Blue Chip Fund |
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. |
THE DATE OF THIS
P R O S P E C T U S
IS JANUARY 31, 2007
CONTENTS |
OVERVIEW OF THE FUND
What is the Blue Chip Fund?
3
Objective
3
Principal Investment Strategies
3
Principal Risks
3
Who should consider buying the Blue Chip Fund?
4
How has the Blue Chip Fund performed?
5
What are the fees and expenses of the Blue Chip Fund?
7
THE FUND IN DETAIL
What are the Blue Chip Fund’s objective, principal
investment strategies and principal risks?
8
Who manages the Blue Chip Fund?
9
BUYING AND SELLING SHARES
How and when does the Fund price its shares?
10
How do I buy shares?
11
What are the sales charges?
12
Are sales charge discounts available?
13
How do I sell shares?
15
What if my account falls below the minimum account requirement?
16
Can I exchange my shares for the shares of other First Investors Funds?
16
What are the Fund’s policies on frequent trading in the shares of the Fund?
16
What are the risks of frequent trading in the shares of the Fund?
17
ACCOUNT POLICIES
What about dividends and capital gain distributions?
18
What about taxes?
18
Other account privileges and policies
18
FINANCIAL HIGHLIGHTS
20
OVERVIEW OF THE FUND |
What is the Blue Chip Fund Objective: The Fund seeks high total investment return. Principal Investment Strategies: The Fund primarily invests in the common stocks of large, well-established companies that the Fund considers to be Blue Chip companies. The Fund uses fundamental research to select stocks of companies that it believes to have attractive valuations and growth potential within their respective sectors and industries. The Fund attempts to stay broadly diversified but it may emphasize certain industry sectors based on economic and market conditions. While the Fund invests primarily in securities that are traded in the U.S., it may also invest in securities that are traded in foreign markets (“foreign securities”). The Fund may also opportunistically invest in small-cap and mid-cap companies that have been selected for their growth potential. Principal Risks: While Blue Chip stocks are regarded as among the most conservative stocks, like all stocks they fluctuate in price not only because of company-specific developments but also in response to movements in the overall securities markets, general economic conditions and changes in interest rates or investor sentiment. This is known as market risk. Fluctuations in the prices of Blue Chip stocks at times can be substantial. Because the Fund may emphasize certain industry sectors, the Fund’s performance may be adversely affected if those sectors perform poorly. The market risk associated with small-cap and mid-cap stocks is generally greater than that associated with large-cap stocks |
| because small-cap and mid-cap stocks tend to experience sharper price fluctuations than large-cap stocks, particularly during bear markets. Investments in foreign securities involve additional risks, including risks arising from currency fluctuations, government regulation, unfavorable political or legal developments, differences in financial reporting standards and less stringent regulation of foreign securities markets. Accordingly, the value of your investment in the Fund will go up and down, which means that you could lose money. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. |
Who should consider buying the Blue Chip Fund? The Blue Chip Fund may be used as a core holding for an investment portfolio or as a base on which to build a portfolio. It may be appropriate for you if you: n Are seeking growth of capital, n Are willing to accept a moderate degree of investment risk, and n Have a long-term investment horizon and are able to ride out market cycles. You should keep in mind that the Fund is not a complete investment program. For most investors, a complete program should include not only stock funds but also bond and money market funds. While stocks have historically outperformed other categories of investments over long periods of time, they generally carry higher risks. There have also been extended periods during which bonds and money market instruments have outperformed stocks. By allocating your assets among different types of funds, you can reduce the overall risk of your portfolio. Of course, even a diversified investment program can result in a loss. The investment objective of the Fund is non-fundamental, which means that the Board of Trustees may change the investment objective of the Fund without shareholder approval. The Board may take such action when it believes that a change in the objective is necessary or appropriate in light of market circumstances or other events. |
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How has the Blue Chip Fund performed? The following information shows how the Fund’s performance has varied from year to year and in comparison with a broad-based index. This gives you some indication of the risks of investing in the Fund. The Fund’s past performance does not necessarily indicate how the Fund will perform in the future. The bar chart presented below shows the performance of the Fund’s Class A shares |
| over the past ten calendar years. The Fund also has Class B shares. The performance of Class B shares differs from the performance of Class A shares only to the extent that they do not have the same expenses. The bar chart does not reflect sales charges that you may pay upon purchase or redemption of Fund shares. If they were included, the returns would be less than those shown. |
During the periods shown, the highest quarterly return was 19.96% (for the quarter ended December 31, 1998) and the lowest quarterly return was -18.14% (for the quarter ended September 30, 2001).
The following table shows the average annual total returns for the Fund’s Class A and Class B shares, assuming reinvestment of dividends and other distributions, if any, and payment of the current maximum sales charge or contingent deferred sales charge (“CDSC”). The returns on Class A shares are shown both before and after taxes. After-tax returns are calculated using the historical highest individual federal marginal income tax rates for each of the time periods shown below and do not reflect the impact of state or local taxes. |
| After-tax returns on the sale of Fund shares may be higher than other returns for the same period because capital losses on redemptions produce tax deductions. Your actual after-tax returns may differ from those shown because they depend on your individual tax situation. Moreover, the after-tax returns set forth below are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans or IRAs. After-tax returns for Class B shares will vary from those shown below. |
Average Annual Total Returns
(For the periods ended December 31, 2006)
| 1 Year | 5 Years | 10 Years |
Class A Shares |
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Return Before Taxes | 7.25% | 1.81% | 4.41% |
Return After Taxes on Distributions | 7.19% | 1.78% | 3.69% |
Return After Taxes on Distributions and Sale of Fund Shares | 4.78% | 1.51% | 3.53% |
Class B Shares |
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Return Before Taxes | 9.03% | 1.94% | 4.53% |
Index |
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S&P 500 Index (reflects no deduction for fees, expenses or taxes)* | 15.79% | 6.19% | 8.42% |
* The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure the performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries.
What are the fees and expenses of the Blue Chip Fund?
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder fees (fees paid directly from your investment) | Class A Shares | Class B Shares |
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Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75%* | None |
Maximum deferred sales charge (load) (as a percentage of the lower of purchase price or redemption price) | None** | 4.00%*** |
* Due to rounding of numbers in calculating a sales charge, you may pay more or less than what is shown above.
** A CDSC of 1.00% will be assessed on certain redemptions of Class A shares that are purchased without a sales charge.
*** 4.00% in the first year; declining to 0% after the sixth year. Class B shares convert to Class A shares after eight years.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
| Management Fees | Distribution and Service (12b-1) Fees | Other Expenses (1) | Total Annual Fund Operating Expenses (1) |
Class A Shares | 0.74% | 0.30% | 0.41% | 1.45% |
Class B Shares | 0.74% | 1.00% | 0.41% | 2.15% |
(1) The Fund has an expense offset arrangement that may reduce the Fund’s custodian fee based on the amount of cash maintained by the Fund with its custodian. Any such fee reductions are not reflected under Other Expenses or Total Annual Fund Operating Expenses.
Example
This example helps you to compare the costs of investing in the Fund with the cost of investing in other mutual funds. It assumes that (1) you invest $10,000 in the Fund for the time periods indicated; (2) your investment has a 5% return each year; and (3) the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, under these assumptions your costs would be:
| One Year | Three Years | Five Years | Ten Years | |
If you redeem your shares: | |||||
Class A shares | $714 | $1,007 | $1,322 | $2,210 | |
Class B shares | $618 | $973 | $1,354 | $2,305* | |
If you do not redeem your shares: | |||||
Class A shares | $714 | $1,007 | $1,322 | $2,210 | |
Class B shares | $218 | $673 | $1,154 | $2,305* |
* Assumes conversion to Class A shares eight years after purchase.
THE FUND IN DETAIL |
What are the Blue Chip Fund’s objective, principal investment strategies and principal risks?
Objective: The Fund seeks high total investment return. Principal Investment Strategies: Under normal circumstances, the Fund will invest at least 80% of its net assets in common stocks of “Blue Chip” companies. The Fund will provide shareholders with at least 60 days notice before changing this 80% policy. The Fund defines “Blue Chip” companies as large, well-established companies that have market capitalizations of greater than $5 billion. While the Fund invests primarily in securities that are traded in the U.S., it may also invest in securities that are traded in foreign markets. The Fund may also opportunistically invest in small-cap and mid-cap companies that have been selected for their growth potential. The Fund uses fundamental research to select stocks of companies that it believes have attractive valuations and growth potential within their respective sectors and industries. The Fund considers a variety of factors, including the strength of a company’s balance sheet, its record of earnings growth and its competitive position. The Fund attempts to stay broadly diversified but it may emphasize certain industry sectors based on economic and market conditions. The Fund may sell a stock when it becomes fully valued, its fundamentals have deteriorated or alternative investments become more attractive. The Fund may take temporary defensive positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political or other conditions. If it does so, it may not achieve its investment objective. |
| The Fund may also choose not to take defensive positions. Information on the Fund’s recent strategies and holdings can be found in the most recent annual report and information concerning the Fund’s policies and procedures with respect to disclosure of the Fund’s portfolio holdings is available in the Fund’s Statement of Additional Information (see back cover). Principal Risks: Any investment carries with it some level of risk. Here are the principal risks of investing in the Blue Chip Fund: Market Risk: Because the Fund primarily invests in common stocks, it is subject to market risk. Stock prices may decline over short or even extended periods not only because of company-specific developments but also due to an economic downturn, a change in interest rates or a change in investor sentiment. Stock markets tend to run in cycles with periods when prices generally go up, known as “bull” markets, and periods when stock prices generally go down, referred to as “bear” markets. While Blue Chip stocks have historically been the least risky and most liquid of stocks, like all stocks they fluctuate in value. Moreover, Blue Chip stocks include stocks of technology companies that may fluctuate substantially in price. While the Fund generally attempts to stay broadly diversified, it may emphasize certain industry sectors based upon economic and market conditions. The Fund’s performance could be adversely |
affected if these industry sectors perform worse than expected. The market risk associated with small-cap and mid-cap stocks is generally greater than that associated with large-cap stocks because such stocks tend to experience sharper price fluctuations than large-cap stocks. The additional volatility associated with small-to-mid-cap stocks is attributable to a number of factors, including the fact that the earnings of small-to-mid-size companies tend to be less predictable than those of larger, more established companies. Small-to-mid-cap stocks are also not as broadly traded as stocks of companies with larger market capitalizations. At times, it may be difficult for the Fund to sell small-to-mid-cap stocks at reasonable prices. Foreign Securities Risk: Investments in foreign securities involve additional risks, including risks arising from currency fluctuations, government regulation, unfavorable political or legal developments, differences in financial reporting standards and less stringent regulation of foreign securities markets. Who manages the Blue Chip Fund? First Investors Management Company, Inc. ("FIMCO" or “Adviser”) is the investment adviser to the Fund. FIMCO has been the investment adviser to the First Investors Family of Funds since 1965. Its address is 95 Wall Street, New York, NY 10005. As of September 30, 2006, FIMCO served as investment adviser to 50 mutual funds or series of funds with total net assets of approximately $7.04 billion. FIMCO supervises all aspects of the Fund's operations. For the fiscal year ended September 30, 2006, FIMCO received advisory fees of 0.75% of the Fund’s average daily net assets, net of any waiver. Matthew S. Wright serves as Portfolio Manager of the Blue Chip Fund. Mr. |
| Wright also serves as a Portfolio Manager for certain other First Investors Funds and joined FIMCO in February 1996 as an Equity Analyst. Constance Unger serves as the Assistant Portfolio Manager of the Blue Chip Fund and also serves as an Assistant Portfolio Manager for another First Investors Fund. Ms. Unger joined FIMCO in 2005 as an equity analyst. Prior to joining FIMCO, Ms. Unger was a Senior Portfolio Manager and Equity Analyst at Evergreen Investment Management Corp. (1998-2002). Descriptions of the factors considered by the Board of Trustees in approving the foregoing Advisory Agreement are available in the Fund’s Annual Report to shareholders for fiscal year ending September 30, 2006. The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of securities in a Fund. The Fund has applied for an exemptive order from the Securities and Exchange Commission. If granted, the order would permit FIMCO to enter into new or modified subadvisory agreements with existing or new subadvisers without approval of a Fund’s shareholders but subject to the approval of the Fund’s Board of Trustees. In addition, there is a rule pending at the SEC, which, if adopted, would permit the Fund to act in such manner without seeking an exemptive order. In any event, the Prospectus will be supplemented if additional subadvisers are retained. |
BUYING AND SELLING SHARES |
How and when does the Fund price its shares? The share price (which is called "net asset value" or "NAV" per share) for the Fund is calculated as of the close of regular trading on the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern Time) each day that the NYSE is open (“Business Day”). The NYSE is closed on most national holidays and Good Friday. In the event that the NYSE closes early, the share price will be determined as of the time of the closing. To calculate the NAV, the Fund first values its assets, subtracts its liabilities and divides the balance, called net assets, by the number of shares outstanding. The prices or NAVs of Class A shares and Class B shares will generally differ because they have different expenses. The investments of the Fund are generally valued based upon their last reported sale prices, market quotations, or estimates of value provided by a pricing service as of the close of trading on the NYSE (collectively, “current market values”). If current market values for investments are not readily available, are deemed to be unreliable, or do not appear to reflect significant events that have occurred prior to the close of trading on the NYSE, the investments may be valued at fair value prices as determined by the investment adviser of the Fund under procedures that have been approved by the Board of Trustees of the Fund. The Fund may fair value a security due to, among other things, the fact that: (a) a pricing service does not offer a current market value for the security; (b) a current market value furnished by a pricing service is believed to be stale; (c) the security does not open for |
| trading or stops trading and does not resume trading before the close of trading on the NYSE, pending some corporate announcement or development; or (d) the security is illiquid or trades infrequently and its market value is therefore slow to react to information. In such cases, the Fund’s investment adviser will price the security based upon its estimate of the security’s market value using some or all of the following factors: the information that is available as of the close of trading on the NYSE, including issuer-specific news; overall market movements; sector movements; or movements of similar securities. Foreign securities are generally priced based upon their market values as of the close of foreign markets in which they principally trade (“closing foreign market prices”). Foreign securities may be priced based upon fair value estimates (rather than closing foreign market prices) provided by a pricing service when price movements in the U.S. subsequent to the closing of foreign markets have exceeded a pre-determined threshold. The pricing service, its methodology or threshold may change from time to time. As in the case of all securities owned by the Fund, foreign securities may also be valued at fair value prices as determined by the investment adviser of the Fund for the other reasons described above. In the event that a security, domestic or foreign, is priced using fair value pricing, a Fund’s value for that security is likely to be different than the security’s last reported market sale price or quotation. Moreover, fair value pricing is based upon opinions or predictions on how events or information may affect market prices. Thus, different investment advisers may, in good faith and using reasonable procedures, conclude that the same security has a different fair value. Finally, the use of fair value pricing for one or more securities held by the Fund could cause the Fund’s net asset value to be materially different than if the Fund had employed market values in pricing its securities. |
What are the sales charges? The Fund has two classes of shares, Class A and Class B. While each class invests in the same portfolio of securities, the classes have separate sales charge and expense structures. Because of the different expense structures, each class of shares generally will have different NAVs and dividends. The principal advantages of Class A shares are the lower overall expenses, the availability of quantity discounts on volume purchases and certain account privileges that are available only on Class A shares. The principal advantage of Class B shares is that all of your money is invested from the outset. Because of the lower overall expenses on Class A shares, we recommend Class A shares (rather than Class B shares) for purchases of $100,000 or more in the aggregate (based upon your holdings in all of our Funds). We will not accept a |
| purchase order for Class B shares of $100,000 or more for a single Fund account unless we are contacted before the order is placed and we agree to accept it. For investments less than $100,000, the class that is best for you generally depends upon the amount you invest, your time horizon and your preference for paying the sales charge initially or later. If you fail to tell us what class of shares you want, we will purchase Class A shares for you. Your broker-dealer may have policies with respect to Class B shares that are more restrictive than those of our Funds. You should also be aware that we are not able to monitor purchases that are made through an omnibus account with another broker-dealer. In such case, it is the responsibility of the broker-dealer to observe our $100,000 limit. The following tables describe the sales charge and contingent deferred sales charge (“CDSC”) for Class A and Class B shares. |
Class A Shares | ||
Class A shares of the Fund are sold at the public offering price, which includes a front-end sales charge. The sales charge declines with the size of your purchase, as illustrated below. | ||
Your investment | Sales Charge as a percentage of offering price* | Sales Charge as a percentage of net amount invested* |
Less than $100,000 | 5.75% | 6.10% |
$100,000-$249,999 | 4.50 | 4.71 |
$250,000-$499,999 | 3.50 | 3.63 |
$500,000-$999,999 | 2.50 | 2.56 |
$1,000,000 or more | 0** | 0** |
* Due to rounding of numbers in calculating a sales charge, you may pay more or less than what is shown above. ** If you invest $1,000,000 or more, you will not pay a front-end sales charge. However, if you make such an investment and then sell your shares within 24 months of purchase, you will pay a CDSC of 1.00%. As described in our Shareholder Manual, a CDSC of 1.00% may also be imposed on redemptions of Class A shares that are purchased by group retirement plans without a front-end sales charge pursuant to a sales charge waiver privilege. As further described in the Shareholder Manual, any applicable CDSCs may also be waived under certain circumstances. |
Class B Shares* Class B shares are sold at net asset value without any initial sales charge. However, you may pay a CDSC when you sell your shares. The CDSC declines the longer you hold your shares, as illustrated below. Class B shares convert to Class A shares after eight years. | |
Year of Redemption | CDSC as a percentage of Purchase Price |
Within the 1st or 2nd year | 4% |
Within the 3rd or 4th year | 3 |
In the 5th year | 2 |
In the 6th year | 1 |
Within the 7th year and 8th year | 0 |
* There is no CDSC on Class B shares that are acquired through reinvestment of dividends or distributions. The CDSC is imposed on the lower of the original purchase price or the net asset value of the shares being sold. For purposes of determining the CDSC, all purchases made during a calendar month are counted as having been made on the first day of that month at the average cost of all purchases made during that month. To keep your CDSC as low as possible, each time you place a request to sell shares, we will first sell any shares in your account that carry no CDSC. If there is an insufficient number of these shares to meet your request in full, we will then sell those shares that have the lowest CDSC. As further described in the Shareholder Manual, any applicable CDSCs may also be waived under certain circumstances. |
The Fund has adopted plans pursuant to Rule 12b-1 for its Class A and Class B shares that allow the Fund to pay fees for the distribution related activities and the ongoing maintenance and servicing of shareholder accounts. The plans provide for payments at annual rates (based on average daily net assets) of up to 0.30% on Class A shares and 1.00% on Class B shares. No more than 0.25% of the Fund’s average daily net assets may be paid under the plans as service fees and no more than 0.75% of the Fund’s average daily net assets may be paid under the Class B plan as asset-based sales charges. Because these fees are paid out of the Fund's assets on an ongoing basis, the higher fees for Class B shares will increase the cost of your investment. Rule 12b-1 fees may cost you more over time than paying other types of sales charges. |
| Are sales charge discounts available? You may qualify for Class A share sales charge discount under our Rights of Accumulation (“ROA”) policy. If you already own shares of First Investors Funds, you are entitled to add the current values of those shares (measured by the current offering price) to your purchase in computing your sales charge. (Class A shares of our money market Funds are not counted for ROA purposes if they were purchased directly without a sales charge.) Thus, for example, if you already own shares of First Investors Funds on which you have paid sales charges and those shares are worth $100,000 based on the current offering price, your current purchase of $10,000 is entitled to the $100,000 sales charge discount. In computing your sales charge discount level, you are also entitled to credit for the current values of First Investors Fund shares held in the accounts of other shareholders whose accounts are registered |
under your address of record (i.e., your mailing address on your account) and are serviced by your broker-dealer firm (“Eligible Accounts”). For example, you are entitled to combine the current values of all First Investors Fund shares (measured by the current offering price) owned by you, your spouse, your children, and any other individuals as long as you all share the same address of record and are serviced by the same broker-dealer firm. You can also qualify for a sales charge discount by signing a non-binding letter of intent (“LOI”) to purchase a specific dollar amount of shares within 13 months. For example, your current purchase of $10,000 will be processed at the $100,000 sales charge discount level if you sign an LOI for $100,000. You are not legally required to complete the LOI. However, if you fail to do so, your share balance will be reduced to reflect the appropriate sales charge without the LOI. To ensure that you receive the proper sales charge discount, you must advise your broker-dealer of all Eligible Accounts that can be aggregated with your own accounts for ROA purposes as well as your desire to enter into an LOI (if applicable). In addition, the Fund or your broker-dealer may also ask you to provide account records, statements or other information related to all Eligible Accounts. You should be aware that we are not able to monitor purchases that are made through an omnibus account with another broker-dealer. Your broker-dealer is responsible for processing your order at the correct discount level and for offering you the opportunity to enter into an LOI. We will also reduce or waive sales charges and CDSCs in the following circumstances. Discounts on Class A share sales charges are available for group retirement plans and certain unit investment trust holders. Sales charges on Class A shares are waived on reinvestments of dividends and distributions within the same customer |
| account, investments by certain qualified retirement plans, investments that are made to repay loans from retirement accounts, certain exchanges within the same customer account, certain reinvestments of redemptions that have been made within six months, and investments by current and former associates of FIMCO or its affiliates and certain of their family members and certain employees of a subadviser of a First Investors Fund. CDSCs on Class A and Class B shares are waived for certain redemptions on the death or disability of all account owners, distributions from retirement plans due to plan termination, redemptions to remove excess contributions to IRAs and other retirement plan accounts, redemptions that are made because an account has fallen below our minimum account size or to pay account fees, certain redemptions that are made to satisfy required minimum distribution requirements from retirement accounts, and redemptions of up to 8 percent of the value of an account pursuant to a Systematic Withdrawal Plan. Finally, CDSCs on Class A and Class B share redemptions will be refunded in certain circumstances if the proceeds are reinvested in the shares of our Funds within six months. You should consult with your Representative or read our Shareholder Manual to determine whether you qualify for these discounts or waivers and for additional information on how they operate. The Shareholder Manual, which is part of the Statement of Additional Information, is available free of charge, upon request, from the Fund’s transfer agent (see back cover). It is also available on our website, www.firstinvestors.com, under the heading “Information Center”, and by clicking on “Shareholder Manual”. Our website also provides a direct link to the pages of the Shareholder Manual that discuss sales charges, discounts and waivers under the heading “Information Center”, and by clicking on “Sales |
Charges, Discounts and Waivers – Choosing Between Share Classes”. How do I sell shares? You may redeem your Fund shares on any day the Fund is open for business by contacting your Representative who may place a redemption order for you or by sending a written redemption request to Administrative Data Management Corp. ("ADM"), at Raritan Plaza 1, Edison, N.J. 08837. You may also make a redemption by telephoning the Special Services Department of ADM at 1-800-342-6221 or instructing us to make an electronic transfer to a predesignated bank account. Shares in certificate form may only be redeemed by written request. For your protection, we will not process a written redemption request for an account without a signature guarantee if (1) the amount of the redemption is over $100,000, (2) the redemption is to be made payable to any person other than the registered owner(s) or any entity other than a major financial institution for the benefit of the registered owner(s), (3) the redemption proceeds are to be sent to an address other than the address of record, a pre-authorized bank account, or a major financial institution on the registered owner(s) behalf, (4) the redemption is to the address of record and the address of record has changed within sixty (60) days of the request (unless the written address change request was signed by all owners and signature guaranteed), or (5) we conclude that other circumstances warrant obtaining a signature guarantee. We may also require documentary proof of authority for redemptions from certain types of accounts, such as partnership accounts, corporate accounts, and retirement accounts. Similarly, for your protection, we will not accept a telephone redemption request if (1) you do not have telephone privileges |
| for such account, (2) the amount of the redemption is over $100,000, (3) the amount of the redemption, combined with all other telephone redemptions within the previous 30 days, exceeds $200,000 for any one Fund account, (4) the redemption is to be made payable to any person other than the registered owners of the account, (5) the redemption is to be electronically transferred to any bank account other than a pre-authorized bank account, (6) the redemption proceeds are to be mailed to any address other than the address of record, or (7) the redemption is to the address of record and the address of record has been changed within the prior sixty (60) days and we have not received a signature guaranteed request signed by all of the owners of the account. In such circumstances, you will have to provide us with a written redemption request. You may use our Systematic Withdrawal Plan to redeem a specific dollar amount, number of shares, or percentage from your account on a regular basis. You should be aware that systematic withdrawals in excess of the dividends and distributions paid by a Fund will reduce and possibly exhaust your invested principal, especially in the event of a market decline. You should not assume that the value of your Fund shares will appreciate enough to cover withdrawals. You should also be aware that systematic payments are not eligible for our reinstatement privilege. You should avoid making any investments in First Investors Funds at the same time that you are taking systematic withdrawals, unless your investments can be made without paying a sales charge. Buying shares on which a sales charge is imposed during the same period as you are selling shares is not advantageous to you because you will be incurring unnecessary sales charges and may not be able to deduct any capital losses because of wash sale rules. |
ACCOUNT POLICIES |
retirement account holds more than one Fund the fee is allocated equally among each of the Funds. The Fund reserves the right to discontinue paying this fee at any time on forty-five (45) days’ written notice to account holders. In such event, the fee will be charged to account holders. The custodian also reserves the right to increase or modify the fee on prior written notice. The full range of privileges and related policies are described in our Shareholder Manual, which you may obtain upon request free of charge. For more information on the full range of services available, please contact us directly at 1-800-423-4026. |
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FINANCIAL HIGHLIGHTS |
The financial highlights shown in the tables represent the financial history of the predecessor fund of the same name , which was acquired by the Fund on January 27, 2006. The Fund has adopted the financial history of its respective predecessor fund. The financial highlights tables are intended to help you understand the financial performance of the Fund for the years indicated. The following tables set forth the per share data for each fiscal year ended September 30, except as otherwise indicated. Certain information reflects financial results for a single Fund share. The total returns in the tables represent the rates that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and other distributions). The information has been audited by Tait, Weller & Baker, whose report, along with the Fund’s financial statements, is included in the Statement of Additional Information, which is available upon request. |
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BLUE CHIP FUND |
Per Share Data | |||||||
| Net Asset Value at Beginning of Period | Income from Net Net Realized Total from and Investment Unrealized Operations Gain (Loss) on Investments | Less Distributions Net Net Realized Total Gain Distributions | ||||
CLASS A | |||||||
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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 |
2006 | 20.60 | .10 | 1.82 | 1.92 | .07 | — | .07 |
CLASS B | |||||||
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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 |
2006 | 19.30 | (.08) | 1.72 | 1.64 | — | — | — |
* | Calculated without sales charges. |
† | Net of expenses waived or assumed by the Adviser. |
| Total | Ratios/Supplemental Data | |||||||||
Net | Total Return* | Net Millions) | Ratio to Average Expenses Net (%) Investment Income (Loss) (%) | Ratio to Average Expenses Net Investment Income (Loss) (%) | Portfolio Turnover Rate (%) | ||||||
CLASS A | |||||||||||
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| |||||
$14.56 | (23.93) | $333 | 1.48 | (.17) | 1.58 | (.27) | 144 | ||||
17.14 | 17.72 | 383 | 1.56 | — | 1.68 | (.12) | 111 | ||||
18.69 | 9.04 | 414 | 1.47 | .03 | 1.58 | (.08) | 94 | ||||
20.60 | 10.76 | 421 | 1.45 | .54 | 1.56 | .43 | 55 | ||||
22.45 | 9.31 | 438 | 1.46 | .47 | 1.50 | .44 | 6 | ||||
CLASS B | |||||||||||
|
|
|
|
|
| ||||||
$13.91 | (24.48) | $57 | 2.18 | (.87) | 2.28 | (.97) | 144 | ||||
16.26 | 16.90 | 62 | 2.26 | (.70) | 2.38 | (.82) | 111 | ||||
17.61 | 8.30 | 61 | 2.17 | (.67) | 2.28 | (.78) | 94 | ||||
19.30 | 9.98 | 52 | 2.15 | (.16) | 2.26 | (.27) | 55 | ||||
20.94 | 8.50 | 44 | 2.16 | (.23) | 2.20 | (.27) | 6 |
BLUE CHIP FUND |
For more information about the Fund, the following documents are available for free upon request: Annual/Semi-Annual Reports: These Reports include the portfolio holdings of the Fund as well as a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year. Statement of Additional The SAI provides more detailed Shareholder Manual: The Shareholder Manual provides more detailed information about the purchase, redemption and sale of the Fund’s shares. To obtain free copies of the Reports, the Administrative Data Management Corp. Raritan Plaza 1 Edison, NJ 08837 Telephone: 1-800-423-4026 |
| To obtain information about the Fund, including your account balance and transaction history, you may also visit our website at: www.firstinvestors.com. To access your account information, you will need a password, which you may request over the web or by telephone. You can review and copy Fund documents (including the Reports, the SAI and the Shareholder Manual) at the (Investment Company Act File No. 811-6618) |
Focused Equity Fund |
The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
THE DATE OF THIS
P R O S P E C T U S
ISJANUARY 31, 2007
CONTENTS |
OVERVIEW OF THE FUND
What is the Focused Equity Fund?
3
Objective
3
Principal Investment Strategies
3
Principal Risks
3
Who should consider buying the Focused Equity Fund?
4
How has the Focused Equity Fund performed?
5
What are the fees and expenses of the Focused Equity Fund?
7
THE FUND IN DETAIL
What are the Focused Equity Fund’s objective, principal
investment strategies and principal risks?
8
Who manages the Focused Equity Fund?
10
BUYING AND SELLING SHARES
How and when does the Fund price its shares?
11
How do I buy shares?
12
What are the sales charges?
13
Are sales charge discounts available?
15
How do I sell shares?
16
What if my account falls below the minimum account requirement?
17
Can I exchange my shares for the shares of other First Investors Funds?
18
What are the Fund’s policies on frequent trading in the shares of the Fund?
18
What are the risks of frequent trading in the shares of the Fund?
18
ACCOUNT POLICIES
What about dividends and capital gain distributions?
19
What about taxes?
19
Other account privileges and policies
20
FINANCIAL HIGHLIGHTS
21
OVERVIEW OF THE FUND |
What is the Focused Equity Fund? Objective: The Fund seeks capital appreciation. Principal Investment Strategies: The Fund normally invests in the common stocks and other equity securities of 40 to 50 companies. While the Fund invests primarily in securities that are traded in the U.S., it may also invest in securities that are traded in foreign markets ("foreign securities"). The Fund employs a two-fold investment approach: n First, using a top-down approach, the Fund seeks to identify sectors and industries that will likely benefit over the short-term. As part of this process, the Fund considers not only current economic conditions, but also long-term demographic trends, technological changes and political and social developments in the U.S. and abroad. n Second, using a bottom-up approach, the Fund relies on fundamental research to identify the most attractive companies within the sectors and industries that have been identified through the top-down analysis. The Fund generally focuses on large, high quality companies that exhibit above average growth, a strong balance sheet and capable management. These companies will likely be in industries that are experiencing cyclical or secular growth. |
| Principal Risks: Any investment carries with it some level of risk. The following are the principal risks of the Focused Equity Fund: n The value of the portfolio will fluctuate with movements in the overall securities markets, general economic conditions and changes in interest rates or investor sentiment. n Because the Fund is non-diversified and concentrates its investments in the stocks of a small number of issuers, the Fund’s performance may be substantially impacted by the change in value of a single holding. n Investments in foreign securities involve additional risks, including risks arising from currency fluctuations, government regulation, unfavorable political or legal developments, differences in financial reporting standards and less stringent regulation of foreign securities markets. Accordingly, the value of your investment in the Fund will go up and down, which means that you could lose money. An investment in the Fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. |
Who should consider buying the Focused Equity Fund? The Focused Equity Fund is most appropriately used as part of a diversified investment portfolio. It may be appropriate for you if you: n Are seeking significant growth of capital, n Are willing to accept a high degree of investment risk, and n Have a long-term investment horizon and are able to ride out market cycles. You should keep in mind that the Fund is not a complete investment program. For most investors, a complete program should include not only stock funds but also bond and money market funds. While stocks have historically outperformed other categories of investments over long periods of time, they generally carry higher risks. There have also been extended periods during which bonds and money market instruments have outperformed stocks. By allocating your assets among different types of funds, you can reduce the overall risk of your portfolio. Of course, even a diversified investment program can result in a loss. The investment objective of the Fund is non-fundamental, which means that the Board of Trustees may change the investment objective of the Fund without shareholder approval. The Board may take such action when it believes that a change in the objective is necessary or appropriate in light of market circumstances or other events. |
|
|
How has the Focused Equity Fund performed? | ||
The following information shows you how the Fund’s performance has varied from year to year and in comparison with a broad-based index. This gives you some indication of the risks of investing in the Fund. The Fund’s past performance does not necessarily indicate how the Fund will perform in the future. The bar chart presented below shows the performance of the Fund’s Class A shares |
| over the past ten calendar years (or the life of the Fund, if less). The Fund also has Class B shares. The performance of Class B shares differs from the performance of Class A shares only to the extent that they do not have the same expenses. The bar chart does not reflect sales charges that you may pay upon purchase or redemption of Fund shares. If they were included, the returns would be less than those shown. |
During the period shown, the highest quarterly return was 17.33% (for the quarter ended June 30, 2003) and the lowest quarterly return was -20.35% (for the quarter ended June 30, 2002).
The following table shows the average annual total returns for the Fund’s Class A and Class B shares, assuming reinvestment of dividends and other distributions, if any, and payment of the current maximum sales charge or contingent deferred sales charge ("CDSC"). The returns on Class A shares are shown both before and after taxes. After-tax returns are calculated using the historical highest individual federal marginal income tax rates for each of the time periods shown below and do not reflect the impact of state or local taxes. |
| After-tax returns on the sale of Fund shares may be higher than other returns for the same period because capital losses on redemptions produce tax deductions. Your actual after-tax returns may differ from those shown because they depend on your individual tax situation. Moreover, the after-tax returns set forth below are not relevant to investors who hold their Fund shares through tax-deferred arrangements such as 401(k) plans or IRAs. After-tax returns for Class B shares will vary from those shown below. |
Average Annual Total Returns
(For the periods ended December 31, 2006)
| 1 Year | 5 Years | Life of Class* |
Class A Shares |
|
|
|
Return Before Taxes | 2.57% | 0.13% | -1.27% |
Return After Taxes on Distributions | 2.57% | 0.12% | -1.28% |
Return After Taxes on Distributions and Sale of Fund Shares | 1.67% | 0.11% | -1.08% |
Class B Shares |
|
|
|
Return Before Taxes | 4.09% | 0.22% | -1.21% |
Index |
|
|
|
S&P 500 Index (reflects no deduction for fees, expenses or taxes)** | 15.79% | 6.19% | 2.77% |
* Class A shares and Class B shares commenced operations on 3/22/99. The return shown for the S&P 500 Index is for the period 3/22/99 to 12/31/06.
** The S&P 500 Index is an unmanaged capitalization-weighted index of 500 stocks designed to measure the performance of the broad domestic economy through changes in the aggregate market value of such stocks, which represent all major industries.
What are the fees and expenses of the Focused Equity Fund?
This table describes the fees and expenses that you may pay if you buy and hold shares of the Fund.
Shareholder fees (fees paid directly from your investment) | Class A Shares | Class B Shares |
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) | 5.75%* | None |
Maximum deferred sales charge (load) (as a percentage of the lower of purchase price or redemption price) | None** | 4.00%*** |
* Due to rounding of numbers in calculating a sales charge, you may pay more or less than what is shown above.
** A CDSC of 1.00% will be assessed on certain redemptions of Class A shares that are purchased without a sales charge.
*** 4.00% in the first year; declining to 0% after the sixth year. Class B shares convert to Class A shares after eight years.
Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
| Management | Distribution | Other | Total |
Class A Shares | 0.75% | 0.30% | 0.75% | 1.80% |
Class B Shares | 0.75% | 1.00% | 0.75% | 2.50% |
(1) The Fund has an expense offset agreement that may reduce the Fund’s custodian fee based on the amount of cash maintained by the Fund with its custodian. Any such fee reductions are not reflected under Other Expenses or Total Annual Fund Operating Expenses.
Example
This example helps you to compare the costs of investing in the Fund with the cost of investing in other mutual funds. It assumes that (1) you invest $10,000 in the Fund for the time periods indicated; (2) your investment has a 5% return each year; and (3) the Fund’s operating expenses remain the same. Although your actual costs may be higher or lower, under these assumptions your costs would be:
| One Year | Three Years | Five Years | Ten Years |
If you redeem your shares: |
|
|
|
|
Class A shares | $747 | $1,109 | $1,494 | $2,569 |
Class B shares | $653 | $1,079 | $1,531 | $2,664* |
If you do not redeem your shares: |
|
|
|
|
Class A shares | $747 | $1,109 | $1,494 | $2,569 |
Class B shares | $253 | $779 | $1,331 | $2,664* |
* Assumes conversion to Class A shares eight years after purchase.
THE FUND IN DETAIL |
What are the Focused Equity Fund’s objective, principal investment strategies and principal risks?
Objective: The Fund seeks capital appreciation. Principal Investment Strategies: The Fund normally invests in the common stocks and other equity securities of 40 to 50 companies. The Fund is a non-diversified investment company. The Fund may therefore concentrate its portfolio in a relatively small number of holdings. Under normal circumstances, the Fund will invest at least 80% of its net assets in equity securities (including not only common stocks, but also preferred stocks and securities convertible into common and preferred stocks). The Fund will provide shareholders with at least 60 days notice before changing this 80% policy. While the Fund invests primarily in securities that are traded in the U.S., it may also invest in securities that are traded in foreign markets. In selecting investments, the Fund favors large, high-quality companies with long-term growth potential. The companies will have accelerating earnings growth, strong possibility of multiple expansion or hidden or unappreciated value. The Fund has a two-tiered strategy in selecting these investments. n First, using a "top-down" approach, the Fund analyzes the general economic and investment environment. As part of the process, the Fund evaluates among other things, economic conditions, U.S. fiscal and monetary |
| policy, long-term demographic trends, technological changes and political and social developments in the U.S. and abroad. Based upon this analysis, the Fund attempts to anticipate trends and changes in markets and the overall economy. The Fund then seeks to identify those industries and sectors that will likely benefit from the current economic environment. n Second, using a "bottom-up" approach, the Fund relies on fundamental analysis to identify 40 to 50 of the most attractive large companies within the industries or sectors identified through top-down analysis. The Fund’s fundamental analysis involves the assessment of a company’s business environment, global expansion plans, management, balance sheet, income statement, anticipated earnings, revenues and other related measures of value. Assessment of investor sentiment may also be an important factor in evaluating purchases. The Fund continually monitors every company in its portfolio for fundamental attractiveness. The Fund typically sells an investment when the investment achieves its anticipated potential, the company begins to show deteriorating investment fundamentals, or alternative investments become sufficiently more attractive. The Fund may take temporary defensive positions that are inconsistent with the Fund’s principal investment strategies in attempting to respond to adverse market, economic, political, or other conditions. If it does so, it may not achieve its investment objective. The Fund may also choose not to take defensive positions. The Fund may, at times, engage in short-term trading, which could produce higher transaction costs and |
taxable distributions and may result in a lower total return for the Fund. Information on the Fund’s recent strategies and holdings can be found in the most recent annual report and information concerning the Fund’s policies and procedures with respect to disclosure of the Fund’s portfolio holdings is available in the Fund’s Statement of Additional Information (see back cover). Principal Risks: Any investment carries with it some level of risk. Here are the principal risks of investing in the Focused Equity Fund: Market Risk: Because the Fund primarily invests in stocks, it is subject to market risk. Stock prices in general may decline over short or even extended periods not only due to company-specific developments but also due to an economic downturn, a change in interest rates or a change in investor sentiment, regardless of the success or failure of an individual company’s operations. Stock markets tend to run in cycles with periods when prices generally go up, known as "bull" markets, and periods when stock prices generally go down, referred to as "bear" markets. Non-Diversification Risk: The Fund is a non-diversified investment company and, as such, its assets may be invested in a limited number of issuers. This means that the Fund’s performance may be substantially impacted by the change in value of even a single holding. The price of a share of the Fund can therefore be expected to fluctuate more than a comparable diversified fund. Moreover, the Fund’s share price may decline even when the overall market is increasing. Accordingly, an investment in the Fund therefore may entail greater |
| risks than an investment in a diversified investment company. Foreign Securities Risk: Investments in foreign securities involve additional risks, including risks arising from currency fluctuations, government regulation, unfavorable political or legal developments, differences in financial reporting standards and less stringent regulation of foreign securities markets. |
Who manages the Focused Equity Fund? First Investors Management Company, Inc. ("FIMCO" or "Adviser") is the investment adviser to the Fund. FIMCO has been the investment adviser to the First Investors Family of Funds since 1965. Its address is 95 Wall Street, New York, NY 10005. As of September 30, 2006, FIMCO served as investment adviser to 50 mutual funds or series of funds with total net assets of approximately $7.04 billion. FIMCO supervises all aspects of the Fund's operations. For the fiscal year ended September 30, 2006, FIMCO received advisory fees of 0.75% of the Fund’s average daily net assets, net of any waiver. Wellington Management Company, LLP ("Wellington Management") serves as the investment subadviser of the Focused Equity Fund. Wellington Management has discretionary trading authority over all of the Fund's assets, subject to continuing oversight and supervision by FIMCO and the Fund’s Board of Trustees. Wellington Management is located at 75 State Street, Boston, MA 02109. Wellington Management is a professional investment counseling firm which provides investment services to investment companies, employee benefit plans, endowment funds, foundations and other institutions. As of September 30, 2006, Wellington Management held investment management authority with respect to approximately $544 billion of assets. Of that amount, Wellington Management acted as investment adviser or subadviser to approximately 175 registered investment companies or series of such companies, wi th net assets of approximately $257 billion. |
| Matthew E. Megargel, CFA, is a Senior Vice President and Equity Portfolio Manager of Wellington Management and has served as the Portfolio Manager of the Focused Equity Fund since 2002. Mr. Megargel also serves as a Portfolio Manager for certain other First Investors Funds. Mr. Megargel joined Wellington Management as an investment professional in 1983. Descriptions of the factors considered by the Board of Trustees in approving the foregoing Advisory and Subadvisory Agreements are available in the Fund’s Annual Report to shareholders for fiscal year ending September 30, 2006. The Statement of Additional Information provides additional information about the portfolio manager’s compensation, other accounts managed by the portfolio manager, and the portfolio manager’s ownership of securities in a Fund. The Fund has applied for an exemptive order from the Securities and Exchange Commission. If granted, the order would permit FIMCO to enter into new or modified subadvisory agreements with existing or new subadvisers without approval of a Fund’s shareholders but subject to the approval of the Fund’s Board of Trustees. In addition, there is a rule pending at the SEC, which, if adopted, would permit the Fund to act in such manner without seeking an exemptive order. In any event, the Prospectus will be supplemented if additional subadvisers are retained. |
BUYING AND SELLING SHARES | ||
| ||
How and when does the Fund price its shares? The share price (which is called "net asset value" or "NAV" per share) for the Fund is calculated as of the close of regular trading on the New York Stock Exchange ("NYSE") (normally 4:00 p.m. Eastern Time) each day that the NYSE is open ("Business Day"). The NYSE is closed on most national holidays and Good Friday. In the event that the NYSE closes early, the share price will be determined as of the time of the closing. To calculate the NAV, the Fund first values its assets, subtracts its liabilities and divides the balance, called net assets, by the number of shares outstanding. The prices or NAVs of Class A shares and Class B shares will generally differ because they have different expenses. The investments of the Fund are generally valued based upon their last reported sale prices, market quotations, or estimates of value provided by a pricing service as of the close of trading on the NYSE (collectively, "current market values"). If current market values for investments are not readily available, are deemed to be unreliable, or do not appear to reflect significant events that have occurred prior to the close of trading on the NYSE, the investments may be valued at fair value prices as determined by the investment adviser of the Fund under procedures that have been approved by the Board of Trustees of the Fund. The Fund may fair value a security due to, among other things, the fact that: (a) a pricing service does not offer a current market value for the security; (b) a current market value furnished by a |
| pricing service is believed to be stale; (c) the security does not open for trading or stops trading and does not resume trading before the close of trading on the NYSE, pending some corporate announcement or development; or (d) the security is illiquid or trades infrequently and its market value is therefore slow to react to information. In such cases, the Fund’s investment adviser will price the security based upon its estimate of the security’s market value using some or all of the following factors: the information that is available as of the close of trading on the NYSE, including issuer-specific news; overall market movements; sector movements; or movements of similar securities. Foreign securities are generally priced based upon their market values as of the close of foreign markets in which they principally trade ("closing foreign market prices"). Foreign securities may be priced based upon fair value estimates (rather than closing foreign market prices) provided by a pricing service when price movements in the U.S. subsequent to the closing of foreign markets have exceeded a pre-determined threshold. The pricing service, its methodology or threshold may change from time to time. As in the case of all securities owned by the Fund, foreign securities may also be valued at fair value prices as determined by the investment adviser of the Fund for the other reasons described above. In the event that a security, domestic or foreign, is priced using fair value pricing, a Fund’s value for that security is likely to be different than the security’s last reported market sale price or quotation. Moreover, fair value pricing is based upon opinions or predictions on how events or information may affect market prices. Thus, different investment advisers may, in good faith and using reasonable procedures, conclude that the same security has a different fair value. Finally, the use of fair value pricing for one or more securities held by the Fund could cause the Fund’s net asset value to be materially |
different than if the Fund had employed market values in pricing its securities. Debt obligations with maturities of 60 days or less are valued at amortized cost. How do I buy shares? You may buy shares of the Fund through a registered representative of First Investors Corporation or through another authorized broker-dealer ("Representative"). Your Representative will help you complete and submit an application. Your initial investment must be at least $1,000. Subsequent investments can be made in any dollar amount. We have lower initial investment requirements for retirement accounts and offer automatic investment plans that allow you to open a Fund account with small monthly payments. For further information on the procedures for buying shares, please contact your Representative or call Shareholder Services at 1-800-423-4026. If we receive your order in our Edison, N.J. offices in good order, as described in the Shareholder Manual, by the close of regular trading on the NYSE, your transaction will be priced at that day's NAV plus any applicable sales charge ("offering price"). If you place your order with your Representative by the close of regular trading on the NYSE, your transaction will also be priced at that day's offering price provided that your order is received by our Edison, N.J. offices by our processing deadline. Orders placed after the close of regular trading on the NYSE, or received in our Edison, N.J. offices after our processing deadline, will be priced at the next Business Day's offering price. The procedures for processing transactions |
| are explained in more detail in our Shareholder Manual, which is available upon request. The Fund reserves the right to refuse any order to buy shares, without prior notice, if the Fund determines that doing so would be in the best interests of the Fund and its shareholders. |
What are the sales charges? The Fund has two classes of shares, Class A and Class B. While each class invests in the same portfolio of securities, the classes have separate sales charge and expense structures. Because of the different expense structures, each class of shares generally will have different NAVs and dividends. The principal advantages of Class A shares are the lower overall expenses, the availability of quantity discounts on volume purchases and certain account privileges that are available only on Class A shares. The principal advantage of Class B shares is that all of your money is invested from the outset. Because of the lower overall expenses on Class A shares, we recommend Class A shares (rather than Class B shares) for purchases of $100,000 or more in the aggregate (based upon your holdings in all of our Funds). We will not accept a purchase order for Class B shares of |
| $100,000 or more for a single Fund account unless we are contacted before the order is placed and we agree to accept it. For investments less than $100,000, the class that is best for you generally depends upon the amount you invest, your time horizon and your preference for paying the sales charge initially or later. If you fail to tell us what class of shares you want, we will purchase Class A shares for you. Your broker-dealer may have policies with respect to Class B shares that are more restrictive than those of our Funds. You should also be aware that we are not able to monitor purchases that are made through an omnibus account with another broker-dealer. In such case, it is the responsibility of the broker-dealer to observe our $100,000 limit. The following tables describe the sales charge and contingent deferred sales charge ("CDSC") for Class A and Class B shares. |
Class A Shares | ||
Class A shares of the Fund are sold at the public offering price, which includes a front-end sales charge. The sales charge declines with the size of your purchase, as illustrated below. | ||
Your investment | Sales Charge as a percentage | Sales Charge as a percentage of net amount invested* |
Less than $100,000 | 5.75% | 6.10% |
$100,000-$249,999 | 4.50 | 4.71 |
$250,000-$499,999 | 3.50 | 3.63 |
$500,000-$999,999 | 2.50 | 2.56 |
$1,000,000 or more | 0** | 0** |
* Due to rounding of numbers in calculating a sales charge, you may pay more or less than what is shown above. ** If you invest $1,000,000 or more, you will not pay a front-end sales charge. However, if you make such an investment and then sell your shares within 24 months of purchase, you will pay a CDSC of 1.00%. As described in our Shareholder Manual, a CDSC of 1.00% may also be imposed on redemptions of Class A shares that are purchased by group retirement plans without a front-end sales charge pursuant to a sales charge waiver privilege. As further described in the Shareholder Manual, any applicable CDSCs may also be waived under certain circumstances. |
Class B Shares* Class B shares are sold at net asset value without any initial sales charge. However, you may pay a CDSC when you sell your shares. The CDSC declines the longer you hold your shares, as illustrated below. Class B shares convert to Class A shares after eight years. | |
Year of Redemption | CDSC as a percentage of Purchase Price |
Within the 1st or 2nd year |
4% |
Within the 3rd or 4th year | 3 |
In the 5th year | 2 |
In the 6th year | 1 |
Within the 7th year and 8th year | 0 |
* There is no CDSC on Class B shares that are acquired through reinvestment of dividends or distributions. The CDSC is imposed on the lower of the original purchase price or the net asset value of the shares being sold. For purposes of determining the CDSC, all purchases made during a calendar month are counted as having been made on the first day of that month at the average cost of all purchases made during that month. To keep your CDSC as low as possible, each time you place a request to sell shares, we will first sell any shares in your account that carry no CDSC. If there is an insufficient number of these shares to meet your request in full, we will then sell those shares that have the lowest CDSC. As further described in the Shareholder Manual, any applicable CDS Cs may also be waived under certain circumstances. |
account, investments by certain qualified retirement plans, investments that are made to repay loans from retirement accounts, certain exchanges within the same customer account, reinvestments of redemptions that have been made within six months, and investments by current and former associates of FIMCO or its affiliates and certain of their family members and certain employees of a subadviser of a First Investors Fund. CDSCs on Class A and Class B shares are waived for certain redemptions on the death or disability of all account owners, distributions from retirement plans due to plan termination, redemptions to remove excess contributions to IRAs and other retirement plan accounts, redemptions that are made because an account has fallen below our minimum account size or to pay account fees, certain redemptions that are made to satisfy required minimum distribution requirements from retirement accounts, and redemptions of up to 8 percent of the value of an account pursuant to a Systematic Withdrawal Plan. Finally, CDSCs on Class A and Class B share redemptions will be refunded in certain circumstances if the proceeds are reinvested in the shares of our Funds within six months. You should consult with your Representative or read our Shareholder Manual to determine whether you qualify for these discounts or waivers and for additional information on how they operate. The Shareholder Manual, which is part of the Statement of Additional Information, is available free of charge, upon request, from the Fund’s transfer agent (see back cover). It is also available on our website, www.firstinvestors.com, under the heading "Information Center", and by clicking on "Shareholder Manual". Our website also provides a direct link to the pages of the Shareholder Manual that discuss sales charges, discounts and waivers under the heading "Information Center", and by clicking on "Sales Charges, Discounts and Waivers – Choosing Between Share Classes". |
| How do I sell shares? You may redeem your Fund shares on any day the Fund is open for business by contacting your Representative who may place a redemption order for you or by sending a written redemption request to Administrative Data Management Corp. ("ADM"), at Raritan Plaza 1, Edison, N.J. 08837. You may also make a redemption by telephoning the Special Services Department of ADM at 1-800-342-6221 or instructing us to make an electronic transfer to a predesignated bank account. Shares in certificate form may only be redeemed by written request. For your protection, we will not process a written redemption request for an account without a signature guarantee if (1) the amount of the redemption is over $100,000, (2) the redemption is to be made payable to any person other than the registered owner(s) or any entity other than a major financial institution for the benefit of the registered owner(s), (3) the redemption proceeds are to be sent to an address other than the address of record, a pre-authorized bank account, or a major financial institution on the registered owner(s) behalf, (4) the redemption is to the address of record and the address of record has changed within sixty (60) days of the request (unless the written address change request was signed by all owners and signature guaranteed), or (5) we conclude that other circumstances warrant obtaining a signature guarantee. We may also require documentary proof of author ity for redemptions from certain types of accounts, such as partnership accounts, corporate accounts, and retirement accounts. Similarly, for your protection, we will not accept a telephone redemption request if (1) you do not have telephone privileges |
for such account, (2) the amount of the redemption is over $100,000, (3) the amount of the redemption, combined with all other telephone redemptions within the previous 30 days, exceeds $200,000 for any one Fund account, (4) the redemption is to be made payable to any person other than the registered owners of the account, (5) the redemption is to be electronically transferred to any bank account other than a pre-authorized bank account, (6) the redemption proceeds are to be mailed to any address other than the address of record, or (7) the redemption is to the address of record and the address of record has been changed within the prior sixty (60) days and we have not received a signature guaranteed request signed by all of the owners of the account. In such circumstances, you will have to provide us with a written redemption request. You may use our Systematic Withdrawal Plan to redeem a specific dollar amount, number of shares, or percentage from your account on a regular basis. You should be aware that systematic withdrawals in excess of the dividends and distributions paid by a Fund will reduce and possibly exhaust your invested principal, especially in the event of a market decline. You should not assume that the value of your Fund shares will appreciate enough to cover withdrawals. You should also be aware that systematic payments are not eligible for our reinstatement privilege. You should avoid making any investments in First Investors Funds at the same time that you are taking systematic withdrawals, unless your investments can be made without paying a sales charge. Buying shares on which a sales charge is imposed during the same period as you are selling shares is not advantageous to you because you will be incurring unnecessary sales charges and may not be able to deduct any capital losses because of wash sale rules. Your redemption request will be processed at the price next computed after we receive |
| the request in good order (less any applicable CDSC), as described in the Shareholder Manual. For all requests, please provide your account number. Payment of redemption proceeds generally will be made within 7 days. If you are redeeming shares which you recently purchased by check, payment may be delayed to verify that your check has cleared (which may take up to 15 days from the date of purchase). For additional information on our redemption and signature guarantee policies, see our Shareholder Manual, call your Representative, or call ADM at 1-800-423-4026. The Fund reserves the right to make in-kind redemptions. This means that it could respond to a redemption request by distributing shares of the Fund's underlying investments rather than distributing cash. What if my account falls below the minimum account requirement? If your account falls below the minimum account balance for any reason other than market fluctuation, the Fund reserves the right to redeem your account without your consent or to impose a low balance account fee of $25 annually on 60 days prior notice. The Fund may also redeem your account or impose a low balance account fee if you have established your account under a systematic investment program and discontinue the program before you meet the minimum account balance. You may avoid redemption or imposition of a fee by purchasing additional Fund shares during this 60-day period to bring your account balance to the required minimum. If you own Class B shares, you will not be charged a CDSC on a low balance redemption. |
ACCOUNT POLICIES |
What about dividends and capital gain distributions? To the extent that it has net investment income, the Fund will declare and pay a dividend from net investment income on an annual basis. Any net realized capital gains will be distributed on an annual basis, usually at the end of the Fund's fiscal year. The Fund may make an additional distribution in any year, if necessary, to avoid a Federal excise tax on certain undistributed income and capital gains. Dividends and other distributions declared on both classes of the Fund's shares are calculated at the same time and in the same manner. Dividends on Class B shares of the Fund are expected to be lower than those for its Class A shares because of the higher distribution fees borne by the Class B shares. Dividends on each class also might be affected differently by the allocation of other class-specific expenses. You may choose to reinvest all dividends and other distributions at NAV in additional shares of the same class of the Fund or certain other First Investors Funds or receive all dividends and other distributions in cash. If you do not select an option when you open your account, all dividends and other distributions will be reinvested in additional Fund shares. If you do not cash a dividend or distribution check, you will not receive interest on the amount of the check while it remains outstanding. If the Fund is unable to obtain a current address for you, it will reinvest your future dividends and other distributions in additional Fund shares in accordance with our "Returned Mail" policy, as described in our Shareholder Manual. A dividend or other distributions declared on a class of shares will be paid in |
| additional shares of the distributing class if it is under $10 or if the Fund has received notice that all account owners are deceased (until written alternate payment instructions and other necessary documents are provided by your legal representative). What about taxes? Any dividends or capital gain distributions paid by the Fund are taxable to you unless you hold your shares in an IRA, 403(b) account, 401(k) account or other tax-deferred account. Dividends and distributions of net short-term capital gains (if any) are taxable to you as ordinary income. If you are an individual and meet certain holding period requirements with respect to your Fund shares, you may be eligible for reduced federal tax rates on "qualified dividend income" distributed by the Fund. Distributions of long-term capital gains (if any) are taxed to you as long-term capital gains, regardless of how long you owned your Fund shares. You are taxed in the same manner whether you receive your dividends and capital gain distributions in cash or reinvest them in additional Fund shares. Your sale or exchange of Fund shares may be considered a taxable event for you. Depending on the purchase price and the sale price of the shares you sell or exchange, you may have a gain or a loss on the transaction. You are responsible for any tax liabilities generated by your transactions. |
Other account privileges and policies The Fund offers a full range of special privileges, including systematic investment programs, automatic payroll investment programs and telephone privileges. There is an annual custodial fee of $15 for each First Investors Fund IRA, SIMPLE-IRA, SEP-IRA, SARSEP-IRA, MPP/PSP, 401(k), 403(b), 457 and ESA account that you maintain, irrespective of the number of Funds that are held in the account. The Fund currently pays this fee. If the retirement account holds more than one Fund the fee is allocated equally among each of the Funds. The Fund reserves the right to discontinue paying this fee at any time on forty-five (45) days’ written notice to account holders. In such event, the fee will be charged to account holders. The custodian also reserves the right to increase or modify the fee on prior written notice. The full range of privileges and related policies are described in our Shareholder Manual, which you may obtain upon request free of charge. For more information on the full range of services available, please contact us directly at 1-800-423-4026. |
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FINANCIAL HIGHLIGHTS |
The financial highlights shown in the tables represent the financial history of the predecessor fund of the same name , which was acquired by the Fund on January 27, 2006. The Fund has adopted the financial history of its respective predecessor fund. The financial highlights tables are intended to help you understand the financial performance of the Fund for the years indicated. The following tables set forth the per share data for each fiscal year ended September 30, except as otherwise indicated. Certain information reflects financial results for a single Fund share. The total returns in the tables represent the rates that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and other distributions). The information has been audited by Tait, Weller & Baker, whose report, along with the Fund's financial statements, is included in the Statement of Additional Information, which is available upon request. |
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FOCUSED EQUITY FUND |
Per Share Data | |||||||
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| Net Asset Value at Beginning of Period | Income from Investment Operations Net Net Realized Total Investment and Un- from Income realized Invest- (Loss) Gain (Loss) ment on Invest- Opera- ments tions | Less Distributions from Net Net Realized Total Invest- Gain Distri- ment butions Income | ||||
CLASS A | |||||||
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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 |
2006 | 8.70 | (.02) | .43 | .41 | .01 | — | .01 |
CLASS B | |||||||
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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 | — | — | — |
2006 | 8.33 | (.09) | .42 | .33 | — | — | — |
*
Calculated without sales charges.
†
Net of expenses waived or assumed by the Adviser.
| Total | Ratios/Supplemental Data | ||||||||||
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Net Asset Value at End of Period | Total Return* (%) | Net Assets at End of Period (in Millions) | Ratio to Average Net Assets† Expenses Net (%) Invest- ment Income (Loss) (%) | Ratio to Average Net Assets Before Expenses Waived or Assumed Expenses Net (%) Invest- ment Loss (%) | Portfolio Turnover Rate (%) | |||||||
CLASS A | ||||||||||||
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$5.73 | (25.78) | $38 | 1.83 | (.90) | N/A | N/A | 150 | |||||
7.23 | 26.18 | 48 | 1.99 | (.35) | N/A | N/A | 49 | |||||
7.83 | 8.30 | 49 | 1.85 | (.30) | N/A | N/A | 39 | |||||
8.70 | 11.35 | 48 | 1.79 | .41 | N/A | N/A | 60 | |||||
9.10 | 4.72 | 45 | 1.80 | (.18) | N/A | N/A | 76 | |||||
CLASS B | ||||||||||||
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$5.59 | (26.25) | $9 | 2.53 | (1.60) | N/A | N/A | 150 | |||||
7.00 | 25.22 | 11 | 2.69 | (1.05) | N/A | N/A | 49 | |||||
7.53 | 7.57 | 11 | 2.55 | (1.00) | N/A | N/A | 39 | |||||
8.33 | 10.68 | 9 | 2.49 | (.29) | N/A | N/A | 60 | |||||
8.66 | 3.96 | 8 | 2.50 | (.88) | N/A | N/A | 76 |
FOCUSED EQUITY FUND For more information about the Fund, the following documents are available for free upon request: Annual/Semi-Annual Reports: These Reports include the portfolio holdings of the Fund as well as a discussion of the market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year. Statement of Additional Information (SAI): The SAI provides more detailed information about the Fund and is incorporated by reference into this prospectus. Shareholder Manual: The Shareholder Manual provides more detailed information about the purchase, redemption and sale of the Fund’s shares. |
| To obtain free copies of the Reports, the SAI and the Shareholder Manual, or to obtain other information, you may visit our website at: www.firstinvestors.com or contact the Fund at: Administrative Data Management Corp. Raritan Plaza 1 Edison, NJ 08837 Telephone: 1-800-423-4026 To obtain information about the Fund, including your account balance and transaction history, you may also visit our website at: www.firstinvestors.com. To access your account information, you will need a password, which you may request over the web or by telephone. You can review and copy Fund documents (including the Reports, the SAI and the Shareholder Manual) at the Public Reference Room of the SEC in Washington, D.C. You can also obtain copies of Fund documents after paying a duplicating fee (i) by writing to the Public Reference Section of the SEC, Washington, D.C. 20549 or (ii) by electronic request at publicinfo@sec.gov. To find out more, call the SEC at 1-202-551-8090. Text-only versions of Fund documents can be viewed online or downloaded from the EDGAR database on the SEC’s Internet website at http://www.sec.gov. (Investment Company Act File No. 811-6618) |