WARRANTS INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- --------------------------------------------------------------------------------------
<C> <S> <C> <C>
WARRANTS--0.0%
REAL ESTATE COMPANIES
1,276 *Security Capital Group, Inc. - Class "B"
(expiring 9/18/98) (cost $0) $ 6,141 $ --
- --------------------------------------------------------------------------------------
REPURCHASE AGREEMENT--5.1%
$ 11,300M Paribas Corp., 5.67%, 11/3/97 (collateralized by
U.S. Treasury Notes, 5.5%, 12/31/00 and 5.125%,
2/28/98, valued in total at $11,542,533) (cost
$11,300,000) 11,300,000 512
- --------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $166,274,956) 99.6% 219,937,042 9,963
OTHER ASSETS, LESS LIABILITIES .4 816,809 37
- --------------------------------------------------------------------------------------
NET ASSETS 100.0% $220,753,851 $10,000
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
15
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
October 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--81.9%
BASIC MATERIALS--5.4%
4,600 Boise Cascade Corporation $ 159,275 $ 55
1,200 Consolidated Papers, Inc. 62,325 21
10,400 Ethyl Corporation 89,700 31
12,000 *Gaylord Container Corporation - Class "A" 79,500 27
13,000 Louisiana-Pacific Corporation 273,000 93
4,900 *NS Group, Inc. 131,075 45
10,000 *NuCo2, Inc. 130,000 44
3,300 Nucor Corporation 172,425 59
1,800 Olin Corporation 81,787 28
6,000 Schulman (A.), Inc. 135,000 46
3,600 Universal Corporation 138,375 47
4,000 Willamette Industries, Inc. 132,250 45
- ----------------------------------------------------------------------------------------
1,584,712 541
- ----------------------------------------------------------------------------------------
CAPITAL GOODS--11.4%
7,700 Aeroquip-Vickers, Inc. 400,881 137
4,000 *American Power Conversion Corporation 109,000 37
5,000 Avery Dennison Corporation 199,062 68
2,000 Case Corporation 119,625 41
11,400 *Checkpoint Systems, Inc. 182,400 62
3,300 Corning, Inc. 148,912 51
13,700 *Corporate Express, Inc. 201,219 69
3,000 Crane Company 124,687 43
2,600 *EVI, Inc. 166,887 57
4,900 *Hadco Corporation 271,337 93
4,000 Johnson Controls, Inc. 179,500 61
3,000 *Maverick Tube Corporation 105,750 36
18,000 *Miller Industries, Inc. 182,250 62
800 *Sanmina Corporation 59,800 20
2,200 Tenneco, Inc. 98,862 34
4,000 Thomas & Betts Corporation 199,000 68
5,000 *U.S. Filter Corporation 200,625 69
- ----------------------------------------------------------------------------------------
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
CAPITAL GOODS (continued)
6,400 *USA Waste Services, Inc. $ 236,800 $ 81
3,500 York International Corporation 159,687 55
- ----------------------------------------------------------------------------------------
3,346,284 1,144
- ----------------------------------------------------------------------------------------
COMMUNICATION SERVICES--3.2%
4,000 *Brooks Fiber Properties, Inc. 223,500 76
6,000 Century Telephone Enterprises, Inc. 254,625 87
3,300 *ICG Communications, Inc. 75,900 26
5,000 *IXC Communications, Inc. 165,000 56
8,500 *LCI International, Inc. 219,937 75
- ----------------------------------------------------------------------------------------
938,962 320
- ----------------------------------------------------------------------------------------
CONSUMER CYCLICALS--15.6%
9,800 *Bed Bath & Beyond, Inc. 311,150 106
17,900 *Checkfree Corporation 483,300 165
4,000 *CompUSA, Inc. 131,000 45
6,500 *Consolidated Stores Corporation 259,187 89
6,600 *CUC International, Inc. 194,700 67
7,700 *Extended Stay America, Inc. 101,062 35
4,800 *Fred Meyer, Inc. 137,100 47
7,000 Harte-Hanks Communications, Inc. 243,250 83
17,400 Innkeepers USA Trust 290,362 99
6,000 Mark IV Industries, Inc. 145,500 50
4,300 Masco Corporation 188,662 65
6,000 *Mirage Resorts, Inc. 150,000 51
8,400 *OfficeMax, Inc. 112,350 38
9,700 Ogden Corporation 244,925 84
8,600 *PETsMART, Inc. 65,575 22
15,000 *Prime Hospitality Corporation 305,625 105
6,000 Royal Caribbean Cruises, Ltd. 278,625 95
8,200 *Saks Holdings, Inc. 175,275 60
5,800 *Staples, Inc. 152,250 52
6,200 *The Neiman Marcus Group, Inc. 205,762 70
4,500 *U.S. Office Products Company 140,625 48
- ----------------------------------------------------------------------------------------
</TABLE>
17
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
October 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
CONSUMER CYCLICALS (continued)
3,400 Unifi, Inc. $ 130,688 $ 45
5,000 Wolverine World Wide, Inc. 110,000 38
- ----------------------------------------------------------------------------------------
4,556,973 1,559
- ----------------------------------------------------------------------------------------
CONSUMER STAPLES--7.5%
3,600 Coca-Cola Enterprises, Inc. 101,250 35
6,000 Dole Food Company, Inc. 265,875 91
25,900 *Four Media Company 229,863 79
13,000 *Host Marriott Corporation 271,375 93
6,000 McCormick & Company, Inc. 150,000 51
5,500 Newell Company 211,063 72
7,500 Richfood Holdings, Inc. 180,938 62
5,000 *Rock of Ages Corporation - Class "A" 95,000 33
6,900 *Tele-Communications, Inc. Liberty Media Group -
Series "A" 240,206 82
3,200 Time Warner, Inc. 184,600 63
10,600 Whitman Corporation 278,250 95
- ----------------------------------------------------------------------------------------
2,208,420 756
- ----------------------------------------------------------------------------------------
ENERGY--9.6%
4,400 Apache Corporation 184,800 63
20,000 *Comstock Resources, Inc. 335,000 115
8,600 *Global Industries, Ltd. 173,075 59
8,700 *Nabors Industries, Inc. 357,788 122
30,000 *National Energy Group, Inc. 163,125 56
15,000 *Oryx Energy Company 413,438 141
9,000 *Patterson Energy, Inc. 504,000 172
9,300 Quaker State Corporation 144,150 49
4,100 Tosco Corporation 135,300 46
4,400 Ultramar Diamond Shamrock Corporation 135,850 46
6,300 *Veritas DGC, Inc. 257,906 88
- ----------------------------------------------------------------------------------------
2,804,432 957
- ----------------------------------------------------------------------------------------
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
FINANCIAL--7.2%
7,000 American Financial Group, Inc. $ 266,438 $ 91
6,000 *Budget Group, Inc. - Class "A" 210,000 72
3,990 Charter One Financial, Inc. 231,919 79
4,054 Conseco, Inc. 176,856 61
5,200 Fannie Mae 251,875 86
9,200 *Imperial Credit Industries, Inc. 231,150 79
3,213 Mercantile Bancorporation, Inc. 156,031 53
2,800 Redwood Trust, Inc. 70,350 24
2,600 Starwood Lodging Trust 155,513 53
5,000 Storage Trust Realty 127,813 44
8,000 The Money Store, Inc. 227,000 78
- ----------------------------------------------------------------------------------------
2,104,945 720
- ----------------------------------------------------------------------------------------
HEALTHCARE--3.8%
20,000 *Alfacell Corporation 66,250 23
1,700 *Centocor, Inc. 74,800 26
8,000 *Compdent Corporation 165,500 57
5,400 *Health Management Associates, Inc. - Class "A" 131,625 45
5,700 Jones Medical Industries, Inc. 171,713 59
9,000 *MedPartners, Inc. 228,938 78
5,800 Mylan Laboratories, Inc. 127,238 44
5,200 *Vencor, Inc. 140,400 48
- ----------------------------------------------------------------------------------------
1,106,464 380
- ----------------------------------------------------------------------------------------
TECHNOLOGY--17.0%
5,900 *Adaptec, Inc. 285,781 98
3,000 Adobe Systems, Inc. 143,250 49
2,800 *Adtran, Inc. 100,800 35
2,600 *Altera Corporation 115,375 39
5,600 *Analog Devices, Inc. 171,150 59
20,000 *ATL Products, Inc. - Class "A" 205,000 70
3,300 *Atmel Corporation 85,388 29
8,000 AVX Corporation 226,000 77
2,100 *Bay Networks, Inc. 66,413 23
- ----------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS U.S.A. MID-CAP OPPORTUNITY FUND
October 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
TECHNOLOGY (continued)
2,000 *Cadence Design Systems, Inc. $ 106,500 $ 36
1,400 *Cisco Systems, Inc. 114,844 39
32,000 *CMC Industries, Inc. 320,000 109
6,000 Comdisco, Inc. 189,375 65
6,200 *Cymer, Inc. 141,825 49
5,900 *EMC Corporation 330,400 113
20,000 *Information Storage Devices, Inc. 155,000 53
1,600 Intel Corporation 123,200 42
6,200 *International Manufacturing Services, Inc. -
Class "A" 67,425 23
6,000 *Kent Electronics Corporation 209,625 72
2,500 *Lattice Semiconductor Corporation 125,156 43
1,000 Linear Technology Corporation 62,875 22
1,500 *Microsoft Corporation 195,000 67
2,400 Motorola, Inc. 148,200 51
6,200 *Network General Corporation 125,550 43
7,900 *PairGain Technologies, Inc. 223,175 76
7,300 Scientific-Atlanta, Inc. 135,506 46
2,800 *Sterling Commerce, Inc. 92,925 32
19,000 *Summit Design, Inc. 275,500 94
3,500 *Synopsys, Inc. 136,063 47
16,600 *SystemSoft Corporation 131,763 45
7,100 *Transcrypt International, Inc. 156,200 53
- ----------------------------------------------------------------------------------------
4,965,264 1,699
- ----------------------------------------------------------------------------------------
UTILITIES--1.2%
5,000 *CalEnergy Company, Inc. 171,250 59
5,600 Sierra Pacific Resources 170,450 58
- ----------------------------------------------------------------------------------------
341,700 117
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $19,405,441) 23,958,156 8,193
- ----------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- ----------------------------------------------------------------------------------------
<C> <S> <C> <C>
SHORT-TERM CORPORATE NOTES--13.7%
$ 500M General Electric Capital Corp., 5.52%, 11/18/97 $ 498,697 $ 171
200M Idaho Power Co., 5.50%, 11/6/97 199,847 68
2,000M Sara Lee Corp., 5.51%, 11/6/97 1,998,469 683
1,300M Schering Corp., 5.55%, 11/12/97 1,297,795 444
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$3,994,808) 3,994,808 1,366
- ----------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $23,400,249) 95.6% 27,952,964 9,559
OTHER ASSETS, LESS LIABILITIES 4.4 1,289,417 441
- ----------------------------------------------------------------------------------------
NET ASSETS 100.0% $29,242,381 $10,000
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
21
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS UTILITIES INCOME FUND
October 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
COMMON STOCKS--92.2%
ELECTRIC POWER--46.2%
21,000 *AES Corporation $ 832,125 $ 75
52,000 American Electric Power Company, Inc. 2,457,000 221
38,000 Baltimore Gas and Electric Company 1,042,625 94
35,000 Boston Edison Company 1,104,687 99
15,000 *CalEnergy Company, Inc. 513,750 46
45,000 Cinergy Corporation 1,485,000 134
32,000 CIPSCO, Inc. 1,228,000 110
49,000 CMS Energy Corporation 1,788,500 161
35,000 Consolidated Edison Company of New York, Inc. 1,198,750 108
25,000 Dominion Resources, Inc. 929,687 84
65,000 DPL, Inc. 1,612,812 145
60,000 DQE, Inc. 1,856,250 167
50,000 Duke Energy Corporation 2,412,500 217
60,000 Edison International 1,537,500 138
48,000 Endesa SA (ADR) 894,000 80
60,000 Florida Progress Corporation 1,953,750 176
60,000 FPL Group, Inc. 3,101,250 279
11,400 General Electric Company 736,012 66
40,000 GPU, Inc. 1,447,500 130
35,000 Houston Industries, Inc. 761,250 68
39,000 Illinova Corporation 867,750 78
40,000 MDU Resources Group, Inc. 1,135,000 102
55,000 New Century Energies, Inc. 2,296,250 207
40,000 New York State Electric & Gas Corporation 1,067,500 96
52,000 NIPSCO Industries, Inc. 2,284,750 206
20,000 Northern States Power Company 1,007,500 91
52,000 OGE Energy Corporation 2,518,750 227
70,000 PacifiCorp 1,518,125 137
30,000 Pinnacle West Capital Corporation 1,044,375 94
40,000 SCANA Corporation 1,010,000 91
70,000 Sierra Pacific Resources 2,130,625 192
100,000 Southern Company 2,293,750 206
19,000 Texas Utilities Company 681,625 61
- -----------------------------------------------------------------------------------------
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
ELECTRIC POWER (continued)
35,000 Union Electric Company $ 1,319,062 $ 119
41,000 UtiliCorp United, Inc. 1,294,062 116
- -----------------------------------------------------------------------------------------
51,362,072 4,621
- -----------------------------------------------------------------------------------------
ENERGY--5.2%
12,000 Ashland, Inc. 572,250 51
13,000 Baker Hughes, Inc. 597,187 54
14,000 Dresser Industries, Inc. 589,750 53
12,500 Noble Affiliates, Inc. 513,281 46
10,000 Schlumberger, Ltd. 875,000 79
23,000 *Seagull Energy Corporation 562,063 51
14,000 Unocal Corporation 577,500 52
30,000 Williams Companies, Inc. 1,528,125 137
- -----------------------------------------------------------------------------------------
5,815,156 523
- -----------------------------------------------------------------------------------------
NATURAL GAS--19.4%
32,000 Coastal Corporation 1,924,000 173
20,000 Columbia Gas System, Inc. 1,445,000 130
27,000 Consolidated Natural Gas Company 1,459,688 131
21,000 El Paso Natural Gas Company 1,258,688 113
20,000 Enron Corporation 760,000 68
29,000 KN Energy, Inc. 1,261,500 113
40,000 MCN Energy Group, Inc. 1,385,000 125
27,000 National Fuel Gas Company 1,191,375 107
30,000 New Jersey Resources Corporation 971,250 87
26,000 NICOR, Inc. 1,002,625 90
29,000 Oneok, Inc. 995,063 90
30,000 Pacific Enterprises 980,625 88
25,000 Piedmont Natural Gas Company, Inc. 700,000 63
30,000 Questar Corporation 1,158,750 104
30,000 Sonat, Inc. 1,378,125 124
40,000 Southwest Gas Corporation 752,500 68
27,000 TransCanada Pipelines, Ltd. 504,563 45
35,000 UGI Corporation 940,625 85
- -----------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
PORTFOLIO OF INVESTMENTS
FIRST INVESTORS UTILITIES INCOME FUND
October 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
INVESTED
FOR EACH
$10,000 OF
SHARES SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
NATURAL GAS (continued)
30,000 Washington Gas Light Company $ 770,625 $ 69
34,100 Westcoast Energy, Inc. 699,050 63
- -----------------------------------------------------------------------------------------
21,539,052 1,936
- -----------------------------------------------------------------------------------------
TELECOMMUNICATIONS--5.7%
15,000 *AirTouch Communications, Inc. 579,375 52
30,000 Century Telephone Enterprises, Inc. 1,273,125 115
30,000 Cincinnati Bell, Inc. 810,000 73
15,000 Ericsson (L.M.) Telephone Co. - Class "B" (ADR) 663,750 60
11,000 *Intermedia Communications, Inc. 499,125 45
32,000 *LCI International, Inc. 828,000 74
20,000 *Teleport Communications Group, Inc. - Class "A" 967,500 87
20,000 *WorldCom, Inc. 672,500 61
- -----------------------------------------------------------------------------------------
6,293,375 567
- -----------------------------------------------------------------------------------------
TELEPHONE/UTILITIES--15.7%
30,000 Ameritech Corporation 1,950,000 175
40,000 Bell Atlantic Corporation 3,195,000 287
53,000 BellSouth Corporation 2,507,563 226
20,600 Cia de Telecomunicaciones de Chile SA (ADR) 571,650 51
51,000 GTE Corporation 2,164,313 195
40,000 SBC Communications, Inc. 2,545,000 229
18,000 Telefonica de Argentina SA (ADR) 506,250 46
15,000 Telefonica de Espana SA (ADR) 1,233,750 111
20,000 Telephone and Data Systems, Inc. 850,000 76
49,000 US West, Inc. Communications Group 1,950,813 175
- -----------------------------------------------------------------------------------------
17,474,339 1,571
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF COMMON STOCKS (cost $86,631,699) 102,483,994 9,218
- -----------------------------------------------------------------------------------------
PREFERRED STOCKS--0.8%
TELEPHONE/UTILITIES
10,000 Pacific Telesis Financing I, 7.56% 251,250 23
10,000 Pacific Telesis Financing II, 8.50% 260,000 23
- -----------------------------------------------------------------------------------------
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
AMOUNT
SHARES INVESTED
OR FOR EACH
PRINCIPAL $10,000 OF
AMOUNT SECURITY VALUE NET ASSETS
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C>
TELEPHONE/UTILITIES (continued)
5,000 US West Financing I, 7.96% $ 124,687 $ 11
10,000 US West Financing II, 8.25% 254,375 23
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF PREFERRED STOCKS (cost $875,000) 890,312 80
- -----------------------------------------------------------------------------------------
CORPORATE BONDS--4.7%
ELECTRIC & GAS UTILITIES--3.3%
$ 500M Baltimore Gas and Electric Co., 7.52%, 2000 513,605 46
500M Consolidated Edison Co. of New York, Inc.,
6.625%, 2002 508,041 46
500M Duke Energy Corp., 5.875%, 2003 490,315 44
500M Idaho Power Co., 6.40%, 2003 504,028 45
700M Pennsylvania Power & Light Co., 6.875%, 2003 717,574 65
500M SCE Capital Corp., 7.375%, 2003 515,890 46
500M Union Electric Co., 6.75%, 2008 512,198 46
- -----------------------------------------------------------------------------------------
3,761,651 338
- -----------------------------------------------------------------------------------------
TELEPHONE--1.4%
500M AT & T Corp., 7.50%, 2006 535,256 48
500M BellSouth Telecommunications, Inc., 6.375%, 2004 505,299 46
500M United Telephone Co. of Florida, 6.25%, 2003 499,322 45
- -----------------------------------------------------------------------------------------
1,539,877 139
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF CORPORATE BONDS (cost $5,286,568) 5,301,528 477
- -----------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--1.9%
500M General Electric Capital Corp., 5.52%, 11/18/97 498,697 45
1,600M Schering Corp., 5.55%, 11/12/97 1,597,286 144
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF SHORT-TERM CORPORATE NOTES (cost
$2,095,983) 2,095,983 189
- -----------------------------------------------------------------------------------------
TOTAL VALUE OF INVESTMENTS (cost $94,889,250) 99.6% 110,771,817 9,964
OTHER ASSETS, LESS LIABILITIES .4 400,048 36
- -----------------------------------------------------------------------------------------
NET ASSETS 100.0% $111,171,865 $10,000
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
See notes to financial statements
25
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
FIRST INVESTORS SERIES FUND II, INC.
October 31, 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................... $166,274,956 $ 23,400,249 $ 94,889,250
------------ -------------- ------------
------------ -------------- ------------
At value (Note 1A)................... $219,937,042 $ 27,952,964 $110,771,817
Cash (overdraft)....................... 103,961 508,831 (5,815)
Receivables:
Capital shares sold.................. 912,073 294,476 112,269
Investment securities sold........... -- 595,900 --
Dividends and interest............... 240,731 4,206 546,868
Deferred organization expenses (Note
1E).................................. 3,250 -- 1,250
------------ -------------- ------------
Total Assets........................... 221,197,057 29,356,377 111,426,389
------------ -------------- ------------
LIABILITIES
Payable for capital shares redeemed.... 237,203 73,280 144,846
Accrued advisory fees.................. 140,501 18,614 70,940
Accrued expenses....................... 65,502 22,102 38,738
------------ -------------- ------------
Total Liabilities...................... 443,206 113,996 254,524
------------ -------------- ------------
NET ASSETS............................. $220,753,851 $ 29,242,381 $111,171,865
------------ -------------- ------------
------------ -------------- ------------
NET ASSETS CONSIST OF:
Capital paid in........................ $161,772,820 $ 22,772,292 $ 88,937,571
Undistributed net investment income.... -- -- 463,281
Accumulated net realized gain on
investment transactions.............. 5,318,945 1,917,374 5,888,446
Net unrealized appreciation in value of
investments.......................... 53,662,086 4,552,715 15,882,567
------------ -------------- ------------
Total.................................. $220,753,851 $ 29,242,381 $111,171,865
------------ -------------- ------------
------------ -------------- ------------
NET ASSETS:
Class A.............................. $193,831,801 $ 26,283,571 $101,833,736
Class B.............................. $ 26,922,050 $ 2,958,810 $ 9,338,129
CAPITAL SHARES OUTSTANDING (Note 4):
Class A.............................. 16,728,481 1,416,407 14,487,201
Class B.............................. 2,345,745 162,267 1,341,454
NET ASSET VALUE AND REDEMPTION PRICE
PER SHARE - CLASS A.................. $ 11.59 $ 18.56 $ 7.03
------ ------ -----
------ ------ -----
MAXIMUM OFFERING PRICE PER
SHARE - CLASS A (Net asset
value/.9375)*........................ $ 12.36 $ 19.80 $ 7.50
------ ------ -----
------ ------ -----
NET ASSET VALUE AND OFFERING PRICE PER
SHARE - CLASS B...................... $ 11.48 $ 18.23 $ 6.96
------ ------ -----
------ ------ -----
</TABLE>
* On purchases of $25,000 or more, the sales charge is reduced.
See notes to financial statements
26
<PAGE>
STATEMENT OF OPERATIONS
FIRST INVESTORS SERIES FUND II, INC.
Year Ended October 31, 1997
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
GROWTH & U.S.A. MID-CAP UTILITIES
INCOME OPPORTUNITY INCOME
FUND FUND FUND
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Income:
Dividends............................ $ 2,790,405 $ 170,765 $ 4,383,153
Interest............................. 564,574 101,123 491,571
------------ -------------- -----------
Total income........................... 3,354,979 271,888 4,874,724
------------ -------------- -----------
Expenses (Notes 1 and 3):
Advisory fee......................... 1,301,867 211,922 836,278
Shareholder servicing costs.......... 522,340 92,828 364,656
Distribution plan expenses - Class
A.................................. 462,388 58,074 309,426
Distribution plan expenses - Class
B.................................. 191,490 17,899 83,756
Professional fees.................... 42,895 27,307 41,308
Reports and notices to
shareholders....................... 40,301 7,919 25,568
Custodian fees....................... 23,361 8,173 15,701
Amortization of organization
expenses........................... 3,000 -- 3,000
Other expenses....................... 24,514 6,211 24,620
------------ -------------- -----------
Total expenses......................... 2,612,156 430,333 1,704,313
Less: Expenses waived or assumed....... (70,218) (91,881) (83,835)
Custodian fees paid indirectly.... (2,629) (8,173) (15,701)
------------ -------------- -----------
Net expenses........................... 2,539,309 330,279 1,604,777
------------ -------------- -----------
Net investment income (loss)........... 815,670 (58,391) 3,269,947
------------ -------------- -----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (Note 2):
Net realized gain on investments....... 5,328,547 1,997,140 7,342,477
Net unrealized appreciation of
investments.......................... 31,106,647 3,087,322 2,774,850
------------ -------------- -----------
Net gain on investments................ 36,435,194 5,084,462 10,117,327
------------ -------------- -----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS...................... $ 37,250,864 $ 5,026,071 $13,387,274
------------ -------------- -----------
------------ -------------- -----------
</TABLE>
See notes to financial statements
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
FIRST INVESTORS SERIES FUND II, INC.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
GROWTH &
INCOME FUND
----------------------------
YEAR ENDED OCTOBER 31 1997 1996
- ---------------------------------------- -------------- ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss).......... $ 815,670 $ 1,064,411
Net realized gain on investments...... 5,328,547 2,338,223
Net unrealized appreciation of
investments......................... 31,106,647 14,282,176
-------------- ------------
Net increase in net assets resulting
from operations.................... 37,250,864 17,684,810
-------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A....... (817,347) (1,124,492)
Net investment income - Class B....... (14,650) (56,261)
Net realized gains - Class A.......... (2,000,523) --
Net realized gains - Class B.......... (234,403) --
-------------- ------------
Total distributions................. (3,066,923) (1,180,753)
-------------- ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............. 69,592,366 44,537,868
Value of distributions reinvested..... 2,780,887 1,102,988
Cost of shares redeemed............... (20,987,333) (12,479,680)
-------------- ------------
51,385,920 33,161,176
-------------- ------------
Class B:
Proceeds from shares sold............. 12,978,761 7,730,826
Value of distributions reinvested..... 246,352 54,999
Cost of shares redeemed............... (2,077,855) (509,452)
-------------- ------------
11,147,258 7,276,373
-------------- ------------
Net increase (decrease) from capital
share transactions.................. 62,533,178 40,437,549
-------------- ------------
Net increase (decrease) in net
assets............................. 96,717,119 56,941,606
NET ASSETS
Beginning of year..................... 124,036,732 67,095,126
-------------- ------------
End of year+.......................... $ 220,753,851 $124,036,732
-------------- ------------
-------------- ------------
+Includes undistributed net investment
income of.............................. $ -- $ 11,885
-------------- ------------
-------------- ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold.................................. 6,493,708 5,098,974
Issued for distributions reinvested... 283,146 125,569
Redeemed.............................. (1,962,857) (1,437,840)
-------------- ------------
Net increase (decrease) in Class A
capital shares outstanding.......... 4,813,997 3,786,703
-------------- ------------
-------------- ------------
Class B:
Sold.................................. 1,213,405 891,261
Issued for distributions reinvested... 25,769 6,317
Redeemed.............................. (195,408) (58,752)
-------------- ------------
Net increase in Class B capital shares
outstanding......................... 1,043,766 838,826
-------------- ------------
-------------- ------------
</TABLE>
See notes to financial statements
28
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
U.S.A. MID-CAP UTILITIES
OPPORTUNITY FUND INCOME FUND
--------------------------- -----------------------------
1997 1996 1997 1996
- ---------------------------------------- -------------- ----------- --------------- ------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss).......... $ (58,391) $ 37,706 $ 3,269,947 $ 3,539,164
Net realized gain on investments...... 1,997,140 704,468 7,342,477 3,348,109
Net unrealized appreciation of
investments......................... 3,087,322 492,864 2,774,850 4,512,594
-------------- ----------- --------------- ------------
Net increase in net assets resulting
from operations.................... 5,026,071 1,235,038 13,387,274 11,399,867
-------------- ----------- --------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income - Class A....... (36,607) (34,589) (2,954,931) (3,356,371)
Net investment income - Class B....... -- (1,319) (187,678) (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) (3,142,609) (3,531,423)
-------------- ----------- --------------- ------------
CAPITAL SHARE TRANSACTIONS (a)
Class A:
Proceeds from shares sold............. 10,263,593 6,237,390 13,294,852 28,533,238
Value of distributions reinvested..... 696,970 526,859 2,837,444 3,227,282
Cost of shares redeemed............... (3,053,623) (1,744,626) (27,788,751) (18,917,320)
-------------- ----------- --------------- ------------
7,906,940 5,019,623 (11,656,455) 12,843,200
-------------- ----------- --------------- ------------
Class B:
Proceeds from shares sold............. 1,556,469 1,021,499 2,798,462 4,829,402
Value of distributions reinvested..... 52,868 22,208 182,590 168,900
Cost of shares redeemed............... (183,075) (210,746) (2,096,554) (910,784)
-------------- ----------- --------------- ------------
1,426,262 832,961 884,498 4,087,518
-------------- ----------- --------------- ------------
Net increase (decrease) from capital
share transactions.................. 9,333,202 5,852,584 (10,771,957) 16,930,718
-------------- ----------- --------------- ------------
Net increase (decrease) in net
assets............................. 13,596,036 6,530,249 (527,292) 24,799,162
NET ASSETS
Beginning of year..................... 15,646,345 9,116,096 111,699,157 86,899,995
-------------- ----------- --------------- ------------
End of year+.......................... $ 29,242,381 $15,646,345 $ 111,171,865 $111,699,157
-------------- ----------- --------------- ------------
-------------- ----------- --------------- ------------
+Includes undistributed net investment
income of............................. $ -- $ 37,394 $ 463,281 $ 332,943
-------------- ----------- --------------- ------------
-------------- ----------- --------------- ------------
(a)CAPITAL SHARES ISSUED AND REDEEMED
Class A:
Sold.................................. 610,878 424,011 1,993,525 4,588,232
Issued for distributions reinvested... 45,613 37,986 423,434 516,114
Redeemed.............................. (187,193) (119,786) (4,158,047) (3,050,042)
-------------- ----------- --------------- ------------
Net increase (decrease) in Class A
capital shares outstanding.......... 469,298 342,211 (1,741,088) 2,054,304
-------------- ----------- --------------- ------------
-------------- ----------- --------------- ------------
Class B:
Sold.................................. 92,935 69,762 422,620 781,947
Issued for distributions reinvested... 3,501 1,612 27,429 27,217
Redeemed.............................. (11,554) (14,524) (315,946) (148,928)
-------------- ----------- --------------- ------------
Net increase in Class B capital shares
outstanding......................... 84,882 56,850 134,103 660,236
-------------- ----------- --------------- ------------
-------------- ----------- --------------- ------------
</TABLE>
See notes to financial statements
29
<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.
U.S.A. MID-CAP OPPORTUNITY FUND seeks long-term capital growth.
UTILITIES INCOME FUND primarily seeks high current income. Long-term capital
appreciation is a secondary objective.
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, 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 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.
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 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
30
<PAGE>
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 $26,503 against custodian
charges based on the uninvested cash balances of these Funds.
2. PURCHASES AND SALES OF SECURITIES--For the year ended October 31, 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................... $99,706,271 $45,116,587
U.S.A. Mid-Cap Opportunity Fund........ 23,053,476 16,773,112
Utilities Income Fund.................. 65,138,405 75,406,553
</TABLE>
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS
FIRST INVESTORS SERIES FUND II, INC.
At October 31, 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................... $166,274,956 $ 56,893,102 $ 3,231,016 $ 53,662,086
U.S.A. Mid-Cap Opportunity Fund........ 23,406,603 5,342,698 796,337 4,546,361
Utilities Income Fund.................. 94,914,763 16,689,311 832,257 15,857,054
</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 waived 1/4 of
the 1% annual fee of the U.S.A. Mid-Cap Opportunity Fund for the year ended
October 31, 1997. For the year ended October 31, 1997, total advisory fees
accrued to FIMCO were $2,350,067 of which $180,047 was waived. In addition,
expenses of $65,887 were assumed by FIMCO.
For the year ended October 31, 1997, FIC, as underwriter, received $3,641,035 in
commissions from the sale of shares of Series Fund II, after allowing $10,698 to
other dealers. Shareholder servicing costs included $650,785 in transfer agent
fees accrued to ADM and $213,326 in IRA 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 $1,123,033.
Wellington Management Company serves as an investment subadviser to the Growth &
Income
32
<PAGE>
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 expense
levels. Class A shares are sold with an initial sales charge of up to 6.25% of
the amount invested and together with the Class B shares are subject to
distribution plan fees as described in Note 3. Class B shares are sold without
an initial sales charge, but are generally subject to a contingent deferred
sales charge which declines in steps from 4% to 0% over a six-year period. Class
B shares automatically convert into Class A shares after eight years. Realized
and unrealized gains or losses, investment income and expenses (other than
distribution plan fees 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, Series Fund II has
classified 50,000,000 shares as Class A and 50,000,000 shares as Class B.
33
<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 10/31/97..................... 9.39 .060 2.359 2.419 .059 .160 .219
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 10/31/97..................... 9.33 .002 2.318 2.320 .010 .160 .170
- --------------------------------------------------------------------------------------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
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 10/31/97..................... 15.29 (.033) 4.021 3.988 .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 10/31/97..................... 15.10 (.077) 3.888 3.811 -- .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 10/31/97..................... 6.41 .204 .609 .813 .193 -- .193
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 10/31/97..................... 6.35 .153 .606 .759 .149 -- .149
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations of Class A shares 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 1996
See notes to financial statements
34
<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>
- --------------------------------------------------
--------
NET
ASSET
VALUE
--------
END
OF
PERIOD
- --------------------------------------------------
<S> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93.................... $ 6.56
11/1/93 to 10/31/94..................... 6.69
11/1/94 to 10/31/95..................... 7.81
11/1/95 to 10/31/96..................... 9.39
11/1/96 to 10/31/97..................... 11.59
CLASS B
1/12/95* to 10/31/95.................... 7.78
11/1/95 to 10/31/96..................... 9.33
11/1/96 to 10/31/97..................... 11.48
- --------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
11/1/92 to 10/31/93..................... $ 12.15
11/1/93 to 10/31/94..................... 11.78
11/1/94 to 10/31/95..................... 14.58
11/1/95 to 10/31/96..................... 15.29
11/1/96 to 10/31/97..................... 18.56
CLASS B
1/12/95* to 10/31/95.................... 14.51
11/1/95 to 10/31/96..................... 15.10
11/1/96 to 10/31/97..................... 18.23
- --------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93.................... $ 5.92
11/1/93 to 10/31/94..................... 5.08
11/1/94 to 10/31/95..................... 5.90
11/1/95 to 10/31/96..................... 6.41
11/1/96 to 10/31/97..................... 7.03
CLASS B
1/12/95* to 10/31/95.................... 5.86
11/1/95 to 10/31/96..................... 6.35
11/1/96 to 10/31/97..................... 6.96
- --------------------------------------------------
<CAPTION>
R A T I O S / S U P P L E M E N T A L D A T A
--------------------------------------------------------------------------------------
RATIO TO AVERAGE NET
RATIO TO AVERAGE NET ASSETS BEFORE EXPENSES
ASSETS++ WAIVED OR ASSUMED
NET ASSETS ------------------------ ------------------------
TOTAL END OF NET NET PORTFOLIO
RETURN PERIOD INVESTMENT INVESTMENT TURNOVER
** (IN EXPENSES INCOME EXPENSES INCOME RATE
(%) THOUSANDS) (%) (%) (%) (%) (%)
- --------------------------------------------------
<S> <C>
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93.................... .99+ $ 3,407 -- 1.02+ 1.37+ (.35)+ 0
11/1/93 to 10/31/94..................... 3.67 34,489 .67 2.26 1.83 1.11 6
11/1/94 to 10/31/95..................... 19.51 63,493 .98 2.34 1.59 1.74 19
11/1/95 to 10/31/96..................... 21.82 111,896 1.31 1.20 1.49 1.02 25
11/1/96 to 10/31/97..................... 26.20 193,832 1.39 .55 1.43 .51 28
CLASS B
1/12/95* to 10/31/95.................... 22.73 3,602 1.90+ 2.23+ 2.61+ 1.52+ 19
11/1/95 to 10/31/96..................... 20.92 12,141 2.03 .48 2.19 .31 25
11/1/96 to 10/31/97..................... 25.23 26,922 2.09 (.15) 2.13 (.19) 28
- --------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
11/1/92 to 10/31/93..................... 4.23 $ 15,586 .81 .96 2.03 (.26) 52
11/1/93 to 10/31/94..................... (2.05) 7,651 .90 .45 2.32 (.97) 29
11/1/94 to 10/31/95..................... 24.59 8,818 1.34 .48 2.36 (.55) 106
11/1/95 to 10/31/96..................... 11.64 14,478 1.57 .36 2.15 (.21) 118
11/1/96 to 10/31/97..................... 27.09 26,284 1.50 (.21) 1.94 (.65) 90
CLASS B
1/12/95* to 10/31/95.................... 20.62 298 2.29+ (.03)+ 3.79+ (1.53)+ 106
11/1/95 to 10/31/96..................... 10.80 1,168 2.30 (.37) 3.03 (1.10) 118
11/1/96 to 10/31/97..................... 26.17 2,959 2.20 (.91) 2.64 (1.35) 90
- --------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93.................... 11.28+ $ 58,373 .35+ 3.84+ 1.80+ 2.39+ 17
11/1/93 to 10/31/94..................... (10.15) 62,671 .80 4.59 1.59 3.80 58
11/1/94 to 10/31/95..................... 21.35 83,691 1.04 4.37 1.57 3.84 16
11/1/95 to 10/31/96..................... 12.45 104,029 1.20 3.49 1.49 3.19 38
11/1/96 to 10/31/97..................... 12.86 101,834 1.40 2.98 1.48 2.90 60
CLASS B
1/12/95* to 10/31/95.................... 21.99 3,209 1.82+ 4.93+ 2.53+ 4.21+ 16
11/1/95 to 10/31/96..................... 11.61 7,670 1.91 2.77 2.28 2.40 38
11/1/96 to 10/31/97..................... 12.08 9,338 2.10 2.28 2.18 2.20 60
- --------------------------------------------------
<CAPTION>
AVERAGE
COMMISSION
RATE
+++
- --------------------------------------------------
GROWTH & INCOME FUND
CLASS A
10/4/93* to 10/31/93.................... $ --
11/1/93 to 10/31/94..................... --
11/1/94 to 10/31/95..................... --
11/1/95 to 10/31/96..................... .0530
11/1/96 to 10/31/97..................... .0532
CLASS B
1/12/95* to 10/31/95.................... --
11/1/95 to 10/31/96..................... .0530
11/1/96 to 10/31/97..................... .0532
- --------------------------------------------------
U.S.A. MID-CAP OPPORTUNITY FUND***
CLASS A
11/1/92 to 10/31/93..................... $ --
11/1/93 to 10/31/94..................... --
11/1/94 to 10/31/95..................... --
11/1/95 to 10/31/96..................... .0704
11/1/96 to 10/31/97..................... .0683
CLASS B
1/12/95* to 10/31/95.................... --
11/1/95 to 10/31/96..................... .0704
11/1/96 to 10/31/97..................... .0683
- --------------------------------------------------
UTILITIES INCOME FUND
CLASS A
2/22/93* to 10/31/93.................... $ --
11/1/93 to 10/31/94..................... --
11/1/94 to 10/31/95..................... --
11/1/95 to 10/31/96..................... .0706
11/1/96 to 10/31/97..................... .0694
CLASS B
1/12/95* to 10/31/95.................... --
11/1/95 to 10/31/96..................... .0706
11/1/96 to 10/31/97..................... .0694
- --------------------------------------------------
</TABLE>
* Commencement of operations of Class A shares 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 1996
See notes to financial statements
35
<PAGE>
INDEPENDENT AUDITORS' 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 and Utilities Income Fund (comprising First Investors Series
Fund II, Inc.), as of October 31, 1997, 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, 1997, 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 Growth
& Income Fund, U.S.A. Mid-Cap Opportunity Fund and Utilities Income Fund
(comprising First Investors Series Fund II, Inc.) at October 31, 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
November 24, 1997
36
<PAGE>
This page intentionally left blank
37
<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
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
38
<PAGE>
FIRST INVESTORS SERIES FUND II, INC.
SHAREHOLDER INFORMATION
- ------------------------------------------
INVESTMENT ADVISER
FIRST INVESTORS MANAGEMENT COMPANY, INC.
95 Wall Street
New York, NY 10005
SUBADVISER (Growth & Income Fund only)
WELLINGTON MANAGEMENT COMPANY
75 State Street
Boston, MA 02109
UNDERWRITER
FIRST INVESTORS CORPORATION
95 Wall Street
New York, 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
Eight Penn Center Plaza
Philadelphia, PA 19103
It is the Fund's practice to mail only one copy of its annual and semi-annual
reports to any address at which more than one shareholder with the same last
name has indicated that mail is to be delivered. Additional copies of the
reports will be mailed if requested by any shareholder in writing or by calling
800-423-4026. The Fund will ensure that separate reports are sent to any
shareholder who subsequently changes his or her mailing address.
This report is authorized for distribution only to existing shareholders, and,
if given to prospective shareholders, must be accompanied or preceded by the
Fund's prospectus.
39
<PAGE>
FIRST
INVESTORS
SERIES FUND II, INC.
GROWTH & INCOME FUND
U.S.A. MID-CAP OPPORTUNITY FUND
UTILITIES INCOME FUND
ANNUAL
REPORT
OCTOBER 31, 1997
Vertically reading from bottom to top in the center of the page the words "FIRST
INVESTORS" appear.
The following appears in a box to the left of the above language:
First Investors Logo (as described above)
NEED SERVICE?
If you have questions about your account...or would like information regarding
other products or services...please contact your representative or call our
Shareholder Services Department at...
(800) 423-4026
The following appears in a box within the above box:
OUR BUSINESS IS...putting investors first
The following appears on the bottom lefthand side:
FIUSA03
