-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OedgFL0mBI8C6YxwNFD+YNNGbIvToKsvW0Eu1fBE5Md+yx/fecGkkg5Lg1iPHmvT b9SIrR1psxHTHdmbu+e+yg== 0000842939-05-000013.txt : 20051207 0000842939-05-000013.hdr.sgml : 20051207 20051207153733 ACCESSION NUMBER: 0000842939-05-000013 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050930 FILED AS OF DATE: 20051207 DATE AS OF CHANGE: 20051207 EFFECTIVENESS DATE: 20051207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST INVESTORS SERIES FUND CENTRAL INDEX KEY: 0000842939 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-05690 FILM NUMBER: 051249562 BUSINESS ADDRESS: STREET 1: 95 WALL ST CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 1-212-858-8000 MAIL ADDRESS: STREET 1: RARITAN PLAZA 1 STREET 2: 8TH FLOOR CITY: EDISON STATE: NJ ZIP: 08837-3620 FORMER COMPANY: FORMER CONFORMED NAME: FIRST INVESTORS FUND DATE OF NAME CHANGE: 19900422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST INVESTORS SERIES FUND II INC CENTRAL INDEX KEY: 0000886048 IRS NUMBER: 133663175 STATE OF INCORPORATION: MD FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06618 FILM NUMBER: 051249564 BUSINESS ADDRESS: STREET 1: 95 WALL ST CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 1-212-858-8000 MAIL ADDRESS: STREET 1: RARITAN PLAZA 1 STREET 2: 8TH FLOOR CITY: EDISON STATE: NJ ZIP: 08837-3620 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST INVESTORS GLOBAL FUND INC CENTRAL INDEX KEY: 0000352564 IRS NUMBER: 133094384 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03169 FILM NUMBER: 051249563 BUSINESS ADDRESS: STREET 1: 95 WALL ST CITY: NEW YORK STATE: NY ZIP: 10005 BUSINESS PHONE: 1-212-858-8000 MAIL ADDRESS: STREET 1: RARITAN PLAZA 1 STREET 2: 8TH FLOOR CITY: EDISON STATE: NJ ZIP: 08837-3620 FORMER COMPANY: FORMER CONFORMED NAME: FIRST INVESTORS INTERNATIONAL SECURITIES FUND INC DATE OF NAME CHANGE: 19891213 N-CSR 1 equity093005.txt FIRST INVESTORS EQUITY FUNDS UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------- FORM N-CSR -------- CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES INVESTMENT COMPANY ACT FILE NUMBERS 811-5690; 811-6618; 811-3169 FIRST INVESTORS SERIES FUND FIRST INVESTORS SERIES FUND II, INC. FIRST INVESTORS GLOBAL FUND, INC. (Exact name of registrant as specified in charter) 95 Wall Street New York, NY 10005 (Address of principal executive offices) (Zip code) Joseph I. Benedek First Investors Management Company, Inc. Raritan Plaza I Edison, NJ 08837-3620 1-732-855-2712 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-212-858-8000 DATE OF FISCAL YEAR END: SEPTEMBER 30, 2005 DATE OF REPORTING PERIOD: SEPTEMBER 30, 2005 Item 1. Reports to Stockholders The Annual Report to Stockholders follows [First Investors Logo] EQUITY FUNDS TOTAL RETURN VALUE BLUE CHIP GROWTH & INCOME ALL-CAP GROWTH MID-CAP OPPORTUNITY SPECIAL SITUATIONS FOCUSED EQUITY GLOBAL ANNUAL REPORT September 30, 2005 Portfolio Managers' Letter FIRST INVESTORS TOTAL RETURN FUND Dear Investor: This is the annual report for the First Investors Total Return Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 9.3% for Class A shares and 8.5% for Class B shares, including dividends of 24.5 cents per share on Class A shares and 15.4 cents per share on Class B shares. The Fund's strategy remains to allocate its portfolio among stocks, bonds and cash equivalents, with at least 50% in stocks and at least 25% in bonds. During the fiscal year, the Fund maintained a 65.1% average equity allocation, and an average bond allocation of 29.7%. Performance of the equities portion of the portfolio was impacted by the continued strength in the general economy, the rise in energy prices, the solid performance of the equity markets and strong stock selection across multiple sectors. Fund performance on an absolute basis was largely the result of the Fund's investments in the energy, technology, consumer discretionary and industrials sectors. In addition, the Fund's multi-cap strategy aided performance, as mid- and small-cap equities outperformed their larger capitalization counterparts during the review period. Stock selection benefited investments in almost all sectors, most notably in the consumer discretionary, energy, industrials and materials areas. The Fund's investments in financial services firms detracted from results. Approximately 60% of the bond allocation was invested in high-grade corporate bonds, 25% in mortgage-backed bonds, and the remainder in U.S. agency and municipal bonds. With the exception of municipal bonds, which outperformed the bond market in general, returns across bond sectors were fairly uniform. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ EDWIN D. MISKA Edwin D. Miska Director of Equities /s/ CLARK D. WAGNER Clark D. Wagner Director of Fixed Income October 31, 2005 Understanding Your Fund's Expenses FIRST INVESTORS EQUITY FUNDS As a mutual fund shareholder, you incur two types of costs: (1) transaction costs, including a sales charge (load) on purchase payments (on Class A shares only), a contingent deferred sales charge on redemptions (on Class B shares only); and (2) ongoing costs, including advisory fees; distribution and service fees (12b-1); and other expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The examples are based on an investment of $1,000 in each Fund at the beginning of the period, April 1, 2005, and held for the entire six-month period ended September 30, 2005. The calculations assume that no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. Actual Expenses Example: These amounts help you to estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the Fund's actual return, and the "Expenses Paid During Period" shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use the information here, together with the amount you invested, to estimate the expenses that you paid over the period. To estimate the expenses you paid on your account during this period, simply divide your ending account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number given for your Fund under the heading "Expenses Paid During Period". Hypothetical Expenses Example: These amounts provide information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio for Class A and Class B shares, and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. Please note that the expenses shown in the table are meant to highlight and help you compare your ongoing costs only and do not reflect any transaction costs, such as front-end or contingent deferred sales charges (loads). Therefore, the hypothetical expenses example is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. Board Considerations of Advisory Contracts and Fees FIRST INVESTORS EQUITY FUNDS At a meeting held on May 19, 2005 ("May Meeting"), the Boards of Directors or Trustees ("Board"), as the case may be, including a majority of the non-interested or independent Directors/Trustees (hereinafter, "Directors"), approved the renewal of the investment advisory agreements (each an "Advisory Agreement") between First Investors Management Company, Inc. ("FIMCO") and each of the following funds (each, a "Fund" and collectively, the "Funds"): Blue Chip Fund, Growth & Income Fund, All-Cap Growth Fund, Focused Equity Fund, Mid-Cap Opportunity Fund, Special Situations Fund, Total Return Fund, Value Fund and Global Fund. In addition, at the May Meeting, the Board, including a majority of non-interested Directors, approved the renewal of the sub-advisory agreement (each a "Sub-Advisory Agreement") between FIMCO and Wellington Management Company, LLP ("WMC") with respect to the All-Cap Growth Fund, Focused Equity Fund and Global Fund (collectively, the "Sub-Advised Funds"). In reaching its decisions, the Board reviewed and considered information furnished and discussed throughout the year at regularly scheduled Board meetings as well as information provided specifically in relation to the renewal of the Advisory Agreements and Sub-Advisory Agreements for the May Meeting. Information furnished at Board meetings throughout the year included FIMCO's analysis of each Fund's investment performance, presentations given by FIMCO's Director of Equities and representatives of WMC and various reports on compliance and other services provided by FIMCO and its affiliates. In response to specific requests from the Directors in connection with the May Meeting, FIMCO furnished, and the Board reviewed, information concerning a variety of aspects of its operations, including: (1) the nature, extent and quality of services provided by FIMCO and its affiliates to the Funds, including investment advisory and administrative services to the Funds; (2) the investment performance of each Fund, including comparisons to a group of mutual funds based on the category assigned to the Fund, and data published, by Lipper, Inc. ("Peer Group"); (3) the management fees paid by each Fund and total expense ratios of each Fund compared to the management fees and total expense ratios of each Fund's Peer Group; (4) the costs of providing services to each Fund and the profits realized by FIMCO and its affiliate, Administrative Data Management Corporation ("ADM"), the Funds' affiliated transfer agent, from the relationship with each Fund and, with respect to the Sub-Advised Funds, the fact that FIMCO pays WMC a sub-advisory fee for its services to those Funds out of the advisory fee received by FIMCO; and (5) any "fall out" or ancillary benefits enjoyed by FIMCO or its affiliates as a result of the relationship with each Fund. In addition to evaluating, among other things, the written information provided by FIMCO, the Board also evaluated the answers to questions posed by the Board to representatives of FIMCO at the May Meeting. Board Considerations of Advisory Contracts and Fees (continued) FIRST INVESTORS EQUITY FUNDS In addition, in response to specific requests from the Directors in connection with the May Meeting, WMC furnished, and the Board reviewed, information concerning a variety of aspects of its operations, including: (1) the nature, extent and quality of services provided by WMC to the Sub-Advised Funds; (2) the investment performance of each Sub-Advised Fund, including comparisons to each Fund's Peer Group; (3) the sub-advisory fee rates charged by WMC, a comparison of those fee rates to the fee rates charged by WMC for providing sub-advisory services to other investment companies or accounts, as applicable, with objectives similar to the Sub-Advised Funds and a comparison of the fee rates charged by other sub-advisers to investment companies in the same Peer Group as the Sub-Advised Funds; (4) the overall profitability of WMC; and (5) any "fall out" or ancillary benefits enjoyed by WMC as a result of the relationship with each Sub-Advised Fund. In considering the information and materials described above, the Directors received assistance from and met separately with independent counsel. Although the Advisory Agreements for all of the Funds and the Sub-Advisory Agreements for the Sub-Advised Funds were considered at the same Board meeting, the Directors addressed each Fund separately during the May Meeting. In view of the broad scope and variety of factors and information, the Directors did not find it practicable to, and did not, assign relative weights to the specific factors considered in reaching their conclusions and determinations to approve the continuance of the Advisory Agreements and Sub-Advisory Agreements. Rather, the approval determinations were made on the basis of each Director's business judgment after consideration of all of the factors taken in their entirety. Although not meant to be all-inclusive, the following discusses some of the factors relevant to the Board's decisions to approve the continuance of the Advisory Agreements and Sub-Advisory Agreements. Nature, Extent and Quality of Services In examining the nature, extent and quality of the services provided by FIMCO, the Board recognized that FIMCO is dedicated to providing investment management services exclusively to the Funds and the other funds in the First Investors fund complex and that, unlike many other mutual fund managers, FIMCO does not provide management services to hedge funds, pension funds or separately managed accounts. As a result, the Directors considered that FIMCO's personnel devote substantially all of their time to serving the funds in the First Investors fund complex, and emphasized that FIMCO's senior management sets a tone for the organization that is aimed at the protection of Fund shareholders and that this focus permeates the entire organization. The Board noted that FIMCO has undertaken extensive responsibilities as manager of the Funds, including: (i) the provision of investment advice to the Funds; (ii) implementing policies and procedures designed to ensure compliance with each Fund's investment objectives and policies; (iii) the review of brokerage arrangements; (iv) oversight of general portfolio compliance with applicable laws; (v) the provision of certain administrative services to the Funds, including fund accounting; and (vi) the implementation of Board directives as they relate to the Funds. The Board also acknowledged that FIMCO has devoted substantial time and resources to ensure that the Funds and FIMCO are in compliance with a wide array of new regulatory initiatives that have been aimed at mutual funds and their service providers. With regard to compliance, the Board noted that FIMCO's and the Funds' overall compliance records were good. The Board also noted that FIMCO had made changes to portfolio managers, strengthened portfolio manager teams and added to its in-house research and analytical capabilities in response to previous discussions with the Board. The Board also considered the nature, extent and quality of the services provided to the Funds by FIMCO's affiliates, including transfer agency and distribution services. The Board took into account the fact that ADM is dedicated to providing transfer agency services exclusively to the Funds and the other funds in the First Investors fund complex. As a result, ADM can tailor its processes and services to satisfy the needs of the Funds' shareholder base. The Board noted that the Funds' shares are distributed primarily through First Investors Corporation ("FIC"), which is an affiliate of FIMCO. Furthermore, the Board considered the nature, extent and quality of the investment management services provided by WMC to the Sub-Advised Funds over both the short and long term and the organizational depth and stability of WMC. Based on the totality of the information considered, the Directors concluded that the Funds were likely to benefit from the nature, extent and quality of FIMCO's and WMC's services, as applicable, as well as the services of FIMCO's affiliates, and that FIMCO and its affiliates as well as WMC have the ability to continue to provide these services based on their respective experience, operations and resources. Investment Performance The Board placed significant emphasis on the investment performance of each of the Funds. While consideration was given to performance reports and discussions held at prior Board meetings, particular attention was given to the performance reports prepared by FIMCO and WMC specifically for the May Meeting. In particular, the Directors reviewed the performance of the Funds for each of the past five calendar years and gave more weight to each Fund's performance over the most recent calendar year ("1-year period") and average performance over the most recent three calendar year period ("3-year period"). In this regard, the Board considered the performance of each Fund on a percentile and quintile basis as compared to its Peer Group. In reviewing this data, the Board particularly focused on whether a Fund's Board Considerations of Advisory Contracts and Fees (continued) FIRST INVESTORS EQUITY FUNDS performance was in the top three quintiles versus the Fund's Peer Group for the 3-year period. On a Fund-by-Fund basis, the performance reports indicated, and the Board noted, that: * Growth & Income Fund, Special Situations Fund, Total Return Fund and Global Fund were in the third quintile of their respective Peer Group for both the 1-year period and 3-year period. The Board also considered the recent appointment of a sub-adviser for the Special Situations Fund, Paradigm Capital Management, Inc., to enhance performance. * All-Cap Growth Fund and Value Fund were in the second highest quintile of their respective Peer Group for both the 1-year period and 3-year period. * Mid-Cap Opportunity Fund was in the second highest quintile of its Peer Group for the 1-year period and the third quintile for the 3-year period. With regard to Blue Chip Fund, the performance report showed that the Fund was in the fourth quintile of its Peer Group for both the 1-year period and 3-year period. The Board considered the fact that a new portfolio manager had been assigned to the Blue Chip Fund in May of 2005 to be a favorable development, and was pleased with management's efforts to address Fund performance. The Board expressed its intention to continue to closely monitor the Fund's performance in concert with FIMCO. With regard to Focused Equity Fund, the performance report showed that the Fund was in the last quintile of its Peer Group for the 1-year period and the fourth quintile for the 3-year period. However, in reviewing the Focused Equity Fund's performance compared to its Peer Group, the Board noted that the Fund had delivered above average returns for two of the last five calendar years. Furthermore, the Board noted that WMC had assigned a new portfolio manager for the Fund on August 31, 2002 and that the Fund's performance since that time through March 31, 2005 fell within the third quintile of its Peer Group. The Board was encouraged by the Fund's performance over this time period; considered the recent shift in strategy with regard to the market capitalization of the Fund's portfolio securities to be a positive development; and expressed confidence in the current portfolio manager. The Board also expressed its intention to continue to closely monitor the Fund's performance in concert with FIMCO. Fund Expenses, Costs of Services, Economies of Scale and Related Benefits Management Fees and Expenses. The Board gave substantial consideration to the fees payable under each Fund's Advisory Agreement as well as under the Sub-Advisory Agreements for the Sub-Advised Funds. The Board reviewed reports prepared by FIMCO comparing each Fund's effective management fee rates, operating expense ratios, and total expense ratios to its Peer Group. The Board also noted the effect of the management fee waivers in place for the Blue Chip Fund, Mid-Cap Opportunity Fund, Special Situations Fund and Total Return Fund during the periods presented, and discussed with FIMCO whether the fee schedules should be modified in light of these fee waivers. With regard to the effective management fee rates for the 2004 fiscal year, on a Fund-by-Fund basis, the Board noted that: * The level of management fee rates for Blue Chip Fund, Growth & Income Fund, All-Cap Growth Fund, Focused Equity Fund, Total Return Fund, Value Fund, Mid-Cap Opportunity Fund and Special Situations Fund, taking into account the fee waivers (as applicable), were either lower than or generally comparable (within 10%) to their Peer Group median. The recent appointment of Paradigm Capital Management, Inc. as sub-adviser of Special Situations Fund is at a substantial expense to FIMCO. * The level of management fee rate for Global Fund was higher (by more than 10%) than its Peer Group median. In considering the sub-advisory fee rates charged by and costs and profitability of WMC with regard to the Sub-Advised Funds, the Board noted that FIMCO pays WMC a sub-advisory fee from its own advisory fee rather than each Fund paying WMC a fee directly. WMC provided, and the Board reviewed, information comparing the fees charged by WMC for services to the Sub-Advised Funds versus the fees charged by WMC to other comparable investment companies or accounts, as applicable, as well as a comparison of fees charged by other sub-advisers to investment companies in the same Peer Group as the Sub-Advised Funds. Based on a review of this information, the Board noted that the fees charged by WMC for services to each Sub-Advised Fund appeared comparable to the fees WMC charges to such other investment companies or accounts after taking into consideration the assets under management by WMC for each of the Sub-Advised Funds and that the fees charged by WMC appeared comparable to fees charged by other sub-advisers to investment companies in the same Peer Group as the Sub-Advised Funds. With regard to overall expense ratios, the Board noted that each Fund's total expense ratio (Class A Shares) for the most recent calendar year, taking into account FIMCO's expense limitations (as applicable), was higher than the median of its respective Peer Group. The Board acknowledged the effect on the Funds' total operating expense ratios of transfer agency fees due to the small average account size of the Funds versus the industry average account size. The Board further acknowledged the nature and quality of the services provided by the Funds' transfer agent given the Funds' shareholder base, which is largely composed of investors who maintain retirement accounts and those who maintain small account balances. In addition, management explained, and the Board considered, the benefits to the Funds from investment by shareholders Board Considerations of Advisory Contracts and Fees (continued) FIRST INVESTORS EQUITY FUNDS who maintain retirement accounts in the Funds. Furthermore, the Board recognized management's efforts to control operating expenses, noting that each Fund's total expense ratio had declined from the previous calendar year. Profitability. The Board reviewed the materials it received from FIMCO regarding its revenues and costs in providing investment management and certain administrative services to the Funds. In particular, the Board considered the detailed analysis of FIMCO's profitability with respect to each Fund, calculated for the year ended December 31, 2004, as well as profitability information relating to the past five calendar years. The Board also considered FIMCO's expectation that its fixed costs will increase in the future due to, among other things, new regulatory requirements. In reviewing the profitability information, the Directors also considered the "fall-out" or ancillary benefits that may accrue to FIMCO and its affiliates as a result of their relationship with the Funds, which are discussed below. The Directors recognized that, as a business matter, FIMCO was entitled to earn reasonable profits for its services to the Funds. Economies of Scale. With respect to whether economies of scale are realized by FIMCO as a Fund's assets increase and the extent to which any economies of scale are reflected in the level of management fee rates charged, the Board considered that the Advisory Agreement for each Fund currently includes "breakpoints" (i.e., reductions in the management fee rate as assets increase) to account for management economies of scale. The Board noted that Blue Chip Fund, Growth & Income Fund, Mid-Cap Opportunity Fund, Special Situations Fund and Total Return Fund have each reached an asset size at which the Fund and its shareholders are benefiting from reduced management fee rates. With regard to All-Cap Growth Fund, Focused Equity Fund, Value Fund and Global Fund, the Board recognized that, although these Funds have not reached a size at which they can take advantage of the breakpoints contained in their fee schedule, each schedule is structured so that when the assets of these Funds grow, economies of scale may be shared for the benefit of shareholders. "Fall Out" or Ancillary Benefits. The Board considered the "fall-out" or ancillary benefits that may accrue to FIMCO and WMC as a result of their relationship with the Funds. In that regard, the Board noted that FIMCO and WMC engage in soft dollar transactions and that the Funds' brokerage transactions may be directed to certain brokers to obtain research and other services, which may be used in servicing all funds in the First Investors fund complex or other clients of WMC, as applicable. However, the Board noted that FIMCO and WMC must select brokers based on each Fund's requirements for seeking best execution. The Board also considered information relating to ADM's fees and profitability and the income received by FIC and FIMCO's affiliated bank as a result of FIMCO's management of the Funds. After review of this information, the Board concluded that the benefits accruing to FIMCO and its affiliates as well as WMC by virtue of their relationship to the applicable Funds are fair and reasonable. After evaluation of the comparative performance, fee and expense information and the profitability, ancillary benefits and other considerations as described above, and in light of the nature, extent and quality of services, including any applicable non-management services, to be provided by FIMCO and WMC, the Board concluded that the level of fees paid to FIMCO with respect to each Fund and WMC with respect to each Sub-Advised Fund is reasonable. * * * In summary, based on the various considerations discussed above, the Board determined that approval of the Advisory Agreement with respect to each Fund and the Sub-Advisory Agreement with respect to each Sub-Advised Fund was in the best interests of the applicable Fund. As a result, the Board, including a majority of the independent Directors, approved each Advisory Agreement and Sub-Advisory Agreement. Fund Expenses FIRST INVESTORS TOTAL RETURN FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period Expense Example - Class A Shares (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Actual $1,000.00 $1,038.52 $7.26 Hypothetical (5% annual return before expenses) $1,000.00 $1,017.95 $7.18 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,034.86 $10.81 Hypothetical (5% annual return before expenses) $1,000.00 $1,014.44 $10.71 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.42% for Class A shares and 2.12% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Financials 17.6% Consumer Discretionary 10.8% Industrials 10.6% Information Technology 10.4% Health Care 8.5% Consumer Staples 8.0% Mortgage-Backed Certificates 7.2% Energy 5.9% Materials 4.8% U.S. Government Agency Obligations 3.9% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total market value of investments. Cumulative Performance Information FIRST INVESTORS TOTAL RETURN FUND Comparison of change in value of $10,000 investment in the First Investors Total Return Fund (Class A shares), the Merrill Lynch U.S. Corporate & Government Master Index and the Standard & Poor's 500 Index. First Investors Total Return Fund Graph Plot Points for the periods Ended 9/30/05 Merrill Lynch Total Return S&P 500 U.S Corporate and Government Fund Index Master Index Dec-95 $ 9,425 $10,000 $10,000 Dec-96 10,426 12,296 10,291 Dec-97 12,311 16,398 11,297 Sep-98 12,898 17,382 12,346 Sep-99 14,381 22,214 12,163 Sep-00 17,066 25,164 12,978 Sep-01 14,113 18,465 14,718 Sep-02 12,499 14,682 16,059 Sep-03 14,447 18,264 17,057 Sep-04 15,841 20,797 17,625 Sep-05 17,306 23,345 18,104 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 9.25% 2.98% Five Years 0.28% (0.90%) Ten Years 6.77% 6.15% Class B Shares One Year 8.49% 4.49% Five Years (0.42%) (0.82%) Ten Years 6.03% 6.03% The graph compares a $10,000 investment in the First Investors Total Return Fund (Class A shares) beginning 12/31/95 with theoretical investments in the Merrill Lynch Corporate & Government Master Index and the Standard & Poor's 500 Index (the "Indices"). The Merrill Lynch U.S. Corporate & Government Master Index tracks the performance of U.S. dollar-denominated investment grade U.S. Government and corporate public debt issued in the U.S. domestic bond market, excluding collateralized products such as Mortgage Pass-Through and Assets Backed securities. Qualifying bonds have at least one year to maturity, a fixed coupon schedule and minimum amount outstanding of $1 billion for U.S. Treasuries and $150 million for all other securities. The Standard & Poor's 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries. It is not possible to invest directly in these Indices. In addition, the Indices do not take into account fees and expenses that an investor would incur in purchasing securities in these Indices. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 2.81%, (1.13%) and 5.90%, respectively. The Class B "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 4.32%, (1.04%) and 5.78%, respectively. Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Merrill Lynch U.S. Corporate & Government Master Index figures are from Merrill Lynch & Co., Standard & Poor's 500 Index figures are from Standard & Poor's and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS TOTAL RETURN FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--64.4% Consumer Discretionary--10.4% 30,800 Applebee's International, Inc. $637,252 $20 64,800 Blockbuster, Inc. - Class "A" 307,800 10 57,600 Claire's Stores, Inc. 1,389,888 44 61,500 Clear Channel Communications, Inc. 2,022,735 63 75,700 * Cost Plus, Inc. 1,373,955 43 70,700 Dollar General Corporation 1,296,638 41 1,500 * DSW, Inc. - Class "A" 31,800 1 26,800 * Eddie Bauer Holdings, Inc. 659,950 21 15,500 Genuine Parts Company 664,950 21 18,100 Harley-Davidson, Inc. 876,764 27 33,300 * Helen of Troy, Ltd. 687,312 22 36,900 Home Depot, Inc. 1,407,366 44 16,900 J.C. Penney Company, Inc. (Holding Co.) 801,398 25 30,800 Kenneth Cole Productions, Inc. - Class "A" 840,532 26 115,100 Leggett & Platt, Inc. 2,325,020 73 50,400 * Lincoln Educational Services Corporation 594,216 19 64,500 McDonald's Corporation 2,160,105 68 53,800 Movado Group, Inc. 1,007,136 32 69,500 Orient-Express Hotels, Ltd. 1,975,190 62 23,500 Oxford Industries, Inc. 1,060,320 33 31,900 Polo Ralph Lauren Corporation - Class "A" 1,604,570 50 84,600 * Prestige Brands Holdings, Inc. 1,042,272 33 69,200 RadioShack Corporation 1,716,160 54 15,400 Ross Stores, Inc. 364,980 11 45,100 Russell Corporation 633,204 20 19,900 Sherwin-Williams Company 876,993 27 36,900 * Steiner Leisure Ltd. 1,253,493 39 27,900 * Timberland Company - Class "A" 942,462 29 61,500 * Tommy Hilfiger Corporation 1,067,025 33 46,100 Viacom, Inc. - Class "B" 1,521,761 48 - ---------------------------------------------------------------------------------------------------------------------- 33,143,247 1,039 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--4.3% 30,800 Altria Group, Inc. 2,270,268 71 84,300 Avon Products, Inc. 2,276,100 71 15,300 Coca-Cola Company 660,807 21 1,000 * Diamond Foods, Inc. 17,100 1 19,500 Estee Lauder Companies, Inc. - Class "A" 679,185 21 23,100 * Herbalife, Ltd. 696,234 22 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples (continued) 14,800 Kimberly-Clark Corporation $881,044 $28 88,800 Nu Skin Enterprises, Inc. - Class "A" 1,691,640 53 15,300 PepsiCo, Inc. 867,663 27 23,100 Procter & Gamble Company 1,373,526 43 27,335 Tootsie Roll Industries, Inc. 867,886 27 23,000 Wal-Mart Stores, Inc. 1,007,860 32 22,200 WD-40 Company 588,522 18 - ---------------------------------------------------------------------------------------------------------------------- 13,877,835 435 - ---------------------------------------------------------------------------------------------------------------------- Energy--5.9% 18,400 Anadarko Petroleum Corporation 1,761,800 55 61,500 Chesapeake Energy Corporation 2,352,375 74 24,600 ConocoPhillips 1,719,786 54 35,300 ExxonMobil Corporation 2,242,962 70 5,093 Marathon Oil Corporation 351,060 11 24,600 Noble Corporation 1,684,116 53 5,000 * Petroleum Helicopters, Inc. - Non Voting Shares 155,100 5 30,500 Sasol, Ltd. (ADR) 1,180,045 37 46,000 Suncor Energy, Inc. 2,784,380 87 18,300 * Swift Energy Company 837,225 26 36,800 * Transocean, Inc. 2,256,208 71 36,866 XTO Energy, Inc. 1,670,767 52 - ---------------------------------------------------------------------------------------------------------------------- 18,995,824 595 - ---------------------------------------------------------------------------------------------------------------------- Financials--12.1% 15,400 American Express Company 884,576 28 27,600 American International Group, Inc. 1,710,096 54 60,706 Bank of America Corporation 2,555,723 80 45,900 Citigroup, Inc. 2,089,368 66 61,500 Colonial BancGroup, Inc. 1,377,600 43 30,500 Comerica, Inc. 1,796,450 56 74,000 Doral Financial Corporation 967,180 30 18,500 Endurance Specialty Holdings, Ltd. 631,035 20 15,400 Fannie Mae 690,228 22 40,000 Independence Community Bank Corporation 1,363,600 43 47,700 JPMorgan Chase & Company 1,618,461 51 13,000 Lehman Brothers Holdings, Inc. 1,514,240 47 46,500 MBNA Corporation 1,145,760 36 32,300 Merrill Lynch & Company, Inc. 1,981,605 62 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS TOTAL RETURN FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Financials (continued) 49,400 Montpelier Re Holdings, Ltd. $1,227,590 $38 27,700 Morgan Stanley 1,494,138 47 27,700 National City Corporation 926,288 29 69,900 New York Community Bancorp, Inc. 1,146,360 36 76,900 NewAlliance Bancshares, Inc. 1,125,816 35 69,032 North Fork Bancorporation, Inc. 1,760,316 55 23,000 Plum Creek Timber Company, Inc. (REIT) 871,930 27 12,200 Safeco Corporation 651,236 20 30,600 South Financial Group, Inc. 821,304 26 61,500 Sovereign Bancorp, Inc. 1,355,460 43 46,100 U.S. Bancorp 1,294,488 41 26,945 U.S.B. Holding Company, Inc. 614,346 19 30,900 Wachovia Corporation 1,470,531 46 33,800 Washington Mutual, Inc. 1,325,636 42 21,500 Wells Fargo & Company 1,259,255 39 18,000 Westcorp, Inc. 1,060,200 33 - ---------------------------------------------------------------------------------------------------------------------- 38,730,816 1,214 - ---------------------------------------------------------------------------------------------------------------------- Health Care--7.9% 49,400 Abbott Laboratories 2,094,560 66 13,900 Aetna, Inc. 1,197,346 37 14,400 * Amgen, Inc. 1,147,248 36 61,500 * Boston Scientific Corporation 1,437,255 45 36,800 * Charles River Laboratories International, Inc. 1,605,216 50 6,200 * Genentech, Inc. 522,102 16 12,300 Guidant Corporation 847,347 26 29,100 * Impax Laboratories, Inc. 351,383 11 30,800 Johnson & Johnson 1,949,024 61 21,500 * Laboratory Corporation of America Holdings 1,047,265 33 15,400 Medtronic, Inc. 825,748 26 24,700 Merck & Company, Inc. 672,087 21 15,500 * PacifiCare Health Systems, Inc. 1,236,590 39 101,680 Pfizer, Inc. 2,538,950 80 21,400 Sanofi-Aventis (ADR) 889,170 28 67,600 * Thermo Electron Corporation 2,088,840 65 23,000 * Triad Hospitals, Inc. 1,041,210 33 27,600 * WellPoint, Inc. 2,092,632 66 36,800 Wyeth 1,702,736 53 - ---------------------------------------------------------------------------------------------------------------------- 25,286,709 792 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Industrials--8.4% 35,300 3M Company $2,589,608 $81 15,500 Alexander & Baldwin, Inc. 825,220 26 47,600 Briggs & Stratton Corporation 1,646,484 52 19,800 Burlington Northern Santa Fe Corporation 1,184,040 37 60,800 Cendant Corporation 1,254,912 39 61,600 Chicago Bridge & Iron Company NV - NY Shares 1,915,144 60 11,100 Eaton Corporation 705,405 22 35,450 Engineered Support Systems, Inc. 1,454,868 46 52,400 * Gardner Denver, Inc. 2,337,040 73 200 * Global Cash Access, Inc. 2,820 -- 15,300 Harsco Corporation 1,003,221 32 47,600 Honeywell International, Inc. 1,785,000 56 61,300 Knoll, Inc. 1,124,855 35 18,300 Lockheed Martin Corporation 1,117,032 35 43,000 Masco Corporation 1,319,240 41 76,500 * Navigant Consulting, Inc. 1,465,740 46 27,600 Northrop Grumman Corporation 1,500,060 47 22,700 * Pike Electric Corporation 425,171 13 61,300 * Pinnacle Airlines Corporation 398,450 13 18,500 Pitney Bowes, Inc. 772,190 24 35,100 United Technologies Corporation 1,819,584 57 - ---------------------------------------------------------------------------------------------------------------------- 26,646,084 835 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--10.4% 30,800 Amphenol Corporation - Class "A" 1,242,472 39 4,600 Analog Devices, Inc. 170,844 5 61,600 * Cisco Systems, Inc. 1,104,488 35 44,900 * Electronics for Imaging, Inc. 1,030,006 32 107,600 * EMC Corporation 1,392,344 44 85,700 * Entrust, Inc. 479,920 15 43,076 First Data Corporation 1,723,040 54 72,300 Hewlett-Packard Company 2,111,160 66 53,800 Intel Corporation 1,326,170 42 33,800 International Business Machines Corporation 2,711,436 85 7,700 * International Rectifier Corporation 347,116 11 24,600 Intersil Corporation - Class "A" 535,788 17 18,000 * Lam Research Corporation 548,460 17 39,100 * Lexar Media, Inc. 250,240 8 107,600 Microsoft Corporation 2,768,548 87 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS TOTAL RETURN FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Information Technology (continued) 82,700 Motorola, Inc. $1,826,843 $57 92,600 Nokia Corporation - Class "A" (ADR) 1,565,866 49 63,000 * OmniVision Technologies, Inc. 795,060 25 40,300 * Palm, Inc. 1,141,699 36 83,000 * Paxar Corporation 1,398,550 44 41,500 QUALCOMM, Inc. 1,857,125 58 33,800 * SanDisk Corporation 1,630,850 51 19,800 StarTek, Inc. 261,360 8 69,100 * Symantec Corporation 1,565,806 49 59,834 Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 491,835 15 29,200 * Tech Data Corporation 1,071,932 34 77,300 * VeriSign, Inc. 1,651,901 52 10,800 Xilinx, Inc. 300,780 9 - ---------------------------------------------------------------------------------------------------------------------- 33,301,639 1,044 - ---------------------------------------------------------------------------------------------------------------------- Materials--3.4% 21,400 Ashland, Inc. 1,182,136 37 30,800 Calgon Carbon Corporation 243,320 8 24,500 Dow Chemical Company 1,020,915 32 18,900 Freeport-McMoRan Copper & Gold, Inc. - Class "B" 918,351 29 38,500 Georgia-Pacific Corporation 1,311,310 41 37,500 Lubrizol Corporation 1,624,875 51 31,300 MeadWestvaco Corporation 864,506 27 13,800 PPG Industries, Inc. 816,822 25 18,500 Praxair, Inc. 886,705 28 58,400 RPM International, Inc. 1,074,560 34 12,300 Weyerhaeuser Company 845,625 26 - ---------------------------------------------------------------------------------------------------------------------- 10,789,125 338 - ---------------------------------------------------------------------------------------------------------------------- Other--.3% 23,000 Nasdaq - 100 Index Tracking Stock 907,580 28 - ---------------------------------------------------------------------------------------------------------------------- Telecommunication Services--.6% 42,800 SBC Communications, Inc. 1,025,916 32 23,000 Verizon Communications, Inc. 751,870 24 - ---------------------------------------------------------------------------------------------------------------------- 1,777,786 56 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Utilities--.7% 35,300 Atmos Energy Corporation $997,225 $31 23,000 Consolidated Edison, Inc. 1,116,650 35 - ---------------------------------------------------------------------------------------------------------------------- 2,113,875 66 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $171,590,935) 205,570,520 6,442 - ---------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS--15.4% Aerospace/Defense--.2% $500M Precision Castparts Corp., 5.6%, 2013 509,990 16 - ---------------------------------------------------------------------------------------------------------------------- Automotive--.2% DaimlerChrysler NA Holdings Corp.: 350M 8%, 2010 387,937 12 350M 6.5%, 2013 370,634 12 - ---------------------------------------------------------------------------------------------------------------------- 758,571 24 - ---------------------------------------------------------------------------------------------------------------------- Chemicals--.2% 698M Rohm & Haas Co., 7.4%, 2009 761,732 24 - ---------------------------------------------------------------------------------------------------------------------- Consumer Non-Durables--.3% 900M Clorox Co., 6.125%, 2011 957,152 30 - ---------------------------------------------------------------------------------------------------------------------- Financial--1.5% CIT Group, Inc. : 500M 4.75%, 2010 497,753 15 750M 7.75%, 2012 860,864 27 Ford Motor Credit Co.: 500M 6.5%, 2007 500,736 16 500M 7.75%, 2007 506,218 16 250M 6.625%, 2008 244,492 8 650M General Motors Acceptance Corp., 7.75%, 2010 630,612 20 750M Household Finance Corp., 6.5%, 2008 788,113 25 885M SLM Corp., 5%, 2015 881,746 27 - ---------------------------------------------------------------------------------------------------------------------- 4,910,534 154 - ---------------------------------------------------------------------------------------------------------------------- Financial Services--2.2% 638M Bank United Corp., 8%, 2009 701,074 22 1,000M Lincoln National Corp., 6.5%, 2008 1,049,818 33 810M Manufacturers & Traders Trust Co., 8%, 2010 930,918 29 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS TOTAL RETURN FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Financial Services (continued) $765M Marshall & Ilsley Bank, 5.2%, 2017 $743,409 $23 500M Merrill Lynch & Co., 4.79%, 2010 498,804 16 853M National City Bank of Kentucky, 6.3%, 2011 919,244 29 1,000M Nationsbank Corp., 7.8%, 2016 1,219,661 38 737M Washington Mutual, Inc., 8.25%, 2010 827,838 26 - ---------------------------------------------------------------------------------------------------------------------- 6,890,766 216 - ---------------------------------------------------------------------------------------------------------------------- Food/Beverage/Tobacco--1.1% Bottling Group, LLC: 950M Series "B", 4.625%, 2012 940,527 30 200M Series "B", 5%, 2013 203,391 6 1,000M Coca-Cola Co., 5.75%, 2011 1,048,271 33 1,030M Coca-Cola Enterprises, Inc., 7.125%, 2009 1,123,926 35 250M Wm. Wrigley Jr. Co., 4.65%, 2015 246,221 8 - ---------------------------------------------------------------------------------------------------------------------- 3,562,336 112 - ---------------------------------------------------------------------------------------------------------------------- Food/Drug--.9% 600M Delhaize America, Inc., 8.125%, 2011 653,287 21 1,000M Kroger Co., 7.8%, 2007 1,051,168 33 996M Safeway, Inc., 7%, 2007 1,033,464 32 - ---------------------------------------------------------------------------------------------------------------------- 2,737,919 86 - ---------------------------------------------------------------------------------------------------------------------- Forest Products/Containers--.6% 1,100M International Paper Co., 6.75%, 2011 1,180,378 37 700M Weyerhaeuser Co., 6.75%, 2012 757,380 24 - ---------------------------------------------------------------------------------------------------------------------- 1,937,758 61 - ---------------------------------------------------------------------------------------------------------------------- Gaming/Leisure--.3% 750M MGM Mirage, Inc., 8.5%, 2010 819,375 26 - ---------------------------------------------------------------------------------------------------------------------- Health Care--.6% 1,000M HCA, Inc., 5.25%, 2008 987,427 31 800M Wyeth, 6.95%, 2011 879,790 28 - ---------------------------------------------------------------------------------------------------------------------- 1,867,217 59 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Manufacturing--.6% $700M Newell Rubbermaid, Inc., 6.75%, 2012 $750,877 $24 900M United Technologies Corp., 7.125%, 2010 1,000,077 31 - ---------------------------------------------------------------------------------------------------------------------- 1,750,954 55 - ---------------------------------------------------------------------------------------------------------------------- Media - Broadcasting--.7% Comcast Cable Communications, Inc.: 705M 8.375%, 2007 744,114 23 750M 7.125%, 2013 835,841 26 800M Cox Communications, Inc., 5.5%, 2015 796,655 25 - ---------------------------------------------------------------------------------------------------------------------- 2,376,610 74 - ---------------------------------------------------------------------------------------------------------------------- Media - Diversified--.7% 750M AOL Time Warner, Inc., 6.75%, 2011 806,369 25 500M Time Warner, Inc., 6.875%, 2018 552,849 17 705M Viacom, Inc., 8.625%, 2012 817,439 26 - ---------------------------------------------------------------------------------------------------------------------- 2,176,657 68 - ---------------------------------------------------------------------------------------------------------------------- Metals/Mining--.8% 1,000M Alcan, Inc., 5%, 2015 985,271 31 1,000M Alcoa, Inc., 6%, 2012 1,059,481 33 500M Thiokol Corp., 6.625%, 2008 521,547 16 - ---------------------------------------------------------------------------------------------------------------------- 2,566,299 80 - ---------------------------------------------------------------------------------------------------------------------- Real Estate Investment Trusts--1.0% 750M Boston Properties, Inc., 5%, 2015 732,833 23 700M EOP Operating LP, 8.1%, 2010 786,309 25 700M Mack-Cali Realty LP, 7.75%, 2011 783,754 24 800M Simon Property Group LP, 7.375%, 2018 925,948 29 - ---------------------------------------------------------------------------------------------------------------------- 3,228,844 101 - ---------------------------------------------------------------------------------------------------------------------- Retail - General Merchandise--.4% 500M Federated Department Stores, Inc., 7.45%, 2017 573,561 18 600M Target Corp., 7.5%, 2010 672,801 21 - ---------------------------------------------------------------------------------------------------------------------- 1,246,362 39 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS TOTAL RETURN FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Telecommunications--.4% $600M SBC Communications, Inc., 6.25%, 2011 $637,895 $20 600M Verizon New York, Inc., 6.875%, 2012 642,721 20 - ---------------------------------------------------------------------------------------------------------------------- 1,280,616 40 - ---------------------------------------------------------------------------------------------------------------------- Transportation--.8% Burlington Northern Santa Fe Corp.: 250M 6.75%, 2011 272,395 8 700M 4.875%, 2015 692,237 22 500M 8.125%, 2020 635,660 20 1,000M Union Pacific Corp., 7.375%, 2009 1,092,342 34 - ---------------------------------------------------------------------------------------------------------------------- 2,692,634 84 - ---------------------------------------------------------------------------------------------------------------------- Utilities--1.6% 1,000M Carolina Power & Light, Inc., 5.15%, 2015 1,003,494 31 750M Consumers Energy Co., 6.375%, 2008 775,536 24 576M DPL, Inc., 6.875%, 2011 623,520 20 750M Duke Capital Corp., 8%, 2019 912,699 29 750M NiSource Finance Corp., 7.875%, 2010 844,115 26 900M PP&L Capital Funding, Inc., 8.375%, 2007 950,842 30 - ---------------------------------------------------------------------------------------------------------------------- 5,110,206 160 - ---------------------------------------------------------------------------------------------------------------------- Waste Management--.3% 1,000M Waste Management, Inc., 6.875%, 2009 1,064,826 33 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Corporate Bonds (cost $48,313,001) 49,207,358 1,542 - ---------------------------------------------------------------------------------------------------------------------- MORTGAGE-BACKED CERTIFICATES--7.2% Fannie Mae--3.1% 5,641M 5.5%, 4/1/33--10/1/33 5,645,220 177 1,376M 6.5%, 11/1/33 1,430,582 45 2,645M 7%, 3/1/32--8/1/32 2,795,865 87 - ---------------------------------------------------------------------------------------------------------------------- 9,871,667 309 - ---------------------------------------------------------------------------------------------------------------------- Freddie Mac--1.1% 2,699M 6%, 9/1/32--6/1/35 2,747,715 86 851M 6.5%, 1/1/34 874,937 28 - ---------------------------------------------------------------------------------------------------------------------- 3,622,652 114 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Principal For Each Amount $10,000 of or Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Government National Mortgage Association I Program--3.0% $8,610M 5.5%, 4/15/33 - 7/15/35 $8,706,585 $273 361M 6%, 9/15/34 369,797 12 405M 6.5%, 7/15/28 422,668 13 - ---------------------------------------------------------------------------------------------------------------------- 9,499,050 298 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Mortgage-Backed Certificates (cost $23,054,367) 22,993,369 721 - ---------------------------------------------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS--4.0% 5,000M Fannie Mae, 5.4%, 2013 5,001,230 157 Federal Farm Credit Bank: 4,650M 4.94%, 2012 4,620,235 145 3,000M 5.33%, 2013 2,986,955 94 - ---------------------------------------------------------------------------------------------------------------------- Total Value of U.S. Government Agency Obligations (cost $12,642,645) 12,608,420 396 - ---------------------------------------------------------------------------------------------------------------------- MUNICIPAL BONDS--3.6% 2,000M Jefferson Cnty., AL, Ltd. Oblig. Rev. Bonds, 5%, 2024 2,075,000 65 4,500M Massachusetts Bay Trans. Auth. Sales Tax Rev. Bonds, 5%, 2035 4,623,750 145 1,000M New Jersey Economic Dev. Auth. Rev., 5.125%, 2030 1,048,750 33 1,500M Tobacco Settlement Financing Corp., NJ Rev. Bonds, 6.75%, 2039 1,745,625 54 2,000M Virginia Beach, VA, Water & Sewer Rev. Bonds, 5%, 2030 2,105,000 66 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Municipal Bonds (cost $11,231,607) 11,598,125 363 - ---------------------------------------------------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCKS--.6% Financials--.5% 15,400 Chubb Corp. - Series "B", 7%, 2006 508,200 16 16,400 Hartford Financial Services Group, Inc. - Class "A", 6%, 2006 1,141,850 36 - ---------------------------------------------------------------------------------------------------------------------- 1,650,050 52 - ---------------------------------------------------------------------------------------------------------------------- Health Care--.1% 5,800 Baxter International, Inc., 7%, 2006 332,050 10 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Convertible Preferred Stocks (cost $1,477,622) 1,982,100 62 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS TOTAL RETURN FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Principal For Each Amount or $10,000 of Warrants Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- PASS THROUGH CERTIFICATES--.2% Transportation $746M Continental Airlines, Inc., 8.388%, 2020 (cost $774,065) $644,387 $20 - ---------------------------------------------------------------------------------------------------------------------- WARRANTS--.0% Information Technology 3,736 * Lucent Technologies, Inc. (expiring 12/10/07) (cost $0) 3,549 -- - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM CORPORATE NOTES--3.9% General Electric Capital Corp.: $1,000M 3.61%, 11/1/05 996,882 31 2,000M 3.73%, 11/1/05 1,993,565 63 2,600M Paccar Financial Corp., 3.72%, 10/5/05 2,598,925 81 1,200M Pitney Bowes, Inc., 3.7%, 10/11/05 1,198,765 38 2,500M Prudential Funding Corp., 3.73%, 10/4/05 2,499,223 78 3,200M Toyota Motor Credit Corp., 3.73%, 10/20/05 3,193,700 100 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Short-Term Corporate Notes (cost $12,481,060) 12,481,060 391 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM U.S. GOVERNMENT AGENCY OBLIGATIONS--1.4% 1,000M Federal Home Loan Bank, 3.63%, 10/12/05 998,890 31 Freddie Mac: 2,200M 3.5%, 10/4/05 2,199,357 69 1,200M 3.67%, 10/25/05 1,197,063 38 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Short-Term U.S. Government Agency Obligations (cost $4,395,310) 4,395,310 138 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $285,960,612) 100.7% 321,484,198 10,075 Excess of Liabilities Over Other Assets (.7) (2,394,867) (75) - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $319,089,331 $10,000 ====================================================================================================================== * Non-income producing Summary of Abbreviations: ADR American Depositary Receipts REIT Real Estate Investment Trust See notes to financial statements
Portfolio Manager's Letter FIRST INVESTORS VALUE FUND Dear Investor: This is the annual report for the First Investors Value Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 12.3% for Class A shares and 11.4% for Class B shares, including dividends of 7.1 cents per share on Class A shares and 3.0 cents per share on Class B shares. The Fund's performance was largely driven by the improving economy, solid performance of the equity markets and rising energy prices. The Fund generated strong returns across multiple sectors and market capitalization classes. The Fund's multi-cap strategy aided performance, as mid- and small-cap equities outperformed their larger capitalization counterparts during the review period. Energy was the best performing sector for the Fund, but strong returns were also generated in the utilities, information technology and industrials sectors. The top contributors to performance were ConocoPhillips, Marathon Oil and Diamond Offshore Drilling, all companies in the energy sector. Relative to the Standard & Poor's 500 Index, the Fund's holdings in the financial, industrials and energy sectors were very strong. Compared to the Standard & Poor's 500 Index, the Fund's holdings in the utilities and consumer staples sectors underperformed. Also, the Fund's allocation to cash equivalents was a drag on relative performance, since stock market returns were positive for the reporting period and the Index does not include cash. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ MATTHEW S. WRIGHT Matthew S. Wright Portfolio Manager October 31, 2005 Fund Expenses FIRST INVESTORS VALUE FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,029.00 $7.32 Hypothetical (5% annual return before expenses) $1,000.00 $1,017.85 $7.28 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,026.13 $10.87 Hypothetical (5% annual return before expenses) $1,000.00 $1,014.34 $10.81 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.44% for Class A shares and 2.14% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Financials 24.7% Consumer Discretionary 14.9% Consumer Staples 9.7% Energy 9.5% Industrials 8.1% Materials 7.5% Health Care 5.1% Utilities 4.8% Information Technology 4.5% Telecommunication Services 3.8% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS VALUE FUND Comparison of change in value of $10,000 investment in the First Investors Value Fund (Class A shares) and the Standard & Poor's 500 Index. First Investors Value Fund Graph Plot Points for the periods Ended 9/30/05 Value S&P 500 Fund Index Oct-95 $ 9,425 $10,000 Oct-96 10,498 12,410 Oct-97 11,848 16,395 Sep-98 13,749 18,497 Sep-99 15,397 23,639 Sep-00 18,104 26,778 Sep-01 13,581 19,650 Sep-02 10,004 15,623 Sep-03 11,909 19,436 Sep-04 14,359 22,131 Sep-05 16,126 24,842 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 12.31% 5.90% Five Years (2.29%) (3.43%) Ten Years 5.81% 5.18% Class B Shares One Year 11.43% 7.43% Five Years (2.96%) (3.35%) Ten Years 5.03% 5.03% The graph compares a $10,000 investment in the First Investors Value Fund (Class A shares) beginning 10/31/95 with a theoretical investment in the Standard & Poor's 500 Index (the "Index"). The Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in this Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During certain of the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return for Ten Years would have been 5.14%. The Class B "S.E.C. Standardized" Average Annual Total Return for Ten Years would have been 4.99%. Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Standard & Poor's 500 Index figures are from Standard & Poor's and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS VALUE FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--89.3% Consumer Discretionary--14.8% 63,400 Bob Evans Farms, Inc. $1,439,814 $49 80,000 Clear Channel Communications, Inc. 2,631,200 89 92,400 Dollar General Corporation 1,694,616 58 107,400 Family Dollar Stores, Inc. 2,134,038 72 46,200 Genuine Parts Company 1,981,980 67 57,400 Home Depot, Inc. 2,189,236 74 47,000 J.C. Penney Company, Inc. (Holding Co.) 2,228,740 76 62,100 Jones Apparel Group, Inc. 1,769,850 60 24,500 Kenneth Cole Productions, Inc. - Class "A" 668,605 23 70,974 Kimball International, Inc. - Class "B" 858,076 29 42,000 Lee Enterprises, Inc. 1,784,160 61 97,200 Leggett & Platt, Inc. 1,963,440 67 26,600 Liberty Corporation 1,247,274 42 18,000 Liz Claiborne, Inc. 707,760 24 24,400 Magna International, Inc. - Class "A" 1,826,584 62 105,200 McDonald's Corporation 3,523,148 120 95,700 Natuzzi SpA (ADR) 787,611 27 70,500 New York Times Company - Class "A" 2,097,375 71 35,300 Newell Rubbermaid, Inc. 799,545 27 54,700 Outback Steakhouse, Inc. 2,002,020 68 162,900 Pearson PLC (ADR) 1,910,817 65 63,700 Talbots, Inc. 1,905,904 65 68,300 Tribune Company 2,314,687 79 122,200 Walt Disney Company 2,948,686 100 - ---------------------------------------------------------------------------------------------------------------------- 43,415,166 1,475 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--9.6% 49,100 Anheuser-Busch Companies, Inc. 2,113,264 72 66,500 Avon Products, Inc. 1,795,500 61 35,400 Brown-Forman Corporation - Class "B" 2,107,716 72 67,800 Coca-Cola Company 2,928,282 100 73,800 ConAgra Foods, Inc. 1,826,550 62 26,241 * Del Monte Foods Company 281,566 10 45,200 Diageo PLC (ADR) 2,622,052 89 42,000 Estee Lauder Companies, Inc. - Class "A" 1,462,860 50 20,700 Fomento Economico Mexicano SA de CV (ADR) 1,447,344 49 49,200 H.J. Heinz Company 1,797,768 61 31,300 Kimberly-Clark Corporation 1,863,289 63 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples (continued) 52,500 Ruddick Corporation $1,210,125 $41 105,500 Sara Lee Corporation 1,999,225 68 58,200 Tasty Baking Company 505,176 17 49,500 UST, Inc. 2,072,070 70 50,500 Wal-Mart Stores, Inc. 2,212,910 75 - ---------------------------------------------------------------------------------------------------------------------- 28,245,697 960 - ---------------------------------------------------------------------------------------------------------------------- Energy--9.4% 27,600 Anadarko Petroleum Corporation 2,642,700 90 39,000 BP PLC (ADR) 2,763,150 94 66,117 Chevron Corporation 4,279,753 145 51,400 ConocoPhillips 3,593,374 122 43,100 Diamond Offshore Drilling, Inc. 2,639,875 90 23,424 Kerr-McGee Corporation 2,274,705 77 55,400 Marathon Oil Corporation 3,818,722 130 47,200 Royal Dutch Shell PLC - Class "A" (ADR) 3,098,208 105 52,600 Tidewater, Inc. 2,560,042 87 - ---------------------------------------------------------------------------------------------------------------------- 27,670,529 940 - ---------------------------------------------------------------------------------------------------------------------- Financials--22.7% 45,300 A.G. Edwards, Inc. 1,984,593 67 14,600 ACE, Ltd. 687,222 23 26,000 Allstate Corporation 1,437,540 49 55,700 AmSouth Bancorporation 1,406,982 48 100,400 Amvescap PLC (ADR) 1,308,212 44 69,600 Aon Corporation 2,232,768 76 35,100 Assured Guaranty, Ltd. 839,943 28 134,400 Bank Mutual Corporation 1,440,768 49 58,864 Bank of America Corporation 2,478,174 84 94,900 Bank of New York Company, Inc. 2,791,009 95 75,000 Brascan Corporation - Class "A" 3,495,000 119 50,247 Cincinnati Financial Corporation 2,104,847 71 66,300 Citigroup, Inc. 3,017,976 103 34,200 Comerica, Inc. 2,014,380 68 56,900 Eagle Hospitality Properties Trust, Inc. 567,862 19 34,200 Erie Indemnity Company - Class "A" 1,804,050 61 30,300 FBL Financial Group, Inc. - Class "A" 907,485 31 78,400 Hudson City Bancorp, Inc. 932,960 32 35,600 Jefferson-Pilot Corporation 1,821,652 62 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS VALUE FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Financials (continued) 85,200 JPMorgan Chase & Company $2,890,836 $98 56,400 KeyCorp 1,818,900 62 30,300 Lincoln National Corporation 1,576,206 54 64,800 MBNA Corporation 1,596,672 54 48,600 Merrill Lynch & Company, Inc. 2,981,610 101 34,000 Montpelier Re Holdings, Ltd. 844,900 29 48,300 Morgan Stanley 2,605,302 89 96,300 NewAlliance Bancshares, Inc. 1,409,832 48 51,200 North Fork Bancorporation, Inc. 1,305,600 44 21,800 One Liberty Properties, Inc. 434,038 15 50,900 Plum Creek Timber Company, Inc. (REIT) 1,929,619 66 22,200 PMI Group, Inc. 885,114 30 34,400 PNC Financial Services Group, Inc. 1,995,888 68 51,300 Protective Life Corporation 2,112,534 72 58,700 PXRE Group, Ltd. 790,102 27 82,100 Regions Financial Corporation 2,554,952 87 15,800 * State National Bancshares, Inc. 410,800 14 30,300 SunTrust Banks, Inc. 2,104,335 71 26,079 TD Banknorth, Inc. 786,021 27 6,800 Waddell & Reed Financial, Inc. - Class "A" 131,648 4 38,600 Wells Fargo & Company 2,260,802 77 - ---------------------------------------------------------------------------------------------------------------------- 66,699,134 2,266 - ---------------------------------------------------------------------------------------------------------------------- Health Care--5.1% 60,500 Abbott Laboratories 2,565,200 87 19,800 Biomet, Inc. 687,258 23 50,500 Bristol-Myers Squibb Company 1,215,030 41 43,000 GlaxoSmithKline PLC (ADR) 2,205,040 75 41,800 Johnson & Johnson 2,645,104 90 33,200 Novartis AG (ADR) 1,693,200 58 89,500 Pfizer, Inc. 2,234,815 76 82,100 Schering-Plough Corporation 1,728,205 59 - ---------------------------------------------------------------------------------------------------------------------- 14,973,852 509 - ---------------------------------------------------------------------------------------------------------------------- Industrials--8.0% 28,200 A.O. Smith Corporation 803,700 27 29,800 Adesa, Inc. 658,580 22 2,600 Alexander & Baldwin, Inc. 138,424 5 27,800 Avery Dennison Corporation 1,456,442 50 34,800 Baldor Electric Company 882,180 30 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Industrials (continued) 12,000 Deere & Company $734,400 $25 45,100 Dover Corporation 1,839,629 63 53,700 Federal Signal Corporation 917,733 31 22,200 General Dynamics Corporation 2,654,010 90 66,300 Honeywell International, Inc. 2,486,250 85 72,800 Masco Corporation 2,233,504 76 60,000 Norfolk Southern Corporation 2,433,600 83 47,500 Pall Corporation 1,306,250 44 47,700 Pitney Bowes, Inc. 1,990,998 68 16,300 SPX Corporation 748,985 25 21,100 Stewart & Stevenson Services, Inc. 503,235 17 102,800 Werner Enterprises, Inc. 1,777,412 60 - ---------------------------------------------------------------------------------------------------------------------- 23,565,332 801 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--4.5% 56,700 Automatic Data Processing, Inc. 2,440,368 83 86,600 AVX Corporation 1,103,284 38 6,381 * Freescale Semiconductor, Inc. - Class "B" 150,464 5 97,900 Hewlett-Packard Company 2,858,680 97 35,600 Intersil Corporation - Class "A" 775,368 26 72,900 Methode Electronics, Inc. 839,808 29 57,800 Motorola, Inc. 1,276,802 43 84,000 Nokia Corporation - Class "A" (ADR) 1,420,440 48 28,200 * Palm, Inc. 798,906 27 92,000 * Planar Systems, Inc. 756,240 26 57,400 Woodhead Industries, Inc. 788,102 27 - ---------------------------------------------------------------------------------------------------------------------- 13,208,462 449 - ---------------------------------------------------------------------------------------------------------------------- Materials--7.4% 31,500 Air Products & Chemicals, Inc. 1,736,910 59 40,200 Albemarle Corporation 1,515,540 51 51,700 Alcoa, Inc. 1,262,514 43 106,830 Chemtura Corporation 1,326,829 45 56,600 Compass Minerals International, Inc. 1,301,800 44 34,800 Dow Chemical Company 1,450,116 49 66,500 DuPont (E.I.) de Nemours & Company 2,604,805 89 74,600 Glatfelter 1,051,114 36 59,500 Lubrizol Corporation 2,578,135 88 50,900 MeadWestvaco Corporation 1,405,858 48 73,830 Myers Industries, Inc. 859,381 29 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS VALUE FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Materials (continued) 122,200 Sappi, Ltd. (ADR) $1,440,738 $49 78,900 Sonoco Products Company 2,154,759 73 14,500 Vulcan Materials Company 1,076,045 37 - ---------------------------------------------------------------------------------------------------------------------- 21,764,544 740 - ---------------------------------------------------------------------------------------------------------------------- Telecommunication Services--3.5% 9,651 ALLTEL Corporation 628,377 21 62,300 BellSouth Corporation 1,638,490 56 60,400 CT Communications, Inc. 747,148 25 46,300 D&E Communications, Inc. 419,941 14 60,100 Nippon Telegraph and Telephone Corporation (ADR) 1,491,682 51 67,400 SBC Communications, Inc. 1,615,578 55 9,100 SureWest Communications 260,988 9 24,000 Telephone & Data Systems, Inc. 936,000 32 24,000 Telephone & Data Systems, Inc. - Special Shares 901,200 31 53,528 Verizon Communications, Inc. 1,749,830 59 - ---------------------------------------------------------------------------------------------------------------------- 10,389,234 353 - ---------------------------------------------------------------------------------------------------------------------- Utilities--4.3% 34,250 American States Water Company 1,146,005 39 39,200 KeySpan Corporation 1,441,776 49 44,300 MDU Resources Group, Inc. 1,579,295 54 78,000 NiSource, Inc. 1,891,500 64 37,700 Northwest Natural Gas Company 1,403,194 48 40,300 ONEOK, Inc. 1,371,006 46 51,200 Southwest Gas Corporation 1,402,368 48 48,700 United Utilities PLC (ADR) 1,141,040 39 47,800 Vectren Corporation 1,355,130 46 - ---------------------------------------------------------------------------------------------------------------------- 12,731,314 433 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $211,362,345) 262,663,264 8,926 - ---------------------------------------------------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCKS--1.8% Financials 49,000 Chubb Corp., 7%, 2005 - Series "A" 1,626,310 55 56,900 Lehman Brothers Holdings, Inc., 6.25%, 2007 - Series "GIS" 1,500,737 51 10,100 State Street Corp., 6.75%, 2006 2,171,157 74 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Convertible Preferred Stocks (cost $4,660,511) 5,298,204 180 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- PREFERRED STOCKS--.4% Telecommunication Services--.2% 27,300 Verizon South, Inc., 7%, 2041 - Series "F" $696,423 $24 - ---------------------------------------------------------------------------------------------------------------------- Utilities--.2% 22,300 Entergy Louisiana, Inc., 7.6%, 2032 566,866 19 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Preferred Stocks (cost $1,253,436) 1,263,289 43 - ---------------------------------------------------------------------------------------------------------------------- CORPORATE BONDS--.2% Utilities $500M Union Electric Co., 6.75%, 2008 (cost $499,474) 524,490 18 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM U.S. GOVERNMENT AGENCY OBLIGATIONS--4.4% 7,600M Federal Home Loan Bank, 3.53%, 10/7/05 7,595,519 258 5,500M Freddie Mac, 3.5%, 10/4/05 5,498,392 186 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Short-Term U.S. Government Agency Obligations (cost $13,093,911) 13,093,911 444 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM CORPORATE NOTES--2.9% 2,000M ChevronTexaco Corp., 3.68%, 10/4/05 1,999,386 68 1,400M General Electric Capital Corp., 3.72%, 10/4/05 1,399,566 48 1,000M Pitney Bowes, Inc., 3.7%, 10/11/05 998,971 34 4,000M Prudential Funding Corp., 3.68%, 10/12/05 3,995,499 136 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Short-Term Corporate Notes (cost $8,393,422) 8,393,422 286 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $239,263,099) 99.0% 291,236,580 9,897 Other Assets, Less Liabilities 1.0 3,036,364 103 - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $294,272,944 $10,000 ====================================================================================================================== * Non-income producing Summary of Abbreviations: ADR American Depositary Receipts REIT Real Estate Investment Trust See notes to financial statements
Portfolio Managers' Letter FIRST INVESTORS BLUE CHIP FUND Dear Investor: This is the annual report for the First Investors Blue Chip Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 10.8% for Class A shares and 10.0% for Class B shares, including dividends of 10.1 cents per share on Class A shares and 6.7 cents per share on Class B shares. The Fund's performance was largely driven by the improving economy, solid performance of the equity markets and rising energy prices. While the energy sector was, by far, the best performing sector for the Fund, positive returns were generated across all major economic sectors. The biggest contributors to performance included ExxonMobil, Altria Group and Office Depot. The two sectors that lagged the most relative to the Standard & Poor's 500 Index were utilities and financials. In the utilities sector, the Fund was hurt by its underweight position relative to the Standard & Poor's 500 Index. Utility stocks rose to richer valuation levels than historic norms. In financials, New York Community Bancorp, a bank holding company operating in the New York metropolitan area, was the biggest drag on performance. In addition, the Fund was hurt by its holdings in American International Group, an international insurance giant, and Marsh & McLennan, a major insurance broker and asset management company. Both companies were roiled by scandals. Positive contributors relative to the Standard & Poor's 500 Index were strong relative performance in the information technology, consumer discretionary and energy sectors. In information technology, companies such as SanDisk, a maker of flash storage products, and Amdocs, a provider of information systems to telecommunications companies, performed very well. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ MATTHEW S. WRIGHT Matthew S. Wright Portfolio Manager* /s/ JAMES A. HASSO James A. Hasso Assistant Portfolio Manager* October 31, 2005 * Mr. Wright and Mr. Hasso became the Fund's Portfolio Manager and Assistant Portfolio Manager, respectively, on May 1, 2005. Fund Expenses FIRST INVESTORS BLUE CHIP FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,034.53 $7.50 Hypothetical (5% annual return before expenses) $1,000.00 $1,017.70 $7.44 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,030.68 $11.05 Hypothetical (5% annual return before expenses) $1,000.00 $1,014.19 $10.96 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.47% for Class A shares and 2.17% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Financials 17.8% Information Technology 17.1% Health Care 13.1% Industrials 12.8% Consumer Discretionary 11.6% Consumer Staples 11.2% Energy 9.7% Materials 2.7% Telecommunication Services 2.5% Utilities 1.0% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS BLUE CHIP FUND Comparison of change in value of $10,000 investment in the First Investors Blue Chip Fund (Class A shares) and the Standard & Poor's 500 Index. First Investors Blue Chip Fund Graph Plot Points for the periods Ended 9/30/05 Blue Chip S&P 500 Fund Index Dec-95 $9,425 $10,000 Dec-96 11,363 12,296 Dec-97 14,323 16,398 Sep-98 14,101 17,382 Sep-99 17,610 22,214 Sep-00 21,394 25,164 Sep-01 14,787 18,465 Sep-02 11,249 14,682 Sep-03 13,242 18,264 Sep-04 14,439 20,797 Sep-05 15,993 23,345 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 10.76% 4.39% Five Years (5.65%) (6.77%) Ten Years 6.01% 5.38% Class B Shares One Year 9.98% 5.98% Five Years (6.31%) (6.68%) Ten Years 5.17% 5.17% The graph compares a $10,000 investment in the First Investors Blue Chip Fund (Class A shares) beginning 12/31/95 with a theoretical investment in the Standard & Poor's 500 Index (the "Index"). The Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 4.29%, (6.88%) and 5.25%, respectively. The Class B "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 5.88%, (6.78%) and 5.04%, respectively. Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Standard & Poor's 500 Index figures are from Standard & Poor's and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS BLUE CHIP FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--99.3% Consumer Discretionary--11.6% 36,200 Best Buy Company, Inc. $1,575,786 $33 31,500 Carnival Corporation 1,574,370 33 39,600 Clear Channel Communications, Inc. 1,302,444 28 71,996 * Comcast Corporation - Class "A" 2,115,242 45 48,900 * Comcast Corporation - Special Class "A" 1,407,342 30 55,300 Eastman Kodak Company 1,345,449 28 31,500 * eBay, Inc. 1,297,800 27 99,200 Gap, Inc. 1,729,056 37 79,800 Hilton Hotels Corporation 1,781,136 38 135,700 Home Depot, Inc. 5,175,598 109 49,100 * Kohl's Corporation 2,463,838 52 48,700 Lowe's Companies, Inc. 3,136,280 66 101,100 McDonald's Corporation 3,385,839 72 158,600 News Corporation - Class "A" 2,472,574 52 33,100 NIKE, Inc. - Class "B" 2,703,608 57 64,700 * Office Depot, Inc. 1,921,590 41 73,800 Target Corporation 3,832,434 81 258,300 Time Warner, Inc. 4,677,813 99 52,800 TJX Companies, Inc. 1,081,344 23 40,300 Tribune Company 1,365,767 29 125,200 Viacom, Inc. - Class "B" 4,132,852 87 137,000 Walt Disney Company 3,305,810 70 23,500 Yum! Brands, Inc. 1,137,635 24 - ---------------------------------------------------------------------------------------------------------------------- 54,921,607 1,161 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--11.2% 74,600 Altria Group, Inc. 5,498,766 116 43,900 Anheuser-Busch Companies, Inc. 1,889,456 40 88,600 Avon Products, Inc. 2,392,200 51 142,900 Coca-Cola Company 6,171,851 130 72,400 Coca-Cola Enterprises, Inc. 1,411,800 30 27,000 Colgate-Palmolive Company 1,425,330 30 36,800 Costco Wholesale Corporation 1,585,712 33 95,600 CVS Corporation 2,773,356 59 25,600 Estee Lauder Companies, Inc. - Class "A" 891,648 19 32,900 General Mills, Inc. 1,585,780 33 18,400 Gillette Company 1,070,880 23 25,800 Hershey Foods Corporation 1,452,798 31 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS BLUE CHIP FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples (continued) 55,800 Kimberly-Clark Corporation $3,321,774 $70 104,100 PepsiCo, Inc. 5,903,511 125 112,100 Procter & Gamble Company 6,665,466 141 54,300 Walgreen Company 2,359,335 50 146,100 Wal-Mart Stores, Inc. 6,402,102 135 - ---------------------------------------------------------------------------------------------------------------------- 52,801,765 1,116 - ---------------------------------------------------------------------------------------------------------------------- Energy--9.7% 39,600 BP PLC (ADR) 2,805,660 59 22,000 Burlington Resources, Inc. 1,789,040 38 172,200 ChevronTexaco Corporation 11,146,506 236 66,000 ConocoPhillips 4,614,060 98 204,300 ExxonMobil Corporation 12,981,222 274 55,700 Halliburton Company 3,816,564 81 42,100 Schlumberger, Ltd. 3,552,398 75 55,100 * Transocean, Inc. 3,378,181 71 14,600 Valero Energy Corporation 1,650,676 35 - ---------------------------------------------------------------------------------------------------------------------- 45,734,307 967 - ---------------------------------------------------------------------------------------------------------------------- Financials--17.7% 55,500 ACE, Ltd. 2,612,385 55 21,000 Allstate Corporation 1,161,090 25 89,500 American Express Company 5,140,880 109 100,800 American International Group, Inc. 6,245,568 132 186,166 Bank of America Corporation 7,837,589 166 117,700 Bank of New York Company, Inc. 3,461,557 73 750 * Berkshire Hathaway, Inc. - Class "B" 2,048,250 43 43,100 Capital One Financial Corporation 3,427,312 72 16,900 Chubb Corporation 1,513,395 32 250,500 Citigroup, Inc. 11,402,760 241 28,600 Fannie Mae 1,281,852 27 40,500 Freddie Mac 2,286,630 48 29,300 Goldman Sachs Group, Inc. 3,562,294 75 170,968 JPMorgan Chase & Company 5,800,944 123 12,500 Lehman Brothers Holdings, Inc. 1,456,000 31 40,500 Marsh & McLennan Companies, Inc. 1,230,795 26 93,700 MBNA Corporation 2,308,768 49 56,500 Merrill Lynch & Company, Inc. 3,466,275 73 80,300 Morgan Stanley 4,331,382 92 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Financials (continued) 58,200 New York Community Bancorp, Inc. $954,480 $20 56,500 U.S. Bancorp 1,586,520 34 75,600 Wachovia Corporation 3,597,804 76 70,200 Washington Mutual, Inc. 2,753,244 58 65,000 Wells Fargo & Company 3,807,050 80 18,400 Willis Group Holdings, Ltd. 690,920 15 - ---------------------------------------------------------------------------------------------------------------------- 83,965,744 1,775 - ---------------------------------------------------------------------------------------------------------------------- Health Care--13.1% 93,500 Abbott Laboratories 3,964,400 84 33,800 Aetna, Inc. 2,911,532 62 75,700 * Amgen, Inc. 6,031,019 128 95,700 * Boston Scientific Corporation 2,236,509 47 180,500 Bristol-Myers Squibb Company 4,342,830 92 14,600 * Coventry Health Care, Inc. 1,255,892 27 24,100 HCA, Inc. 1,154,872 24 157,000 Johnson & Johnson 9,934,960 210 80,700 Medtronic, Inc. 4,327,134 91 69,600 Merck & Company, Inc. 1,893,816 40 97,800 Novartis AG (ADR) 4,987,800 105 367,060 Pfizer, Inc. 9,165,488 194 36,800 Teva Pharmaceutical Industries, Ltd. (ADR) 1,229,856 26 26,400 * Triad Hospitals, Inc. 1,195,128 25 80,800 UnitedHealth Group, Inc. 4,540,960 96 60,100 Wyeth 2,780,827 59 - ---------------------------------------------------------------------------------------------------------------------- 61,953,023 1,310 - ---------------------------------------------------------------------------------------------------------------------- Industrials--12.8% 51,100 3M Company 3,748,696 79 36,600 Boeing Company 2,486,970 53 81,300 Caterpillar, Inc. 4,776,375 101 114,800 Cendant Corporation 2,369,472 50 23,700 Deere & Company 1,450,440 31 33,000 Dover Corporation 1,346,070 28 38,100 Emerson Electric Company 2,735,580 58 409,000 General Electric Company 13,771,030 291 55,300 Honeywell International, Inc. 2,073,750 44 24,200 ITT Industries, Inc. 2,749,120 58 59,200 Lockheed Martin Corporation 3,613,568 76 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS BLUE CHIP FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Industrials (continued) 78,300 Masco Corporation $2,402,244 $51 42,800 Northrop Grumman Corporation 2,326,180 49 159,700 Tyco International, Ltd. 4,447,645 94 36,800 Union Pacific Corporation 2,638,560 56 37,400 United Parcel Service, Inc. - Class "B" 2,585,462 55 94,800 United Technologies Corporation 4,914,432 104 - ---------------------------------------------------------------------------------------------------------------------- 60,435,594 1,278 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--17.1% 53,600 * Accenture, Ltd. - Class "A" 1,364,656 29 34,500 Analog Devices, Inc. 1,281,330 27 15,400 * Apple Computer, Inc. 825,594 17 77,100 Applied Materials, Inc. 1,307,616 28 66,100 * ASML Holding NV - NY Shares 1,091,311 23 32,000 Automatic Data Processing, Inc. 1,377,280 29 338,900 * Cisco Systems, Inc. 6,076,477 128 136,300 * Corning, Inc. 2,634,679 56 157,100 * Dell, Inc. 5,372,820 114 338,600 * EMC Corporation 4,381,484 93 93,200 First Data Corporation 3,728,000 79 110,900 Hewlett-Packard Company 3,238,280 68 320,200 Intel Corporation 7,892,930 167 71,700 International Business Machines Corporation 5,751,774 122 505,300 Microsoft Corporation 13,001,369 275 136,200 Motorola, Inc. 3,008,658 64 110,500 National Semiconductor Corporation 2,906,150 61 171,000 Nokia Corporation - Class "A" (ADR) 2,891,610 61 192,900 * Oracle Corporation 2,390,031 50 40,500 QUALCOMM, Inc. 1,812,375 38 54,100 * SanDisk Corporation 2,610,325 55 65,091 * Symantec Corporation 1,474,962 31 109,900 Texas Instruments, Inc. 3,725,610 79 55,300 * Xerox Corporation 754,845 16 - ---------------------------------------------------------------------------------------------------------------------- 80,900,166 1,710 - ---------------------------------------------------------------------------------------------------------------------- Materials--2.6% 59,000 Alcoa, Inc. 1,440,780 30 45,922 Cemex SA de CV (ADR) 2,401,721 51 66,300 Dow Chemical Company 2,762,721 58 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Materials (continued) 55,700 DuPont (E.I.) de Nemours & Company $2,181,769 $46 66,200 International Paper Company 1,972,760 42 18,300 Newmont Mining Corporation 863,211 18 7,300 Phelps Dodge Corporation 948,489 20 - ---------------------------------------------------------------------------------------------------------------------- 12,571,451 265 - ---------------------------------------------------------------------------------------------------------------------- Telecommunication Services--2.5% 135,800 SBC Communications, Inc. 3,255,126 69 206,366 Sprint Corporation 4,907,383 104 110,900 Verizon Communications, Inc. 3,625,321 76 - ---------------------------------------------------------------------------------------------------------------------- 11,787,830 249 - ---------------------------------------------------------------------------------------------------------------------- Utilities--1.0% 160,700 Duke Energy Corporation 4,687,620 99 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $362,048,360) 469,759,107 9,930 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM CORPORATE NOTES--.3% $1,500M General Electric Capital Corp., 3.72%, 10/4/05 (cost $1,499,535) 1,499,535 32 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM U.S. GOVERNMENT AGENCY OBLIGATIONS--.2% 800M Federal Home Loan Bank, 3.53%, 10/7/05 (cost $799,528) 799,528 17 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $364,347,423) 99.8% 472,058,170 9,979 Other Assets, Less Liabilities .2 997,929 21 - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $473,056,099 $10,000 ====================================================================================================================== * Non-income producing Summary of Abbreviations: ADR American Depositary Receipts See notes to financial statements
Portfolio Manager's Letter FIRST INVESTORS GROWTH & INCOME FUND Dear Investor: This is the annual report for the First Investors Growth & Income Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 13.4% for Class A shares and 12.7% for Class B shares, including dividends of 9.8 cents per share on Class A shares and 2.9 cents per share on Class B shares. The Fund's performance primarily resulted from the continued strength in the general economy, the rise in energy prices, the solid performance of the equity markets and strong stock selection across multiple sectors. Specifically, returns were greatest in the Fund's investments in the energy, technology, consumer discretionary and industrials sectors. In addition, the Fund's multi-cap strategy aided performance, as mid- and small-cap equities outperformed their larger capitalization counterparts during the review period. Stock selection benefited investments in almost all sectors, most notably in the consumer discretionary, energy, industrials and materials areas. The Fund's investments in financial services firms detracted from results. The Fund's biggest contributing sector was consumer discretionary, which benefited from the strong performance of retailers, hotels and leisure companies and apparel manufacturers. Strong consumer activity during the year helped these stocks. The Fund's best overall performing sector was energy, which benefited from higher prices for crude oil and natural gas, as well as increased demand from the world's economies. Oil and gas companies, as well as equipment and services companies, did well. Industrial companies benefited from increased global demand and from their continued focus on cost cutting and efficiencies, which helped offset the rising prices of raw materials. Shares of aerospace, machinery and engineering firms posted solid results. The Fund also benefited from increased merger and acquisition activity during the reporting period. Thirteen of our holdings received merger offers; most notable were the takeover of Neiman Marcus Group by the Texas Pacific investor group, the purchase of specialty pharmaceutical distributor Accredo Healthcare by Medco Health, and the pending merger of MBNA with Bank of America. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ EDWIN D. MISKA Edwin D. Miska Director of Equities and Portfolio Manager October 31, 2005 Fund Expenses FIRST INVESTORS GROWTH & INCOME FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,049.83 $7.19 Hypothetical (5% annual return before expenses) $1,000.00 $1,018.05 $7.08 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,046.47 $10.77 Hypothetical (5% annual return before expenses) $1,000.00 $1,014.54 $10.61 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.40% for Class A shares and 2.10% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Financials 19.4% Information Technology 16.0% Consumer Discretionary 15.9% Industrials 12.8% Health Care 12.2% Energy 9.1% Consumer Staples 6.7% Materials 5.2% Utilities 1.0% Telecommunication Services 0.9% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS GROWTH & INCOME FUND Comparison of change in value of $10,000 investment in the First Investors Growth & Income Fund (Class A shares) and the Standard & Poor's 500 Index. First Investors Growth & Income Fund Graph Plot Points for the periods Ended 9/30/05 Growth & Income S&P 500 Fund Index Oct-95 $ 9,425 $10,000 Oct-96 11,408 12,410 Oct-97 14,396 16,395 Sep-98 15,669 18,497 Sep-99 19,390 23,639 Sep-00 23,522 26,778 Sep-01 17,428 19,650 Sep-02 13,850 15,623 Sep-03 16,827 19,436 Sep-04 19,174 22,131 Sep-05 21,750 24,842 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 13.43% 6.92% Five Years (1.55%) (2.71%) Ten Years 8.53% 7.89% Class B Shares One Year 12.65% 8.65% Five Years (2.24%) (2.63%) Ten Years 7.68% 7.68% The graph compares a $10,000 investment in the First Investors Growth & Income Fund (Class A shares) beginning 10/31/95 with a theoretical investment in the Standard & Poor's 500 Index (the "Index"). The Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During certain of the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return for Ten Years would have been 7.87%. The Class B "S.E.C. Standardized" Average Annual Total Return for Ten Years would have been 7.66%. Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Standard & Poor's 500 Index figures are from Standard & Poor's and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS GROWTH & INCOME FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--98.8% Consumer Discretionary--16.0% 100,000 Applebee's International, Inc. $2,069,000 $31 212,500 Blockbuster, Inc. - Class "A" 1,009,375 15 186,500 Claire's Stores, Inc. 4,500,245 66 200,000 Clear Channel Communications, Inc. 6,578,000 97 245,602 * Cost Plus, Inc. 4,457,676 66 230,000 Dollar General Corporation 4,218,200 62 4,800 * DSW, Inc. - Class "A" 101,760 2 89,200 * Eddie Bauer Holdings, Inc. 2,196,550 32 50,000 Genuine Parts Company 2,145,000 32 60,000 Harley-Davidson, Inc. 2,906,400 43 110,000 * Helen of Troy, Ltd. 2,270,400 33 120,000 Home Depot, Inc. 4,576,800 67 55,000 J.C. Penney Company, Inc. (Holding Co.) 2,608,100 38 100,000 Kenneth Cole Productions, Inc. - Class "A" 2,729,000 40 375,000 Leggett & Platt, Inc. 7,575,000 112 161,900 * Lincoln Educational Services Corporation 1,908,801 28 210,000 McDonald's Corporation 7,032,900 104 175,000 Movado Group, Inc. 3,276,000 48 226,100 Orient-Express Hotels, Ltd. 6,425,762 95 82,300 Oxford Industries, Inc. 3,713,376 55 104,600 Polo Ralph Lauren Corporation - Class "A" 5,261,380 78 275,600 * Prestige Brands Holdings, Inc. 3,395,392 50 225,000 RadioShack Corporation 5,580,000 82 50,000 Ross Stores, Inc. 1,185,000 17 148,700 Russell Corporation 2,087,748 31 65,000 Sherwin-Williams Company 2,864,550 42 120,000 * Steiner Leisure, Ltd. 4,076,400 60 90,000 * Timberland Company - Class "A" 3,040,200 45 200,000 * Tommy Hilfiger Corporation 3,470,000 51 150,000 Viacom, Inc. - Class "B" 4,951,500 73 - ---------------------------------------------------------------------------------------------------------------------- 108,210,515 1,595 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--6.7% 100,000 Altria Group, Inc. 7,371,000 109 275,000 Avon Products, Inc. 7,425,000 110 50,000 Coca-Cola Company 2,159,500 32 3,000 * Diamond Foods, Inc. 51,300 1 65,000 Estee Lauder Companies, Inc. - Class "A" 2,263,950 33 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS GROWTH & INCOME FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples (continued) 75,000 * Herbalife, Ltd. $2,260,500 $33 47,500 Kimberly-Clark Corporation 2,827,675 42 290,000 Nu Skin Enterprises, Inc. - Class "A" 5,524,500 81 50,000 PepsiCo, Inc. 2,835,500 42 75,000 Procter & Gamble Company 4,459,500 66 89,091 Tootsie Roll Industries, Inc. 2,828,639 42 75,000 Wal-Mart Stores, Inc. 3,286,500 48 72,300 WD-40 Company 1,916,673 28 - ---------------------------------------------------------------------------------------------------------------------- 45,210,237 667 - ---------------------------------------------------------------------------------------------------------------------- Energy--9.1% 60,000 Anadarko Petroleum Corporation 5,745,000 85 200,000 Chesapeake Energy Corporation 7,650,000 113 80,000 ConocoPhillips 5,592,800 82 115,000 ExxonMobil Corporation 7,307,100 108 16,548 Marathon Oil Corporation 1,140,654 17 80,000 Noble Corporation 5,476,800 81 16,600 * Petroleum Helicopters, Inc. - Non Voting Shares 514,932 8 100,000 Sasol, Ltd. (ADR) 3,869,000 57 150,000 Suncor Energy, Inc. 9,079,500 134 60,000 * Swift Energy Company 2,745,000 40 120,000 * Transocean, Inc. 7,357,200 108 120,000 XTO Energy, Inc. 5,438,400 80 - ---------------------------------------------------------------------------------------------------------------------- 61,916,386 913 - ---------------------------------------------------------------------------------------------------------------------- Financials--18.6% 50,000 American Express Company 2,872,000 42 90,000 American International Group, Inc. 5,576,400 82 197,718 Bank of America Corporation 8,323,928 123 150,000 Citigroup, Inc. 6,828,000 101 200,000 Colonial BancGroup, Inc. 4,480,000 66 100,000 Comerica, Inc. 5,890,000 87 255,000 Doral Financial Corporation 3,332,850 49 60,000 Endurance Specialty Holdings, Ltd. 2,046,600 30 50,000 Fannie Mae 2,241,000 33 130,000 Independence Community Bank Corporation 4,431,700 65 155,000 JPMorgan Chase & Company 5,259,150 78 42,500 Lehman Brothers Holdings, Inc. 4,950,400 73 150,000 MBNA Corporation 3,696,000 54 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Financials (continued) 105,000 Merrill Lynch & Company, Inc. $6,441,750 $95 155,400 Montpelier Re Holdings, Ltd. 3,861,690 57 90,000 Morgan Stanley 4,854,600 72 90,000 National City Corporation 3,009,600 44 230,000 New York Community Bancorp, Inc. 3,772,000 56 250,000 NewAlliance Bancshares, Inc. 3,660,000 54 225,000 North Fork Bancorporation, Inc. 5,737,500 85 75,000 Plum Creek Timber Company, Inc. (REIT) 2,843,250 42 40,000 Safeco Corporation 2,135,200 31 100,000 South Financial Group, Inc. 2,684,000 40 200,000 Sovereign Bancorp, Inc. 4,408,000 65 150,000 U.S. Bancorp 4,212,000 62 87,570 U.S.B. Holding Company, Inc. 1,996,596 29 100,000 Wachovia Corporation 4,759,000 70 110,000 Washington Mutual, Inc. 4,314,200 64 70,000 Wells Fargo & Company 4,099,900 60 60,000 Westcorp, Inc. 3,534,000 52 - ---------------------------------------------------------------------------------------------------------------------- 126,251,314 1,861 - ---------------------------------------------------------------------------------------------------------------------- Health Care--12.1% 160,000 Abbott Laboratories 6,784,000 100 45,000 Aetna, Inc. 3,876,300 57 46,700 * Amgen, Inc. 3,720,589 55 200,000 * Boston Scientific Corporation 4,674,000 69 120,000 * Charles River Laboratories International, Inc. 5,234,400 77 20,000 * Genentech, Inc. 1,684,200 25 40,000 Guidant Corporation 2,755,600 41 100,000 * Impax Laboratories, Inc. 1,207,500 18 100,000 Johnson & Johnson 6,328,000 93 70,000 * Laboratory Corporation of America Holdings 3,409,700 50 50,000 Medtronic, Inc. 2,681,000 39 80,000 Merck & Company, Inc. 2,176,800 32 50,000 * PacifiCare Health Systems, Inc. 3,989,000 59 330,000 Pfizer, Inc. 8,240,100 121 70,000 Sanofi-Aventis (ADR) 2,908,500 43 220,000 * Thermo Electron Corporation 6,798,000 100 75,000 * Triad Hospitals, Inc. 3,395,250 50 90,000 * WellPoint, Inc. 6,823,800 101 120,000 Wyeth 5,552,400 82 - ---------------------------------------------------------------------------------------------------------------------- 82,239,139 1,212 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS GROWTH & INCOME FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Industrials--12.8% 115,000 3M Company $8,436,400 $124 50,400 Alexander & Baldwin, Inc. 2,683,296 39 155,000 Briggs & Stratton Corporation 5,361,450 79 65,000 Burlington Northern Santa Fe Corporation 3,887,000 57 200,000 Cendant Corporation 4,128,000 61 200,400 Chicago Bridge & Iron Company NV - NY Shares 6,230,436 92 36,000 Eaton Corporation 2,287,800 34 115,000 Engineered Support Systems, Inc. 4,719,600 70 170,000 * Gardner Denver, Inc. 7,582,000 112 800 * Global Cash Access, Inc. 11,280 -- 50,000 Harsco Corporation 3,278,500 48 155,000 Honeywell International, Inc. 5,812,500 86 200,100 Knoll, Inc. 3,671,835 54 60,000 Lockheed Martin Corporation 3,662,400 54 140,000 Masco Corporation 4,295,200 63 250,000 * Navigant Consulting, Inc. 4,790,000 71 90,000 Northrop Grumman Corporation 4,891,500 72 75,400 * Pike Electric Corporation 1,412,242 21 200,000 * Pinnacle Airlines Corporation 1,300,000 19 60,000 Pitney Bowes, Inc. 2,504,400 37 115,000 United Technologies Corporation 5,961,600 88 - ---------------------------------------------------------------------------------------------------------------------- 86,907,439 1,281 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--16.0% 100,000 Amphenol Corporation - Class "A" 4,034,000 59 15,000 Analog Devices, Inc. 557,100 8 200,000 * Cisco Systems, Inc. 3,586,000 53 146,200 * Electronics for Imaging, Inc. 3,353,828 49 350,000 * EMC Corporation 4,529,000 67 300,000 * Entrust, Inc. 1,680,000 25 140,000 First Data Corporation 5,600,000 83 235,000 Hewlett-Packard Company 6,862,000 101 175,000 Intel Corporation 4,313,750 64 110,000 International Business Machines Corporation 8,824,200 130 25,000 * International Rectifier Corporation 1,127,000 17 80,000 Intersil Corporation - Class "A" 1,742,400 26 60,000 * Lam Research Corporation 1,828,200 27 127,100 * Lexar Media, Inc. 813,440 12 350,000 Microsoft Corporation 9,005,500 133 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Information Technology (continued) 275,000 Motorola, Inc. $6,074,750 $90 300,000 Nokia Corporation - Class "A" (ADR) 5,073,000 75 205,000 * OmniVision Technologies, Inc. 2,587,100 38 132,000 * Palm, Inc. 3,739,560 55 270,000 * Paxar Corporation 4,549,500 67 135,000 QUALCOMM, Inc. 6,041,250 89 110,000 * SanDisk Corporation 5,307,500 78 65,000 StarTek, Inc. 858,000 13 224,840 * Symantec Corporation 5,094,874 75 194,060 Taiwan Semiconductor Manufacturing Co., Ltd. (ADR) 1,595,173 23 95,000 * Tech Data Corporation 3,487,450 51 250,000 * VeriSign, Inc. 5,342,500 79 35,000 Xilinx, Inc. 974,750 14 - ---------------------------------------------------------------------------------------------------------------------- 108,581,825 1,601 - ---------------------------------------------------------------------------------------------------------------------- Materials--5.2% 70,000 Ashland, Inc. 3,866,800 57 100,000 Calgon Carbon Corporation 790,000 12 80,000 Dow Chemical Company 3,333,600 49 60,000 Freeport-McMoRan Copper & Gold, Inc. - Class "B" 2,915,400 43 125,000 Georgia-Pacific Corporation 4,257,500 63 122,100 Lubrizol Corporation 5,290,593 78 100,000 MeadWestvaco Corporation 2,762,000 41 45,000 PPG Industries, Inc. 2,663,550 39 60,000 Praxair, Inc. 2,875,800 42 190,000 RPM International, Inc. 3,496,000 52 40,000 Weyerhaeuser Company 2,750,000 40 - ---------------------------------------------------------------------------------------------------------------------- 35,001,243 516 - ---------------------------------------------------------------------------------------------------------------------- Other--.4% 75,000 Nasdaq - 100 Index Tracking Stock 2,959,500 44 - ---------------------------------------------------------------------------------------------------------------------- Telecommunication Services--.9% 140,000 SBC Communications, Inc. 3,355,800 50 75,000 Verizon Communications, Inc. 2,451,750 36 - ---------------------------------------------------------------------------------------------------------------------- 5,807,550 86 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Shares, Invested Warrants or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Utilities--1.0% 115,400 Atmos Energy Corporation $3,260,050 $48 75,000 Consolidated Edison, Inc. 3,641,250 54 - ---------------------------------------------------------------------------------------------------------------------- 6,901,300 102 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $551,051,852) 669,986,448 9,878 - ---------------------------------------------------------------------------------------------------------------------- CONVERTIBLE PREFERRED STOCKS--.9% Financials--.8% 50,000 Chubb Corp., 7%, 2006 - Series "B" 1,650,000 24 50,000 Hartford Financial Services Group, Inc., 6%, 2006 - Class "A" 3,481,250 51 - ---------------------------------------------------------------------------------------------------------------------- 5,131,250 75 - ---------------------------------------------------------------------------------------------------------------------- Health Care--.1% 16,000 Baxter International, Inc., 7%, 2006 916,000 14 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Convertible Preferred Stocks (cost $4,425,823) 6,047,250 89 - ---------------------------------------------------------------------------------------------------------------------- WARRANTS--.0% Information Technology 23,179 * Lucent Technologies, Inc. (expiring 12/10/07) (cost $0) 22,020 -- - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM CORPORATE NOTES--.4% $3,000M General Electric Capital Corp., 3.72%, 10/5/05 (cost $2,998,760) 2,998,760 44 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $558,476,435) 100.1% 679,054,478 10,011 Excess of Liabilities Over Other Assets (.1) (770,986) (11) - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $678,283,492 $10,000 ====================================================================================================================== * Non-income producing Summary of Abbreviations: ADR American Depositary Receipts REIT Real Estate Investment Trust See notes to financial statements
Portfolio Manager's Letter FIRST INVESTORS ALL-CAP GROWTH FUND Dear Investor: This is the annual report for the First Investors All-Cap Growth Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 13.1% for Class A shares and 12.3% for Class B shares. The Fund's positive overall performance during the reporting period was helped by the solid performance of the equity markets. In addition, the Fund's multi-cap strategy aided performance, as mid- and small-cap equities outperformed their larger-capitalization counterparts during the period. The Fund's outperformance relative to the Russell 3000 Growth Index was largely due to the Fund's greater than benchmark exposure to energy stocks, which significantly outperformed, as well as its limited exposure to consumer discretionary and consumer staples stocks, which trailed the overall Index. In addition, favorable security selection in the energy, information technology and consumer staples sectors helped relative performance. Top individual contributors included Google, which benefited from both a strong secular trend toward increased online advertising and the company's exceptional growth rate, and Petro-Canada, which was supported by rising oil prices. The primary detractor from relative performance was the Fund's security selection in the health care sector. Negative results within this sector were primarily driven by biotech holding Elan, which declined significantly after the company announced in late February that its new multiple sclerosis drug, Tysabri, was associated with a fatal side effect. Other individual detractors included Countrywide Financial and eBay. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ ANDREW J. SHILLING Andrew J. Shilling Portfolio Manager October 31, 2005 Fund Expenses FIRST INVESTORS ALL-CAP GROWTH FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,098.38 $8.31 Hypothetical (5% annual return before expenses) $1,000.00 $1,017.15 $7.99 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,093.71 $11.97 Hypothetical (5% annual return before expenses) $1,000.00 $1,013.64 $11.51 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.58% for Class A shares and 2.28% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio Composition BY SECTOR [BAR CHART DATA:] Information Technology 28.9% Health Care 19.6% Industrials 14.4% Financials 12.9% Consumer Discretionary 8.9% Energy 8.3% Consumer Staples 2.0% Telecommunication Services 1.0% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS ALL-CAP GROWTH FUND Comparison of change in value of $10,000 investment in the First Investors All-Cap Growth Fund (Class A shares) and the Russell 3000 Growth Index. First Investors All-Cap Growth Fund Graph Plot Points for the periods Ended 9/30/05 All-Cap Russell Growth 3000 Growth Fund Index Oct-00 $ 9,425 $10,000 Sep-01 6,155 6,001 Sep-02 5,024 4,667 Sep-03 6,362 5,925 Sep-04 7,352 6,388 Sep-05 8,313 7,163 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 13.08% 6.52% Since Inception (10/25/00) (2.51%) (3.68%) Class B Shares One Year 12.25% 8.25% Since Inception (10/25/00) (3.19%) (3.59%) The graph compares a $10,000 investment in the First Investors All-Cap Growth Fund (Class A shares) beginning 10/25/00 (inception date) with a theoretical investment in the Russell 3000 Growth Index (the "Index"). The Index is an unmanaged index composed of the 3000 largest U.S. companies, as determined by market capitalization, and represents approximately 98% of the investable U.S. equity market. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in the sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures are for the periods ended 9/30/05. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Total Return Since Inception would have been (3.81%). The Class B "S.E.C. Standardized" Total Return Since Inception would have been (3.71%). Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Russell 3000 Growth Index figures are from Frank Russell and Company and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS ALL-CAP GROWTH FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------- COMMON STOCKS--94.9% Consumer Discretionary--8.8% 28,300 * Chico's FAS, Inc. $1,041,440 $54 3,600 * Coach, Inc. 112,896 6 29,633 D.R. Horton, Inc. 1,073,307 56 23,600 * Education Management Corporation 760,864 39 13,000 * Electronics Boutique Holdings Corporation 816,920 42 26,050 * GameStop Corporation - Class "B" 739,560 38 54,730 Geox SpA 547,346 28 24,560 * Insight Enterprises, Inc. 456,816 24 47,610 * La Quinta Corporation 413,731 22 30,130 Omnicom Group, Inc. 2,519,771 131 29,100 * Pixar 1,295,241 67 7,670 * Red Robin Gourmet Burgers, Inc. 351,593 18 2,240 Standard Pacific Corporation 92,982 5 9,000 * Wynn Resorts, Ltd. 406,350 21 177,020 * XM Satellite Radio Holdings, Inc. - Class "A" 6,356,788 330 - ---------------------------------------------------------------------------------------------------- 16,985,605 881 - ---------------------------------------------------------------------------------------------------- Consumer Staples--2.0% 64,040 Procter & Gamble Company 3,807,818 197 - ---------------------------------------------------------------------------------------------------- Energy--8.2% 6,500 * Alon USA Energy, Inc. 156,975 8 11,350 Arch Coal, Inc. 766,125 40 13,165 Cabot Oil & Gas Corporation - Class "A" 664,964 35 32,600 Cameco Corporation 1,744,100 90 20,700 EOG Resources, Inc. 1,550,430 80 49,880 Halliburton Company 3,417,778 177 4,800 Oil Service HOLDRs Trust 595,200 31 135,460 Petro-Canada 5,652,746 293 26,266 XTO Energy, Inc. 1,190,375 62 - ---------------------------------------------------------------------------------------------------- 15,738,693 816 - ---------------------------------------------------------------------------------------------------- Financials--12.7% 7,415 * Affiliated Managers Group, Inc. 536,994 28 14,190 * Arch Capital Group, Ltd. 703,682 37 31,100 Capital One Financial Corporation 2,473,072 128 14,990 * CB Richard Ellis Group, Inc. - Class "A" 737,508 38 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------- Financials (continued) 12,550 Chicago Mercantile Exchange Holdings, Inc. - Class "A" $4,233,115 $219 200,710 Countrywide Financial Corporation 6,619,416 343 32,000 Franklin Resources, Inc. 2,686,720 139 47,410 Legg Mason, Inc. 5,200,403 270 32,100 * NASDAQ Stock Market, Inc. 813,735 42 15,380 Nuveen Investments, Inc. - Class "A" 605,818 31 - ---------------------------------------------------------------------------------------------------- 24,610,463 1,275 - ---------------------------------------------------------------------------------------------------- Health Care--19.4% 28,900 * Abgenix, Inc. 366,452 19 27,550 * Alkermes, Inc. 462,840 24 60,140 * Amgen, Inc. 4,791,354 248 20,570 * Amylin Pharmaceuticals, Inc. 715,630 37 24,400 Applera Corporation - Applied Biosystems Group 567,056 29 163,870 AstraZeneca PLC (ADR) 7,718,277 400 24,200 Biomet, Inc. 839,982 44 12,600 * Cephalon, Inc. 584,892 30 11,170 * Covance, Inc. 536,048 28 27,000 * DaVita, Inc. 1,243,890 65 20,760 * Digene Corporation 591,660 31 13,900 * Foxhollow Technologies, Inc. 661,779 34 4,760 * HealthTronics, Inc. 47,410 3 20,360 * Hologic, Inc. 1,175,790 61 121,370 Medtronic, Inc. 6,507,859 337 10,100 Mentor Corporation 555,601 29 11,870 * Pharmaceutical Product Development, Inc. 682,644 35 169,190 Schering-Plough Corporation 3,561,450 185 102,300 UnitedHealth Group, Inc. 5,749,260 298 - ---------------------------------------------------------------------------------------------------- 37,359,874 1,937 - ---------------------------------------------------------------------------------------------------- Industrials--14.3% 12,480 * Advisory Board Company 649,459 34 66,260 Boeing Company 4,502,367 233 18,900 C. H. Robinson Worldwide, Inc. 1,211,868 63 9,200 Corporate Executive Board Company 717,416 37 16,350 * Corrections Corporation of America 649,095 34 56,470 Danaher Corporation 3,039,780 158 22,310 * DiamondCluster International, Inc. 169,110 9 - ---------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS ALL-CAP GROWTH FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------- Industrials (continued) 18,700 Expeditors International of Washington, Inc. $1,061,786 $55 18,000 Fastenal Company 1,099,620 57 32,820 General Dynamics Corporation 3,923,631 203 141,250 General Electric Company 4,755,887 247 10,650 Gol-Linhas Aereas Inteligentes SA (ADR) 345,593 18 8,990 * Jacobs Engineering Group, Inc. 605,926 31 22,760 Knight Transportation, Inc. 554,434 29 37,300 * Monster Worldwide, Inc. 1,145,483 59 14,500 PACCAR, Inc. 984,405 51 43,400 Robert Half International, Inc. 1,544,606 80 10,390 * Stericycle, Inc. 593,788 31 - ---------------------------------------------------------------------------------------------------- 27,554,254 1,429 - ---------------------------------------------------------------------------------------------------- Information Technology--28.5% 26,500 * Amdocs, Ltd. 734,845 38 26,230 * aQuantive, Inc. 528,010 27 15,700 CDW Corporation 925,044 48 18,700 * Cognizant Technology Solutions Corporation - Class "A" 871,233 45 14,100 * Cognos, Inc. 548,913 29 177,130 * Dell, Inc. 6,057,846 314 120,100 * Electronic Arts, Inc. 6,832,489 354 11,140 * F5 Networks, Inc. 484,256 25 15,670 * Google, Inc. - Class "A" 4,958,928 257 11,300 * Intuit, Inc. 506,353 26 45,400 * Jabil Circuit, Inc. 1,403,768 73 27,400 Linear Technology Corporation 1,029,966 53 29,620 * Logitech International SA (ADR) 1,207,015 63 34,200 * MEMC Electronic Materials, Inc. 779,418 40 17,680 * Microsemi Corporation 451,547 23 149,880 Microsoft Corporation 3,856,412 200 7,980 * NAVTEQ Corporation 398,601 21 146,590 * Network Appliance, Inc. 3,480,047 180 33,700 * NVIDIA Corporation 1,155,236 60 121,680 * Opsware, Inc. 631,519 33 74,750 QUALCOMM, Inc. 3,345,063 174 118,650 * Red Hat, Inc. 2,514,194 130 37,000 * Redback Networks, Inc. 367,040 19 30,780 * Research in Motion, Ltd. 2,105,352 109 - ---------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------- Information Technology (continued) 23,640 * Salesforce.com, Inc. $546,557 $28 28,300 * SanDisk Corporation 1,365,475 71 520 * Take-Two Interactive Software, Inc. 11,487 1 33,555 * THQ, Inc. 715,393 37 49,900 * VeriFone Holdings, Inc. 1,003,489 52 185,000 * Yahoo!, Inc. 6,260,400 325 - ---------------------------------------------------------------------------------------------------- 55,075,896 2,855 - ---------------------------------------------------------------------------------------------------- Telecommunication Services--1.0% 35,700 * Alamosa Holdings, Inc. 610,827 32 55,600 * American Tower Corporation - Class "A" 1,387,220 72 - ---------------------------------------------------------------------------------------------------- 1,998,047 104 - ---------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $150,251,867) 183,130,650 9,494 - ---------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT--4.0% $7,702M UBS Securities, 3.31%, dated 9/30/05, to be repurchased at $7,704,124 on 10/3/05 (collateralized by U.S. Treasury Bonds, 7.875%, 2/15/21, valued at $7,837,711) (cost $7,702,000) 7,702,000 400 - ---------------------------------------------------------------------------------------------------- Total Value of Investments (cost $157,953,867) 98.9% 190,832,650 9,894 Other Assets, Less Liabilities 1.1 2,039,129 106 - ---------------------------------------------------------------------------------------------------- Net Assets 100.0% $192,871,779 $10,000 ==================================================================================================== * Non-income producing Summary of Abbreviations: ADR American Depositary Receipts
See notes to financial statements Portfolio Manager's Letter FIRST INVESTORS MID-CAP OPPORTUNITY FUND Dear Investor: This is the annual report for the First Investors Mid-Cap Opportunity Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 24.4% for Class A shares and 23.5% for Class B shares. The Fund's performance was largely driven by rising oil and natural gas prices, earnings growth among health care service providers, solid performance of the mid-cap stock sector and asset allocation decisions. Performance on an absolute basis was attributable to investments in two key sectors: energy and health care. Strong global demand, as well as unexpected supply interruptions from Hurricanes Katrina and Rita, resulted in higher oil and natural gas prices in the energy sector. Shares of HMOs, drug distributors and pharmacy benefit managers were key contributors in the health care sector, aided by merger and acquisition activity. Meaningful contributions also came from the industrials and consumer staples sectors. On a relative basis, the Fund outperformed the Standard & Poor's 400 Midcap Index due to its overweight positions in the energy and health care sectors. Within the energy sector, the Fund had relative outperformance due to its emphasis on natural gas stocks, which generally did better than oil stocks. Among health care sector holdings, shares of HMOs, drug distributors and pharmacy benefit managers rose sharply. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ STEVEN S. HILL Steven S. Hill Portfolio Manager* October 31, 2005 * Mr. Hill became the Fund's sole Portfolio Manager on July 1, 2005. Fund Expenses FIRST INVESTORS MID-CAP OPPORTUNITY FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,100.12 $7.84 Hypothetical (5% annual return before expenses) $1,000.00 $1,017.60 $7.54 - ---------------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,096.34 $11.51 Hypothetical (5% annual return before expenses) $1,000.00 $1,014.09 $11.06 - ---------------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.49% for Class A shares and 2.19% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Health Care 18.7% Consumer Discretionary 16.2% Financials 13.8% Energy 13.7% Industrials 12.0% Information Technology 11.3% Materials 4.3% Other 4.1% Consumer Staples 3.1% Utilities 2.2% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS MID-CAP OPPORTUNITY FUND Comparison of change in value of $10,000 investment in the First Investors Mid-Cap Opportunity Fund (Class A shares) and the Standard & Poor's 400 Midcap Index. First Investors Mid-Cap Opportunity Fund Graph Plot Points for the periods Ended 9/30/05 Mid-cap S&P 400 Opportunity Mid-cap Fund Index Oct-95 $ 9,425 $10,000 Oct-96 9,884 11,736 Oct-97 12,561 15,568 Sep-98 10,499 15,247 Sep-99 15,188 19,129 Sep-00 21,477 27,397 Sep-01 14,961 22,192 Sep-02 13,383 21,150 Sep-03 16,267 26,820 Sep-04 19,261 31,528 Sep-05 23,951 38,515 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 24.35% 17.18% Five Years 2.20% 1.00% Ten Years 10.27% 9.62% Class B Shares One Year 23.51% 19.51% Five Years 1.49% 1.11% Ten Years 9.41% 9.41% The graph compares a $10,000 investment in the First Investors Mid-Cap Opportunity Fund (Class A shares) beginning 10/31/95 with a theoretical investment in the Standard & Poor's 400 Midcap Index (the "Index"). The Index is an unmanaged capitalization-weighted index of 400 stocks designed to measure performance of the mid-range sector of the U.S. stock market where the median market capitalization is approximately $700 million. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 17.05%, .79% and 9.29%, respectively. The Class B "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 19.39%, .90% and 9.08%, respectively. Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Standard & Poor's 400 Midcap Index figures are from Standard & Poor's and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS MID-CAP OPPORTUNITY FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--99.3% Consumer Discretionary--16.2% 75,000 American Axle & Manufacturing Holdings, Inc. $1,731,000 $37 85,000 Applebee's International, Inc. 1,758,650 38 63,000 BorgWarner, Inc. 3,556,980 76 70,000 * Chico's FAS, Inc. 2,576,000 55 150,000 Claire's Stores, Inc. 3,619,500 77 95,000 * Coach, Inc. 2,979,200 64 140,000 Dollar General Corporation 2,567,600 55 110,000 * Eddie Bauer Holdings, Inc. 2,708,750 58 125,000 * Fossil, Inc. 2,273,750 49 115,000 * Helen of Troy, Ltd. 2,373,600 51 40,000 * Hovnanian Enterprises, Inc. - Class "A" 2,048,000 44 86,000 Kenneth Cole Productions, Inc. - Class "A" 2,346,940 50 150,000 Leggett & Platt, Inc. 3,030,000 65 30,000 M.D.C. Holdings, Inc. 2,366,700 51 130,000 Movado Group, Inc. 2,433,600 52 167,000 * Office Depot, Inc. 4,959,900 106 144,200 Orient-Express Hotels, Ltd. 4,098,164 88 165,000 * Pacific Sunwear of California, Inc. 3,537,600 76 70,000 Polo Ralph Lauren Corporation - Class "A" 3,521,000 75 220,000 * Prestige Brands Holdings, Inc. 2,710,400 58 70,000 Regis Corporation 2,647,400 57 85,000 Tiffany & Company 3,380,450 72 75,000 * Timberland Company - Class "A" 2,533,500 54 125,000 * Tommy Hilfiger Corporation 2,168,750 46 105,000 Tupperware Corporation 2,391,900 51 110,000 * Warnaco Group, Inc. - Class "A" 2,410,100 51 150,000 Westwood One, Inc. 2,983,500 64 - ---------------------------------------------------------------------------------------------------------------------- 75,712,934 1,620 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--3.1% 60,000 Alberto-Culver Company 2,685,000 57 33,000 Altria Group, Inc. 2,432,430 52 151,400 * Herbalife, Ltd. 4,563,196 98 130,000 Nu Skin Enterprises, Inc. - Class "A" 2,476,500 53 75,000 Tootsie Roll Industries, Inc. 2,381,250 51 - ---------------------------------------------------------------------------------------------------------------------- 14,538,376 311 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS MID-CAP OPPORTUNITY FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Energy--13.7% 40,000 Anadarko Petroleum Corporation $3,830,000 $82 210,000 Chesapeake Energy Corporation 8,032,500 172 90,000 EOG Resources, Inc. 6,741,000 144 65,000 GlobalSantaFe Corporation 2,965,300 63 165,000 * Grant Prideco, Inc. 6,707,250 144 160,000 Patterson-UTI Energy, Inc. 5,772,800 124 24,000 * Petroleum Helicopters, Inc. - Non Voting Shares 744,480 16 80,000 Suncor Energy, Inc. 4,842,400 104 90,000 * Swift Energy Company 4,117,500 88 120,000 Talisman Energy, Inc. 5,860,800 125 77,500 * Transocean, Inc. 4,751,525 102 50,000 * Weatherford International, Ltd. 3,433,000 73 134,000 XTO Energy, Inc. 6,072,880 130 - ---------------------------------------------------------------------------------------------------------------------- 63,871,435 1,367 - ---------------------------------------------------------------------------------------------------------------------- Financials--13.7% 55,000 A.G. Edwards, Inc. 2,409,550 52 37,500 Ambac Financial Group, Inc. 2,702,250 58 30,000 Bear Stearns Companies, Inc. 3,292,500 70 60,000 Brookline Bancorp, Inc. 949,200 20 52,000 Citigroup, Inc. 2,367,040 51 35,000 City National Corporation 2,453,150 52 135,000 Colonial BancGroup, Inc. 3,024,000 65 115,000 * Conseco, Inc. 2,427,650 52 87,500 Endurance Specialty Holdings, Ltd. 2,984,625 64 120,000 Hub International, Ltd. 2,721,600 58 75,000 Independence Community Bank Corporation 2,556,750 55 175,000 Janus Capital Group, Inc. 2,528,750 54 13,000 Legg Mason, Inc. 1,425,970 31 175,000 NewAlliance Bancshares, Inc. 2,562,000 55 140,000 North Fork Bancorporation, Inc. 3,570,000 76 55,000 PMI Group, Inc. 2,192,850 47 70,000 Protective Life Corporation 2,882,600 62 115,000 Provident Financial Services, Inc. 2,024,000 43 46,000 Radian Group, Inc. 2,442,600 52 52,000 SAFECO Corporation 2,775,760 59 85,000 South Financial Group, Inc. 2,281,400 49 201,000 Sovereign Bancorp, Inc. 4,430,040 95 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Financials (continued) 80,000 TD Banknorth, Inc. $2,411,200 $52 120,000 Waddell & Reed Financial, Inc. - Class "A" 2,323,200 50 35,000 Zions Bancorporation 2,492,350 53 - ---------------------------------------------------------------------------------------------------------------------- 64,231,035 1,375 - ---------------------------------------------------------------------------------------------------------------------- Health Care--18.7% 50,000 Aetna, Inc. 4,307,000 92 32,500 AmerisourceBergen Corporation 2,512,250 54 145,000 * Andrx Corporation 2,237,350 48 135,000 * Aspreva Pharmaceuticals Corporation 1,925,100 41 45,000 Beckman Coulter, Inc. 2,429,100 52 65,000 Biomet, Inc. 2,256,150 48 110,000 * Caremark Rx, Inc. 5,492,300 117 35,000 * Centene Corporation 876,050 19 54,000 * Charles River Laboratories International, Inc. 2,355,480 50 72,500 * Coley Pharmaceuticals Group, Inc. 1,319,500 28 95,000 * Community Health Systems, Inc. 3,686,950 79 40,000 Cooper Companies, Inc. 3,064,400 66 50,000 DENTSPLY International, Inc. 2,701,000 58 240,000 * Exelixis, Inc. 1,840,800 39 45,000 * Fisher Scientific International, Inc. 2,792,250 60 65,000 * Gilead Sciences, Inc. 3,169,400 68 85,000 * Henry Schein, Inc. 3,622,700 77 220,000 * Human Genome Sciences, Inc. 2,989,800 64 65,000 * Humana, Inc. 3,112,200 67 130,000 * Idenix Pharmaceuticals, Inc. 3,263,000 70 60,000 * Laboratory Corporation of America Holdings 2,922,600 63 48,000 * Medco Health Solutions, Inc. 2,631,840 56 63,000 * Neurocrine Biosciences, Inc. 3,098,970 66 160,000 * Noven Pharmaceuticals, Inc. 2,240,000 48 180,000 Option Care, Inc. 2,635,200 56 35,000 * PacifiCare Health Systems, Inc. 2,792,300 60 110,000 * Thermo Electron Corporation 3,399,000 73 68,500 * Triad Hospitals, Inc. 3,100,995 66 65,000 * Waters Corporation 2,704,000 58 1,000 * WebMD Health Corporation - Class "A" 24,649 1 75,000 * WellPoint, Inc. 5,686,500 122 - ---------------------------------------------------------------------------------------------------------------------- 87,188,834 1,866 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS MID-CAP OPPORTUNITY FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Industrials--12.0% 65,000 American Standard Companies, Inc. $3,025,750 $65 45,000 Avery Dennison Corporation 2,357,550 50 70,000 Briggs & Stratton Corporation 2,421,300 52 187,000 Chicago Bridge & Iron Company NV - NY Shares 5,813,830 124 55,000 * ChoicePoint, Inc. 2,374,350 51 41,000 FedEx Corporation 3,572,330 76 97,000 * Gardner Denver, Inc. 4,326,200 93 50,000 Harsco Corporation 3,278,500 70 65,000 IDEX Corporation 2,765,750 59 120,000 * K&F Industries Holdings, Inc. 2,007,600 43 150,000 Knoll, Inc. 2,752,500 59 30,000 L-3 Communications Holdings, Inc. 2,372,100 51 67,000 Manpower, Inc. 2,974,130 64 90,000 Masco Corporation 2,761,200 59 75,000 * Mobile Mini, Inc. 3,251,250 70 75,000 Northrop Grumman Corporation 4,076,250 87 150,000 * Pike Electric Corporation 2,809,500 60 95,000 Regal-Beloit Corporation 3,081,800 66 - ---------------------------------------------------------------------------------------------------------------------- 56,021,890 1,199 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--11.3% 113,000 Amphenol Corporation - Class "A" 4,558,420 97 37,500 * CheckFree Corporation 1,418,250 30 125,000 * Comverse Technology, Inc. 3,283,750 70 45,000 * DST Systems, Inc. 2,467,350 53 115,000 * Electronics for Imaging, Inc. 2,638,100 57 71,250 Fair Isaac Corporation 3,192,000 68 220,000 * Ingram Micro, Inc. - Class "A" 4,078,800 87 60,000 * International Rectifier Corporation 2,704,800 58 125,000 Intersil Corporation - Class "A" 2,722,500 58 62,500 * Intuit, Inc. 2,800,625 60 120,000 * Manhattan Associates, Inc. 2,784,000 60 110,000 * McAfee, Inc. 3,456,200 74 80,000 * Novellus Systems, Inc. 2,006,400 43 100,000 * Palm, Inc. 2,833,000 61 155,000 * Paxar Corporation 2,611,750 56 170,000 * Polycom, Inc. 2,748,900 59 165,000 * Sybase, Inc. 3,864,300 83 120,000 * VeriSign, Inc. 2,564,400 55 - ---------------------------------------------------------------------------------------------------------------------- 52,733,545 1,129 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Materials--4.3% 80,000 Freeport-McMoRan Copper & Gold, Inc. - Class "B" $3,887,200 $83 60,000 Georgia-Pacific Corporation 2,043,600 44 65,000 Louisiana-Pacific Corporation 1,799,850 39 70,000 Lubrizol Corporation 3,033,100 65 80,000 MeadWestvaco Corporation 2,209,600 47 50,000 Praxair, Inc. 2,396,500 51 170,000 Sappi, Ltd. (ADR) 2,004,300 43 40,000 Sigma-Aldrich Corporation 2,562,400 55 - ---------------------------------------------------------------------------------------------------------------------- 19,936,550 427 - ---------------------------------------------------------------------------------------------------------------------- Other--4.1% 147,500 MidCap SPDR Trust - Series "1" 19,304,800 413 - ---------------------------------------------------------------------------------------------------------------------- Utilities--2.2% 65,000 AGL Resources, Inc. 2,412,150 52 70,000 Equitable Resources, Inc. 2,734,200 58 57,000 SCANA Corporation 2,407,680 52 66,000 Wisconsin Energy Corporation 2,634,720 56 - ---------------------------------------------------------------------------------------------------------------------- 10,188,750 218 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $350,161,706) 463,728,149 9,925 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM CORPORATE NOTES--.4% $1,400M General Electric Capital Corp., 3.73%, 11/1/05 1,395,496 30 500M Pitney Bowes, Inc., 3.7%, 10/11/05 499,485 10 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Short-Term Corporate Notes (cost $1,894,981) 1,894,981 40 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM U.S. GOVERNMENT OBLIGATIONS--.2% 1,000M Freddie Mac, 3.5%, 10/4/05 (cost $999,708) 999,708 21 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $353,056,395) 99.9% 466,622,838 9,986 Other Assets, Less Liabilities .1 673,355 14 - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $467,296,193 $10,000 ====================================================================================================================== *Non-income producing Summary of Abbreviations: ADR American Depositary Receipts See notes to financial statements
Portfolio Manager's Letter FIRST INVESTORS SPECIAL SITUATIONS FUND Dear Investor: This is the annual report for the First Investors Special Situations Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 21.4% for Class A shares and 20.5% for Class B shares. The Fund made a major shift in strategy in March. Previously, the Fund had invested primarily in small-cap growth stocks. Since approximately mid-March, the Fund has shifted to a value strategy. The Fund now seeks good, small companies that have been neglected by investors. We look for undervalued companies that have instituted positive changes, which we believe will lead to better than expected returns. The Fund's strategic shift approximately five months into the reporting period makes 12-month comparisons to indexes problematic. However, we're pleased to report that the Fund outperformed its current benchmark, the Russell 2000 Index, for both the reporting period and the period after the transition. Stock selection was the primary factor in the Fund's favorable performance relative to the Russell 2000 Index. Our selection process discovered Flowers Foods, a baker that benefited from efficient operations, while its major rivals floundered. The Fund was also helped by its holdings in Intergraph, a technology company that is enjoying a very interesting second life. During the last six months of the period, energy, the price of gasoline and natural gas and its influence on the economy dominated the stock market. The Fund benefited from investments in exploration and production companies, as well as in refiners and engineering companies. The Fund's underweight position relative to the Russell 2000 Index in the consumer discretionary sector also helped performance. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ JOHN B. WALTHAUSEN John B. Walthausen Portfolio Manager* October 31, 2005 * Mr. Walthausen became the Fund's Portfolio Manager on March 9, 2005. Fund Expenses FIRST INVESTORS SPECIAL SITUATIONS FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,087.22 $8.63 Hypothetical (5% annual return before expenses) $1,000.00 $1,016.80 $8.34 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,083.33 $12.27 Hypothetical (5% annual return before expenses) $1,000.00 $1,013.29 $11.86 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.65% for Class A shares and 2.35% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Industrials 22.2% Information Technology 19.3% Consumer Discretionary 11.7% Health Care 10.4% Consumer Staples 8.9% Utilities 6.0% Energy 5.6% Financials 4.4% Telecommunication Services 4.4% Materials 2.8% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS SPECIAL SITUATIONS FUND Comparison of change in value of $10,000 investment in the First Investors Special Situations Fund (Class A shares) and the Russell 2000 Index. First Investors Special Situations Fund Graph Plot Points for the periods Ended 9/30/05 Special Russell Situations 2000 Fund Index Dec-95 $ 9,425 $10,000 Dec-96 10,513 11,649 Dec-97 12,211 14,254 Sep-98 9,816 11,943 Sep-99 12,882 14,221 Sep-00 18,430 17,547 Sep-01 10,530 13,825 Sep-02 8,794 12,540 Sep-03 10,857 17,116 Sep-04 11,697 20,329 Sep-05 14,198 23,978 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 21.38% 14.38% Five Years (5.08%) (6.20%) Ten Years 4.01% 3.40% Class B Shares One Year 20.46% 16.46% Five Years (5.75%) (6.13%) Ten Years 3.23% 3.23% The graph compares a $10,000 investment in the First Investors Special Situations Fund (Class A shares) beginning 12/31/95 with a theoretical investment in the Russell 2000 Index (the "Index"). The Index consists of the smallest 2,000 companies in the Russell 3000 Index (which represents approximately 98% of the investable U.S. equity market). The Index is an unmanaged index generally considered as the premier of small capitalization stocks. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in the sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 14.16%, (6.46%) and 3.16%, respectively. The Class B "S.E.C. Standardized" Average Annual Total Return for One Year, Five Years and Ten Years would have been 16.25%, (6.34%) and 3.00%, respectively. Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Russell 2000 Index figures are from Frank Russell and Company and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS SPECIAL SITUATIONS FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--96.2% Consumer Discretionary--11.8% 65,700 Arbitron, Inc. $2,617,488 $107 130,800 Catalina Marketing Corporation 2,974,392 122 134,500 Dillard's, Inc. - Class "A" 2,808,360 115 2,000 Ethan Allen Interiors, Inc. 62,700 3 195,200 Journal Communications, Inc. 2,908,480 119 107,000 Matthews International Corporation - Class "A" 4,043,530 165 52,400 Media General, Inc. - Class "A" 3,039,724 124 175,500 * Payless ShoeSource, Inc. 3,053,700 125 2,625 Pre-Paid Legal Services, Inc. 101,588 4 3,575 * ProQuest Company 129,415 5 156,200 RadioShack Corporation 3,873,760 159 73,600 Sherwin-Williams Company 3,243,552 133 - ---------------------------------------------------------------------------------------------------------------------- 28,856,689 1,181 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--9.0% 119,300 Chiquita Brands International, Inc. 3,334,435 136 96,600 Church & Dwight Company, Inc. 3,568,404 146 169,300 Flower Foods, Inc. 4,618,504 189 105,000 Hormel Foods Corporation 3,463,950 142 79,800 Lancaster Colony Corporation 3,431,400 140 109,708 Tootsie Roll Industries, Inc. 3,483,229 143 - ---------------------------------------------------------------------------------------------------------------------- 21,899,922 896 - ---------------------------------------------------------------------------------------------------------------------- Energy--5.6% 25,400 * Denbury Resources, Inc. 1,281,176 52 55,100 Overseas Shipholding Group, Inc. 3,213,983 132 1,400 * SEACOR Holdings, Inc. 101,612 4 31,600 * Southwestern Energy Company 2,319,440 95 48,500 * Swift Energy Company 2,218,875 91 67,400 Tesoro Corporation 4,531,976 185 - ---------------------------------------------------------------------------------------------------------------------- 13,667,062 559 - ---------------------------------------------------------------------------------------------------------------------- Financials--4.5% 3,225 21st Century Insurance Group 51,439 2 119,500 Commerce Bancorp, Inc. 3,667,455 150 112,150 HCC Insurance Holdings, Inc. 3,199,640 131 184,100 MoneyGram International, Inc. 3,996,811 164 - ---------------------------------------------------------------------------------------------------------------------- 10,915,345 447 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS SPECIAL SITUATIONS FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Health Care--10.4% 142,100 * AmSurg Corporation $3,887,856 $159 442,000 * BioScrip, Inc. 2,873,000 118 89,400 * Humana, Inc. 4,280,472 175 87,500 * LabOne, Inc. 3,806,250 156 79,900 * Lincare Holdings, Inc. 3,279,895 134 102,200 * Magellan Health Services, Inc. - Class "A" 3,592,330 147 127,200 West Pharmaceutical Services, Inc. 3,774,024 154 - ---------------------------------------------------------------------------------------------------------------------- 25,493,827 1,043 - ---------------------------------------------------------------------------------------------------------------------- Industrials--22.3% 160,900 Angelica Corporation 2,872,065 118 60,000 Carlisle Companies, Inc. 3,814,200 156 115,200 CLARCOR, Inc. 3,308,544 135 57,400 Curtiss-Wright Corporation 3,542,154 145 3,600 ElkCorp 128,772 5 70,000 HNI Corporation 4,215,400 173 63,800 * Jacobs Engineering Group, Inc. 4,300,120 176 92,600 John H. Harland Company 4,111,440 168 168,700 * Kansas City Southern, Inc. 3,932,397 161 111,600 * NCI Building Systems, Inc. 4,552,164 186 109,000 United Industrial Corporation 3,896,750 160 163,200 Wabtec Corporation 4,452,096 182 70,400 * Washington Group International, Inc. 3,793,856 155 131,300 Watson Wyatt & Company Holdings - Class "A" 3,538,535 145 48,000 Woodward Governor Company 4,082,400 167 - ---------------------------------------------------------------------------------------------------------------------- 54,540,893 2,232 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--19.4% 157,425 * Avnet, Inc. 3,849,041 157 239,400 AVX Corporation 3,049,956 125 119,900 * Cabot Microelectronics Corporation 3,522,662 144 230,100 * Convergys Corporation 3,306,537 135 83,100 Imation Corporation 3,562,497 146 101,100 * Intergraph Corporation 4,520,181 185 65,700 * International Rectifier Corporation 2,961,756 121 223,400 * MEMC Electronic Materials, Inc. 5,091,286 208 362,000 * Overland Storage, Inc. 2,950,300 121 89,600 * Rogers Corporation 3,467,520 142 184,600 Sabre Holdings Corporation - Class "A" 3,743,688 153 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Information Technology (continued) 436,500 * Tyler Technologies, Inc. $3,614,220 $148 89,900 * Varian Semiconductor Equipment Associates, Inc. 3,809,063 156 - ---------------------------------------------------------------------------------------------------------------------- 47,448,707 1,941 - ---------------------------------------------------------------------------------------------------------------------- Materials--2.8% 70,200 AptarGroup, Inc. 3,496,662 143 98,500 Commercial Metals Company 3,323,390 136 6,200 * Metals USA, Inc. 126,852 5 - ---------------------------------------------------------------------------------------------------------------------- 6,946,904 284 - ---------------------------------------------------------------------------------------------------------------------- Telecommunication Services--4.4% 105,300 CenturyTel, Inc. 3,683,394 151 371,400 * Premiere Global Services, Inc. 3,038,052 124 105,825 Telephone & Data Systems, Inc. - Special Shares 3,973,729 163 - ---------------------------------------------------------------------------------------------------------------------- 10,695,175 438 - ---------------------------------------------------------------------------------------------------------------------- Utilities--6.0% 121,300 Atmos Energy Corporation 3,426,725 140 261,800 * CMS Energy Corporation 4,306,610 176 185,200 Duquesne Light Holdings, Inc. 3,187,292 130 160,100 Pepco Holdings, Inc. 3,725,526 153 - ---------------------------------------------------------------------------------------------------------------------- 14,646,153 599 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $209,985,596) 235,110,677 9,620 - ---------------------------------------------------------------------------------------------------------------------- SHORT-TERM U.S. GOVERNMENT AGENCY OBLIGATIONS--4.3% $10,600M Federal Home Loan Bank, 3.18%, 10/3/05 (cost $10,598,127) 10,598,127 434 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $220,583,723) 100.5% 245,708,804 10,054 Excess of Liabilities Over Other Assets (.5) (1,325,759) (54) - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $244,383,045 $10,000 ====================================================================================================================== * Non-income producing See notes to financial statements
Portfolio Manager's Letter FIRST INVESTORS FOCUSED EQUITY FUND Dear Investor: This is the annual report for the First Investors Focused Equity Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 11.4% for Class A shares and 10.7% for Class B shares, including dividends of 1.8 cents per share on Class A shares and 0.4 cents per share on Class B shares. The Fund's performance during the reporting period was driven by a combination of the solid performance of the equity markets and the concentrated nature of the Fund. As with any concentrated equity fund, stock selection had a key impact on performance. The Fund was helped by top absolute contributors ConocoPhillips, which benefited from higher oil prices, and Altria Group, which rose on a positive litigation outcome and the company's decision to increase its dividend. Individual detractors during the period included Pfizer and First Data. The Fund's relative performance versus the Standard & Poor's 500 Index was helped by strong security selection across a number of sectors including consumer staples, industrials and financials. Negative security selection was concentrated in the information technology sector. The Fund's bias towards the mega-capitalization portion of the market was a drag on performance relative to the Standard & Poor's 500 Index as this segment underperformed the overall Index during the period. However, this was more than outweighed by superior stock selection within this market segment. Sector allocation was a moderate negative as the effects of the Fund's underweight allocation to the strong performing utilities sector outweighed the positive results from the Fund's overweight allocation to the energy and information technology sectors. Because the Fund is concentrated in less than 50 securities, sector allocation tends to have less of an impact on Fund performance than stock selection. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ MATTHEW E. MEGARGEL Matthew E. Megargel Portfolio Manager October 31, 2005 Fund Expenses FIRST INVESTORS FOCUSED EQUITY FUND The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,054.54 $9.53 Hypothetical (5% annual return before expenses) $1,000.00 $1,015.79 $9.35 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,050.44 $13.11 Hypothetical (5% annual return before expenses) $1,000.00 $1,012.29 $12.86 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.85% for Class A shares and 2.55% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio Composition TOP TEN SECTORS (BAR CHART DATA:) Health Care 17.6% Financials 16.8% Information Technology 15.4% Energy 11.1% Industrials 10.8% Consumer Staples 10.6% Consumer Discretionary 10.2% Materials 3.6% Telecommunication Services 2.1% Utilities 0.9% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS FOCUSED EQUITY FUND Comparison of change in value of $10,000 investment in the First Investors Focused Equity Fund (Class A shares) and the Standard & Poor's 500 Index. First Investors Focused Equity Fund Graph Plot Points for the periods Ended 9/30/05 Focused Equity S&P 500 Fund Index Mar-99 $ 9,425 $10,000 Sep-99 10,254 9,957 Sep-00 9,783 11,279 Sep-01 7,276 8,277 Sep-02 5,401 6,581 Sep-03 6,814 8,187 Sep-04 7,380 9,322 Sep-05 8,218 10,464 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 11.35% 4.92% Five Years (3.43%) (4.56%) Since Inception (3/22/99) (2.08%) (2.96%) Class B Shares One Year 10.68% 6.68% Five Years (4.07%) (4.46%) Since Inception (3/22/99) (2.75%) (2.75%) The graph compares a $10,000 investment in the First Investors Focused Equity Fund (Class A shares) beginning 3/22/99 (inception date) with a theoretical investment in the Standard & Poor's 500 Index (the "Index"). The Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different lasses. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). During certain of the periods shown, some of the expenses of the Fund were waived or assumed. If such expenses had been paid by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Returns Since Inception would have been (2.97%). The Class B "S.E.C. Standardized" Average Annual Total Returns Since Inception would have been (2.76%). Results represent past performance and do not indicate future results. The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. Standard & Poor's 500 Index figures are from Standard & Poor's and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS FOCUSED EQUITY FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--99.9% Consumer Discretionary--10.3% 24,600 * Comcast Corporation - Special Class "A" $707,988 $123 19,500 * Kohl's Corporation 978,510 170 16,500 Lowe's Companies, Inc. 1,062,600 185 128,600 Time Warner, Inc. 2,328,946 406 25,500 Viacom, Inc. - Class "B" 841,755 147 - ---------------------------------------------------------------------------------------------------------------------- 5,919,799 1,031 - ---------------------------------------------------------------------------------------------------------------------- Consumer Staples--10.7% 23,300 Altria Group, Inc. 1,717,443 299 14,200 Coca-Cola Company 613,298 107 25,500 PepsiCo, Inc. 1,446,105 252 39,600 Procter & Gamble Company 2,354,616 410 - ---------------------------------------------------------------------------------------------------------------------- 6,131,462 1,068 - ---------------------------------------------------------------------------------------------------------------------- Energy--11.2% 37,400 ConocoPhillips 2,614,634 455 17,700 GlobalSantaFe Corporation 807,474 141 24,500 Noble Energy, Inc. 1,149,050 200 21,900 Schlumberger, Ltd. 1,847,922 322 - ---------------------------------------------------------------------------------------------------------------------- 6,419,080 1,118 - ---------------------------------------------------------------------------------------------------------------------- Financials--16.9% 15,220 American International Group, Inc. 943,031 164 50,200 Bank of America Corporation 2,113,420 368 39,500 Citigroup, Inc. 1,798,040 313 13,100 Golden West Financial Corporation 778,009 136 23,700 Merrill Lynch & Company, Inc. 1,453,995 253 13,500 MetLife, Inc. 672,705 117 21,784 St. Paul Travelers Companies, Inc. 977,448 170 20,000 State Street Corporation 978,400 171 - ---------------------------------------------------------------------------------------------------------------------- 9,715,048 1,692 - ---------------------------------------------------------------------------------------------------------------------- Health Care--17.7% 24,300 Abbott Laboratories 1,030,320 179 15,500 * Amgen, Inc. 1,234,885 215 19,400 Baxter International, Inc. 773,478 135 15,200 Eli Lilly & Company 813,504 142 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS FOCUSED EQUITY FUND September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Health Care (continued) 10,300 * Genzyme Corporation $737,892 $129 30,100 Medtronic, Inc. 1,613,962 281 36,800 Pfizer, Inc. 918,896 160 40,700 Schering-Plough Corporation 856,735 149 19,000 * WellPoint, Inc. 1,440,580 251 16,400 Wyeth 758,828 132 - ---------------------------------------------------------------------------------------------------------------------- 10,179,080 1,773 - ---------------------------------------------------------------------------------------------------------------------- Industrials--10.9% 17,600 Boeing Company 1,195,920 208 9,500 General Dynamics Corporation 1,135,725 198 58,100 General Electric Company 1,956,227 341 22,000 Ingersoll-Rand Company - Class "A" 841,060 147 21,600 United Technologies Corporation 1,119,744 195 - ---------------------------------------------------------------------------------------------------------------------- 6,248,676 1,089 - ---------------------------------------------------------------------------------------------------------------------- Information Technology--15.5% 25,900 Analog Devices, Inc. 961,926 168 35,200 * Cisco Systems, Inc. 631,136 110 46,600 * Corning, Inc. 900,778 157 16,800 * Dell, Inc. 574,560 100 19,800 First Data Corporation 792,000 138 101,800 Microsoft Corporation 2,619,315 456 10,300 * Research in Motion, Ltd. 704,520 123 22,600 Texas Instruments, Inc. 766,140 133 27,900 * Yahoo!, Inc. 944,136 165 - ---------------------------------------------------------------------------------------------------------------------- 8,894,511 1,550 - ---------------------------------------------------------------------------------------------------------------------- Materials--3.7% 20,600 Du Pont (E.I.) de Nemours & Company 806,902 141 12,400 Newmont Mining Corporation 584,908 102 4,400 Rio Tinto PLC (ADR) 722,920 126 - ---------------------------------------------------------------------------------------------------------------------- 2,114,730 369 - ---------------------------------------------------------------------------------------------------------------------- Telecommunication Services--2.1% 52,221 Sprint Nextel Corporation 1,241,815 215 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Shares or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Utilities--.9% 12,900 PG&E Corporation $506,325 $88 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $51,332,262) 57,370,526 9,993 - ---------------------------------------------------------------------------------------------------------------------- REPURCHASE AGREEMENT--1.0% $544M UBS Securities, 3.31%, dated 9/30/05 to be repurchased at $544,150 on 10/3/05 (collateralized by U.S. Treasury Bonds, 5.25%, 11/15/28, valued at $553,578) (cost $544,000) 544,000 95 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $51,876,262) 100.9% 57,914,526 10,088 Excess of Liabilities Over Other Assets (.9) (503,679) (88) - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $57,410,847 $10,000 ====================================================================================================================== * Non-income producing Summary of Abbreviations: ADR American Depositary Receipts See notes to financial statements
Portfolio Manager's Letter FIRST INVESTORS GLOBAL FUND, INC. Dear Investor: This is the annual report for the First Investors Global Fund for the fiscal year ended September 30, 2005. During the period, the Fund's return on a net asset value basis was 19.1% for Class A shares and 18.1% for Class B shares. The Fund's positive overall performance during the reporting period was driven by improving global economies and solid performance of the equity markets. Foreign markets outperformed U.S. domestic markets during the period, illustrating the potential benefit of the Fund's global investment approach. As measured by their respective MSCI regional indexes, emerging markets led the way, returning 47%, followed by the Pacific Basin (excluding Japan) with 35%. Japan and Europe also performed well, returning 27% and 25%, respectively. Stock selection was strong across a number of sectors, particularly the consumer staples and energy sectors. Within consumer staples, the Fund's holdings in Japan Tobacco rose significantly during the period. Within the energy sector, ConocoPhillips and Noble Energy were strong performers as both stocks continued to be supported by rising oil prices. These positive results were partially offset by negative stock selection in the information technology sector. In addition, sector allocation decisions detracted from the Fund's results during the period. On a regional basis, the Fund benefited from strong results relative to the MSCI All Country World Free Index from holdings in the U.S. and Japan. However, these gains were offset by negative results from the Fund's European holdings, which included Irish biotech company Elan. Shares of Elan declined significantly after the company announced in late February that its new multiple sclerosis drug, Tysabri, was associated with a fatal side effect. Thank you for placing your trust in First Investors. As always, we appreciate the opportunity to serve your investment needs. Sincerely, /s/ TROND SKRAMSTAD Trond Skramstad Portfolio Manager October 31, 2005 Fund Expenses FIRST INVESTORS GLOBAL FUND, INC. The examples below show the ongoing costs (in dollars) of investing in your Fund and will help you in comparing these costs with costs of other mutual funds. Please refer to page 2 for a detailed explanation of the information presented in these examples.
- ---------------------------------------------------------------------------------------------- Beginning Ending Account Account Expenses Paid Value Value During Period (4/1/05) (9/30/05) (4/1/05-9/30/05)* - ---------------------------------------------------------------------------------------------- Expense Example - Class A Shares Actual $1,000.00 $1,089.51 $9.43 Hypothetical (5% annual return before expenses) $1,000.00 $1,016.05 $9.10 - ---------------------------------------------------------------------------------------------- Expense Example - Class B Shares Actual $1,000.00 $1,084.86 $13.07 Hypothetical (5% annual return before expenses) $1,000.00 $1,012.54 $12.61 - ---------------------------------------------------------------------------------------------- * Expenses are equal to the annualized expense ratio of 1.80% for Class A shares and 2.50% for Class B shares, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Portfolio Composition TOP TEN COUNTRIES (BAR CHART DATA:) United States 50.3% Japan 12.2% United Kingdom 6.9% France 6.5% Switzerland 5.6% Canada 3.7% Germany 2.6% Netherlands 1.6% Taiwan 1.3% Hong Kong 1.2% Portfolio holdings and allocations are subject to change. Percentages are as of September 30, 2005, and are based on the total value of investments. Cumulative Performance Information FIRST INVESTORS GLOBAL FUND, INC. Comparison of change in value of $10,000 investment in the First Investors Global Fund, Inc. (Class A shares) and the Morgan Stanley Capital International ("MSCI") All Country World Free Index. First Investors Global Fund, Inc. Graph Plot Points for the periods Ended 9/30/05 Global MSCI All Country Fund World Free Index Dec-95 $ 9,425 $10,000 Dec-96 10,786 11,320 Dec-97 11,647 13,017 Sep-98 11,502 13,107 Sep-99 14,909 17,157 Sep-00 16,658 18,532 Sep-01 11,849 13,316 Sep-02 9,620 10,948 Sep-03 11,735 13,879 Sep-04 13,487 16,382 Sep-05 16,057 19,812 (INSET BOX IN CHART READS:) Average Annual Total Returns* Class A Shares N.A.V. Only S.E.C. Standardized One Year 19.06% 12.24% Five Years (0.73%) (1.89%) Ten Years 5.98% 5.35% Class B Shares One Year 18.12% 14.12% Five Years (1.45%) (1.85%) Ten Years 5.15% 5.15% The graph compares a $10,000 investment in the First Investors Global Fund, Inc. (Class A shares) beginning 12/31/95 with a theoretical investment in the MSCI All Country World Free Index (the "Index"). The Index represents both the developed and the emerging markets. The Index includes 49 markets of which emerging markets represent approximately 6.5%. It is not possible to invest directly in this Index. In addition, the Index does not take into account fees and expenses that an investor would incur in purchasing securities in the Index. For purposes of the graph and the accompanying table, unless otherwise indicated, it has been assumed that the maximum sales charge was deducted from the initial $10,000 investment in the Fund and all dividends and distributions were reinvested. Class B shares performance may be greater than or less than that shown in the line graph above for Class A shares based on differences in sales loads and fees paid by shareholders investing in the different classes. * Average Annual Total Return figures (for the periods ended 9/30/05) include the reinvestment of all dividends and distributions. "N.A.V. Only" returns are calculated without sales charges. The Class A "S.E.C. Standardized" returns shown are based on the maximum sales charge of 5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C. Standardized" returns are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). Results represent past performance and do not indicate future results.The graph and the returns shown do not reflect the deduction of taxes that a shareholder would pay on distributions or the redemption of fund shares. Investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than the original cost. MSCI All Country World Free Index figures are from Morgan Stanley & Co., Inc. and all other figures are from First Investors Management Company, Inc.
Portfolio of Investments FIRST INVESTORS GLOBAL FUND, INC. September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- COMMON STOCKS--97.8% United States--48.2% 39,000 Abbott Laboratories $1,653,600 $65 72,500 * Alamosa Holdings, Inc. 1,240,475 49 37,500 Alcoa, Inc. 915,750 36 36,300 Altria Group, Inc. 2,675,673 106 36,200 * Amdocs, Ltd. 1,003,826 40 23,653 American International Group, Inc. 1,465,540 58 25,000 * Amgen, Inc. 1,991,750 79 12,600 Analog Devices, Inc. 467,964 19 16,200 Anheuser-Busch Companies, Inc. 697,248 28 79,500 Bank of America Corporation 3,346,950 132 30,800 Baxter International, Inc. 1,227,996 49 26,900 Boeing Company 1,827,855 72 15,600 Caterpillar, Inc. 916,500 36 55,400 * Cisco Systems, Inc. 993,322 39 63,249 Citigroup, Inc. 2,879,094 114 32,800 * Comcast Corporation - Special Class "A" 943,984 37 65,600 ConocoPhillips 4,586,096 181 113,200 * Corning, Inc. 2,188,156 86 9,700 D.R. Horton, Inc. 351,334 14 26,400 * Dell, Inc. 902,880 36 32,400 DuPont (E.I.) de Nemours & Company 1,269,108 50 22,500 Eli Lilly & Company 1,204,200 48 3,900 Federated Department Stores, Inc. 260,793 10 31,900 First Data Corporation 1,276,000 50 21,200 * Fisher Scientific International, Inc. 1,315,460 52 9,800 General Dynamics Corporation 1,171,590 46 93,300 General Electric Company 3,141,411 124 42,900 * Genzyme Corporation 3,073,356 121 39,400 GlobalSantaFe Corporation 1,797,428 71 20,600 Golden West Financial Corporation 1,223,434 48 27,900 * Health Net, Inc. 1,320,228 52 35,500 Hilton Hotels Corporation 792,360 31 37,400 Ingersoll-Rand Company - Class "A" 1,429,802 57 53,260 Intel Corporation 1,312,859 52 33,200 * Intuit, Inc. 1,487,692 59 31,500 * Kohl's Corporation 1,580,670 62 18,800 * Kroger Company 387,092 15 26,500 Lowe's Companies, Inc. 1,706,600 67 29,900 Market 2000+ Holders Trust 1,647,191 65 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS GLOBAL FUND, INC. September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- United States (continued) 48,200 Medtronic, Inc. $2,584,484 $102 8,900 * Mercury Interactive Corporation 352,440 14 38,200 Merrill Lynch & Company, Inc. 2,343,570 93 37,400 Michaels Stores, Inc. 1,236,444 49 163,900 Microsoft Corporation 4,217,147 167 32,600 Motorola, Inc. 720,134 28 12,500 * National-Oilwell Varco, Inc. 822,500 33 44,100 Newmont Mining Corporation 2,080,197 82 99,700 Noble Energy, Inc. 4,675,930 185 35,900 Northern Trust Corporation 1,814,745 72 15,100 Omnicare, Inc. 849,073 34 39,800 PepsiCo, Inc. 2,257,058 89 55,225 Pfizer, Inc. 1,378,968 54 90,500 PG&E Corporation 3,552,125 140 16,800 Precision Castparts Corporation 892,080 35 63,500 Procter & Gamble Company 3,775,710 149 60,600 Schering-Plough Corporation 1,275,630 50 24,000 Schlumberger, Ltd. 2,025,120 80 23,200 Simon Property Group, Inc. (REIT) 1,719,584 68 81,679 Sprint Nextel Corporation 1,942,327 77 35,025 St. Paul Travelers Companies, Inc. 1,571,572 62 31,400 State Street Corporation 1,536,088 61 5,000 Tesoro Corporation 336,200 13 35,600 Texas Instruments, Inc. 1,206,840 48 203,800 Time Warner, Inc. 3,690,818 146 25,500 UnionBanCal Corporation 1,777,860 70 34,700 United Technologies Corporation 1,798,848 71 36,900 UnumProvident Corporation 756,450 30 42,200 Viacom, Inc. - Class "B" 1,393,022 55 20,400 Vulcan Materials Company 1,513,884 60 30,600 * WellPoint, Inc. 2,320,092 92 26,600 Wyeth 1,230,782 49 44,700 * Yahoo!, Inc. 1,512,648 60 25,000 Yum! Brands, Inc. 1,210,250 48 - ---------------------------------------------------------------------------------------------------------------------- 122,043,887 4,822 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Japan--12.1% 62,100 Canon, Inc. $3,358,682 $133 56,000 * Daiichi Sankyo Company, Ltd. 1,148,756 45 326 East Japan Railway Company 1,863,843 74 63,400 Eisai Company, Ltd. 2,712,987 107 44,100 Electric Power Development Company, Ltd. 1,474,669 58 148 Japan Tobacco, Inc. 2,337,392 92 7,300 Keyence Corporation 1,838,204 73 26 Mitsubishi Tokyo Financial Group, Inc. 341,803 13 590 Nippon Telegraph & Telephone Corporation 2,904,711 115 27,000 Promise Company, Ltd. 2,003,441 79 56,300 * Seven & I Holdings Company, Ltd. 1,867,725 74 23,200 Takeda Pharmaceutical Company, Ltd. 1,383,730 55 31,610 Takefuji Corporation 2,468,224 97 614 * UFJ Holdings, Inc.+ 5,000,194 198 - ---------------------------------------------------------------------------------------------------------------------- 30,704,361 1,213 - ---------------------------------------------------------------------------------------------------------------------- United Kingdom--6.9% 86,842 AstraZeneca PLC 4,048,202 160 65,833 Centrica PLC 286,504 11 345,254 EMI Group PLC 1,481,161 58 54,571 Imperial Tobacco Group PLC 1,567,833 62 129,810 Reckitt Benckiser PLC 3,965,996 157 34,921 Rio Tinto PLC 1,432,029 57 60,314 Royal Bank of Scotland Group PLC 1,716,825 68 4,569 Royal Dutch Shell PLC - Class "A" 151,321 6 1,071,012 Vodafone Group PLC 2,794,719 110 - ---------------------------------------------------------------------------------------------------------------------- 17,444,590 689 - ---------------------------------------------------------------------------------------------------------------------- France--6.5% 58,795 * Alcatel SA 785,417 31 21,888 Essilor International SA 1,818,216 72 20,686 LVMH Moet Hennessy Louis Vuitton SA 1,710,885 68 39,010 PSA Peugeot Citroen 2,657,325 105 27,469 Sanofi-Aventis 2,276,857 90 14,243 Total SA 3,899,769 154 96,403 Vivendi Universal SA 3,156,753 125 - ---------------------------------------------------------------------------------------------------------------------- 16,305,222 645 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS GLOBAL FUND, INC. September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Switzerland--5.6% 33,340 Credit Suisse Group - Registered $1,481,778 $58 13,742 Nestle SA - Registered 4,039,727 160 12,789 Roche Holding AG - Genusscheine 1,783,566 70 64,100 UBS AG - Registered 5,469,071 216 8,227 * Zurich Financial Services AG - Registered 1,407,061 56 - ---------------------------------------------------------------------------------------------------------------------- 14,181,203 560 - ---------------------------------------------------------------------------------------------------------------------- Canada--3.7% 36,700 Alcan, Inc. 1,167,785 46 18,600 * Biovail Corporation 434,682 17 72,800 Canadian Pacific Railway, Ltd. 3,135,054 124 30,100 Fairmont Hotels & Resorts, Inc. 1,005,942 40 24,200 Petro-Canada 1,012,330 40 13,500 * Research in Motion, Ltd. 923,400 36 35,600 Talisman Energy, Inc. 1,742,271 69 - ---------------------------------------------------------------------------------------------------------------------- 9,421,464 372 - ---------------------------------------------------------------------------------------------------------------------- Germany--2.6% 81,339 * Bayerische Hypo-und Vereinsbank AG 2,294,748 90 88,465 Deutsche Telekom AG - Registered 1,614,796 64 28,719 E.ON AG 2,652,274 105 - ---------------------------------------------------------------------------------------------------------------------- 6,561,818 259 - ---------------------------------------------------------------------------------------------------------------------- Netherlands--1.6% 294,584 * Koninklijke Ahold NV 2,233,984 88 70,602 Koninklijke (Royal) Philips Electronics NV 1,882,028 75 - ---------------------------------------------------------------------------------------------------------------------- 4,116,012 163 - ---------------------------------------------------------------------------------------------------------------------- Taiwan--1.3% 123,735 AU Optronics Corporation (ADR) 1,603,606 63 94,600 Chunghwa Telecom Company, Ltd. (ADR) 1,751,046 69 - ---------------------------------------------------------------------------------------------------------------------- 3,354,652 132 - ---------------------------------------------------------------------------------------------------------------------- Hong Kong--1.2% 229,500 Esprit Holdings, Ltd. 1,715,833 68 130,000 Sun Hung Kai Properties, Ltd. 1,346,460 53 - ---------------------------------------------------------------------------------------------------------------------- 3,062,293 121 - ---------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------- Amount Invested For Each $10,000 of Shares Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- Brazil--1.2% 46,000 Companhia Vale Do Rio Doce (ADR) $2,017,560 $80 14,100 Petroleo Brasileiro SA--Petrobras (ADR) 1,008,009 40 - ---------------------------------------------------------------------------------------------------------------------- 3,025,569 120 - ---------------------------------------------------------------------------------------------------------------------- Spain--1.2% 169,108 Banco Bilbao Vizcaya Argentaria SA 2,974,676 118 - ---------------------------------------------------------------------------------------------------------------------- Australia--.9% 230,698 Santos, Ltd. 2,203,919 87 5,300 Woodside Petroleum, Ltd. (ADR) 145,704 6 - ---------------------------------------------------------------------------------------------------------------------- 2,349,623 93 - ---------------------------------------------------------------------------------------------------------------------- Sweden--.7% 505,070 Telefonaktiebolaget LM Ericsson AB - Class "B" 1,849,200 73 - ---------------------------------------------------------------------------------------------------------------------- Russia--.7% 43,900 Mobile TeleSystems (ADR) 1,785,852 70 - ---------------------------------------------------------------------------------------------------------------------- Ireland--.6% 34,100 * Ryanair Holdings PLC (ADR) 1,552,573 61 - ---------------------------------------------------------------------------------------------------------------------- South Korea--.6% 24,790 SK Corporation 1,440,034 57 - ---------------------------------------------------------------------------------------------------------------------- Denmark--.6% 24,320 Carlsberg A/S - Class "B" 1,426,266 56 - ---------------------------------------------------------------------------------------------------------------------- Italy--.5% 269,540 Banca Intesa SpA 1,260,072 50 - ---------------------------------------------------------------------------------------------------------------------- Poland--.4% 53,514 Polski Koncern Naftowy Orlen SA 1,100,799 43 - ---------------------------------------------------------------------------------------------------------------------- China--.4% 915,500 * China Shenhua Energy Company, Ltd. 1,073,900 42 - ---------------------------------------------------------------------------------------------------------------------- Austria--.3% 15,622 Wienerberger AG 617,587 25 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Common Stocks (cost $205,169,157) 247,651,653 9,784 - ---------------------------------------------------------------------------------------------------------------------- Portfolio of Investments (continued) FIRST INVESTORS GLOBAL FUND, INC. September 30, 2005 - ---------------------------------------------------------------------------------------------------------------------- Amount Invested Warrants or For Each Principal $10,000 of Amount Security Value Net Assets - ---------------------------------------------------------------------------------------------------------------------- WARRANTS--.0% United States 708 * Lucent Technologies, Inc. (expiring 12/10/07) (cost $0) $673 $-- - ---------------------------------------------------------------------------------------------------------------------- $4,925M REPURCHASE AGREEMENT--2.0% UBS Securities, 3.31% dated 9/30/05, to be repurchased at $4,926,358 on 10/3/05 (collateralized by U.S. Treasury Bonds, 8.875%, 2/15/19, valued at $5,011,799) (cost $4,925,000) 4,925,000 196 - ---------------------------------------------------------------------------------------------------------------------- Total Value of Investments (cost $210,094,157) 99.8% 252,577,326 9,980 Other Assets, Less Liabilities .2 515,627 20 - ---------------------------------------------------------------------------------------------------------------------- Net Assets 100.0% $253,092,953 $10,000 ====================================================================================================================== * Non-income producing + Security valued at fair value (see Note 1A) Summary Abbreviations: ADR American Depositary Receipts REIT Real Estate Investment Trust See notes to financial statements
Sector diversification of the portfolio was as follows: - ------------------------------------------------------------------------------ Percentage Sector of Net Assets Value - ------------------------------------------------------------------------------ Energy......................................... 11.1% $28,021,330 Pharmaceuticals & Biotechnology................ 10.1 25,597,066 Diversified Financials......................... 7.9 19,996,011 Banks.......................................... 7.9 19,936,562 Technology Hardware & Equipment................ 6.0 15,163,674 Food, Beverage & Tobacco....................... 5.9 15,001,197 Telecommunication Services..................... 5.5 14,033,926 Capital Goods.................................. 4.7 11,795,673 Health Care Equipment & Services............... 4.5 11,435,549 Media.......................................... 4.2 10,665,738 Materials...................................... 4.1 10,396,313 Software & Services............................ 3.9 9,849,753 Utilities...................................... 3.1 7,965,572 Household & Personal Products.................. 3.0 7,741,706 Transportation................................. 2.6 6,551,470 Retailing...................................... 2.6 6,500,340 Insurance...................................... 2.1 5,200,623 Food & Staples Retailing....................... 1.8 4,488,801 Consumer Durables & Apparel.................... 1.6 3,944,247 Real Estate.................................... 1.2 3,066,044 Consumer Services.............................. 1.2 3,008,552 Semiconductors & Semiconductor Equipment....... 1.2 2,987,663 Automobiles & Components....................... 1.0 2,657,325 Pooled Vehicle................................. 0.6 1,647,191 Repurchase Agreement........................... 2.0 4,925,000 - ------------------------------------------------------------------------------ Total Value of Investments 99.8 252,577,326 Other Assets, Less Liabilities .2 515,627 - ------------------------------------------------------------------------------ Net Assets 100.0% $253,092,953 ============================================================================== See notes to financial statements
Statements of Assets and Liabilities FIRST INVESTORS September 30, 2005 - -------------------------------------------------------------------------------------------------------------- TOTAL GROWTH & RETURN VALUE BLUE CHIP INCOME - -------------------------------------------------------------------------------------------------------------- Assets Investments in securities: At identified cost $285,960,612 $239,263,099 $364,347,423 $558,476,435 ============ ============ ============ ============ At value (Note 1A) $321,484,198 $291,236,580 $472,058,170 $679,054,478 Cash 335,303 877,040 136,069 1,070,195 Receivables: Investment securities sold 652,003 2,526,448 2,629,212 2,113,027 Dividends and interest 1,257,948 540,593 445,204 626,904 Shares sold 697,836 1,118,947 334,996 1,216,968 Forward currency contracts (Note 4) -- -- -- -- Other assets 14,927 11,912 26,847 32,371 ------------ ------------ ------------ ------------ Total Assets 324,442,215 296,311,520 475,630,498 684,113,943 ------------ ------------ ------------ ------------ Liabilities Payables: Investment securities purchased 4,492,824 1,377,550 1,416,092 4,420,298 Shares redeemed 547,232 361,908 692,794 813,373 Dividends payable 17,901 16,424 23,750 5,248 Accrued advisory fees 196,709 180,441 292,839 405,461 Accrued shareholder servicing costs 69,089 68,378 135,631 161,977 Accrued expenses 29,129 33,875 13,293 24,094 ------------ ------------ ------------ ------------ Total Liabilities 5,352,884 2,038,576 2,574,399 5,830,451 ------------ ------------ ------------ ------------ Net Assets $319,089,331 $294,272,944 $473,056,099 $678,283,492 ============ ============ ============ ============ Net Assets Consist of: Capital paid in $294,435,732 $290,533,350 $477,968,418 $588,258,354 Undistributed net investment income (deficit) (204,518) 593,069 439 808,110 Accumulated net realized gain (loss) on investments and foreign currency transactions (10,665,469) (48,826,956) (112,623,505) (31,361,015) Net unrealized appreciation in value of investments and foreign currency transactions 35,523,586 51,973,481 107,710,747 120,578,043 ------------ ------------ ------------ ------------ Total $319,089,331 $294,272,944 $473,056,099 $678,283,492 ============ ============ ============ ============ Net Assets: Class A $281,259,706 $267,308,724 $420,920,491 $596,683,911 Class B $ 37,829,625 $ 26,964,220 $ 52,135,608 $ 81,599,581 Shares outstanding (Note 5): Class A 20,194,093 40,418,281 20,430,317 43,649,880 Class B 2,755,471 4,140,699 2,701,212 6,249,165 Net asset value and redemption price per share - Class A $13.93 $6.61 $20.60 $13.67 ============ ============ ============ ============ Maximum offering price per share - Class A (Net asset value/.9425)* $14.78 $7.01 $21.86 $14.50 ============ ============ ============ ============ Net asset value and offering price per share - Class B (Note 5) $13.73 $6.51 $19.30 $13.06 ============ ============ ============ ============ Statements of Assets and Liabilities (Continued) FIRST INVESTORS September 30, 2005 - --------------------------------------------------------------------------------------------------------------------------- ALL-CAP MID-CAP SPECIAL FOCUSED GROWTH OPPORTUNITY SITUATIONS EQUITY GLOBAL - --------------------------------------------------------------------------------------------------------------------------- Assets Investments in securities: At identified cost $157,953,867 $353,056,395 $220,583,723 $51,876,262 $210,094,157 ============ ============ ============ ============ ============ At value (Note 1A) $190,832,650 $466,622,838 $245,708,804 $57,914,526 $252,577,326 Cash 82,444 206,202 56,134 90,745 126,552 Receivables: Investment securities sold 2,149,083 -- 136,097 167,590 2,396,881 Dividends and interest 64,434 232,341 170,102 53,185 462,044 Shares sold 334,199 1,181,244 316,107 32,809 221,246 Forward currency contracts (Note 4) -- -- -- -- 2,182 Other assets 9,334 18,376 11,483 3,866 33,116 ------------ ------------ ------------ ------------ ------------ Total Assets 193,472,144 468,261,001 246,398,727 58,262,721 255,819,347 ------------ ------------ ------------ ------------ ------------ Liabilities Payables: Investment securities purchased 48,861 156,038 1,388,687 655,833 2,122,814 Shares redeemed 359,326 377,927 353,101 118,629 302,561 Dividends payable -- -- -- -- -- Accrued advisory fees 117,473 284,846 149,432 35,653 206,008 Accrued shareholder servicing costs 60,531 121,259 80,600 27,200 68,804 Accrued expenses 14,174 24,738 43,862 14,559 26,207 ------------ ------------ ------------ ------------ ------------ Total Liabilities 600,365 964,808 2,015,682 851,874 2,726,394 ------------ ------------ ------------ ------------ ------------ Net Assets $192,871,779 $467,296,193 $244,383,045 $57,410,847 $253,092,953 ============ ============ ============ ============ ============ Net Assets Consist of: Capital paid in $165,189,371 $340,655,116 $225,527,126 $75,349,746 $215,624,336 Undistributed net investment income (deficit) -- -- -- 56,846 -- Accumulated net realized gain (loss) on investments and foreign currency transactions (5,196,375) 13,074,634 (6,269,162) (24,034,009) (5,014,136) Net unrealized appreciation in value of investments and foreign currency transactions 32,878,783 113,566,443 25,125,081 6,038,264 42,482,753 ------------ ------------ ------------ ------------ ------------ Total $192,871,779 $467,296,193 $244,383,045 $57,410,847 $253,092,953 ============ ============ ============ ============ ============ Net Assets: Class A $169,469,936 $410,238,232 $223,573,998 $48,060,138 $238,614,232 Class B $ 23,401,843 $ 57,057,961 $ 20,809,047 $ 9,350,709 $ 14,478,721 Shares outstanding (Note 5): Class A 19,213,230 14,527,330 10,939,271 5,523,358 33,809,118 Class B 2,745,508 2,189,506 1,111,674 1,123,176 2,219,729 Net asset value and redemption price per share - Class A $8.82 $28.24 $20.44 $8.70 $7.06 ============ ============ ============ ============ ============ Maximum offering price per share - Class A (Net asset value/.9425)* $9.36 $29.96 $21.69 $9.23 $7.49 ============ ============ ============ ============ ============ Net asset value and offering price per share - Class B (Note 5) $8.52 $26.06 $18.72 $8.33 $6.52 ============ ============ ============ ============ ============ * On purchases of $100,000 or more, the sales charge is reduced. See notes to financial statements
Statements of Operations FIRST INVESTORS Year Ended September 30, 2005 - -------------------------------------------------------------------------------------------------------------- TOTAL GROWTH & RETURN VALUE BLUE CHIP INCOME - -------------------------------------------------------------------------------------------------------------- Investment Income Dividends $ 4,054,252 $ 6,405,106 $ 9,413,015 $ 13,382,888 Interest 5,093,151 600,467 232,654 23,784 ------------ ------------ ------------ ------------ Total income 9,147,403 7,005,573 9,645,669 13,406,672 ------------ ------------ ------------ ------------ Expenses (Notes 1 and 3): Advisory fees 2,720,317 1,917,333 4,124,083 4,651,191 Distribution plan expenses - Class A 776,007 689,917 1,277,654 1,665,770 Distribution plan expenses - Class B 373,733 256,722 573,330 840,463 Shareholder servicing costs 776,273 749,097 1,572,123 1,837,987 Professional fees 49,189 47,948 87,744 96,682 Custodian fees 35,219 25,386 43,999 47,134 Registration fees 39,372 38,572 38,918 37,418 Reports to shareholders 49,513 47,741 95,873 111,105 Directors/trustees' fees 10,220 8,690 16,981 21,859 Other expenses 71,471 51,889 101,307 128,535 ------------ ------------ ------------ ------------ Total expenses 4,901,314 3,833,295 7,932,012 9,438,144 Less: Expenses waived (500,000) -- (500,000) -- Expenses paid indirectly (14,986) (19,998) (18,275) (11,558) ------------ ------------ ------------ ------------ Net expenses 4,386,328 3,813,297 7,413,737 9,426,586 ------------ ------------ ------------ ------------ Net investment income (loss) 4,761,075 3,192,276 2,231,932 3,980,086 ------------ ------------ ------------ ------------ Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions (Note 2): Net realized gain on investments and foreign currency transactions 14,327,122 10,988,910 27,341,802 52,239,623 Net unrealized appreciation (depreciation) of investments and foreign currency transactions 6,264,904 13,771,189 19,535,734 22,329,279 ------------ ------------ ------------ ------------ Net gain on investments and foreign currency transactions 20,592,026 24,760,099 46,877,536 74,568,902 ------------ ------------ ------------ ------------ Net Increase in Net Assets Resulting from Operations $ 25,353,101 $ 27,952,375 $ 49,109,468 $ 78,548,988 ============ ============ ============ ============ Statements of Operations (Continued) FIRST INVESTORS Year Ended September 30, 2005 - --------------------------------------------------------------------------------------------------------------------------- ALL-CAP MID-CAP SPECIAL FOCUSED GROWTH OPPORTUNITY SITUATIONS EQUITY GLOBAL - --------------------------------------------------------------------------------------------------------------------------- Investment Income Dividends $ 1,407,322 $ 4,133,151 $ 2,011,795 $ 1,285,388 $ 4,273,366+ Interest 173,349 187,212 197,503 22,148 145,775 ------------ ------------ ------------ ------------ ------------ Total income 1,580,671 4,320,363 2,209,298 1,307,536 4,419,141 ------------ ------------ ------------ ------------ ------------ Expenses (Notes 1 and 3): Advisory fees 1,301,509 3,468,957 2,232,767 444,632 2,403,146 Distribution plan expenses - Class A 454,247 1,030,960 629,222 147,564 676,681 Distribution plan expenses - Class B 221,188 522,076 212,948 100,962 147,574 Shareholder servicing costs 724,544 1,392,045 983,218 331,597 789,156 Professional fees 34,273 56,392 68,857 23,414 63,018 Custodian fees 14,804 34,180 28,559 7,753 120,094 Registration fees 40,234 39,418 39,918 41,094 46,541 Reports to shareholders 46,732 87,184 105,792 21,610 61,559 Directors/trustees' fees 5,476 13,396 7,981 2,111 8,345 Other expenses 43,470 78,492 52,118 13,774 75,246 ------------ ------------ ------------ ------------ ------------ Total expenses 2,886,477 6,723,100 4,361,380 1,134,511 4,391,360 Less: Expenses waived -- (500,000) (500,000) -- -- Expenses paid indirectly (2,590) (14,774) (22,771) (1,159) (1,446) ------------ ------------ ------------ ------------ ------------ Net expenses 2,883,887 6,208,326 3,838,609 1,133,352 4,389,914 ------------ ------------ ------------ ------------ ------------ Net investment income (loss) (1,303,216) (1,887,963) (1,629,311) 174,184 29,227 ------------ ------------ ------------ ------------ ------------ Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions (Note 2): Net realized gain on investments and foreign currency transactions 12,586,390 25,408,825 54,920,845 2,888,567 26,274,478 Net unrealized appreciation (depreciation) of investments and foreign currency transactions 9,837,022 61,015,861 (9,477,244) 3,284,026 15,303,113 ------------ ------------ ------------ ------------ ------------ Net gain on investments and foreign currency transactions 22,423,412 86,424,686 45,443,601 6,172,593 41,577,591 ------------ ------------ ------------ ------------ ------------ Net Increase in Net Assets Resulting from Operations $ 21,120,196 $ 84,536,723 $ 43,814,290 $ 6,346,777 $ 41,606,818 ============ ============ ============ ============ ============ + Net of $314,608 foreign taxes withheld See notes to financial statements
Statements of Changes in Net Assets FIRST INVESTORS - ---------------------------------------------------------------------------------------------------------------------------------- TOTAL RETURN VALUE ---------------------------- ---------------------------- Year Ended September 30 2005 2004 2005 2004 - ---------------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations Net investment income (loss) $ 4,761,075 $ 3,537,896 $ 3,192,276 $ 2,050,767 Net realized gain on investments 14,327,122 8,318,115 10,988,910 4,056,548 Net unrealized appreciation of investments 6,264,904 8,527,394 13,771,189 25,404,854 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 25,353,101 20,383,405 27,952,375 31,512,169 ------------ ------------ ------------ ------------ Dividends to Shareholders Net investment income - Class A (4,688,964) (3,344,902) (2,633,134) (1,866,906) Net investment income - Class B (428,201) (318,565) (122,898) (112,863) ------------ ------------ ------------ ------------ Total dividends (5,117,165) (3,663,467) (2,756,032) (1,979,769) ------------ ------------ ------------ ------------ Share Transactions* Class A: Proceeds from shares sold 64,070,678 67,816,731 84,851,705 51,007,936 Reinvestment of dividends 4,613,539 3,288,426 2,574,863 1,814,820 Cost of shares redeemed (36,254,876) (31,026,815) (27,688,829) (19,645,255) ------------ ------------ ------------ ------------ 32,429,341 40,078,342 59,737,739 33,177,501 ------------ ------------ ------------ ------------ Class B: Proceeds from shares sold 5,259,203 9,344,252 6,026,435 5,777,938 Reinvestment of dividends 425,505 316,238 121,750 111,791 Cost of shares redeemed (6,076,543) (4,776,454) (5,162,063) (4,941,142) ------------ ------------ ------------ ------------ (391,835) 4,884,036 986,122 948,587 ------------ ------------ ------------ ------------ Net increase (decrease) from share transactions 32,037,506 44,962,378 60,723,861 34,126,088 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 52,273,442 61,682,316 85,920,204 63,658,488 Net Assets Beginning of year 266,815,889 205,133,573 208,352,740 144,694,252 ------------ ------------ ------------ ------------ End of year + $319,089,331 $266,815,889 $294,272,944 $208,352,740 ============ ============ ============ ============ +Includes undistributed net investment income (deficit) of $ (204,518) $ (264,926) $ 593,069 $ 156,825 ============ ============ ============ ============ *Shares Issued and Redeemed Class A: Sold 4,699,343 5,268,212 13,262,294 8,950,654 Issued for dividends reinvested 336,103 252,536 396,159 310,958 Redeemed (2,656,447) (2,410,468) (4,319,198) (3,441,839) ------------ ------------ ------------ ------------ Net increase (decrease) in Class A shares outstanding 2,378,999 3,110,280 9,339,255 5,819,773 ============ ============ ============ ============ Class B: Sold 393,326 737,727 960,339 1,032,020 Issued for dividends reinvested 31,456 24,614 19,022 19,427 Redeemed (452,242) (375,421) (818,095) (882,554) ------------ ------------ ------------ ------------ Net increase (decrease) in Class B shares outstanding (27,460) 386,920 161,266 168,893 ============ ============ ============ ============ Statements of Changes in Net Assets (Continued) FIRST INVESTORS - ---------------------------------------------------------------------------------------------------------------------------------- BLUE CHIP GROWTH & INCOME ---------------------------- ---------------------------- Year Ended September 30 2005 2004 2005 2004 - ---------------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations Net investment income (loss) $ 2,231,932 $ (283,785) $ 3,980,086 $ 2,341,691 Net realized gain on investments 27,341,802 25,571,788 52,239,623 36,796,326 Net unrealized appreciation of investments 19,535,734 14,361,975 22,329,279 27,753,508 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 49,109,468 39,649,978 78,548,988 66,891,525 ------------ ------------ ------------ ------------ Dividends to Shareholders Net investment income - Class A (2,052,222) -- (4,113,800) (1,198,784) Net investment income - Class B (179,271) -- (201,083) -- ------------ ------------ ------------ ------------ Total dividends (2,231,493) -- (4,314,883) (1,198,784) ------------ ------------ ------------ ------------ Share Transactions* Class A: Proceeds from shares sold 44,068,883 59,861,560 105,630,410 105,331,802 Reinvestment of dividends 2,028,913 -- 4,067,634 1,186,897 Cost of shares redeemed (80,924,729) (62,755,398) (76,352,083) (63,168,639) ------------ ------------ ------------ ------------ (34,826,933) (2,893,838) 33,345,961 43,350,060 ------------ ------------ ------------ ------------ Class B: Proceeds from shares sold 3,947,403 8,311,100 8,233,185 14,981,290 Reinvestment of dividends 178,831 -- 200,260 -- Cost of shares redeemed (18,447,695) (15,084,253) (20,089,693) (17,923,509) ------------ ------------ ------------ ------------ (14,321,461) (6,773,153) (11,656,248) (2,942,219) ------------ ------------ ------------ ------------ Net increase (decrease) from share transactions (49,148,394) (9,666,991) 21,689,713 40,407,841 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets (2,270,419) 29,982,987 95,923,818 106,100,582 Net Assets Beginning of year 475,326,518 445,343,531 582,359,674 476,259,092 ------------ ------------ ------------ ------------ End of year + $473,056,099 $475,326,518 $678,283,492 $582,359,674 ============ ============ ============ ============ +Includes undistributed net investment income (deficit) of $ 439 $ -- $ 808,110 $ 1,142,907 ============ ============ ============ ============ *Shares Issued and Redeemed Class A: Sold 2,197,308 3,172,176 8,066,584 8,833,243 Issued for dividends reinvested 98,491 -- 306,678 97,777 Redeemed (4,035,467) (3,335,866) (5,827,638) (5,290,872) ------------ ------------ ------------ ------------ Net increase (decrease) in Class A shares outstanding (1,739,668) (163,690) 2,545,624 3,640,148 ============ ============ ============ ============ Class B: Sold 209,604 466,882 659,640 1,312,512 Issued for dividends reinvested 9,266 -- 15,843 -- Redeemed (980,107) (846,873) (1,603,975) (1,568,845) ------------ ------------ ------------ ------------ Net increase (decrease) in Class B shares outstanding (761,237) (379,991) (928,492) (256,333) ============ ============ ============ ============ See notes to financial statements Statements of Changes in Net Assets FIRST INVESTORS - ---------------------------------------------------------------------------------------------------------------------------------- ALL-CAP GROWTH MID-CAP OPPORTUNITY ---------------------------- ---------------------------- Year Ended September 30 2005 2004 2005 2004 - ---------------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations Net investment income (loss) $ (1,303,216) $ (1,549,253) $ (1,887,963) $ (1,639,804) Net realized gain on investments 12,586,390 3,952,080 25,408,825 20,378,683 Net unrealized appreciation (depreciation) of investments 9,837,022 12,347,189 61,015,861 24,729,598 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 21,120,196 14,750,016 84,536,723 43,468,477 ------------ ------------ ------------ ------------ Dividends to Shareholders Net investment income - Class A -- -- -- -- Net investment income - Class B -- -- -- -- ------------ ------------ ------------ ------------ Total dividends -- -- -- -- ------------ ------------ ------------ ------------ Share Transactions * Class A: Proceeds from shares sold 41,188,051 52,765,310 99,735,632 79,643,493 Reinvestment of dividends -- -- -- -- Cost of shares redeemed (20,615,450) (11,769,360) (40,559,126) (31,414,210) ------------ ------------ ------------ ------------ 20,572,601 40,995,950 59,176,506 48,229,283 ------------ ------------ ------------ ------------ Class B: Proceeds from shares sold 3,422,603 6,200,445 8,855,927 11,173,893 Reinvestment of dividends -- -- -- -- Cost of shares redeemed (2,944,226) (1,739,011) (8,824,631) (5,939,582) ------------ ------------ ------------ ------------ 478,377 4,461,434 31,296 5,234,311 ------------ ------------ ------------ ------------ Net increase (decrease) from share transactions 21,050,978 45,457,384 59,207,802 53,463,594 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 42,171,174 60,207,400 143,744,525 96,932,071 Net Assets Beginning of year 150,700,605 90,493,205 323,551,668 226,619,597 ------------ ------------ ------------ ------------ End of year + $192,871,779 $150,700,605 $467,296,193 $323,551,668 ============ ============ ============ ============ +Includes undistributed net investment income of $ -- $ -- $ -- $ -- ============ ============ ============ ============ *Shares Issued and Redeemed Class A: Sold 4,995,352 6,871,429 3,889,924 3,631,663 Issued for dividends reinvested -- -- -- -- Redeemed (2,484,476) (1,531,123) (1,578,469) (1,427,534) ------------ ------------ ------------ ------------ Net increase (decrease) in Class A shares outstanding 2,510,876 5,340,306 2,311,455 2,204,129 ============ ============ ============ ============ Class B: Sold 428,824 827,213 373,923 548,606 Issued for dividends reinvested -- -- -- -- Redeemed (366,968) (231,955) (370,530) (289,487) ------------ ------------ ------------ ------------ Net increase (decrease) in Class B shares outstanding 61,856 595,258 3,393 259,119 ============ ============ ============ ============ Statements of Changes in Net Assets (Continued) FIRST INVESTORS - ---------------------------------------------------------------------------------------------------------------------------------- SPECIAL SITUATIONS FOCUSED EQUITY ---------------------------- ---------------------------- Year Ended September 30 2005 2004 2005 2004 - ---------------------------------------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations Net investment income (loss) $ (1,629,311) $ (2,473,241) $ 174,184 $ (268,089) Net realized gain on investments 54,920,845 26,478,497 2,888,567 1,822,147 Net unrealized appreciation (depreciation) of investments (9,477,244) (9,729,555) 3,284,026 3,279,568 ------------ ------------ ------------ ------------ Net increase in net assets resulting from operations 43,814,290 14,275,701 6,346,777 4,833,626 ------------ ------------ ------------ ------------ Dividends to Shareholders Net investment income - Class A -- -- (111,522) -- Net investment income - Class B -- -- (5,816) -- ------------ ------------ ------------ ------------ Total dividends -- -- (117,338) -- ------------ ------------ ------------ ------------ Share Transactions * Class A: Proceeds from shares sold 28,756,884 32,272,999 4,675,073 7,719,981 Reinvestment of dividends -- -- 110,993 -- Cost of shares redeemed (34,605,124) (24,508,853) (11,403,250) (10,216,270) ------------ ------------ ------------ ------------ (5,848,240) 7,764,146 (6,617,184) (2,496,289) ------------ ------------ ------------ ------------ Class B: Proceeds from shares sold 1,950,974 4,172,232 638,285 1,199,744 Reinvestment of dividends -- -- 5,739 -- Cost of shares redeemed (5,674,721) (5,431,921) (2,929,303) (2,128,058) ------------ ------------ ------------ ------------ (3,723,747) (1,259,689) (2,285,279) (928,314) ------------ ------------ ------------ ------------ Net increase (decrease) from share transactions (9,571,987) 6,504,457 (8,902,463) (3,424,603) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 34,242,303 20,780,158 (2,673,024) 1,409,023 Net Assets Beginning of year 210,140,742 189,360,584 60,083,871 58,674,848 ------------ ------------ ------------ ------------ End of year + $244,383,045 $210,140,742 $ 57,410,847 $ 60,083,871 ============ ============ ============ ============ +Includes undistributed net investment income of $ -- $ -- $ 56,846 $ -- ============ ============ ============ ============ *Shares Issued and Redeemed Class A: Sold 1,508,510 1,863,325 559,778 977,797 Issued for dividends reinvested -- -- 13,198 -- Redeemed (1,823,381) (1,421,872) (1,366,256) (1,296,757) ------------ ------------ ------------ ------------ Net increase (decrease) in Class A shares outstanding (314,871) 441,453 (793,280) (318,960) ============ ============ ============ ============ Class B: Sold 111,825 259,292 79,352 157,973 Issued for dividends reinvested -- -- 709 -- Redeemed (324,252) (338,579) (364,892) (280,246) ------------ ------------ ------------ ------------ Net increase (decrease) in Class B shares outstanding (212,427) (79,287) (284,831) (122,273) ============ ============ ============ ============ See notes to financial statements
Statements of Changes in Net Assets FIRST INVESTORS - ------------------------------------------------------------------------------------------------- GLOBAL --------------------------- Year Ended September 30 2005 2004 - ------------------------------------------------------------------------------------------------- Increase (Decrease) in Net Assets From Operations Net investment income (loss) $ 29,227 $ (400,083) Net realized gain on investments and foreign currency transactions 26,274,478 30,025,702 Net unrealized appreciation of investments and foreign currency transactions 15,303,113 690,941 ------------ ------------ Net increase in net assets resulting from operations 41,606,818 30,316,560 ------------ ------------ Share Transactions* Class A: Proceeds from shares sold 21,167,913 16,930,869 Cost of shares redeemed (30,999,052) (28,122,035) ------------ ------------ (9,831,139) (11,191,166) ------------ ------------ Class B: Proceeds from shares sold 1,619,784 1,931,105 Cost of shares redeemed (4,823,294) (3,892,357) ------------ ------------ (3,203,510) (1,961,252) ------------ ------------ Net decrease from share transactions (13,034,649) (13,152,418) ------------ ------------ Net increase in net assets 28,572,169 17,164,142 Net Assets Beginning of year 224,520,784 207,356,642 ------------ ------------ End of year $253,092,953 $224,520,784 ============ ============ *Shares Issued and Redeemed Class A: Sold 3,230,403 2,881,046 Redeemed (4,739,544) (4,801,535) ------------ ------------ Net decrease in Class A shares outstanding (1,509,141) (1,920,489) ============ ============ Class B: Sold 266,888 353,684 Redeemed (800,150) (706,156) ------------ ------------ Net decrease in Class B shares outstanding (533,262) (352,472) ============ ============ See notes to financial statements
Notes to Financial Statements September 30, 2005 1. Significant Accounting Policies--First Investors Total Return Fund, First Investors Blue Chip Fund and First Investors Special Situations Fund, each a series of First Investors Series Fund ("Series Fund"), a Massachusetts business trust; First Investors Value Fund (formerly Utilities Income), First Investors Growth & Income Fund, First Investors All-Cap Growth Fund, First Investors Mid-Cap Opportunity Fund and First Investors Focused Equity Fund, each a series of First Investors Series Fund II, Inc. ("Series Fund II"), a Maryland corporation; and First Investors Global Fund, Inc. ("Global Fund"), a Maryland corporation, are registered under the Investment Company Act of 1940 (the "1940 Act") as diversified, open-end management investment companies, with the exception of First Investors Focused Equity Fund, which is registered as a non-diversified series of the investment company. Each Fund accounts separately for the assets, liabilities, and operations of the Fund. Series Fund offers two additional series which are not included in this report. The objective of each Fund is as follows: Total Return Fund seeks high, long-term total investment return consistent with moderate investment risk. Value Fund seeks total return. Blue Chip Fund seeks high total investment return consistent with the preservation of capital. Growth & Income Fund seeks long-term growth of capital and current income. All-Cap Growth Fund seeks long-term growth of capital. Mid-Cap Opportunity Fund seeks long-term capital growth. Special Situations Fund seeks long-term growth of capital. Focused Equity Fund seeks capital appreciation. Global Fund primarily seeks long-term capital growth and secondarily a reasonable level of current income. A. Security Valuation--Except as provided below, a security listed or traded on an exchange or the Nasdaq Stock Market is valued at its last sale price on the exchange or market where the security is principally traded, and lacking any sales, the security is valued at the mean between the closing bid and asked prices. Securities traded in the over-the-counter ("OTC") market (including securities listed on exchanges whose primary market is believed to be OTC) are valued at the mean between the last bid and asked prices based upon quotes furnished by a market maker for such securities. Securities may also be priced by a pricing service approved by the applicable Fund's Notes to Financial Statements (continued) September 30, 2005 Board of Directors/Trustees ("the Board"). The pricing service considers security type, rating, market condition and yield data as well as market quotations, prices provided by market makers and other available information in determining value. Short-term debt securities that mature in 60 days or less are valued at amortized cost. The Funds monitor for significant events occurring after the close of foreign markets but prior to the close of trading on the New York Stock Exchange that could have a material impact on the value of any foreign securities that are held by the Funds. Examples of such events include natural disasters, political events, issuer-specific developments such as bankruptcies and significant fluctuations in securities markets. If the Valuation Committee decides that such events warrant using fair value estimates for foreign securities, it will take such events into consideration in determining the fair values of such securities. If market quotations or prices are not readily available or determined to be unreliable, the securities will be valued at fair value as determined in good faith pursuant to procedures adopted by the Board. At September 30, 2005, Global Fund held one security that was fair valued by its Valuation Committee with a value of $5,000,194 representing 2.0% of the Fund's net assets. For valuation purposes, where applicable, quotations of foreign securities in foreign currency are translated to U.S. dollar equivalents using the foreign exchange quotation in effect. B. Federal Income Taxes--No provision has been made for federal income taxes on net income or capital gains since it is the policy of each Fund to continue to comply with the special provisions of the Internal Revenue Code applicable to investment companies and to make sufficient distributions of income and capital gains (in excess of any available capital loss carryovers) to relieve it from all, or substantially all, such taxes. At September 30, 2005, capital loss carryovers were as follows:
Year Capital Loss Carryovers Expire ------------------------------------------------------------------- Fund Total 2009 2010 2011 2012 - ---- ----- ---- ---- ---- ---- Total Return $ 8,563,719 $ -- $ -- $ 8,563,719 $ -- Value 48,807,852 -- 12,401,373 36,406,479 -- Blue Chip 103,865,283 -- 34,677,744 69,187,539 -- Growth & Income 26,077,239 -- -- 26,077,239 -- All-Cap Growth 4,730,580 -- -- 4,730,580 -- Special Situations 6,051,363 -- -- 6,051,363 -- Focused Equity 23,740,685 10,726,015 1,712,582 9,856,986 1,445,102 Global 4,588,793 -- -- 4,588,793 --
C. Distributions to Shareholders--Dividends from net investment income, if any, of Total Return Fund, Value Fund, Blue Chip Fund and Growth & Income Fund are declared and paid quarterly. Dividends from net investment income, if any, of All-Cap Growth Fund, Mid-Cap Opportunity Fund, Special Situations Fund, Focused Equity Fund and Global Fund are declared and paid annually. Distributions from net realized capital gains, if any, are normally declared and paid annually. Income dividends and capital gain distributions are determined in accordance with income tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for capital loss carryforwards, deferral of wash sales losses, post-October capital losses, net operating losses and foreign currency transactions. D. Expense Allocation--Expenses directly charged or attributable to a Fund are paid from the assets of that Fund. General expenses of Series Fund and Series Fund II are allocated among and charged to the assets of each Fund in the Series on a fair and equitable basis, which may be based on the relative assets of each Fund or the nature of the services performed and relative applicability to each Fund. E. Repurchase Agreements--Securities pledged as collateral for repurchase agreements entered into by the All-Cap Growth Fund, Focused Equity Fund, and Global Fund are held by each Fund's custodian until maturity of the repurchase agreement. The agreements provide that the Funds will receive, as collateral, securities with a market value which will at all times be at least equal to 100% of the amount invested by the Funds. F. Use of Estimates--The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. G. Foreign Currency Translations--The accounting records of Global Fund are maintained in U.S. dollars. Portfolio securities and other assets and liabilities denominated in foreign currencies are translated to U.S. dollars at the date of valuation. Purchases and sales of investment securities, dividend income and certain expenses are translated to U.S. dollars at the rates of exchange prevailing on the respective dates of such transactions. Global Fund does not isolate that portion of gains and losses on investments which is due to changes in foreign exchange rates from that which is due to changes in market Notes to Financial Statements (continued) September 30, 2005 prices of the investments. Such fluctuations are included with the net realized and unrealized gains and losses from investments. Net realized and unrealized gains and losses on foreign currency transactions include gains and losses from the sales of foreign currency and gains and losses on accrued foreign dividends and related withholding taxes. H. Other--Security transactions are accounted for on the date the securities are purchased or sold. Cost is determined, and gains and losses are based, on the identified cost basis for both financial statement and federal income tax purposes. Dividend income is recorded on the ex-dividend date. Interest income and estimated expenses are accrued daily. Bond discounts and premiums are accreted or amortized using the interest method. For the year ended September 30, 2005, the Bank of New York, custodian for the Series Fund and Series Fund II, has provided total credits in the amount of $91,089 against custodian charges based on the uninvested cash balances of these Funds. The Funds also reduced expenses through brokerage service arrangements. For the year ended September 30, 2005, the Funds expenses were reduced by $16,468 under these arrangements. 2. Security Transactions--For the year ended September 30, 2005, purchases and sales of securities and long-term U.S. Government obligations (excluding U.S. Treasury bills, repurchase agreements, short-term securities and foreign currencies) were as follows: Long-Term U.S. Securities Government Obligations --------------------------- --------------------------- Cost of Proceeds Cost of Proceeds Fund Purchases from Sales Purchases from Sales - ---- ------------ ------------ ------------ ------------ Total Return $167,876,444 $143,094,964 $15,633,525 $2,986,375 Value 90,060,793 39,460,236 -- -- Blue Chip 261,285,402 306,061,154 -- -- Growth & Income 286,685,565 265,780,262 -- -- All-Cap Growth 168,079,583 150,908,393 -- -- Mid-Cap Opportunity 232,430,628 168,942,435 -- -- Special Situations 249,909,035 264,612,307 -- -- Focused Equity 35,035,283 43,863,159 -- -- Global 244,047,001 257,214,122 -- -- At September 30, 2005, aggregate cost and net unrealized appreciation of securities for federal income tax purposes were as follows: Gross Gross Net Aggregate Unrealized Unrealized Unrealized Fund Cost Appreciation Depreciation Appreciation - ---- ------------ ------------ ------------ ------------ Total Return $288,844,846 $ 43,831,467 $11,192,115 $ 32,639,352 Value 239,282,203 57,076,882 5,122,505 51,954,377 Blue Chip 373,105,645 110,738,337 11,785,812 98,952,525 Growth & Income 563,760,212 150,333,438 35,039,172 115,294,266 All-Cap Growth 158,419,662 33,869,597 1,456,609 32,412,988 Mid-Cap Opportunity 353,112,025 120,784,229 7,273,416 113,510,813 Special Situations 220,801,524 31,394,312 6,487,032 24,907,280 Focused Equity 52,169,586 8,522,013 2,777,073 5,744,940 Global 211,036,198 44,478,174 2,937,046 41,541,128 3. Advisory Fee and Other Transactions With Affiliates--Certain officers and directors/trustees of the Funds are officers and directors of the Funds' investment adviser, First Investors Management Company, Inc. ("FIMCO"), their underwriter, First Investors Corporation ("FIC"), their transfer agent, Administrative Data Management Corp. ("ADM") and/or First Investors Federal Savings Bank, ("FIFSB"), custodian of the Funds' retirement accounts. Directors/trustees of the Funds who are not "interested persons" of the Funds as defined in the 1940 Act are remunerated by the Funds. For the year ended September 30, 2005, total directors/trustees fees accrued by the Funds amounted to $95,059. The Investment Advisory Agreements provide as compensation to FIMCO, an annual fee, payable monthly, at the following rates: Total Return, Blue Chip, Mid-Cap Opportunity and Special Situations Funds-- 1% on the first $200 million of each Fund's average daily net assets, .75% on the next $300 million, declining by .03% on each $250 million thereafter, down to .66% on average daily net assets over $1 billion. FIMCO has waived 25% of the 1% annual fee on the first $200 million of each Fund's average daily net assets for the year ended September 30, 2005. Value, Growth & Income, All-Cap Growth and Focused Equity Funds-- .75% on the first $300 million of each Fund's average daily net assets, .72% on the next $200 million, .69% on the next $250 million and .66% on average daily net assets over $750 million. Notes to Financial Statements (continued) September 30, 2005 Global Fund--1% on the first $250 million of the Fund's average daily net assets, declining by .03% on each $250 million thereafter, down to .91% on average daily net assets over $750 million. For the year ended September 30, 2005, total advisory fees accrued to FIMCO by the Funds were $23,263,935 of which $2,000,000 was waived. For the year ended September 30, 2005, FIC, as underwriter, received $18,780,174 in commissions from the sale of shares of the Funds, after allowing $26,517 to other dealers. Shareholder servicing costs included $6,642,923 in transfer agent fees accrued to ADM and $1,889,737 in retirement accounts custodian fees accrued to FIFSB. Pursuant to Distribution Plans adopted under Rule 12b-1 of the 1940 Act, each Fund is authorized to pay FIC a fee up to .30% of the average daily net assets of the Class A shares and 1% of the average daily net assets of the Class B shares on an annualized basis each fiscal year, payable monthly. The fee consists of a distribution fee and a service fee. The service fee is paid for the ongoing servicing of clients who are shareholders of that Fund. For the year ended September 30, 2005, total distribution plan fees accrued to FIC by the Funds amounted to $10,597,018. Wellington Management Company, LLP ("Wellington") serves as investment subadviser to All-Cap Growth Fund, Focused Equity Fund and Global Fund. Effective March 8, 2005, Paradigm Capital Management, Inc. serves as investment subadviser to Special Situations Fund. The subadvisers are paid by FIMCO and not by the Funds. 4. Forward Currency Contracts--A forward currency contract is an obligation to purchase or sell a specific currency for an agreed-upon price at a future date. When a Fund purchases or sells foreign securities it customarily enters into a forward currency contract to minimize foreign exchange risk between the trade date and the settlement date of such transactions. The Fund could be exposed to risk if counter parties to the contracts are unable to meet the terms of their contracts or if the value of the foreign currency changes unfavorably. Forward currency contracts are "marked-to-market" daily at the applicable translation rate and the resulting unrealized gains or losses are reflected in the Fund's assets. Global Fund had the following forward currency contracts outstanding at September 30, 2005: Contracts to Buy Unrealized Foreign Currency In Exchange for Settlement Date Gain - ---------------------------- --------------- --------------- ---------- 436,211 Canadian Dollars US$ 371,497 10/3/05 US$ 4,353 141,956 Euro 170,858 10/3/05 291 125,201 Euro 150,729 10/4/05 219 --------------- ---------- $ 693,084 $ 4,863 =============== ---------- Contracts to Sell Unrealized Foreign Currency In Exchange for Settlement Date Loss - ---------------------------- --------------- --------------- ---------- 135,410 British Pound US$ 239,106 10/3/05 US$ (447) 294,481 British Pound 518,731 10/4/05 (2,234) --------------- ---------- $ 757,837 $(2,681) =============== ---------- Net Unrealized Gain on Forward Currency Contracts $ 2,182 ========== 5. Capital--Each Fund sells two classes of shares, Class A and Class B, each with a public offering price that reflects different sales charges and expense levels. Class A shares are sold with an initial sales charge of up to 5.75% of the amount invested and together with the Class B shares are subject to distribution plan fees as described in Note 3. Class B shares are sold without an initial sales charge, but are generally subject to a contingent deferred sales charge which declines in steps from 4% to 0% over a six-year period. Class B shares automatically convert into Class A shares after eight years. Realized and unrealized gains or losses, investment income and expenses (other than distribution plan fees and certain other class expenses) are allocated daily to each class of shares based upon the relative proportion of net assets of each class. Series Fund has established an unlimited number of no par value shares of beneficial interest for both Class A and Class B shares. Of the 100,000,000 $0.001 par value shares originally designated to each Fund, Series Fund II has classified 50,000,000 shares as Class A and 50,000,000 shares as Class B for each Fund. Of the 100,000,000 $1.00 par value Global Fund shares originally authorized, the Fund has designated 65,000,000 shares as Class A and 35,000,000 shares as Class B. Notes to Financial Statements (continued) September 30, 2005 6. Tax Components of Capital and Distributions to Shareholders--The tax character of distributions declared for the years ended September 30, 2005 and September 30, 2004 consisted entirely of ordinary income as follows: Distributions Declared from Ordinary Income --------------------------------- Fund 2005 2004 - ---- -------------- -------------- Total Return $5,117,165 $3,663,467 Value 2,756,032 1,979,769 Blue Chip 2,231,493 -- Growth & Income 4,314,883 1,198,784 All-Cap Growth -- -- Mid-Cap Opportunity -- -- Special Situations -- -- Focused Equity 117,338 -- Global -- -- As of September 30, 2005, the components of distributable earnings on a tax basis were as follows: Total Undistributed Capital Distributable Ordinary Gain (Loss) Unrealized Income Fund Income Carryovers Appreciation (Deficit) - ---- ------------ ------------ ------------ ------------ Total Return $577,966 $ (8,563,719) $ 32,639,352 $ 24,653,599 Value 593,069 (48,807,852) 51,954,377 3,739,594 Blue Chip 439 (103,865,283) 98,952,525 (4,912,319) Growth & Income 808,110 (26,077,239) 115,294,267 90,025,138 All-Cap Growth -- (4,730,580) 32,412,988 27,682,408 Mid-Cap Opportunity -- 13,130,264 113,510,813 126,641,077 Special Situations -- (6,051,363) 24,907,282 18,855,919 Focused Equity 56,846 (23,740,685) 5,744,940 (17,938,899) Global 516,698 (4,588,793) 41,540,712 37,468,617 7. Fund Reorganizations--On August 18, 2005, the Board of Directors or Trustees of each First Investors Fund covered by this report approved, subject to shareholder approval, an Agreement and Plan of Conversion and Termination pursuant to which each Fund would be reorganized into a corresponding series of the First Investors Equity Funds, a newly-established Delaware statutory trust (the "Reorganizations"). The Reorganizations will offer a number of benefits to the Funds, including, among other things, allowing the Funds to operate under uniform, modern and flexible governing documents that will increase operating efficiency by streamlining the governance process and updating, standardizing and streamlining certain of the Funds' outdated investment restrictions. If approved by shareholders, it is expected that the Reorganizations will take effect after the close of business on or about January 27, 2006, although the date may be adjusted in accordance with the Agreement and Plan of Conversion and Termination.
Financial Highlights FIRST INVESTORS The following table sets forth the per share operating performance data for a share outstanding, total return, ratios to average net assets and other supplemental data for each fiscal year ended September 30, except as otherwise indicated. - ----------------------------------------------------------------------------------------------------- P E R S H A R E D A T A ---------------------------------------------------------------------------------------- Less Distributions Investment Operations from ------------------------------------- ---------------------- Net Asset Net Realized Value, Net and Unrealized Total from Net Net Beginning Investment Gain (Loss) on Investment Investment Realized Total of Year Income Investments Operations Income Gain Distributions - ----------------------------------------------------------------------------------------------------- TOTAL RETURN FUND - ----------------- Class A - ------- 2001 $16.27 $ .26 $(2.86) $(2.60) $ .32 $1.07 $1.39 2002++ 12.28 .22 (1.59) (1.37) .32 -- .32 2003 10.59 .20 1.44 1.64 .21 -- .21 2004 12.02 .20 .96 1.16 .20 -- .20 2005 12.98 .23 .97 1.20 .25 -- .25 Class B - ------- 2001 16.05 .18 (2.84) (2.66) .21 1.07 1.28 2002++ 12.11 .15 (1.59) (1.44) .21 -- .21 2003 10.46 .09 1.44 1.53 .13 -- .13 2004 11.86 .12 .94 1.06 .12 -- .12 2005 12.80 .13 .95 1.08 .15 -- .15 - ----------------------------------------------------------------------------------------------------- VALUE FUND+++ - ----------------- Class A - ------- 2001 $ 8.60 $ .10 $(2.10) $(2.00) $ .11 $ .56 $ .67 2002++ 5.93 .11 (1.65) (1.54) .13 -- .13 2003 4.26 .08 .73 .81 .08 -- .08 2004 4.99 .07 .96 1.03 .07 -- .07 2005 5.95 .08 .65 .73 .07 -- .07 Class B - ------- 2001 8.47 .06 (2.07) (2.01) .06 .56 .62 2002++ 5.84 .07 (1.63) (1.56) .08 -- .08 2003 4.20 .05 .71 .76 .04 -- .04 2004 4.92 .03 .95 .98 .03 -- .03 2005 5.87 .04 .63 .67 .03 -- .03 - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- R A T I O S / S U P P L E M E N T A L D A T A - ------------------------ -------------------------------------------------------------------------------- Ratio to Average Net Ratio to Average Net Assets Before Expenses Assets** Waived or Assumed Net Asset -------------------- ---------------------- Value, Net Assets Net Net Portfolio End of Total End of Year Investment Investment Turnover Year Return* (in millions) Expenses Income Expenses Income Rate - ----------------------------------------------------------------------------------------------------------- TOTAL RETURN FUND - ----------------- Class A - ------- 2001 $12.28 (17.31)% $121 1.37% 2.02% 1.62% 1.77% 130% 2002++ 10.59 (11.44) 129 1.47 1.91 1.72 1.66 185 2003 12.02 15.58 177 1.52 1.72 1.77 1.47 80 2004 12.98 9.65 231 1.44 1.60 1.65 1.39 41 2005 13.93 9.25 281 1.40 1.69 1.57 1.52 52 Class B - ------- 2001 12.11 (17.82) 19 2.07 1.32 2.32 1.07 130 2002++ 10.46 (12.09) 22 2.17 1.21 2.42 .96 185 2003 11.86 14.71 28 2.22 1.02 2.47 .77 80 2004 12.80 8.92 36 2.14 .90 2.35 .69 41 2005 13.73 8.49 38 2.10 .99 2.27 .82 52 - ----------------------------------------------------------------------------------------------------------- VALUE FUND+++ - ----------------- Class A - ------- 2001 $ 5.93 (24.98)% $149 1.37% 1.47% N/A N/A 51% 2002++ 4.26 (26.34) 99 1.51 1.93 N/A N/A 40 2003 4.99 19.04 126 1.67 1.69 N/A N/A 198 2004 5.95 20.57 185 1.48 1.21 N/A N/A 11 2005 6.61 12.31 267 1.43 1.31 N/A N/A 17 Class B - ------- 2001 5.84 (25.46) 26 2.07 .77 N/A N/A 51 2002++ 4.20 (26.94) 17 2.21 1.23 N/A N/A 40 2003 4.92 18.26 19 2.37 .99 N/A N/A 198 2004 5.87 19.91 23 2.18 .51 N/A N/A 11 2005 6.51 11.43 27 2.13 .61 N/A N/A 17 - -----------------------------------------------------------------------------------------------------------
Financial Highlights (continued) FIRST INVESTORS - ----------------------------------------------------------------------------------------------------- P E R S H A R E D A T A ---------------------------------------------------------------------------------------- Less Distributions Investment Operations from ------------------------------------- ---------------------- Net Asset Net Net Realized Value, Investment and Unrealized Total from Net Net Beginning Income Gain (Loss) on Investment Investment Realized Total of Year (Loss) Investments Operations Income Gain Distributions - ----------------------------------------------------------------------------------------------------- BLUE CHIP FUND - -------------------- Class A - ------- 2001 $31.09 $ -- $(8.64) $(8.64) $.01 $3.30 $3.31 2002 19.14 (.03) (4.55) (4.58) -- -- -- 2003 14.56 -- 2.58 2.58 -- -- -- 2004 17.14 .01 1.54 1.55 -- -- -- 2005 18.69 .10 1.91 2.01 .10 -- .10 Class B - ------- 2001 30.21 (.16) (8.33) (8.49) -- 3.30 3.30 2002 18.42 (.16) (4.35) (4.51) -- -- -- 2003 13.91 (.11) 2.46 2.35 -- -- -- 2004 16.26 (.13) 1.48 1.35 -- -- -- 2005 17.61 .09 1.67 1.76 .07 -- .07 - ----------------------------------------------------------------------------------------------------- GROWTH & INCOME FUND - -------------------- Class A - ------- 2001 $16.61 $ .06 $(3.99) $(3.93) $.03 $1.49 $1.52 2002++ 11.16 .03 (2.31) (2.28) .05 -- .05 2003 8.83 .04 1.85 1.89 .04 -- .04 2004 10.68 .06 1.43 1.49 .03 -- .03 2005 12.14 .09 1.54 1.63 .10 -- .10 Class B - ------- 2001 16.17 (.01) (3.88) (3.89) -- 1.49 1.49 2002++ 10.79 (.04) (2.24) (2.28) -- -- -- 2003 8.51 (.03) 1.78 1.75 -- -- -- 2004 10.26 (.03) 1.39 1.36 -- -- -- 2005 11.62 (.04) 1.51 1.47 .03 -- .03 - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- R A T I O S / S U P P L E M E N T A L D A T A - ------------------------ -------------------------------------------------------------------------------- Ratio to Average Net Ratio to Average Net Assets Before Expenses Assets** Waived or Assumed -------------------- ---------------------- Net Asset Net Net Value, Net Assets Investment Investment Portfolio End of Total End of Year Income Income Turnover Year Return* (in millions) Expenses (Loss) Expenses (Loss) Rate - ----------------------------------------------------------------------------------------------------------- BLUE CHIP FUND - -------------------- Class A - ------- 2001 $19.14 (30.88)% $445 1.35% (.02)% 1.43% (.10)% 117% 2002 14.56 (23.93) 333 1.48 (.17) 1.58 (.27) 144 2003 17.14 17.72 383 1.56 -- 1.68 (.12) 111 2004 18.69 9.04 414 1.47 .03 1.58 (.08) 94 2005 20.60 10.76 421 1.45 .54 1.56 .43 55 Class B - ------- 2001 18.42 (31.33) 78 2.05 (.72) 2.13 (.80) 117 2002 13.91 (24.48) 57 2.18 (.87) 2.28 (.97) 144 2003 16.26 16.90 62 2.26 (.70) 2.38 (.82) 111 2004 17.61 8.30 61 2.17 (.67) 2.28 (.78) 94 2005 19.30 9.98 52 2.15 (.16) 2.26 (.27) 55 - ----------------------------------------------------------------------------------------------------------- GROWTH & INCOME FUND - -------------------- Class A - ------- 2001 $11.16 (25.91)% $383 1.34% .47% N/A N/A 168% 2002++ 8.83 (20.53) 318 1.46 .33 N/A N/A 169 2003 10.68 21.49 400 1.52 .44 N/A N/A 70 2004 12.14 13.95 499 1.42 .53 N/A N/A 32 2005 13.67 13.43 597 1.38 .72 N/A N/A 42 Class B - ------- 2001 10.79 (26.38) 82 2.04 (.23) N/A N/A 168 2002++ 8.51 (21.13) 65 2.16 (.37) N/A N/A 169 2003 10.26 20.56 76 2.22 (.26) N/A N/A 70 2004 11.62 13.26 83 2.12 (.17) N/A N/A 32 2005 13.06 12.65 82 2.08 .02 N/A N/A 42 - -----------------------------------------------------------------------------------------------------------
Financial Highlights (continued) FIRST INVESTORS - ----------------------------------------------------------------------------------------------------- P E R S H A R E D A T A ---------------------------------------------------------------------------------------- Less Distributions Investment Operations from ------------------------------------- ---------------------- Net Asset Net Net Realized Value, Investment and Unrealized Total from Net Net Beginning Income Gain (Loss) on Investment Investment Realized Total of Year (Loss) Investments Operations Income Gain Distributions - ----------------------------------------------------------------------------------------------------- ALL-CAP GROWTH FUND - ------------------- Class A - ------- 2001(a) $10.00 $(.05) $(3.42) $(3.47) -- -- -- 2002 6.53 (.06) (1.14) (1.20) -- -- -- 2003 5.33 (.06) 1.48 1.42 -- -- -- 2004 6.75 (.07) 1.12 1.05 -- -- -- 2005 7.80 (.05) 1.07 1.02 -- -- -- Class B - ------- 2001(a) 10.00 (.08) (3.43) (3.51) -- -- -- 2002 6.49 (.10) (1.13) (1.23) -- -- -- 2003 5.26 (.09) 1.44 1.35 -- -- -- 2004 6.61 (.12) 1.10 .98 -- -- -- 2005 7.59 (.11) 1.04 .93 -- -- -- - ----------------------------------------------------------------------------------------------------- MID-CAP OPPORTUNITY FUND - ------------------------ Class A - ------- 2001 $26.66 (.05) $(7.67) $(7.72) -- $1.30 $1.30 2002 17.64 (.13) (1.73) (1.86) -- -- -- 2003 15.78 (.12) 3.52 3.40 -- -- -- 2004 19.18 (.09) 3.62 3.53 -- -- -- 2005 22.71 (.09) 5.62 5.53 -- -- -- Class B - ------- 2001 25.54 (.18) (7.32) (7.50) -- 1.30 1.30 2002 16.74 (.24) (1.63) (1.87) -- -- -- 2003 14.87 (.23) 3.31 3.08 -- -- -- 2004 17.95 (.23) 3.38 3.15 -- -- -- 2005 21.10 (.26) 5.22 4.96 -- -- -- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- R A T I O S / S U P P L E M E N T A L D A T A - ------------------------ -------------------------------------------------------------------------------- Ratio to Average Net Ratio to Average Net Assets Before Expenses Assets** Waived or Assumed -------------------- ---------------------- Net Asset Net Net Value, Net Assets Investment Investment Portfolio End of Total End of Year Income Income Turnover Year Return* (in millions) Expenses (Loss) Expenses (Loss) Rate - ----------------------------------------------------------------------------------------------------------- ALL-CAP GROWTH FUND - ------------------- Class A - ------- 2001(a) $ 6.53 (34.70)% $ 35 1.75%+ (.90)%+ 2.10%+ (1.25)%+ 84% 2002 5.33 (18.38) 44 1.75 (1.03) 1.98 (1.26) 138 2003 6.75 26.64 77 1.94 (1.15) 1.96 (1.17) 126 2004 7.80 15.56 130 1.68 (1.12) N/A N/A 75 2005 8.82 13.08 169 1.58 (.66) N/A N/A 91 Class B - ------- 2001(a) 6.49 (35.10) 8 2.45+ (1.60)+ 2.80+ (1.95)+ 84 2002 5.26 (18.95) 9 2.45 (1.73) 2.68 (1.96) 138 2003 6.61 25.67 14 2.64 (1.85) 2.66 (1.87) 126 2004 7.59 14.83 20 2.38 (1.82) N/A N/A 75 2005 8.52 12.25 23 2.28 (1.36) N/A N/A 91 - ----------------------------------------------------------------------------------------------------------- MID-CAP OPPORTUNITY FUND - ------------------------ Class A - ------- 2001 $17.64 (30.34)% $109 1.51% (.27)% 1.76% (.52)% 123% 2002 15.78 (10.55) 131 1.70 (.82) 1.95 (1.07) 112 2003 19.18 21.55 192 1.73 (.80) 1.97 (1.04) 37 2004 22.71 18.41 277 1.56 (.46) 1.73 (.63) 40 2005 28.24 24.35 410 1.48 (.39) 1.61 (.52) 43 Class B - ------- 2001 16.74 (30.84) 22 2.21 (.97) 2.46 (1.22) 123 2002 14.87 (11.17) 25 2.40 (1.52) 2.65 (1.77) 112 2003 17.95 20.71 35 2.43 (1.50) 2.67 (1.74) 37 2004 21.10 17.55 46 2.26 (1.16) 2.43 (1.33) 40 2005 26.06 23.51 57 2.18 (1.09) 2.31 (1.22) 43 - -----------------------------------------------------------------------------------------------------------
Financial Highlights (continued) FIRST INVESTORS - ----------------------------------------------------------------------------------------------------- P E R S H A R E D A T A ---------------------------------------------------------------------------------------- Less Distributions Investment Operations from ------------------------------------- ---------------------- Net Asset Net Net Realized Value, Investment and Unrealized Total from Net Net Beginning Income Gain (Loss) on Investment Investment Realized Total of Year (Loss) Investments Operations Income Gain Distributions - ----------------------------------------------------------------------------------------------------- SPECIAL SITUATIONS FUND - -------------------------- Class A - ------- 2001 $31.82 $(.18) $(11.59) $(11.77) -- $4.89 $4.89 2002 15.16 (.19) (2.31) (2.50) -- -- -- 2003 12.66 (.17) 3.14 2.97 -- -- -- 2004 15.63 (.18) 1.39 1.21 -- -- -- 2005 16.84 (.12) 3.72 3.60 -- -- -- Class B - ------- 2001 30.46 (.29) (11.00) (11.29) -- 4.89 4.89 2002 14.28 (.29) (2.15) (2.44) -- -- -- 2003 11.84 (.25) 2.93 2.68 -- -- -- 2004 14.52 (.30) 1.32 1.02 -- -- -- 2005 15.54 (.26) 3.44 3.18 -- -- -- - ----------------------------------------------------------------------------------------------------- FOCUSED EQUITY FUND - ------------------- Class A - ------- 2001 $10.38 $(.03) $(2.63) $(2.66) $ -- -- $ -- 2002 7.72 (.07) (1.92) (1.99) -- -- -- 2003 5.73 (.02) 1.52 1.50 -- -- -- 2004 7.23 (.02) .62 .60 -- -- -- 2005 7.83 .03 .86 .89 .02 -- .02 Class B - ------- 2001 10.26 (.09) (2.59) (2.68) -- -- -- 2002 7.58 (.13) (1.86) (1.99) -- -- -- 2003 5.59 (.07) 1.48 1.41 -- -- -- 2004 7.00 (.08) .61 .53 -- -- -- 2005 7.53 (.02) .82 .80 -- -- -- - ----------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------- R A T I O S / S U P P L E M E N T A L D A T A - ------------------------ -------------------------------------------------------------------------------- Ratio to Average Net Ratio to Average Net Assets Before Expenses Assets** Waived or Assumed -------------------- ---------------------- Net Asset Net Net Value, Net Assets Investment Investment Portfolio End of Total End of Year Income Income Turnover Year Return* (in millions) Expenses (Loss) Expenses (Loss) Rate - ----------------------------------------------------------------------------------------------------------- SPECIAL SITUATIONS FUND - -------------------------- Class A - ------- 2001 $15.16 (42.86)% $164 1.54% (.94)% 1.75% (1.15)% 183% 2002 12.66 (16.49) 138 1.69 (1.24) 1.93 (1.48) 153 2003 15.63 23.46 169 1.80 (1.26) 2.05 (1.51) 111 2004 16.84 7.74 190 1.63 (1.08) 1.86 (1.31) 119 2005 20.44 21.38 224 1.60 (.64) 1.82 (.86) 112 Class B - ------- 2001 14.28 (43.26) 21 2.24 (1.64) 2.45 (1.85) 183 2002 11.84 (17.09) 18 2.39 (1.94) 2.63 (2.18) 153 2003 14.52 22.63 20 2.50 (1.96) 2.75 (2.21) 111 2004 15.54 7.03 21 2.33 (1.78) 2.56 (2.01) 119 2005 18.72 20.46 21 2.30 (1.34) 2.52 (1.56) 112 - ----------------------------------------------------------------------------------------------------------- FOCUSED EQUITY FUND - ------------------- Class A - ------- 2001 $ 7.72 (25.63)% $ 51 1.75% (.35)% N/A N/A 240% 2002 5.73 (25.78) 38 1.83 (.90) N/A N/A 150 2003 7.23 26.18 48 1.99 (.35) N/A N/A 49 2004 7.83 8.30 49 1.85 (.30) N/A N/A 39 2005 8.70 11.35 48 1.79 .41 N/A N/A 60 Class B - ------- 2001 7.58 (26.12) 13 2.45 (1.05) N/A N/A 240 2002 5.59 (26.25) 9 2.53 (1.60) N/A N/A 150 2003 7.00 25.22 11 2.69 (1.05) N/A N/A 49 2004 7.53 7.57 11 2.55 (1.00) N/A N/A 39 2005 8.33 10.68 9 2.49 (.29) N/A N/A 60 - -----------------------------------------------------------------------------------------------------------
Financial Highlights (continued) FIRST INVESTORS - ----------------------------------------------------------------------------------------------------- P E R S H A R E D A T A ---------------------------------------------------------------------------------------- Less Distributions Investment Operations from ------------------------------------- ---------------------- Net Asset Net Net Realized Value, Investment and Unrealized Total from Net Net Beginning Income Gain (Loss) on Investment Investment Realized Total of Year (Loss) Investments Operations Income Gain Distributions - ----------------------------------------------------------------------------------------------------- GLOBAL FUND - ----------- Class A - ------- 2001 $ 8.11 $(.01) $(2.13) $(2.14) -- $ .76 $ .76 2002 5.21 (.01) (.96) (.97) -- -- -- 2003 4.24 (.01) .93 .92 -- -- -- 2004 5.16 (.01) .78 .77 -- -- -- 2005 5.93 -- 1.13 1.13 -- -- -- Class B - ------- 2001 7.80 (.06) (2.03) (2.09) -- .76 .76 2002 4.95 -- (.95) (.95) -- -- -- 2003 4.00 (.04) .88 .84 -- -- -- 2004 4.84 (.05) .73 .68 -- -- -- 2005 5.52 (.04) 1.04 1.00 -- -- -- - ----------------------------------------------------------------------------------------------------- * Calculated without sales charges. ** Net of expenses waived or assumed by the investment adviser (Note 3). + Annualized ++ Prior to October 1, 2001, the Total Return Fund, Growth & Income Fund, and Value Fund did not amortize premiums on debt securities. The per share data and ratios prior to 2001 have not been restated. The cumulative effect of this accounting change had no impact on the net assets of the Funds. +++ Prior to December 31, 2002, known as Utilities Income Fund. (a) For the period October 25, 2000 (commencement of operations) to September 30, 2001. See notes to financial statements - ----------------------------------------------------------------------------------------------------------- R A T I O S / S U P P L E M E N T A L D A T A - ------------------------ -------------------------------------------------------------------------------- Ratio to Average Net Ratio to Average Net Assets Before Expenses Assets** Waived or Assumed -------------------- ---------------------- Net Asset Net Net Value, Net Assets Investment Investment Portfolio End of Total End of Year Income Income Turnover Year Return* (in millions) Expenses (Loss) Expenses (Loss) Rate - ----------------------------------------------------------------------------------------------------------- GLOBAL FUND - ----------- Class A - ------- 2001 $ 5.21 (28.87)% $234 1.77% (.21)% N/A N/A 116% 2002 4.24 (18.62) 173 1.87 (.35) N/A N/A 125 2003 5.16 21.70 192 1.98 (.19) N/A N/A 112 2004 5.93 14.92 209 1.86 (.13) N/A N/A 105 2005 7.06 19.06 239 1.78 .05 N/A N/A 104 Class B - ------- 2001 4.95 (29.42) 18 2.47 (.91) N/A N/A 116 2002 4.00 (19.19) 14 2.57 (1.05) N/A N/A 125 2003 4.84 21.00 15 2.68 (.89) N/A N/A 112 2004 5.52 14.05 15 2.56 (.83) N/A N/A 105 2005 6.52 18.12 14 2.48 (.65) N/A N/A 104 - -----------------------------------------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm To the Shareholders and Boards of Directors/Trustees of First Investors Series Fund First Investors Series Fund II, Inc. First Investors Global Fund, Inc. We have audited the accompanying statements of assets and liabilities, including the portfolios of investments of the Blue Chip Fund, Special Situations Fund and Total Return Fund (each a series of First Investors Series Fund), the All-Cap Growth Fund, Focused Equity Fund, Growth & Income Fund, Mid-Cap Opportunity Fund and Value Fund (each a series of First Investors Series Fund II, Inc.) and First Investors Global Fund, Inc. as of September 30, 2005, the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods indicated thereon. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of September 30, 2005, by correspondence with the custodian and brokers. Where brokers have not replied to our confirmation requests, we have carried out other appropriate auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Blue Chip Fund, Special Situations Fund, Total Return Fund, All-Cap Growth Fund, Focused Equity Fund, Growth & Income Fund, Mid-Cap Opportunity Fund, Value Fund, and Global Fund as of September 30, 2005, and the results of their operations for the year then ended, changes in their net assets for each of the two years in the period then ended, and their financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America. Tait, Weller & Baker LLP Philadelphia, Pennsylvania November 1, 2005 FIRST INVESTORS EQUITY FUNDS Directors/Trustees and Officers*
Position(s) Held with Principal Number of Other Funds and Occupation(s) Portfolios in Trusteeships Name, Year of Birth Length of During Past Fund Complex Directorships and Address Service 5 Years Overseen Held - ----------- ------- ------- -------- ---- DISINTERESTED DIRECTORS/TRUSTEES Robert M. Grohol 1932 Director/Trustee None/Retired 49 None c/o First Investors since 6/30/00 Management Company, Inc. 95 Wall Street New York, NY 10005 Rex R. Reed 1922 Director/Trustee None/Retired 49 None c/o First Investors since 3/31/84 Management Company, Inc. 95 Wall Street New York, NY 10005 Herbert Rubinstein 1921 Director/Trustee None/Retired 49 None c/o First Investors since 9/20/79 Management Company, Inc. 95 Wall Street New York, NY 10005 James M. Srygley 1932 Director/Trustee Owner 49 None c/o First Investors since 1/19/95 Hampton Management Company, Inc. Properties 95 Wall Street New York, NY 10005 Robert F. Wentworth 1929 Director/Trustee None/Retired 49 None c/o First Investors since 10/15/92 Management Company, Inc. 95 Wall Street New York, NY 10005 Position(s) Held with Principal Number of Other Funds and Occupation(s) Portfolios in Trusteeships Name, Year of Birth Length of During Past Fund Complex Directorships and Address Service 5 Years Overseen Held - ----------- ------- ------- -------- ---- INTERESTED DIRECTORS/TRUSTEES** Kathryn S. Head 1955 Director/Trustee Chairman, Officer 49 None c/o First Investors since 3/17/94 and Director of Management Company, Inc. First Investors Raritan Plaza I President Corporation; Edison, NJ 08837 since 11/15/01 First Investors Consolidated Chairman Corporation; since 1/1/05 First Investors Management Company, Inc.; Administrative Data Management Corp.; First Investors Federal Savings Bank; School Financial Management Services, Inc.; and other affiliated companies*** John T. Sullivan 1932 Director/Trustee Of Counsel 49 None c/o First Investors since 9/20/79 Hawkins, Management Company, Inc. Delafield & 95 Wall Street Wood; Director New York, NY 10005 of First Investors Corporation, First Investors Consolidated Corporation, First Investors Management Company, Inc., Administrative Data Management Corp., and other affiliated companies*** FIRST INVESTORS EQUITY FUNDS Directors/Trustees and Officers* (continued) * Each Director/Trustee serves for an indefinite term with the Funds, until his/her successor is elected. ** Ms. Head is an interested director/trustee because (a) she indirectly owns more than 5% of the voting stock of the adviser and principal underwriter of the Funds, (b) she is an officer, director and employee of the adviser and principal underwriter of the Funds, and (c) she is an officer of the Funds. Mr. Sullivan is an interested director/trustee because he is a director and he indirectly owns securities issued by the adviser and principal underwriter of the Funds. *** Other affiliated companies consist of: First Investors Realty Company, Inc., First Investors Life Insurance Company, First Investors Leverage Corporation, Route 33 Realty Corporation, First Investors Credit Funding Corporation, N.A.K. Realty Corporation, Real Property Development Corporation, First Investors Credit Corporation and First Investors Resources, Inc. Position(s) Held with Principal Number of Other Funds and Occupation(s) Portfolios in Trusteeships Name, Year of Birth Length of During Past Fund Complex Directorships and Address Service 5 Years Overseen Held - ----------- ------- ------- -------- ---- OFFICERS WHO ARE NOT DIRECTORS/TRUSTEES Joseph I. Benedek 1957 Treasurer Treasurer 49 None c/o First Investors since 1988 and Principal Management Company, Inc. Accounting Officer Raritan Plaza I Edison, NJ 08837 Larry R. Lavoie 1947 Chief Compliance General Counsel 49 None c/o First Investors Officer of First Investors Management Company, Inc. since 2004 Corporation 95 Wall Street and its affiliates New York, NY 10005 Director/Trustee from 9/17/98 to 8/18/04 George V. Ganter 1952 Vice President, Portfolio Manager 2 None c/o First Investors Series Fund, of First Investors Management Company, Inc. since 2000 Management 95 Wall Street Company, Inc. New York, NY 10005 Clark D. Wagner 1959 Vice President, Director of 27 None c/o First Investors Series Fund, Fixed Income Management Company, Inc. since 1991 (previously, Chief 95 Wall Street Investment Officer) New York, NY 10005 of First Investors Management Company, Inc. Matthew S. Wright 1968 Vice President, Portfolio Manager 4 None c/o First Investors Series Fund II, of First Investors Management Company, Inc. since 2005 Management 95 Wall Street Company, Inc. New York, NY 10005
FIRST INVESTORS EQUITY FUNDS Shareholder Information - ----------------------- Investment Adviser Custodian (Global Fund only) First Investors Management Company, Inc. Brown Brothers Harriman & Co. 95 Wall Street 40 Water Street New York, NY 10005 Boston, MA 02109 Subadviser (All-Cap Growth Fund, Transfer Agent Focused Equity Fund and Global Fund only) Administrative Data Management Corp. Wellington Management Company, LLP Raritan Plaza I - 8th Floor 75 State Street Edison, NJ 08837-3620 Boston, MA 02109 Independent Registered Subadviser (Special Situations Fund only) Public Accounting Firm Paradigm Capital Management, Inc. Tait, Weller & Baker LLP Nine Elk Street 1818 Market Street Albany, NY 12207 Philadelphia, PA 19103 Underwriter Legal Counsel First Investors Corporation Kirkpatrick & Lockhart 95 Wall Street Nicholson Graham LLP New York, NY 10005 1800 Massachusetts Avenue, N.W. Washington, DC 20036 Custodian The Bank of New York One Wall Street New York, NY 10286 It is the Funds' practice to mail only one copy of their annual and semi-annual reports to all family members who reside in the same household. Additional copies of the reports will be mailed if requested by any shareholder in writing or by calling 800-423-4026. The Funds will ensure that separate reports are sent to any shareholder who subsequently changes his or her mailing address. This report is authorized for distribution only to existing shareholders, and, if given to prospective shareholders, must be accompanied or preceded by the Funds' prospectus. The Statement of Additional Information includes additional information about the Funds' directors/trustees and is available without charge, upon request in writing or by calling 800-423-4026. A description of the policies and procedures that the Funds use to vote proxies relating to a portfolio's securities is available, without charge, upon request by calling toll free 800-423-4026 or can be viewed online or downloaded from the EDGAR database on the Securities and Exchange Commission's ("SEC") internet website at http://www.sec.gov. In addition, information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, is available, without charge, upon request in writing or by calling 800-423-4026 and on the SEC's internet website at http://www.sec.gov. The Funds file their complete schedule of portfolio holdings with the SEC on Form N-Q for the first and third quarters of each fiscal year. The Funds' Form N-Q is available on the SEC's website at http://www.sec.gov; and may also be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330. The schedule of portfolio holdings is also available, without charge, upon request in writing or by calling 800-423-4026. Item 2. Code of Ethics As of the end of the period, September 30, 2005, the Registrant has adopted a Code of Ethics that applies to the First Investors Funds' ("Funds") principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Funds or a third party. A copy of the code of ethics is attached to this report as Exhibit A. During the period of the report, there have been no amendments to the Code of Ethics or waivers, implicit or otherwise, from its provisions. Item 3. Audit Committee Financial Expert The independent director currently serving as the audit committee financial expert is Robert F. Wentworth. The Registrant's Board has unanimously determined that Mr. Wentworth satisfied the definition of an audit committee financial expert as set forth in the instructions to Form N-CSR under the Investment Company Act of 1940. Specifically, the Board determined that Mr. Wentworth has all of the following: (i) an understanding of generally accepted accounting principles and financial statements; (ii) the ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves; (iii) experience preparing, auditing, analyzing or evaluating financial statements that present the breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Funds' financial statements, or experience actively supervising one or more persons engaged in such activities; (iv) an understanding of internal controls and procedures for financial reports; and (v) an understanding of audit committee functions. Furthermore, he had acquired these attributes through education and many years of relevant experience in various financial positions with American Telephone and Telegraph Company, including the positions of Director - Accounting, Director - Finance, Director - Financial Reporting and Analysis, Controller, and Director of Business Planning. Mr. Wentworth also has many years experience serving on the Audit Committees of the First Investors Funds and other organizations. Finally, Mr. Wentworth is independent as defined in the instructions to the Form. Item 4. Principal Accountant Fees and Services Fiscal Year Ended September 30, ----------------- 2005 2004 ---- ---- (a) Audit Fees First Investors Series Fund Total Return Fund $ 15,500 $ 14,900 Blue Chip Fund 35,400 33,900 Special Situations Fund 26,000 24,900 Series Fund II, Inc. Value Fund 21,800 20,900 Growth & Income Fund 34,300 32,900 All-Cap Growth Fund 11,300 10,900 Mid-Cap Opportunity Fund 14,500 13,900 Focused Equity Fund 11,300 10,900 Global Fund, Inc. 36,400 34,900 (b) Audit-Related Fees First Investors Series Fund Total Return Fund $ 0 $ 0 Blue Chip Fund 0 0 Special Situations Fund 0 0 Series Fund II, Inc. Value Fund 0 0 Growth & Income Fund 0 0 All-Cap Growth Fund 0 0 Mid-Cap Opportunity Fund 0 0 Focused Equity Fund 0 0 Global Fund, Inc. 0 0 (c) Tax Fees First Investors Series Fund Total Return Fund $ 3,600 $ 3,500 Blue Chip Fund 3,600 3,500 Special Situations Fund 3,600 3,500 Series Fund II, Inc. Value Fund 3,600 3,500 Growth & Income Fund 3,600 3,500 All-Cap Growth Fund 3,600 3,500 Mid-Cap Opportunity Fund 3,600 3,500 Focused Equity Fund 3,600 3,500 Global Fund, Inc. 3,600 3,500 Nature of fees: tax returns preparation and tax compliance (d) All Other Fees First Investors Series Fund Total Return Fund $ 0 $ 0 Blue Chip Fund 0 0 Special Situations Fund 0 0 Series Fund II, Inc. Value Fund 0 0 Growth & Income Fund 0 0 All-Cap Growth Fund 0 0 Mid-Cap Opportunity Fund 0 0 Focused Equity Fund 0 0 Global Fund, Inc. 0 0 (e)(1) Audit committee's pre-approval policies The Audit Committee has adopted a charter under which it has the duties, among other things: (a) to pre-approve, and to recommend to the full Board, the selection, retention or termination of the independent auditors to provide audit, review or attest services to the Funds and, in connection therewith, evaluate the independence of the auditors and to obtain the auditors' specific representations as to their independence; (b) to pre-approve all non-audit services to be provided to the Funds by the independent auditor; (c) to pre-approve all non-audit services to be provided by the Funds' independent auditor to the Funds' investment adviser or to any entity that controls, is controlled by or is under common control with the Funds investment adviser ("adviser affiliate") and that provides ongoing services to the Funds, if the engagement relates directly to the operations and financial reporting of the Funds; (d) to establish, if deemed necessary or appropriate as an alternative to Audit Committee pre-approval of services to be provided by the independent auditor as required by paragraphs (b) and (c) above, policies and procedures to permit such services to be pre-approved by other means, such as by action of a designated member and members of the Audit Committee, subject to subsequent Committee review and oversight; (e) to consider whether the non-audit services provided by the Funds' independent auditors to the Funds' investment adviser or any adviser affiliate that provides ongoing services to the Funds, which services were not pre-approved by the Audit Committee, are compatible with maintaining the auditors' independence; (f) to meet with the Funds' independent auditors, including meetings without management representatives, as necessary (i) to review the arrangements for, and scope of, the annual audit, any special audits and any other services to be provided to the Funds by the auditors; (ii) to discuss any matters of concern relating to the Funds' financial statements, including any adjustments to such statements recommended by the auditors, or other results of said audit(s); and (iii) to review the form of opinion the auditors propose to render to the Board and shareholders; (g) to receive and consider (i) information and comments from the auditors with respect to the Funds' accounting and financial reporting policies, procedures and internal control over financial reporting (including the Funds' critical accounting policies and practices) and to consider management's responses to any such comments; (ii) reports from the auditors regarding any material written communications between the auditors and management; and (iii) reports from the auditors regarding all non-audit services provided to any entity in the Funds' investment company complex that were not pre-approved by the Audit Committee or pursuant to pre-approved policies and procedures established by the Audit Committee and associated fees; (h) to consider the effect upon the Funds of any changes in accounting principles or practices proposed by management or the auditors; (i) to review and approve the fees proposed to be charged to the Funds by the auditors for each audit and non-audit service; (j) to receive reports from Fund management in connection with the required certifications on Form N-CSR under the 1940 Act of any significant deficiencies in the design or operation of the Funds' internal control over financial reporting or material weakness therein and any reported evidence of fraud, whether or not material, involving management or other employees of the Funds who have a significant role in the Funds' internal control over financial reporting; (k) to investigate improprieties or suspected improprieties in the Funds' accounting or financial reporting brought to the attention of the Audit Committee; (l) to receive and consider reports from attorneys, in accordance with the "Up-the-Ladder" Reporting Policies for attorneys who appear or practice before the Securities and Exchange Commission in the representation of the Funds and in accordance with applicable federal law, and auditors relating to possible material violations of federal or state law or fiduciary duty; (m) to report its activities to the full Board on a regular basis and to make such recommendations with respect to the above and other matters as the Audit Committee may deem necessary or appropriate; (n) to meet with the Treasurer of the Funds and, as necessary, with internal auditors, if any, for the management company; and (o) to perform such other functions and to have such powers as may be necessary or appropriate in the efficient and lawful discharge of the powers provided in this Charter. (e)(2) None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Registrant and Related Entities disclosed above were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit review or attest services, if certain conditions are satisfied). (f) Not Applicable (g) Aggregate non-audit fees billed by the Registrant's accountant for services rendered to the Registrant and the Registrant's investment adviser or any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the Registrant for the two fiscal years ended September 30, 2005 and 2004 were $68,000 and $66,500 respectively. (h) Not Applicable Item 5. Audit Committee of Listed Registrants Audit Committee Members: Robert M. Grohol Rex R. Reed Herbert Rubinstein James M. Srygley Robert F. Wentworth Item 6. Schedule of Investments Schedule is included as part of the report to shareholders filed under Item 1 of this Form. Item 7. Disclosure of Proxy Voting Policies & Procedures for Closed-End Management Investment Companies Not applicable Item 8. Portfolio Managers of Closed-End Management Investment Companies Not applicable Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers Not applicable Item 10. Submission of Matters to a Vote of Security Holders There were no material changes to the procedure by which shareholders may recommend nominees to the Registrant's Board of Directors/Trustees. Item 11. Controls and Procedures (a) The Registrant's Principal Executive Officer and Principal Financial Officer have concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective, based on their evaluation of these disclosure controls and procedures as of a date within 90 days of the filing date of this report. (b) There were no changes in the Registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting. Item 12. Exhibits (a) Code of Ethics - Previously filed on the Registrant's Form N-CSR on December 8, 2004 (b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 - Filed herewith (c) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 - Filed herewith SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. First Investors Series Fund First Investors Series Fund II, Inc. First Investors Global Fund, Inc. (Registrant) By /S/ KATHRYN S. HEAD Kathryn S. Head President and Principal Executive Officer Date: December 6, 2005 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. First Investors Series Fund First Investors Series Fund II, Inc. First Investors Global Fund, Inc. (Registrant) By /S/ JOSEPH I. BENEDEK Joseph I. Benedek Treasurer and Principal Financial Officer Date: December 6, 2005 EX-99.302 CERT 2 equity302.txt CERTIFICATIONS SECTION 302 CERTIFICATIONS I, Kathryn S. Head, certify that: 1. I have reviewed this report on Form N-CSR of First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal half-year (the Registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer(s) and I have disclosed, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. By: /S/ KATHRYN S. HEAD Kathryn S. Head President and Principal Executive Officer Date: December 6, 2005 CERTIFICATIONS I, Joseph I. Benedek, certify that: 1. I have reviewed this report on Form N-CSR of First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Registrant as of, and for, the periods presented in this report; 4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the Registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal half-year (the Registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 5. The Registrant's other certifying officer(s) and I have disclosed, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. By: /S/ JOSEPH I. BENEDEK Joseph I. Benedek Treasurer and Principal Financial Officer Date: December 6, 2005 EX-99.906 CERT 3 equity906.txt CERTIFICATIONS SECTION 906 CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Kathryn S. Head, President and Principal Executive Officer of the First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. (the "Registrant"), certify, pursuant to 18 U.S.C. Section 1350 as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. The Registrant's periodic report on Form N-CSR of the First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. for the year ended September 30, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: December 6, 2005 /S/ KATHRYN S. HEAD Kathryn S. Head President and Principal Executive Officer, First Investors Series Fund, First Investors Series Fund II, Inc., First Investors Global Fund, Inc. A signed original of this written statement required by Section 906 has been provided to First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. and will be retained by First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Joseph I. Benedek, Treasurer and Principal Financial Officer of the First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. (the "Registrant"), certify, pursuant to 18 U.S.C. Section 1350 as enacted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge: 1. The Registrant's periodic report on Form N-CSR of the First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. for the year ended September 30, 2005, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Dated: December 6, 2005 /S/ JOSEPH I. BENEDEK Joseph I. Benedek Treasurer and Principal Financial Officer, First Investors Series Fund, First Investors Series Fund II, Inc., First Investors Global Fund, Inc. A signed original of this written statement required by Section 906 has been provided to First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. and will be retained by First Investors Series Fund, First Investors Series Fund II, Inc., and First Investors Global Fund, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----