GROWTH & INCOME FUND
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is February 19, 1999
<PAGE>
CONTENTS
OVERVIEW OF THE GROWTH & INCOME FUND
o What is the Growth & Income Fund?
oo Objectives
oo Primary Investment Strategies
oo Primary Risks
o Who should consider buying the Growth & Income Fund?
o How has the Growth & Income Fund performed?
o What are the fees and expenses of the Growth & Income Fund?
THE GROWTH & INCOME FUND IN DETAIL
o What are the Growth & Income Fund's objectives, principal investment
strategies and principal risks?
o Who manages the Growth & Income Fund?
BUYING AND SELLING SHARES
o How and when does the Fund price its shares?
o How do I buy shares?
o Which class of shares is best for me?
o How do I sell shares?
o Can I exchange my shares for the shares of other First Investors Funds?
ACCOUNT POLICIES
o What about dividends and capital gain distributions?
o What about taxes?
o How do I obtain a complete explanation of all account privileges and
policies?
FINANCIAL HIGHLIGHTS
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OVERVIEW OF THE GROWTH & INCOME FUND
What is the Growth & Income Fund?
Objectives: The Fund seeks long-term growth of capital and current income.
Primary
Investment
Strategies: The Fund primarily invests in dividend-paying common stocks and
securities that are convertible into common stocks of established
domestic and foreign companies. The strategy of focusing on
securities which offer income as well as the potential for
capital appreciation is intended to reduce the Fund's volatility
relative to the general stock market while affording potential
for long-term total return. The Fund also may invest in corporate
bonds to increase the income component of its total return.
Primary
Risks: While dividend-paying common stocks and convertible securities
are expected to hold up better in a declining market than stocks
which do not pay dividends, like all stocks they fluctuate in
price in response to movements in the overall securities markets,
general economic conditions, changes in interest rates,
company-specific developments and other factors. Moreover, under
certain conditions, the dividends paid on stocks held by the Fund
may not be sufficient to provide a significant cushion against
price declines. Fluctuations in the prices of the stocks held by
the Fund at times can be substantial. Accordingly, the value of
your investment in the Fund will go up and down, which means that
you could lose money.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
Who should consider buying the Growth & Income Fund?
The Growth & Income Fund may be used as a core holding for an
investment portfolio or as a base on which to build a portfolio.
It may be appropriate for you if you:
. Are primarily seeking growth of capital,
. Are willing to accept a moderate degree of market volatility,
and
. Have a long-term investment horizon and are able to ride out
market cycles.
Since the Fund's income level will likely be small and will
fluctuate, there can be no assurance that the Fund will be able
to pay regular dividends. The Fund is therefore not designed for
investors who need an assured level of current income.
You should keep in mind that the Growth & Income Fund is not a
complete investment program. For most investors, a complete
program should include not only stock funds but also bond and
money market funds. While stocks have historically outperformed
other categories of investments over long periods of time, they
generally carry higher risks. There have also been extended
periods during which bonds and money market instruments have
outperformed stocks. By allocating your assets among different
types of funds, you can reduce the overall risk of your portfolio
and benefit when bonds and money market instruments outperform
stocks. Of course, even a diversified investment program can
result in a loss.
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How has the Growth & Income Fund performed?
The bar chart and table below show you how the Fund's performance has varied
from year to year and in comparison with a broad-based index. This information
gives you some indication of the risks of investing in the Fund.
The Fund has two classes of shares, Class A shares and Class B shares. The bar
chart shows changes in the performance of the Fund's Class A shares from year to
year over the life of the Fund. The performance of Class B shares differs from
the performance of Class A shares shown in the bar chart only to the extent that
it does not have the same expenses. The bar chart does not reflect sales charges
that you may pay upon purchase or redemption of Fund shares. If they were
included, the returns would be less than those shown.
[Bar Chart of Changes in Performance of Class A Shares From 1993 to 1998,
With Following Plot Points:
1994 -0.76%
1995 30.61%
1996 19.96%
1997 27.96%
1998 23.41%
During the periods shown, the highest quarterly return was 19.42% (for the
quarter ended December 31, 1998), and the lowest quarterly return was -10.80%
(for the quarter ended September 30, 1998). THE FUND'S PAST PERFORMANCE DOES NOT
NECESSARILY INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE.
The following table shows how the Fund's average annual total returns for Class
A shares and Class B shares compare to those of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"). This table assumes that the
maximum sales charge or CDSC was paid. The S&P 500 Index is an unmanaged index
generally representative of the market for the stocks of large-sized U.S.
companies. The S&P 500 Index does not take into account fees and expenses that
an investor would incur in holding the securities in the index. If it did so,
the returns would be lower than those shown.
Inception Inception
Class A Shares Class B Shares
1 Year* 5 Years* (10/4/93) (1/12/95)
Class A Shares 15.65% 18.00% 17.43% N/A
Class B Shares 18.58 N/A N/A 24.24%
S&P 400 Index 28.34 24.55 22.98 30.41
*The annual returns are based upon calendar years.
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What are the fees and expenses of the Growth & Income Fund?
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Class A Class B
Shares Shares
------ ------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price).......... 6.25% None
Maximum deferred sales charge (load)
(as a percentage of the lower of purchase
price or redemption price)................... None* 4%**
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
DISTRIBUTION TOTAL
AND SERVICE ANNUAL FUND
MANAGEMENT (12B-1) OTHER OPERATING
FEES FEES(1) EXPENSES EXPENSES(2)
------- ------- ----------- ------------
Class A Shares..... 0.75% 0.30% 0.34% 1.39%
Class B Shares.... 0.75 1.00 0.34 2.09
*A contingent deferred sales charge of 1.00% will be assessed on certain
redemptions of Class A shares that are purchased without a sales charge.
**4% in the first year; declining to 0% after the sixth year. Class B shares
convert to Class A shares after 8 years.
(1) Because the Fund pays Rule 12b-1 fees, long-term shareholders could pay more
than the economic equivalent of the maximum front-end sales charge permitted
by the National Association of Securities Dealers, Inc.
(2) The Fund has an expense offset arrangement that may reduce the Fund's
custodian fee based on the amount of cash maintained by the Fund with its
custodian. Any such fee reductions are not reflected under Total Annual Fund
Operating Expenses.
EXAMPLE
This example helps you to compare the costs of investing in the Fund with the
cost of investing in other mutual funds. The example assumes that (1) you invest
$10,000 in the Fund for the time periods indicated; (2) your investment has a 5%
return each year; and (3) the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ----------- ---------
If you redeem your shares:
Class A shares $758 $1,038 $1,338 $2,189
Class B shares 612 955 1,324 2,242*
If you do not redeem your shares:
Class A shares $758 $1,038 $1,338 $2,189
Class B shares 212 655 1,124 2,242*
*Assumes conversion to Class A shares eight years after purchase.
5
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THE GROWTH & INCOME FUND IN DETAIL
What are the Growth & Income Fund's objectives, principal investment strategies,
and principal risks?
OBJECTIVES: The Fund seeks long-term growth of capital and current income.
PRINCIPAL INVESTMENT STRATEGIES: The Fund invests at least 65% of its total
assets in dividend-paying common stocks and convertible securities of
established domestic and foreign companies. The Fund also invests in corporate
bonds to increase the income component of its total return. The strategy of
focusing on securities which offer income as well as the potential for capital
appreciation is intended to reduce the Fund's volatility relative to the overall
stock market while affording potential for long-term total return.
The Fund uses a "bottom-up" approach to selecting investments. This means that
the Fund identifies potential investments through fundamental research and
analysis and thereafter focuses on broader issues, such as economic trends,
interest rates, and industry diversification. The Fund focuses on companies
which have solid balance sheets, strong management, relatively consistent
earnings growth or potential earnings growth greater than that of the average
company included in the S&P 500 Index. The Fund typically sells a security when
the reason for holding it is no longer valid, it shows deteriorating
fundamentals, or falls short of the manager's expectations. Information on the
Fund's recent strategies and holdings can be found in the most recent annual
report (see back cover).
PRINCIPAL RISKS: Any investment carries with it some level of risk. In general,
the greater the potential reward of the investment, the greater the risk. Here
are the principal risks of owning the Growth & Income Fund:
MARKET RISK: Because the Fund primarily invests in common stocks and convertible
securities, it is subject to market risk. Stock prices in general may decline
over short or even extended periods not only because of company-specific
developments but also due to an economic downturn, a change in interest rates,
or a change in investor sentiment, regardless of the success or failure of an
individual company's operations. Stock markets tend to run in cycles with
periods when prices generally go up, known as "bull" markets, and periods when
stock prices generally go down, referred to as "bear" markets.
While dividend-paying common stocks and convertible securities are expected to
hold up better in a declining market than stocks which do not pay dividends,
like all stocks they fluctuate in price in response to movements in the overall
securities markets, general economic conditions, company-specific developments,
and other factors. Moreover, under certain conditions, the dividends paid on
these stocks may not be sufficient to provide a significant cushion against
price declines. Fluctuations in the prices of these stocks can therefore be
substantial. The dividend income received by the Fund will also fluctuate with
market conditions. Depending upon market conditions, the Fund may not have
sufficient income to pay its shareholders regular dividends. Accordingly, the
value of your investment in the Fund will go up and down, which means that you
could lose money.
The Fund's focus on growth stocks increases the potential volatility of its
share price. Growth stocks are stocks of companies which are expected to
increase their earnings faster than the overall market. If expectations are not
met, the prices of these stocks may decline drastically even if earnings do
increase. Investments in growth companies may lack the dividend yield that can
cushion stock prices in market downturns.
CREDIT RISK: This is the risk that an issuer of bonds will be unable to pay
interest or principal when due. The prices of bonds are affected by the credit
quality of the issuer. Changes in the financial condition of an issuer, changes
in general economic conditions, and changes in specific economic conditions that
6
<PAGE>
affect a particular type of issuer can impact the credit quality of an issuer.
Such changes may weaken an issuer's ability to make payments of principal or
interest, or cause an issuer of bonds to fail to make timely payments of
interest or principal. Lower quality bonds generally tend to be more sensitive
to these changes than higher quality bonds, but BBB-rated bonds may have
speculative characteristics as well. While credit ratings may be available to
assist in evaluating an issuer's credit quality, they may not accurately predict
an issuer's ability to make timely payment of principal and interest.
YEAR 2000 RISKS: The values of securities owned by the Fund may be negatively
affected by Year 2000 problems. Many computer systems are not designed to
process correctly date-related information after January 1, 2000. The issuers of
securities held by the Fund may incur substantial costs in ensuring that
computer systems on which they rely are Year 2000 ready and may face business
and legal problems if these systems are not ready. If computer systems used by
exchanges, broker-dealers, and other market participants are not Year 2000
ready, valuing and trading securities could be difficult. These problems could
have a negative effect on the Fund's investments and returns.
ALTERNATIVE STRATEGIES: At times the Fund may judge that market, economic or
political conditions make pursuing the Fund's investment strategies inconsistent
with the best interests of its shareholders. The Fund then may temporarily use
alternative strategies that are mainly designed to limit the Fund's losses.
Who manages the Growth & Income Fund?
First Investors Management Company, Inc. ("FIMCO") is the investment adviser to
the Fund. Its address is 95 Wall Street, New York, NY 10005. It currently serves
as investment adviser to 51 mutual funds or series of funds with total net
assets of approximately $5 billion. FIMCO supervises all aspects of the Fund's
operations and determines the Fund's portfolio transactions. For the fiscal year
ended September 30, 1998, FIMCO received advisory fees of 0.75% of the Fund's
average daily net assets.
Dennis T. Fitzpatrick serves as Portfolio Manager of the Fund. Mr. Fitzpatrick
has been a member of FIMCO's investment management team since October 1995.
During 1995, Mr. Fitzpatrick was a Regional Surety Manager at United States
Fidelity & Guaranty Co. From 1988 to 1995, he was Northeast Surety Manager at
American International Group.
In addition to the investment risks of the Year 2000 which are discussed above,
the ability of FIMCO and its affiliates to price the Fund's shares, process
purchase and redemption orders, and render other services could be adversely
affected if the computers or other systems on which they rely are not properly
programmed to operate after January 1, 2000. Additionally, because the services
provided by FIMCO and its affiliates depend on the interaction of their computer
systems with the computer systems of brokers, information services and other
parties, any failure on the part of such third party computer systems to deal
with the Year 2000 may have a negative effect on the services provided to the
Fund. FIMCO and its affiliates are taking steps that they believe are reasonably
designed to address the Year 2000 problem for computer and other systems used by
them and are obtaining assurances that comparable steps are being taken by the
Fund's other service providers. However, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund. Nor can the
Fund estimate the extent of any impact.
BUYING AND SELLING SHARES
How and when does the Fund price its shares?
The share price (which is called "net asset value" or "NAV" per share) for the
Fund is calculated once each day as of 4 p.m., Eastern Standard Time ("E.S.T."),
on each day the New York Stock Exchange ("NYSE") is open for regular trading. In
the event that the NYSE closes early, the share price will be determined as of
the time of the closing.
7
<PAGE>
To calculate the NAV, the Fund's assets are valued and totaled, liabilities are
subtracted, and the balance, called net assets, is divided by the number of
shares outstanding. The prices or NAVs of Class A shares and Class B shares will
generally differ because they have different expenses.
In valuing its assets, the Fund uses the market value of securities for which
market quotations or last sale prices are readily available. If there are no
readily available quotations or last sale prices for an investment or the
available quotations are considered to be unreliable, the securities will be
valued at their fair value as determined in good faith pursuant to procedures
adopted by the Board of Directors of the Fund.
How do I buy shares?
You may buy shares of the Fund through a First Investors registered
representative or through a registered representative of an authorized
broker-dealer ("Representative"). Your Representative will help you complete and
submit an application. Your initial investment must be at least $1,000. However,
we offer automatic investment plans that allow you to open a Fund account with
as little as $50. You also may open certain retirement plan accounts with as
little as $500 even without an automatic investment plan. Subsequent investments
may be made in any amount.
If we receive your application or order in our Woodbridge, N.J. offices in
correct form, as described in the Shareholder Manual, prior to the close of
regular trading on the NYSE, your transaction will be priced at that day's NAV.
If you place your order with your Representative prior to the close of regular
trading on the NYSE, your transaction will also be priced at that day's NAV
provided that your Representative transmits the order to our Woodbridge, NJ
office by 5 p.m., E.S.T. Orders placed after the close of regular trading on the
NYSE will be priced at the next business day's NAV. The procedures for
processing transactions are explained in more detail in our Shareholder Manual
which is available upon request.
You can arrange to make systematic investments electronically from your bank
account or through payroll deduction. All the various ways you can buy shares
are explained in the Shareholder Manual. For further information on the
procedures for buying shares, please contact your Representative or call
Shareholder Services at 1-800-423-4026.
The Fund reserves the right to refuse any order to buy shares if the Fund
determines that doing so would be in the best interests of the Fund and its
shareholders.
Which class of shares is best for me?
The Fund has two classes of shares, Class A and Class B. While each class
invests in the same portfolio of securities, the classes have separate sales
charge and expense structures. Because of the different expense structures, each
class of shares generally will have different NAVs and dividends.
The principal advantages of Class A shares are the lower overall expenses, the
availability of quantity discounts on volume purchases and certain account
privileges that are available only on Class A shares. The principal advantage of
Class B shares is that all of your money is put to work from the outset.
Class A shares of the Fund are sold at the public offering price which includes
a front-end sales load. The sales charge declines with the size of your
purchase, as illustrated below.
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Class A Shares
Your investment Sales Charge as a percentage of
-------------------------------
offering price net amount invested
Less than $25,000 6.25% 6.67%
$25,000-$49,999 5.75 6.10
$50,000-$99,999 5.50 5.82
$100,000-$249,999 4.50 4.71
$250,000-$499,999 3.50 3.63
$500,000-$999,999 2.50 2.56
$1,000,000 or more 0* 0*
*If you invest $1,000,000 or more in Class A shares, you will not pay a
front-end sales charge. However, if you make such an investment and then sell
your shares within 24 months of purchase, you will pay a contingent deferred
sales charge ("CDSC") of 1.00%.
Class B shares are sold at net asset value, without any initial sales charge.
However, you may pay a CDSC when you sell your shares. The CDSC declines the
longer you hold your shares, as illustrated below. Class B shares convert to
Class A shares after eight years.
Class B Shares
Year of Redemption CDSC as a Percentage of Purchase Price
------------------ or NAV at Redemption
--------------------
Within the 1st or 2nd year........... 4%
Within the 3rd or 4th year........... 3
In the 5th year...................... 2
In the 6th year...................... 1
Within the 7th year and 8th year..... 0
There is no CDSC on Class B shares which are acquired through reinvestment of
dividends or distributions. The CDSC is imposed on the lower of the original
purchase price or the net asset value of the shares being sold. For purposes of
determining the CDSC, all purchases made during a calendar month are counted as
having been made on the first day of that month at the average cost of all
purchases made during that month.
To keep your CDSC as low as possible, each time you place a request to sell
shares, we will first sell any shares in your account that carry no CDSC. If
there is an insufficient number of these shares to meet your request in full, we
will then sell those shares that have the lowest CDSC.
Sales charges and CDSCs may be reduced or waived under certain circumstances and
for certain groups. Consult your Representative or call us directly at
1-800-423-4026 for details.
The Fund has adopted a plan pursuant to Rule 12b-1 that allows the Fund to pay
distribution fees for the sale and distribution of its shares. Each class of
shares pays Rule 12b-1 fees for the marketing of fund shares and for services
provided to shareholders. The plans provide for payments at annual rates (based
on average daily net assets) of up to .30% on Class A shares and 1.00% on Class
B shares. No more than .25% of these payments may be for service fees. These
fees are paid monthly in arrears. Because these fees are paid out of the Fund's
assets on an ongoing basis, the higher fees for Class B shares will increase the
cost of your investment and over time may cost you more than paying the initial
sales charge for Class A shares.
9
<PAGE>
FOR ACTUAL PAST EXPENSES OF CLASS A AND CLASS B SHARES, SEE THE SECTION ENTITLED
"WHAT ARE THE FEES AND EXPENSES OF THE FUND?" IN THIS PROSPECTUS.
Because of the lower overall expenses on Class A shares, we recommend Class A
shares for purchases in excess of $250,000. If you are investing in excess of
$1,000,000, we will only sell Class A shares to you. For purchases below
$250,000, the class that is best for you generally depends upon the amount you
invest, your time horizon, and your preference for paying the sales charge
initially or later. If you fail to tell us what Class of shares you want, we
will purchase Class A shares for you.
How do I sell shares?
You may redeem your Fund shares on any day the Fund is open for business by:
o Contacting your Representative who will place a redemption order for
you;
o Sending a written redemption request to Administrative Data Management
Corp., ("ADM") at 581 Main Street, Woodbridge, NJ 07095-1198;
o Telephoning the Special Services Department of ADM at 1-800-342-6221 (if
you have elected to have telephone privileges); or
o Instructing us to make an electronic transfer to a predesignated bank
(if you have completed an application authorizing such transfers).
Your redemption request will be processed at the price next computed after we
receive the request in good order, as described in the Shareholder Manual. For
all requests, have your account number available.
Payment of redemption proceeds generally will be made within 7 days. If you are
redeeming shares which you recently purchased by check, payment may be delayed
to verify that your check has cleared. This may take up to 15 days from the date
of your purchase. You may not redeem shares by telephone or Electronic Fund
Transfer unless you have owned the shares for at least 15 days.
If your account falls below the minimum account balance for any reason other
than market fluctuation, the Fund reserves the right to redeem your account
without your consent or to impose a low balance account fee of $15 annually on
60 days prior notice. The Fund may also redeem your account or impose a low
balance account fee if you have established your account under a systematic
investment program and discontinue the program before you meet the minimum
account balance. You may avoid redemption or imposition of a fee by purchasing
additional Fund shares during this 60-day period to bring your account balance
to the required minimum. If you own Class B shares, you will not be charged a
CDSC on a low balance redemption.
The Fund reserves the right to make in-kind redemptions. This means that it
could respond to a redemption request by distributing shares of the Fund's
underlying investments rather than distributing cash.
Can I exchange my shares for the shares of other First Investors Funds?
You may exchange shares of the Fund for shares of other First Investors Funds
without paying any additional sales charge. You can only exchange within the
same class of shares (i.e., Class A to Class A). Consult your Representative or
call ADM at 1-800-423-4026 for details.
The Fund reserves the right to reject any exchange request that appears to be
part of a market timing strategy based upon the holding period of the initial
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investment, the amount of the investment being exchanged, the funds involved,
and the background of the shareholder or dealer involved. The Fund is designed
for long-term investment purposes. It is not intended to provide a vehicle for
short-term market timing.
ACCOUNT POLICIES
What about dividends and capital gain distributions?
To the extent that it has net investment income, the Fund will declare and pay
dividends from net investment income on a quarterly basis. Any net realized
capital gain will be declared and distributed on an annual basis, usually after
the end of the Fund's fiscal year. The Fund may make an additional distribution
in any year if necessary to avoid a Federal excise tax on certain undistributed
income and capital gain.
Dividends and other distributions paid on both classes of the Fund's shares are
calculated at the same time and in the same manner. Dividends on Class B shares
of the Fund are expected to be lower than those for its Class A shares because
of the higher distribution fees borne by the Class B shares. Dividends on each
class also might be affected differently by the allocation of other
class-specific expenses. In order to be eligible to receive a dividend or other
distribution, you must own Fund shares as of the close of business on the record
date of the distribution.
You may choose to reinvest all dividends and other distributions at NAV in
additional shares of the same class of the Fund or certain other First Investors
Funds, or receive all dividends and other distributions in cash. If you do not
select an option when you open your account, all dividends and other
distributions will be reinvested in additional shares of the Fund. If you do not
cash a distribution check and do not notify ADM to issue a new check within 12
months, the distribution may be reinvested in the Fund. If any correspondence
sent by the Fund is returned as "undeliverable," dividends and other
distributions automatically will be reinvested in the Fund. No interest will be
paid to you while a distribution remains uninvested.
A dividend or other distribution paid on a class of shares will only be paid in
additional shares of the distributing class if the total amount of the
distribution is under $5 or the Fund has received notice of your death (until
written alternate payment instructions and other necessary documents are
provided by your legal representative).
What about taxes?
Any dividends or capital gain distributions paid by the Fund are taxable to you
unless you hold your shares in an individual retirement account ("IRA"), 403(b)
account, or 401(k) account, or other tax-deferred account. Dividends (including
distributions of net short-term capital gains) are taxable to you as ordinary
income. Capital gain distributions (essentially, distributions of net long-term
capital gains) by the Fund are taxed to you as long-term capital gains,
regardless of how long you owned your Fund shares. You are taxed in the same
manner whether you receive your dividends and capital gain distributions in cash
or reinvest them in additional Fund shares. Your sale or exchange of Fund shares
may be a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
How do I obtain a complete explanation of all account privileges and policies?
The Fund offers a full range of special privileges, including special investment
programs for group retirement plans, systematic investment programs, automatic
payroll investment programs, telephone privileges, check writing privileges, and
expedited redemptions by wire order or Automated Clearing House transfer. The
full range of privileges, and related policies, are described in a special
Shareholder Manual, which you may obtain on request. For more information on the
full range of services available, please contact us directly at 1-800-423-4026.
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FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years or, if shorter, the period of the
Fund's operations. Certain information reflects financial results for a single
Fund share. The total returns in the tables represent the rate that an investor
would have earned (or lost) on an investment in that Fund (assuming reinvestment
of all dividends and distributions). The information has been audited by Tait,
Weller & Baker, whose report, along with the Fund's financial statements, are
included in the SAI, which is available upon request.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS FROM
--------------------------------- -----------------------
NET REALIZED AND
NET ASSET NET UNREALIZED GAIN TOTAL FROM NET NET
VALUE INVESTMENT (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL
----- INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUND
- --------------------
CLASS A
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
11/1/93-10/31/94..... $ 6.56 $.13 $ .11 $ .24 $.11 $-- $.11
11/1/94-10/31/95..... 6.69 .16 1.13 1.29 .17 -- .17
11/1/95-10/31/96..... 7.81 .10 1.60 1.70 .12 -- .12
11/1/96-10/31/97..... 9.39 .06 2.36 2.42 .06 .16 .22
11/1/97-09/30/98..... 11.59 .05 .97 1.02 .03 .27 .30
CLASS B
- -------
1/12/95*-10/31/95.... 6.43 .08 1.38 1.46 .11 -- .11
11/1/95-10/31/96..... 7.78 .07 1.55 1.62 .07 -- .07
11/1/96-10/31/97..... 9.33 -- 2.32 2.32 .01 .16 .17
11/1/97-09/30/98..... 11.48 (.01) .94 .93 -- .27 .27
* Date Class B shares were first offered.
** Calculated without sales charges.
+ Annualized.
++ Net of expenses waived or assumed.
</TABLE>
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<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
-------------------------------------------------------------------------------------------
RATIO TO AVERAGE NET
RATIO TO AVERAGE NET ASSET BEFORE EXPENSES
ASSETS++ WAIVED OR ASSUMED
-------- ---------------------
NET ASSET NET NET PORTFOLIO
VALUE TOTAL NET ASSETS INVESTMENT INVESTMENT TURNOVER
END RETURN** END OF PERIOD EXPENSES INCOME EXPENSES INCOME RATE
OF PERIOD (%) (IN MILLIONS) (%) (%) (%) (%) (%)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 6.69 3.67 $ 34 .67 2.26 1.83 1.11 6
7.81 19.51 63 .98 2.34 1.59 1.74 19
9.39 21.82 112 1.31 1.20 1.49 1.02 25
11.59 26.20 194 1.39 .55 1.43 .51 28
12.31 8.84 258 1.39+ .47+ N/A N/A 36
7.78 22.73 4 1.90+ 2.23+ 2.61+ 1.52+ 19
9.33 20.92 12 2.03 .48 2.19 .31 25
11.48 25.23 27 2.09 (.15) 2.13 (.19) 28
12.14 8.19 43 2.09+ (.23)+ N/A N/A 36
</TABLE>
13
<PAGE>
[FIRST INVESTORS LOGO]
GROWTH & INCOME FUND
For investors who want more information about the Fund, the following documents
are available free upon request:
ANNUAL/SEMI-ANNUAL REPORTS: Additional information about the Fund's investments
is available in the Fund's annual and semi-annual reports to shareholders. In
the Fund's annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's performance
during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Fund and is incorporated by reference into this
prospectus.
SHAREHOLDER MANUAL: The Shareholder Manual provides more detailed information
about the purchase, redemption and sale of Fund shares.
You can get free copies of reports, the SAI and the Shareholder Manual, request
other information and discuss your questions about the Fund by contacting the
Fund at:
Administrative Data Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Telephone: 1-800-423-4026
You can review and copy information about the Fund for a fee (including the
Fund's reports, Shareholder Manual and SAI) at the Public Reference Room of the
Securities and Exchange Commission ("SEC") in Washington, D.C. You can also send
your request and a duplicating fee to the Public Reference Room of the SEC,
Washington, DC 20549-6009. You can obtain information on the operation of the
Public Reference Room by calling 1-800-SEC-0330. Text-only versions of Fund
documents can be viewed online or downloaded from the SEC's Internet website at
http://www.sec.gov.
(Investment Company Act File No.
First Investors Growth & Income Fund 811-6618
xxxxxx
GROWTH & INCOME FUND
The Securities and Exchange Commission has not approved or disapproved
these securities or passed upon the adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is February 19, 1999
<PAGE>
CONTENTS
OVERVIEW OF THE GROWTH & INCOME FUND
|X| What is the Growth & Income Fund?
|X||X| Objectives
|X||X| Primary Investment Strategies
|X||X| Primary Risks
|X| Who should consider buying the Growth & Income Fund?
|X| How has the Growth & Income Fund performed?
|X| What are the fees and expenses of the Growth & Income Fund?
THE GROWTH & INCOME FUND IN DETAIL
|X| What are the Growth & Income Fund's objectives, principal investment
strategies and principal risks?
|X| Who manages the Growth & Income Fund?
BUYING AND SELLING SHARES
|X| How and when does the Fund price its shares?
|X| How do I buy shares?
|X| Which class of shares is best for me?
|X| How do I sell shares?
|X| Can I exchange my shares for the shares of other First Investors Funds?
ACCOUNT POLICIES
|X| What about dividends and capital gain distributions?
|X| What about taxes?
|X| How do I obtain a complete explanation of all account privileges and
policies?
FINANCIAL HIGHLIGHTS
2
<PAGE>
OVERVIEW OF THE GROWTH & INCOME FUND
What is the Growth & Income Fund?
Objectives: The Fund seeks long-term growth of capital and current income.
Primary
Investment
Strategies: The Fund primarily invests in dividend-paying common stocks and
securities that are convertible into common stocks of established
domestic and foreign companies. The strategy of focusing on
securities which offer income as well as the potential for
capital appreciation is intended to reduce the Fund's volatility
relative to the general stock market while affording potential
for long-term total return. The Fund also may invest in corporate
bonds to increase the income component of its total return.
Primary
Risks: While dividend-paying common stocks and convertible securities
are expected to hold up better in a declining market than stocks
which do not pay dividends, like all stocks they fluctuate in
price in response to movements in the overall securities markets,
general economic conditions, changes in interest rates,
company-specific developments and other factors. Moreover, under
certain conditions, the dividends paid on stocks held by the Fund
may not be sufficient to provide a significant cushion against
price declines. Fluctuations in the prices of the stocks held by
the Fund at times can be substantial. Accordingly, the value of
your investment in the Fund will go up and down, which means that
you could lose money.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
Who should consider buying the Growth & Income Fund?
The Growth & Income Fund may be used as a core holding for an
investment portfolio or as a base on which to build a portfolio.
It may be appropriate for you if you:
. Are primarily seeking growth of capital,
. Are willing to accept a moderate degree of market volatility,
and
. Have a long-term investment horizon and are able to ride out
market cycles.
Since the Fund's income level will likely be small and will
fluctuate, there can be no assurance that the Fund will be able
to pay regular dividends. The Fund is therefore not designed for
investors who need an assured level of current income.
You should keep in mind that the Growth & Income Fund is not a
complete investment program. For most investors, a complete
program should include not only stock funds but also bond and
money market funds. While stocks have historically outperformed
other categories of investments over long periods of time, they
generally carry higher risks. There have also been extended
periods during which bonds and money market instruments have
outperformed stocks. By allocating your assets among different
types of funds, you can reduce the overall risk of your portfolio
and benefit when bonds and money market instruments outperform
stocks. Of course, even a diversified investment program can
result in a loss.
3
<PAGE>
How has the Growth & Income Fund performed?
The bar chart and table below show you how the Fund's performance has varied
from year to year and in comparison with a broad-based index. This information
gives you some indication of the risks of investing in the Fund.
The Fund has two classes of shares, Class A shares and Class B shares. The bar
chart shows changes in the performance of the Fund's Class A shares from year to
year over the life of the Fund. The performance of Class B shares differs from
the performance of Class A shares shown in the bar chart only to the extent that
it does not have the same expenses. The bar chart does not reflect sales charges
that you may pay upon purchase or redemption of Fund shares. If they were
included, the returns would be less than those shown.
[Bar Chart of Changes in Performance of Class A Shares From 1993 to 1998,
With Following Plot Points:
1994 -0.76%
1995 30.61%
1996 19.96%
1997 27.96%
1998 23.41%
During the periods shown, the highest quarterly return was 19.42% (for the
quarter ended December 31, 1998), and the lowest quarterly return was -10.80%
(for the quarter ended September 30, 1998). THE FUND'S PAST PERFORMANCE DOES NOT
NECESSARILY INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE.
The following table shows how the Fund's average annual total returns for Class
A shares and Class B shares compare to those of the Standard & Poor's 500
Composite Stock Price Index ("S&P 500 Index"). This table assumes that the
maximum sales charge or CDSC was paid. The S&P 500 Index is an unmanaged index
generally representative of the market for the stocks of large-sized U.S.
companies. The S&P 500 Index does not take into account fees and expenses that
an investor would incur in holding the securities in the index. If it did so,
the returns would be lower than those shown.
Inception Inception
Class A Shares Class B Shares
1 Year* 5 Years* (10/4/93) (1/12/95)
Class A Shares 15.65% 18.00% 17.43% N/A
Class B Shares 18.58 N/A N/A 24.24%
S&P 400 Index 28.34 24.55 18.47 30.41
*The annual returns are based upon calendar years.
4
<PAGE>
What are the fees and expenses of the Growth & Income Fund?
This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.
Class A Class B
Shares Shares
------ ------
SHAREHOLDER FEES
(fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price).......... 6.25% None
Maximum deferred sales charge (load)
(as a percentage of the lower of purchase
price or redemption price)................... None* 4%**
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
DISTRIBUTION TOTAL
AND SERVICE ANNUAL FUND
MANAGEMENT (12B-1) OTHER OPERATING
FEES FEES(1) EXPENSES EXPENSES(2)
------- ------- ----------- ------------
Class A Shares..... 0.75% 0.30% 0.34% 1.39%
Class B Shares.... 0.75 1.00 0.34 2.09
*A contingent deferred sales charge of 1.00% will be assessed on certain
redemptions of Class A shares that are purchased without a sales charge.
**4% in the first year; declining to 0% after the sixth year. Class B shares
convert to Class A shares after 8 years.
(1) Because the Fund pays Rule 12b-1 fees, long-term shareholders could pay more
than the economic equivalent of the maximum front-end sales charge permitted
by the National Association of Securities Dealers, Inc.
(2) The Fund has an expense offset arrangement that may reduce the Fund's
custodian fee based on the amount of cash maintained by the Fund with its
custodian. Any such fee reductions are not reflected under Total Annual Fund
Operating Expenses.
EXAMPLE
This example helps you to compare the costs of investing in the Fund with the
cost of investing in other mutual funds. The example assumes that (1) you invest
$10,000 in the Fund for the time periods indicated; (2) your investment has a 5%
return each year; and (3) the Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------- ----------- ----------- ---------
If you redeem your shares:
Class A shares $758 $1,038 $1,338 $2,189
Class B shares 612 955 1,324 2,242*
If you do not redeem your shares:
Class A shares $758 $1,038 $1,338 $2,189
Class B shares 212 655 1,124 2,242*
*Assumes conversion to Class A shares eight years after purchase.
5
<PAGE>
THE GROWTH & INCOME FUND IN DETAIL
What are the Growth & Income Fund's objectives, principal investment strategies,
and principal risks?
OBJECTIVES: The Fund seeks long-term growth of capital and current income.
PRINCIPAL INVESTMENT STRATEGIES: The Fund invests at least 65% of its total
assets in dividend-paying common stocks and convertible securities of
established domestic and foreign companies. The Fund also invests in corporate
bonds to increase the income component of its total return. The strategy of
focusing on securities which offer income as well as the potential for capital
appreciation is intended to reduce the Fund's volatility relative to the overall
stock market while affording potential for long-term total return.
The Fund uses a "bottom-up" approach to selecting investments. This means that
the Fund identifies potential investments through fundamental research and
analysis and thereafter focuses on broader issues, such as economic trends,
interest rates, and industry diversification. The Fund focuses on companies
which have solid balance sheets, strong management, relatively consistent
earnings growth or potential earnings growth greater than that of the average
company included in the S&P 500 Index. The Fund typically sells a security when
the reason for holding it is no longer valid, it shows deteriorating
fundamentals, or falls short of the manager's expectations. Information on the
Fund's recent strategies and holdings can be found in the most recent annual
report (see back cover).
PRINCIPAL RISKS: Any investment carries with it some level of risk. In general,
the greater the potential reward of the investment, the greater the risk. Here
are the principal risks of owning the Growth & Income Fund:
MARKET RISK: Because the Fund primarily invests in common stocks and convertible
securities, it is subject to market risk. Stock prices in general may decline
over short or even extended periods not only because of company-specific
developments but also due to an economic downturn, a change in interest rates,
or a change in investor sentiment, regardless of the success or failure of an
individual company's operations. Stock markets tend to run in cycles with
periods when prices generally go up, known as "bull" markets, and periods when
stock prices generally go down, referred to as "bear" markets.
While dividend-paying common stocks and convertible securities are expected to
hold up better in a declining market than stocks which do not pay dividends,
like all stocks they fluctuate in price in response to movements in the overall
securities markets, general economic conditions, company-specific developments,
and other factors. Moreover, under certain conditions, the dividends paid on
these stocks may not be sufficient to provide a significant cushion against
price declines. Fluctuations in the prices of these stocks can therefore be
substantial. The dividend income received by the Fund will also fluctuate with
market conditions. Depending upon market conditions, the Fund may not have
sufficient income to pay its shareholders regular dividends. Accordingly, the
value of your investment in the Fund will go up and down, which means that you
could lose money.
The Fund's focus on growth stocks increases the potential volatility of its
share price. Growth stocks are stocks of companies which are expected to
increase their earnings faster than the overall market. If expectations are not
met, the prices of these stocks may decline drastically even if earnings do
increase. Investments in growth companies may lack the dividend yield that can
cushion stock prices in market downturns.
CREDIT RISK: This is the risk that an issuer of bonds will be unable to pay
interest or principal when due. The prices of bonds are affected by the credit
quality of the issuer. Changes in the financial condition of an issuer, changes
in general economic conditions, and changes in specific economic conditions that
6
<PAGE>
affect a particular type of issuer can impact the credit quality of an issuer.
Such changes may weaken an issuer's ability to make payments of principal or
interest, or cause an issuer of bonds to fail to make timely payments of
interest or principal. Lower quality bonds generally tend to be more sensitive
to these changes than higher quality bonds, but BBB-rated bonds may have
speculative characteristics as well. While credit ratings may be available to
assist in evaluating an issuer's credit quality, they may not accurately predict
an issuer's ability to make timely payment of principal and interest.
YEAR 2000 RISKS: The values of securities owned by the Fund may be negatively
affected by Year 2000 problems. Many computer systems are not designed to
process correctly date-related information after January 1, 2000. The issuers of
securities held by the Fund may incur substantial costs in ensuring that
computer systems on which they rely are Year 2000 ready and may face business
and legal problems if these systems are not ready. If computer systems used by
exchanges, broker-dealers, and other market participants are not Year 2000
ready, valuing and trading securities could be difficult. These problems could
have a negative effect on the Fund's investments and returns.
ALTERNATIVE STRATEGIES: At times the Fund may judge that market, economic or
political conditions make pursuing the Fund's investment strategies inconsistent
with the best interests of its shareholders. The Fund then may temporarily use
alternative strategies that are mainly designed to limit the Fund's losses.
Who manages the Growth & Income Fund?
First Investors Management Company, Inc. ("FIMCO") is the investment adviser to
the Fund. Its address is 95 Wall Street, New York, NY 10005. It currently serves
as investment adviser to 51 mutual funds or series of funds with total net
assets of approximately $5 billion. FIMCO supervises all aspects of the Fund's
operations and determines the Fund's portfolio transactions. For the fiscal year
ended September 30, 1998, FIMCO received advisory fees of 0.75% of the Fund's
average daily net assets.
Dennis T. Fitzpatrick serves as Portfolio Manager of the Fund. Mr. Fitzpatrick
has been a member of FIMCO's investment management team since October 1995.
During 1995, Mr. Fitzpatrick was a Regional Surety Manager at United States
Fidelity & Guaranty Co. From 1988 to 1995, he was Northeast Surety Manager at
American International Group.
In addition to the investment risks of the Year 2000 which are discussed above,
the ability of FIMCO and its affiliates to price the Fund's shares, process
purchase and redemption orders, and render other services could be adversely
affected if the computers or other systems on which they rely are not properly
programmed to operate after January 1, 2000. Additionally, because the services
provided by FIMCO and its affiliates depend on the interaction of their computer
systems with the computer systems of brokers, information services and other
parties, any failure on the part of such third party computer systems to deal
with the Year 2000 may have a negative effect on the services provided to the
Fund. FIMCO and its affiliates are taking steps that they believe are reasonably
designed to address the Year 2000 problem for computer and other systems used by
them and are obtaining assurances that comparable steps are being taken by the
Fund's other service providers. However, there can be no assurance that these
steps will be sufficient to avoid any adverse impact on the Fund. Nor can the
Fund estimate the extent of any impact.
BUYING AND SELLING SHARES
How and when does the Fund price its shares?
The share price (which is called "net asset value" or "NAV" per share) for the
Fund is calculated once each day as of 4 p.m., Eastern Standard Time ("E.S.T."),
on each day the New York Stock Exchange ("NYSE") is open for regular trading. In
the event that the NYSE closes early, the share price will be determined as of
the time of the closing.
7
<PAGE>
To calculate the NAV, the Fund's assets are valued and totaled, liabilities are
subtracted, and the balance, called net assets, is divided by the number of
shares outstanding. The prices or NAVs of Class A shares and Class B shares will
generally differ because they have different expenses.
In valuing its assets, the Fund uses the market value of securities for which
market quotations or last sale prices are readily available. If there are no
readily available quotations or last sale prices for an investment or the
available quotations are considered to be unreliable, the securities will be
valued at their fair value as determined in good faith pursuant to procedures
adopted by the Board of Directors of the Fund.
How do I buy shares?
You may buy shares of the Fund through a First Investors registered
representative or through a registered representative of an authorized
broker-dealer ("Representative"). Your Representative will help you complete and
submit an application. Your initial investment must be at least $1,000. However,
we offer automatic investment plans that allow you to open a Fund account with
as little as $50. You also may open certain retirement plan accounts with as
little as $500 even without an automatic investment plan. Subsequent investments
may be made in any amount.
If we receive your application or order in our Woodbridge, N.J. offices in
correct form, as described in the Shareholder Manual, prior to the close of
regular trading on the NYSE, your transaction will be priced at that day's NAV.
If you place your order with your Representative prior to the close of regular
trading on the NYSE, your transaction will also be priced at that day's NAV
provided that your Representative transmits the order to our Woodbridge, NJ
office by 5 p.m., E.S.T. Orders placed after the close of regular trading on the
NYSE will be priced at the next business day's NAV. The procedures for
processing transactions are explained in more detail in our Shareholder Manual
which is available upon request.
You can arrange to make systematic investments electronically from your bank
account or through payroll deduction. All the various ways you can buy shares
are explained in the Shareholder Manual. For further information on the
procedures for buying shares, please contact your Representative or call
Shareholder Services at 1-800-423-4026.
The Fund reserves the right to refuse any order to buy shares if the Fund
determines that doing so would be in the best interests of the Fund and its
shareholders.
Which class of shares is best for me?
The Fund has two classes of shares, Class A and Class B. While each class
invests in the same portfolio of securities, the classes have separate sales
charge and expense structures. Because of the different expense structures, each
class of shares generally will have different NAVs and dividends.
The principal advantages of Class A shares are the lower overall expenses, the
availability of quantity discounts on volume purchases and certain account
privileges that are available only on Class A shares. The principal advantage of
Class B shares is that all of your money is put to work from the outset.
Class A shares of the Fund are sold at the public offering price which includes
a front-end sales load. The sales charge declines with the size of your
purchase, as illustrated below.
8
<PAGE>
Class A Shares
Your investment Sales Charge as a percentage of
-------------------------------
offering price net amount invested
Less than $25,000 6.25% 6.67%
$25,000-$49,999 5.75 6.10
$50,000-$99,999 5.50 5.82
$100,000-$249,999 4.50 4.71
$250,000-$499,999 3.50 3.63
$500,000-$999,999 2.50 2.56
$1,000,000 or more 0* 0*
*If you invest $1,000,000 or more in Class A shares, you will not pay a
front-end sales charge. However, if you make such an investment and then sell
your shares within 24 months of purchase, you will pay a contingent deferred
sales charge ("CDSC") of 1.00%.
Class B shares are sold at net asset value, without any initial sales charge.
However, you may pay a CDSC when you sell your shares. The CDSC declines the
longer you hold your shares, as illustrated below. Class B shares convert to
Class A shares after eight years.
Class B Shares
Year of Redemption CDSC as a Percentage of Purchase Price
------------------ or NAV at Redemption
--------------------
Within the 1st or 2nd year........... 4%
Within the 3rd or 4th year........... 3
In the 5th year...................... 2
In the 6th year...................... 1
Within the 7th year and 8th year..... 0
There is no CDSC on Class B shares which are acquired through reinvestment of
dividends or distributions. The CDSC is imposed on the lower of the original
purchase price or the net asset value of the shares being sold. For purposes of
determining the CDSC, all purchases made during a calendar month are counted as
having been made on the first day of that month at the average cost of all
purchases made during that month.
To keep your CDSC as low as possible, each time you place a request to sell
shares, we will first sell any shares in your account that carry no CDSC. If
there is an insufficient number of these shares to meet your request in full, we
will then sell those shares that have the lowest CDSC.
Sales charges and CDSCs may be reduced or waived under certain circumstances and
for certain groups. Consult your Representative or call us directly at
1-800-423-4026 for details.
The Fund has adopted a plan pursuant to Rule 12b-1 that allows the Fund to pay
distribution fees for the sale and distribution of its shares. Each class of
shares pays Rule 12b-1 fees for the marketing of fund shares and for services
provided to shareholders. The plans provide for payments at annual rates (based
on average daily net assets) of up to .30% on Class A shares and 1.00% on Class
B shares. No more than .25% of these payments may be for service fees. These
fees are paid monthly in arrears. Because these fees are paid out of the Fund's
assets on an ongoing basis, the higher fees for Class B shares will increase the
cost of your investment and over time may cost you more than paying the initial
sales charge for Class A shares.
9
<PAGE>
FOR ACTUAL PAST EXPENSES OF CLASS A AND CLASS B SHARES, SEE THE SECTION ENTITLED
"WHAT ARE THE FEES AND EXPENSES OF THE FUND?" IN THIS PROSPECTUS.
Because of the lower overall expenses on Class A shares, we recommend Class A
shares for purchases in excess of $250,000. If you are investing in excess of
$1,000,000, we will only sell Class A shares to you. For purchases below
$250,000, the class that is best for you generally depends upon the amount you
invest, your time horizon, and your preference for paying the sales charge
initially or later. If you fail to tell us what Class of shares you want, we
will purchase Class A shares for you.
How do I sell shares?
You may redeem your Fund shares on any day the Fund is open for business by:
o Contacting your Representative who will place a redemption order for
you;
o Sending a written redemption request to Administrative Data Management
Corp., ("ADM") at 581 Main Street, Woodbridge, NJ 07095-1198;
o Telephoning the Special Services Department of ADM at 1-800-342-6221 (if
you have elected to have telephone privileges); or
o Instructing us to make an electronic transfer to a predesignated bank
(if you have completed an application authorizing such transfers).
Your redemption request will be processed at the price next computed after we
receive the request in good order, as described in the Shareholder Manual. For
all requests, have your account number available.
Payment of redemption proceeds generally will be made within 7 days. If you are
redeeming shares which you recently purchased by check, payment may be delayed
to verify that your check has cleared. This may take up to 15 days from the date
of your purchase. You may not redeem shares by telephone or Electronic Fund
Transfer unless you have owned the shares for at least 15 days.
If your account falls below the minimum account balance for any reason other
than market fluctuation, the Fund reserves the right to redeem your account
without your consent or to impose a low balance account fee of $15 annually on
60 days prior notice. The Fund may also redeem your account or impose a low
balance account fee if you have established your account under a systematic
investment program and discontinue the program before you meet the minimum
account balance. You may avoid redemption or imposition of a fee by purchasing
additional Fund shares during this 60-day period to bring your account balance
to the required minimum. If you own Class B shares, you will not be charged a
CDSC on a low balance redemption.
The Fund reserves the right to make in-kind redemptions. This means that it
could respond to a redemption request by distributing shares of the Fund's
underlying investments rather than distributing cash.
Can I exchange my shares for the shares of other First Investors Funds?
You may exchange shares of the Fund for shares of other First Investors Funds
without paying any additional sales charge. You can only exchange within the
same class of shares (i.e., Class A to Class A). Consult your Representative or
call ADM at 1-800-423-4026 for details.
The Fund reserves the right to reject any exchange request that appears to be
part of a market timing strategy based upon the holding period of the initial
10
<PAGE>
investment, the amount of the investment being exchanged, the funds involved,
and the background of the shareholder or dealer involved. The Fund is designed
for long-term investment purposes. It is not intended to provide a vehicle for
short-term market timing.
ACCOUNT POLICIES
What about dividends and capital gain distributions?
To the extent that it has net investment income, the Fund will declare and pay
dividends from net investment income on a quarterly basis. Any net realized
capital gain will be declared and distributed on an annual basis, usually after
the end of the Fund's fiscal year. The Fund may make an additional distribution
in any year if necessary to avoid a Federal excise tax on certain undistributed
income and capital gain.
Dividends and other distributions paid on both classes of the Fund's shares are
calculated at the same time and in the same manner. Dividends on Class B shares
of the Fund are expected to be lower than those for its Class A shares because
of the higher distribution fees borne by the Class B shares. Dividends on each
class also might be affected differently by the allocation of other
class-specific expenses. In order to be eligible to receive a dividend or other
distribution, you must own Fund shares as of the close of business on the record
date of the distribution.
You may choose to reinvest all dividends and other distributions at NAV in
additional shares of the same class of the Fund or certain other First Investors
Funds, or receive all dividends and other distributions in cash. If you do not
select an option when you open your account, all dividends and other
distributions will be reinvested in additional shares of the Fund. If you do not
cash a distribution check and do not notify ADM to issue a new check within 12
months, the distribution may be reinvested in the Fund. If any correspondence
sent by the Fund is returned as "undeliverable," dividends and other
distributions automatically will be reinvested in the Fund. No interest will be
paid to you while a distribution remains uninvested.
A dividend or other distribution paid on a class of shares will only be paid in
additional shares of the distributing class if the total amount of the
distribution is under $5 or the Fund has received notice of your death (until
written alternate payment instructions and other necessary documents are
provided by your legal representative).
What about taxes?
Any dividends or capital gain distributions paid by the Fund are taxable to you
unless you hold your shares in an individual retirement account ("IRA"), 403(b)
account, or 401(k) account, or other tax-deferred account. Dividends (including
distributions of net short-term capital gains) are taxable to you as ordinary
income. Capital gain distributions (essentially, distributions of net long-term
capital gains) by the Fund are taxed to you as long-term capital gains,
regardless of how long you owned your Fund shares. You are taxed in the same
manner whether you receive your dividends and capital gain distributions in cash
or reinvest them in additional Fund shares. Your sale or exchange of Fund shares
may be a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
How do I obtain a complete explanation of all account privileges and policies?
The Fund offers a full range of special privileges, including special investment
programs for group retirement plans, systematic investment programs, automatic
payroll investment programs, telephone privileges, check writing privileges, and
expedited redemptions by wire order or Automated Clearing House transfer. The
full range of privileges, and related policies, are described in a special
Shareholder Manual, which you may obtain on request. For more information on the
full range of services available, please contact us directly at 1-800-423-4026.
11
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Fund's
financial performance for the past five years or, if shorter, the period of the
Fund's operations. Certain information reflects financial results for a single
Fund share. The total returns in the tables represent the rate that an investor
would have earned (or lost) on an investment in that Fund (assuming reinvestment
of all dividends and distributions). The information has been audited by Tait,
Weller & Baker, whose report, along with the Fund's financial statements, are
included in the SAI, which is available upon request.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------
PER SHARE DATA
-------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS LESS DISTRIBUTIONS FROM
--------------------------------- -----------------------
NET REALIZED AND
NET ASSET NET UNREALIZED GAIN TOTAL FROM NET NET
VALUE INVESTMENT (LOSS) ON INVESTMENT INVESTMENT REALIZED TOTAL
----- INCOME INVESTMENTS OPERATIONS INCOME GAIN DISTRIBUTIONS
- -----------------------------------------------------------------------------------------------------------------
GROWTH & INCOME FUND
- --------------------
CLASS A
- -------
<S> <C> <C> <C> <C> <C> <C> <C>
11/1/93-10/31/94..... $ 6.56 $.13 $ .11 $ .24 $.11 $-- $.11
11/1/94-10/31/95..... 6.69 .16 1.13 1.29 .17 -- .17
11/1/95-10/31/96..... 7.81 .10 1.60 1.70 .12 -- .12
11/1/96-10/31/97..... 9.39 .06 2.36 2.42 .06 .16 .22
11/1/97-09/30/98..... 11.59 .05 .97 1.02 .03 .27 .30
CLASS B
- -------
1/12/95*-10/31/95.... 6.43 .08 1.38 1.46 .11 -- .11
11/1/95-10/31/96..... 7.78 .07 1.55 1.62 .07 -- .07
11/1/96-10/31/97..... 9.33 -- 2.32 2.32 .01 .16 .17
11/1/97-09/30/98..... 11.48 (.01) .94 .93 -- .27 .27
* Date Class B shares were first offered.
** Calculated without sales charges.
+ Annualized.
++ Net of expenses waived or assumed.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
-------------------------------------------------------------------------------------------
RATIO TO AVERAGE NET
RATIO TO AVERAGE NET ASSET BEFORE EXPENSES
ASSETS++ WAIVED OR ASSUMED
-------- ---------------------
NET ASSET NET NET PORTFOLIO
VALUE TOTAL NET ASSETS INVESTMENT INVESTMENT TURNOVER
END RETURN** END OF PERIOD EXPENSES INCOME EXPENSES INCOME RATE
OF PERIOD (%) (IN MILLIONS) (%) (%) (%) (%) (%)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 6.69 3.67 $ 34 .67 2.26 1.83 1.11 6
7.81 19.51 63 .98 2.34 1.59 1.74 19
9.39 21.82 112 1.31 1.20 1.49 1.02 25
11.59 26.20 194 1.39 .55 1.43 .51 28
12.31 8.84 258 1.39+ .47+ N/A N/A 36
7.78 22.73 4 1.90+ 2.23+ 2.61+ 1.52+ 19
9.33 20.92 12 2.03 .48 2.19 .31 25
11.48 25.23 27 2.09 (.15) 2.13 (.19) 28
12.14 8.19 43 2.09+ (.23)+ N/A N/A 36
</TABLE>
13
<PAGE>
[FIRST INVESTORS LOGO]
GROWTH & INCOME FUND
For investors who want more information about the Fund, the following documents
are available free upon request:
ANNUAL/SEMI-ANNUAL REPORTS: Additional information about the Fund's investments
is available in the Fund's annual and semi-annual reports to shareholders. In
the Fund's annual report, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's performance
during its last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI): The SAI provides more detailed
information about the Fund and is incorporated by reference into this
prospectus.
SHAREHOLDER MANUAL: The Shareholder Manual provides more detailed information
about the purchase, redemption and sale of Fund shares.
You can get free copies of reports, the SAI and the Shareholder Manual, request
other information and discuss your questions about the Fund by contacting the
Fund at:
Administrative Data Management Corp.
581 Main Street
Woodbridge, NJ 07095-1198
Telephone: 1-800-423-4026
You can review and copy information about the Fund for a fee (including the
Fund's reports, Shareholder Manual and SAI) at the Public Reference Room of the
Securities and Exchange Commission ("SEC") in Washington, D.C. You can also send
your request and a duplicating fee to the Public Reference Room of the SEC,
Washington, DC 20549-6009. You can obtain information on the operation of the
Public Reference Room by calling 1-800-SEC-0330. Text-only versions of Fund
documents can be viewed online or downloaded from the SEC's Internet website at
http://www.sec.gov.
(Investment Company Act File No.
First Investors Growth & Income Fund 811-6618
