[FIRST INVESTORS LOGO]
FOCUSED EQUITY 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 March 8, 1999.
<PAGE>
Contents
OVERVIEW OF THE FOCUSED EQUITY FUND
/ / What is the Focused Equity Fund?
/ / / / Objective
/ / / / Primary Investment Strategies
/ / / / Primary Risks
/ / Who should consider buying the Focused Equity Fund?
/ / What about performance?
/ / What are the fees and expenses of the Focused Equity Fund?
THE FOCUSED EQUITY FUND IN DETAIL
/ / What are the Focused Equity Fund's objective, principal investment
strategies and principal risks?
/ / Who manages the Focused Equity Fund?
BUYING AND SELLING SHARES
/ / How and when does the Fund price its shares?
/ / How do I buy shares?
/ / Which class of shares is best for me?
/ / How do I sell shares?
/ / Can I exchange my shares for the shares of other First Investors
Funds?
ACCOUNT POLICIES
/ / What about dividends and capital gain distributions?
/ / What about taxes?
/ / How do I obtain a complete explanation of all account privileges and
policies?
APPENDIX
2
<PAGE>
OVERVIEW OF THE FOCUSED EQUITY FUND
What is the Focused Equity Fund?
Objective: The Fund seeks capital appreciation.
Primary
Investment
Strategies: The Fund seeks to achieve its objective by focusing its investments
in the common stocks of approximately 20 to 30 U.S. companies.
Generally, not more than 12% of the Fund's assets will be invested
in the securities of a single issuer. The Fund uses an event-driven
approach in selecting investments. In making investment decisions,
the Fund looks for companies that appear to be undervalued because
they are undergoing corporate or other events that appear likely to
result in significant growth in the companies' valuations. The Fund
seeks to identify companies with proven management, superior cash
flow and outstanding franchise values. The Fund usually will sell a
stock when it shows deteriorating fundamentals, reaches its target
value, constitutes 12% or more of the total portfolio, or when the
Fund identifies better investment opportunities.
Primary
Risks: While there are substantial potential long-term rewards of investing
in a concentrated portfolio of securities that are considered
undervalued, there are also substantial risks. First, the value of
the portfolio will fluctuate with movements in the overall
securities markets, general economic conditions, and changes in
interest rates or investor sentiment. Second, because the Fund is
non-diversified and concentrates its investments in the stocks of a
small number of issuers, the Fund's performance may be substantially
impacted by the change in value of a single holding. Third, there is
a risk that the event that led the Fund to make an investment may
occur later than anticipated or not at all. This may disappoint the
market and cause a decline in the value of the investment.
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 Focused Equity Fund?
The Focused Equity Fund can be used to "round out" an investment
portfolio which already contains a core stock fund holding, such as
a blue chip fund or a growth and income fund. It may be appropriate
for you if you:
o Are seeking significant growth of capital,
o Understand and are willing to accept significant stock market
volatility,
3
<PAGE>
o Are willing to take high risk on the money you invest in the
Fund, and
o Have a long-term investment horizon and are able to ride out
market cycles.
You should keep in mind that the Focused Equity 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.
What about performance?
Because the Fund was new when this prospectus was printed, it has no previous
operating history. However, the Fund has investment objectives and policies that
are substantially similar to those of another fund managed by the Fund's
investment subadviser, Arnhold and S. Bleichroeder, Inc. ("ASB" or
"Subadviser"). The other fund is an unregistered, offshore fund named First
Eagle Fund N.V. See the Appendix for information about the performance of this
similar fund.
What are the fees and expenses of the Focused Equity 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%**
4
<PAGE>
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund
assets)
<TABLE>
<CAPTION>
TOTAL
DISTRIBUTION ANNUAL
AND SERVICE FUND
MANAGEMENT (12B-1) OTHER OPERATING EXPENSE NET
FEES FEES(1) EXPENSES(2),(3) EXPENSES ASSUMPTION(3) EXPENSES
---- ------- --------------- --------- ------------- --------
<S> <C> <C> <C> <C> <C> <C>
Class A
Shares ......... 0.75% 0.30% 0.95% 2.00% 0.25% 1.75%
Class B
Shares.......... 0.75 1.00 0.95 2.70 0.25 2.45
</TABLE>
* 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) Because the Fund had no operating history when this prospectus was printed,
these expenses are based on estimated amounts for the current fiscal year.
(3) The Adviser has contractually agreed with the Fund to assume Other Expenses
in excess of .70% during the Fund's first fiscal year (ending September 30,
1999), provided that the Adviser may recover such assumed expenses within
the following three years as long as the total expenses of the Fund do not
exceed 1.75% of the average daily net assets on Class A shares and 2.45% of
the average daily net assets on Class B shares or any lower expense
limitation to which the Adviser agrees. Other Expenses include
organizational 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, except
for year one which is net of expenses assumed. Although your actual costs may be
higher or lower, under these assumptions your costs would be:
5
<PAGE>
ONE YEAR THREE YEARS
-------- -----------
If you redeem your shares:
Class A shares $792 $1,191
Class B Shares 648 1,115
If you do not redeem your shares:
Class A shares $792 $1,191
Class B Shares 248 815
THE FOCUSED EQUITY FUND IN DETAIL
What are the Focused Equity Fund's objective, principal investment strategies,
and principal risks?
OBJECTIVE: The Fund seeks capital appreciation.
PRINCIPAL INVESTMENT STRATEGIES: The Fund seeks to achieve its objective by
focusing its investments in the common stocks of approximately 20 to 30 U.S.
companies. The Fund is a non-diversified investment company. The Fund will
usually concentrate 80% of its portfolio in its top 15 holdings. It will
frequently have more than 10% of its assets in the securities of a single
issuer. Although the Fund is not required to limit the amount of any investment
in the securities of any one issuer, it generally will not invest more than 12%
of its assets in the securities of a single issuer. The Fund's strategy is to
remain relatively fully invested, but at times the Fund may have cash positions
of 10% or more if the Fund cannot identify qualified investment opportunities or
it has a negative or "bearish" view of the stock market. However, under normal
market conditions, at least 65% of the Fund's total assets will be invested in
equity securities (including not only common stocks, but preferred stocks and
securities convertible into common and preferred stocks).
The Fund uses an event-driven approach in selecting investments. The Fund looks
for companies that appear to be undervalued because they are undergoing some
corporate or other event that the Fund believes can result in significant growth
in the companies' valuations. Examples of these events include: announced
mergers, acquisitions and divestitures; financial restructurings; management
reorganizations; stock buy-back programs; or industry transformations that can
affect competitiveness. The Fund then identifies companies with proven
management teams which maintain significant financial interest in the companies,
superior cash flows in excess of internal growth requirements and outstanding
franchise values. The Fund generally invests with a time horizon of two to five
years and seeks investments which offer the potential of appreciating at least
50% within the first two years of the investment.
The Fund actively monitors the companies in its portfolio through regular
meetings and teleconference calls with senior management and personal visits.
The Fund also actively monitors the industries and competitors of the companies
within its portfolio and checks whether the original investment thesis still
holds true. The Fund usually will sell a stock when it shows deteriorating
6
<PAGE>
fundamentals, reaches its target value, constitutes 12% or more of the total
portfolio, or when the Fund identifies better investment opportunities.
The Fund may purchase and sell futures contracts and options on futures
contracts for hedging purposes. The Fund anticipates engaging in such
transactions relatively infrequently and over relatively short periods of time.
Any hedging strategy that the Fund may decide to employ will generally be
effected by buying puts on the overall market or an index, such as puts on the
Standard & Poor's 500 Composite Stock Price Index.
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 Focused Equity Fund:
MARKET RISK: Because the Fund primarily invests in stocks, it is subject to
market risk. Stock prices in general may decline over short or even extended
periods not only due to 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. Fluctuations in the prices of
stocks can be sudden and substantial. Accordingly, the value of your investment
in the Fund will go up and down, which means that you could lose money.
NON-DIVERSIFICATION RISK: The Fund is a non-diversified investment company and,
as such, its assets may be invested in a limited number of issuers. This means
that the Fund's performance may be substantially impacted by the change in value
of even a single holding. The price of a share of the Fund can therefore be
expected to fluctuate more than a comparable diversified fund. Moreover, the
Fund's share price may decline even when the overall market is increasing.
Accordingly, an investment in the Fund may entail greater risks than an
investment in a diversified investment company.
EVENT-DRIVEN STYLE RISK: The event-driven investment approach used by the Fund
carries the additional risk that the event anticipated may occur later than
expected or not at all or may not have the desired effect on the market price of
the security.
FUTURES AND OPTIONS RISKS: The Fund could suffer a loss if it fails to hedge its
portfolio prior to a market decline. Moreover, if the Fund engages in hedging
transactions using futures or options, the Fund could nevertheless suffer a loss
if the hedging is based upon an inaccurate prediction of movements in the
direction of the securities and interest rate markets or the hedging instrument
does not accurately reflect the Fund's portfolio. The Fund may experience
adverse consequences that leave it in a worse position than if such strategies
were not used. As a result, the Fund may not achieve its investment objective.
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
7
<PAGE>
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 its losses by investing
up to 100% of its assets in short-term money market instruments. If the Fund
does so, it may not achieve its investment objective.
Who manages the Focused Equity Fund?
First Investors Management Company, Inc. ("FIMCO" or "Adviser") is the
investment adviser to the Fund. Its address is 95 Wall Street, New York, NY
10005. It currently serves as investment adviser to 52 mutual funds with total
net assets of approximately $5 billion. FIMCO supervises all aspects of the
Fund's operations, except that the investment subadviser determines the Fund's
portfolio transactions. For its services, FIMCO receives a fee at an annual rate
of 0.75% of the average daily net assets of the Fund up to and including $300
million; 0.72% of the average daily net assets in excess of $300 million up to
and including $500 million; 0.69% of the average daily net assets in excess of
$500 million up to and including $750 million; and 0.66% of the average daily
net assets over $750 million. This fee will be computed daily and paid monthly.
FIMCO and the Fund have retained Arnhold and S. Bleichroeder, Inc. as the Fund's
investment subadviser. Subject to continuing oversight and supervision by FIMCO
and the Board of Directors, ASB has discretionary trading authority over all of
the Fund's assets. ASB is located at 1345 Avenue of the Americas, New York, NY
10105. ASB and its affiliates currently provide investment advisory services to
investment companies, institutions and private clients. As of December 31, 1998,
ASB and its affiliates held investment management authority with respect to more
than $3 billion of domestic and international assets. For its subadvisory
services, FIMCO will pay ASB an annualized fee.
The Fund is managed by Colin G. Morris, Senior Vice President of ASB, who has
been responsible for the management of various ASB clients since January 1993.
Prior to joining ASB in 1992, Mr. Morris was a partner at Mabon Securities, with
responsibility over arbitrage investments from 1988 to 1992.
In addition to the investment risks of the Year 2000 which are discussed above,
the ability of FIMCO, ASB and their 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, ASB and their 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
8
<PAGE>
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 Time ("E.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.
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.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.
9
<PAGE>
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.
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.
10
<PAGE>
Class B Shares
CDSC as a Percentage of Purchase
Year of Redemption 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 other 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.
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;
11
<PAGE>
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
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.
12
<PAGE>
ACCOUNT POLICIES
What about dividends and capital gain distributions?
To the extent that it has net investment income and capital gains, the Fund will
declare and pay dividends from its net investment income and any realized
capital gains on an annual basis, usually at the end of its 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 Fund shares. 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 additional Fund shares. If any
correspondence sent by the Fund is returned as "undeliverable," dividends and
other distributions automatically will be reinvested in additional Fund shares.
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 that 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 and 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, 401(k) account, or other tax-deferred account. Dividends (including
distributions of net short-term capital gains) paid by the Fund 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 gain, 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 will 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.
13
<PAGE>
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.
14
<PAGE>
APPENDIX
--------
PERFORMANCE OF SIMILAR FUND MANAGED BY SUBADVISER
At the time this prospectus was printed, the Fund had no operating history.
However, the Fund has an investment objective, policies and strategies that are
substantially similar to those of another fund managed by the Fund's Subadviser,
the First Eagle Fund N.V. ("First Eagle"). First Eagle is organized in a foreign
jurisdiction and offered outside of the United States. ASB has managed First
Eagle since its inception in 1967.
Set forth below is information regarding the prior performance of First Eagle,
not the performance of the Fund. This information reflects the total returns of
First Eagle during the periods indicated. Since First Eagle does not pay
dividends or make other distributions to its shareholders, the returns are based
upon changes in the value of an investment in First Eagle over given periods.
Total return is based on past results and is not an indication of future
performance. The performance information is provided in two ways: (1) net of all
advisory fees and other expenses, and (2) net of all advisory fees and expenses
except for performance fees. The methodology for calculating the performance of
First Eagle differs from that required to be employed by mutual funds that are
offered in the United States.
Although First Eagle has an investment objective, policies, and strategies that
are substantially similar to those of the Fund, First Eagle's shares are sold
through different distribution channels, it has a different purchase and
redemption cycle (monthly rather than daily), and it has different expenses. In
nine of the ten years for which the performance history of First Eagle is
provided, the total fees paid by First Eagle exceeded those projected for the
Fund. In 1994, the expenses of First Eagle were 1.66%. First Eagle also is not
subject to restrictions imposed by the Investment Company Act of 1940, as
amended, or the Internal Revenue Code of 1986, as amended. These differences may
adversely affect the performance of the Fund and cause it to differ from the
future performance of First Eagle. The Fund's future performance may be greater
or less than the performance of First Eagle due to, among other things,
differences in the sales charges, expenses, asset sizes and cash flows of the
Fund and First Eagle.
Moreover, past performance is no guarantee of future results. You should not
interpret First Eagle's historical performance as indicative of its future
performance or that of the Fund.
15
<PAGE>
Ten Year Performance History
----------------------------
First Eagle Fund Classes A, B and C*
------------------------------------
Annual Return Standard & Poor's
Annual Return (Net of (without deducting 500 Index
Year all fees and expenses) performance fee**) (with dividends)
---- ---------------------- ------------------ -----------------
12/31/89 28.82% 30.91% 31.65%
12/31/90 -11.72% -11.72% -3.14%
12/31/91 18.72% 19.69% 30.48%
12/31/92 18.66% 19.62% 7.64%
12/31/93 23.07% 24.52% 10.05%
12/31/94 -0.38% -0.38% 1.27%
12/31/95 30.69% 32.98% 37.53%
12/31/96 24.37% 25.96% 22.99%
12/31/97 27.84% 30.93% 33.35%
12/31/98 38.86% 43.18% 28.57%
*Classes A, B and C have the same expense ratio and performance.
**This column shows performance net of all fees and expenses except for
performance fees. Prior to 1997, the management fee was 1.60% of net assets. In
1997 and 1998, the management fee was 1.50%. First Eagle Fund also pays a
performance fee which differs according to the class of shares. For Classes A, B
and C, First Eagle Fund has paid a performance fee in the amount of 10% of the
annual capital appreciation of the First Eagle Fund's share price since October
31, 1996. Prior to that date, the performance fee for Classes A, B and C was 10%
of the annual capital appreciation above a threshold of 10%.
16
<PAGE>
[FIRST INVESTORS LOGO]
FOCUSED EQUITY FUND
For investors who want more information about the Fund, the following documents
are available free upon request:
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 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 Shareholder Manual and SAI) at the Public Reference Room of the 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 Focused Equity Fund 811-6618)
FIFEPRO
