UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBERS 811-2860; 811-3967;
811-5690; 811-2107
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
FIRST INVESTORS GOVERNMENT FUND, INC.
FIRST INVESTORS SERIES FUND
FIRST INVESTORS FUND FOR INCOME, 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
8th Floor
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: MARCH 31, 2005
Item 1. Reports to Stockholders
The Semi-Annual Report to Stockholders follows
[First Investors Logo]
TAXABLE BOND & MONEY MARKET FUNDS
CASH MANAGEMENT
GOVERNMENT
INVESTMENT GRADE
FUND FOR INCOME
SEMI-ANNUAL REPORT
March 31, 2005
Bond Market Overview
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Dear Investor:
The U.S. economy decelerated during the reporting period, primarily in
response to higher oil prices. Following a third quarter 2004 gain of 4%,
economic growth decelerated to 3.8% in the fourth quarter and 3.1% in the
first quarter of 2005. Nonetheless, the unemployment rate continued to
decline from 5.4% to 5.2% as the economy -- in its fourth year of
expansion -- added over one million new jobs.
Inflation moved higher during the reporting period, although from a low
base. The consumer price index showed a year-over-year gain of 3.1%
through March, up from 2.5% six months earlier. Excluding the volatile
food and energy components, consumer prices rose a milder 2.3% for the
twelve months ending in March.
Concern about potential inflation, as well as the belief that monetary
policy remained accommodative, kept the Federal Reserve ("the Fed") on a
steady course of tighter monetary policy. Specifically, the Fed raised the
benchmark federal funds rate four times during the reporting period, from
1.75% to 2.75%. As well, the Fed indicated that it would continue to raise
rates at a measured pace.
In response to the Fed's ongoing tightening of monetary policy, short-term
interest rates rose notably. As measured by the 2-year U.S. Treasury note,
yields increased from 2.61% at the end of the third quarter of 2004 to
3.78% at the close of the first quarter of 2005. In contrast, long-term
interest rates were surprisingly stable. As measured by the 10-year U.S.
Treasury note, yields rose from 4.12% to 4.48% over the same period.
Several factors contributed to the resilience of long-term rates in the
face of Fed tightening: decelerating economic growth, relatively low
inflation, and foreign central bank purchases of U.S. debt.
During the reporting period, high-yield corporate bonds provided the best
returns by far as the sector benefited from low default rates and positive
economic fundamentals. The mortgage-backed sector also had positive
returns, benefiting from low volatility and benign prepayments during the
reporting period. Investment grade corporate bonds were on track for
strong returns until General Motors' negative earnings warning and Moody's
subsequent lowering of GM's corporate debt rating triggered a general
underperformance of corporate bonds in March. Lastly, U.S. government
securities were the weakest sector, reflecting the negative impact of
higher interest rates.
Bond Market Overview (Continued)
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Thank you for placing your trust in First Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ CLARK D. WAGNER
Clark D. Wagner
Director of Fixed Income
First Investors Management Company, Inc.
May 2, 2005
This Market Overview is not part of the Funds' financial report and is
submitted for the general information of the shareholders of the Funds. It
is not authorized for distribution to prospective investors in the Funds
unless preceded or accompanied by an effective prospectus. The Market
Overview reflects conditions through the end of the period as stated on
the cover. Market conditions are subject to change. This Market Overview
may not be relied on as investment advice or an indication of current or
future trading intent on behalf of any Fund.
There are a variety of risks associated with investing in mutual funds.
For stock funds, the risks include market risk (the risk that the entire
stock market will decline because of an event such as a deterioration in
the economy or a rise in interest rates), as well as special risks
associated with investing in certain types of stock funds, such as
small-cap, global and international funds. For bond funds, the risks
include interest rate risk and credit risk. Interest rate risk is the risk
that bonds will decrease in value as interest rates rise. As a general
matter, longer-term bonds fluctuate more than shorter-term bonds in
reaction to changes in interest rates. Credit risk is the risk that bonds
will decline in value as the result of a decline in the credit rating of
the bonds or the economy as a whole, or that the issuer will be unable to
pay interest and/or principal when due. You should consult your prospectus
for a precise explanation of the risks associated with your fund.
Understanding Your Fund's Expenses
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
As a mutual fund shareholder, you incur two types of costs: (1)
transaction costs, including sales charges (loads) on purchase payments
(on Class A shares only), contingent deferred sales charges on redemptions
(on Class B shares only); and (2) ongoing costs, including advisory fees;
distribution and service fees (12b-1); and other expenses. These examples
are 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, October 1, 2004, and held for the entire
six-month period ended March 31, 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 Expense 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 during 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 Expense Example:
The amounts in the table 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
transactional costs, such as front-end or contingent deferred sales
charges (loads). Therefore, the hypothetical expense 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
transactional costs were included, your costs would have been higher.
Fund Expenses
FIRST INVESTORS CASH MANAGEMENT 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 3 for a detailed explanation of the
information presented in these examples.
- ----------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(10/1/04) (3/31/05) (10/1/04-3/31/05)*
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,007.05 $3.50
Hypothetical
(5% annual return before expenses) $1,000.00 $1,021.44 $3.53
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,003.28 $7.24
Hypothetical
(5% annual return before expenses) $1,000.00 $1,017.70 $7.29
- ----------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the annualized expense ratio of .70% for Class A
shares and 1.45% for Class B shares, multiplied by the average account
value over the period, multiplied by 182/365 (to reflect the one-half year
period). Expenses paid during the period are net of expenses waived.
Portfolio Composition
BY SECTOR
(BAR CHART DATA:)
Corporate Notes 59.0%
U.S. Government Agency Obligations 33.7%
Floating Rate Notes 4.6%
Bankers' Acceptances 2.7%
Portfolio holdings and allocations are subject to change. Percentages are
as of March 31, 2005, and are based on the total value of investments.
Portfolio of Investments
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE NOTES--58.2%
$5,000M Abbott Laboratories, 4/28/05+ 2.73% $4,989,759 $292
4,500M AIG Funding, Inc., 4/29/05 2.77 4,490,304 263
5,000M Anheuser-Busch Companies, Inc., 5/24/05+ 2.65 4,980,417 292
4,975M Colgate-Palmolive Co., 4/5/05+ 2.76 4,973,474 291
5,000M DuPont (E.I.) de Nemours & Co., 5/3/05 2.74 4,987,819 292
2,000M Exxon Capital Corp., 7/1/05 2.08 2,019,406 118
3,555M Florida Power & Light Co., 4/21/05 2.77 3,549,528 208
2,385M Gannett Company, Inc., 4/1/05 2.65 2,385,000 140
3,000M General Electric Capital Corp., 5/5/05 2.78 2,992,119 175
4,000M Hewlett-Packard Co., 4/26/05+ 2.63 3,992,670 234
4,500M Illinois Tool Works, Inc., 4/26/05 2.75 4,491,401 263
4,500M International Business Machines Corp.,
5/5/05 2.74 4,488,354 263
2,000M JPMorgan Chase & Co., 2/1/06 3.15 2,054,864 120
3,000M Kimberly-Clark Worldwide, 5/12/05+ 2.79 2,990,465 175
Madison Gas & Electric Co.:
3,170M 4/25/05 2.75 3,164,188 185
1,500M 4/29/05 2.75 1,496,791 88
2,000M Merrill Lynch & Co., 3/10/06 3.45 1,982,007 116
5,000M National Rural Utilities Cooperative
Finance Corp., 4/18/05 2.73 4,993,546 293
5,000M New York Times Co., 4/4/05 2.74 4,998,858 293
Paccar Financial Corp.:
3,000M 4/14/05 2.70 2,997,071 176
2,000M 4/29/05 2.77 1,995,691 117
PepsiCo, Inc.:
3,000M 4/18/05+ 2.73 2,996,132 176
1,900M 4/20/05+ 2.73 1,897,262 111
5,000M Pfizer, Inc., 4/20/05+ 2.73 4,992,794 293
1,000M Procter & Gamble Co., 4/25/05+ 2.57 998,278 59
5,000M Prudential Funding Corp., 4/4/05 2.57 4,998,927 293
1,000M Sherwin-Williams Co., 4/27/05+ 2.75 998,013 58
2,500M Toyota Motor Credit Corp., 4/5/05 2.63 2,499,268 147
5,000M Wal-Mart Stores, Inc., 5/3/05+ 2.73 4,987,865 292
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Notes (cost $99,382,271) 99,382,271 5,823
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--33.3%
Fannie Mae:
2,300M 5/3/05 1.36 2,300,000 135
2,000M 5/9/05 1.65 1,999,693 117
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (Continued)
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Fannie Mae (Continued)
$3,000M 5/16/05 1.65% $3,000,000 $176
660M 5/16/05 2.10 659,621 39
4,000M 5/23/05 1.75 4,000,000 234
500M 7/14/05 2.28 498,893 29
555M 7/22/05 2.30 550,967 32
1,225M 8/5/05 2.90 1,220,462 72
500M 9/2/05 3.00 498,254 29
550M 10/21/05 2.85 547,593 32
495M 11/14/05 2.85 492,881 29
1,000M 12/15/05 2.88 996,393 58
2,000M 3/17/06 3.31 1,998,988 117
10,818M Farm Credit System Financial
Assistance Corp., 6/10/05 2.85 10,937,230 641
Federal Farm Credit Bank:
1,850M 6/21/05 2.46 1,849,736 108
250M 7/28/05 2.70 249,122 15
Federal Home Loan Bank:
1,000M 4/14/05 2.19 999,654 59
2,500M 4/27/05 1.33 2,499,937 147
2,000M 5/13/05 1.56 2,000,000 117
2,000M 5/27/05 1.78 2,000,000 117
1,200M 6/16/05 2.10 1,198,419 70
500M 6/17/05 2.05 499,566 29
500M 6/17/05 2.65 498,908 29
500M 6/30/05 2.65 498,509 29
750M 7/8/05 2.28 748,249 44
1,500M 7/8/05 2.38 1,496,131 88
1,000M 8/15/05 2.33 1,003,334 59
1,000M 9/30/05 3.00 994,013 58
1,000M 10/27/05 2.43 997,486 59
1,850M 11/4/05 2.53 1,849,793 108
1,375M 11/15/05 2.52 1,390,003 82
3,000M 12/30/05 3.12 2,968,420 174
2,000M 3/13/06 3.31 1,985,012 116
Freddie Mac:
1,000M 5/26/05 2.26 999,436 59
300M 11/17/05 2.54 299,526 18
- ----------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Obligations
(cost $56,726,229) 56,726,229 3,325
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
FLOATING RATE NOTES--4.5%
$4,700M Federal Farm Credit Bank, 9/1/05 2.93% $4,701,559 $275
3,000M Federal Home Loan Bank, 10/5/05 2.45 2,998,964 176
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Floating Rate Notes (cost $7,700,523) 7,700,523 451
- ----------------------------------------------------------------------------------------------------------------------
BANKERS' ACCEPTANCES--2.7%
Bank of America, NA:
938M 5/9/05 2.79 935,142 55
2,446M 5/10/05 2.79 2,438,991 143
1,271M 5/16/05 2.79 1,265,867 74
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Bankers' Acceptances (cost $4,640,000) 4,640,000 272
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $168,449,023)** 98.7% 168,449,023 9,871
Other Assets, Less Liabilities 1.3 2,203,454 129
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $170,652,477 $10,000
======================================================================================================================
* The interest rates shown are the effective rates at the time of
purchase by the Fund. The interest rates shown on the floating rate notes
are adjusted periodically; the rates shown are the rates in effect at
March 31, 2005.
** Aggregate cost for federal income tax purposes is the same
+ Security exempt from registration under Section 4(2) of the Securities
Act of 1933 (see Note 4)
See notes to financial statements
Fund Expenses
FIRST INVESTORS GOVERNMENT 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 3 for a detailed explanation of the
information presented in these examples.
- ----------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(10/1/04) (3/31/05) (10/1/04-3/31/05)*
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,006.55 $5.50
Hypothetical
(5% annual return before expenses) $1,000.00 $1,019.45 $5.54
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,002.76 $9.24
Hypothetical
(5% annual return before expenses) $1,000.00 $1,015.71 $9.30
- ----------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the annualized expense ratio of 1.10% for Class A
shares and 1.85% for Class B shares, multiplied by the average account
value over the period, multiplied by 182/365 (to reflect the one-half year
period). Expenses paid during the period are net of expenses waived.
Portfolio Composition
BY SECTOR
(BAR CHART DATA:)
Government National Mortgage Association 76.6%
Fannie Mae 17.5%
Cash Equivalents 3.3%
Freddie Mac 2.6%
Portfolio holdings and allocations are subject to change. Percentages are
as of March 31, 2005, and are based on the total value of investments.
Portfolio of Investments
FIRST INVESTORS GOVERNMENT FUND, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED CERTIFICATES--96.1%
Fannie Mae--17.4%
$26,329M 5.5%, 4/1/2033 - 7/1/2034 $26,429,570 $1,349
6,227M 6%, 9/1/2032 6,375,099 325
1,130M 8%, 9/1/2027 1,235,622 63
- ----------------------------------------------------------------------------------------------------------------------
34,040,291 1,737
- ----------------------------------------------------------------------------------------------------------------------
Freddie Mac--2.6%
4,995M 5.5%, 2/1/2035 5,012,962 256
- ----------------------------------------------------------------------------------------------------------------------
Government National Mortgage
Association I Program--74.6%
12,381M 5%, 4/15/2034 - 3/15/2035 12,230,586 624
36,910M 5.5%, 3/15/2033 - 2/15/2035 37,344,045 1,905
41,779M 6%, 3/15/2031 - 11/15/2034 43,071,091 2,197
31,675M 6.5%, 10/15/2028 - 8/15/2034 33,251,441 1,697
10,776M 7%, 7/15/2027 - 4/15/2034 11,433,044 583
6,051M 7.5%, 7/15/2023 - 6/15/2034 6,499,516 332
2,232M 8%, 4/15/2030 - 6/15/2034 2,421,571 124
- ----------------------------------------------------------------------------------------------------------------------
146,251,294 7,462
- ----------------------------------------------------------------------------------------------------------------------
Government National Mortgage
Association II Program--1.5%
2,781M 7%, 6/20/2023 - 10/20/2029 2,938,037 150
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Mortgage-Backed Certificates
(cost $188,605,652) 188,242,584 9,605
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS--3.3%
U.S. Treasury Bills:
550M 2.47%, 4/7/05 549,774 28
4,500M 2.59%, 4/14/05 4,495,791 229
1,500M 2.65%, 4/21/05 1,497,790 76
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term U.S. Government Obligations
(cost $6,543,355) 6,543,355 333
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $195,149,007) 99.4% 194,785,939 9,938
Other Assets, Less Liabilities .6 1,222,947 62
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $196,008,886 $10,000
======================================================================================================================
See notes to financial statements
Fund Expenses
FIRST INVESTORS INVESTMENT GRADE 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 3 for a detailed explanation of the
information presented in these examples.
- ----------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(10/1/04) (3/31/05) (10/1/04-3/31/05)*
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $999.23 $5.48
Hypothetical
(5% annual return before expenses) $1,000.00 $1,019.45 $5.54
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $995.66 $9.20
Hypothetical
(5% annual return before expenses) $1,000.00 $1,015.71 $9.30
- ----------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the annualized expense ratio of 1.10% for Class A
shares and 1.85% for Class B shares, multiplied by the average account
value over the period, multiplied by 182/365 (to reflect the one-half
year period). Expenses paid during the period are net of expenses waived.
Portfolio Composition
Portfolio Composition
TOP TEN SECTORS
(BAR CHART DATA:)
Financials 26.2%
Industrials 14.1%
Consumer Staples 13.4%
Consumer Discretionary 9.7%
Utilities 8.3%
Materials 6.5%
U.S. Government Obligations 6.1%
U.S. Government Agency Obligations 4.2%
Telecommunication Services 2.9%
Health Care 2.7%
Portfolio holdings and allocations are subject to change. Percentages are
as of March 31, 2005, and are based on the total value of investments.
Portfolio of Investments
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS--80.2%
Aerospace/Defense--1.8%
Honeywell International, Inc.:
$1,500M 7.5%, 2010 $1,685,151 $79
975M 6.125%, 2011 1,042,397 49
400M Precision Castparts Corp., 5.6%, 2013 402,562 19
717M TRW, Inc., 7.125%, 2009 772,920 37
- ----------------------------------------------------------------------------------------------------------------------
3,903,030 184
- ----------------------------------------------------------------------------------------------------------------------
Automotive--1.7%
2,000M DaimlerChrysler NA Holdings Corp., 8%, 2010 2,225,924 105
886M Ford Motor Co., 8.9%, 2032 898,066 42
500M Lear Corp., 8.11%, 2009 541,569 26
- ----------------------------------------------------------------------------------------------------------------------
3,665,559 173
- ----------------------------------------------------------------------------------------------------------------------
Chemicals--.4%
700M Lubrizol Corp., 7.25%, 2025 778,298 37
- ----------------------------------------------------------------------------------------------------------------------
Consumer Durables--.3%
650M Black & Decker Corp., 4.75%, 2014 626,946 30
- ----------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--2.2%
1,800M Colgate-Palmolive Co., 7.84%, 2007 1,934,347 91
1,350M Procter & Gamble Co., 4.85%, 2015 1,323,527 63
1,415M Unilever Capital Corp., 6.875%, 2005 1,450,580 68
- ----------------------------------------------------------------------------------------------------------------------
4,708,454 222
- ----------------------------------------------------------------------------------------------------------------------
Energy--1.6%
500M Mobil Corp., 8.625%, 2021 696,517 33
833M Repsol International Finance BV, 7.45%, 2005 843,278 40
975M Sunoco, Inc., 9.375%, 2016 1,030,878 48
800M Texaco Capital, Inc., 8.25%, 2006 848,493 40
- ----------------------------------------------------------------------------------------------------------------------
3,419,166 161
- ----------------------------------------------------------------------------------------------------------------------
Financial--5.9%
875M American General Finance Corp., 8.125%, 2009 985,579 47
300M Caterpillar Financial Services Corp., 4.6%, 2014 291,959 14
CIT Group, Inc.:
300M 6.875%, 2009 324,409 15
1,900M 7.75%, 2012 2,200,694 104
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Financial (continued)
ERAC USA Finance Enterprise Co.:
$1,775M 7.35%, 2008+ $1,917,616 $90
520M 8%, 2011+ 599,635 28
General Electric Capital Corp.:
850M 7.875%, 2006 901,435 42
700M 8.5%, 2008 782,280 37
1,000M 5.45%, 2013 1,028,813 49
1,550M General Motors Acceptance Corp., 7.75%, 2010 1,490,224 70
1,825M Household Finance Corp., 6.5%, 2008 1,935,914 91
- ----------------------------------------------------------------------------------------------------------------------
12,458,558 587
- ----------------------------------------------------------------------------------------------------------------------
Financial Services--12.3%
Bank of America Corp.:
1,067M 7.8%, 2010 1,209,053 57
1,225M 7.4%, 2011 1,382,640 65
Bank One Corp.:
1,165M 7.6%, 2007 1,241,500 58
700M 7.875%, 2010 798,252 38
700M Chase Manhattan Corp., 7.875%, 2010 797,180 38
1,750M Comerica, 7.125%, 2013 1,894,170 89
1,595M Fifth Third Bank, 3.375%, 2008 1,540,984 73
1,200M First Union National Bank, 7.8%, 2010 1,376,118 65
1,000M Fleet Capital Trust II, 7.92%, 2026 1,079,303 51
1,500M Florida Windstorm Underwriting Assoc.,
7.125%, 2019+ 1,731,243 81
1,200M Greenpoint Bank, 9.25%, 2010 1,441,813 68
775M Huntington National Bank, 8%, 2010 875,614 41
795M Manufacturers & Traders Trust Co., 8%, 2010 919,138 43
1,200M National City Bank of Pennsylvania, 7.25%, 2011 1,363,319 64
288M NBD Bancorp, Inc., 7.125%, 2007 304,462 14
1,125M Old National Bank, 6.75%, 2011 1,233,912 58
1,298M Republic NY Corp., 7.75%, 2009 1,440,337 68
1,600M Royal Bank of Scotland Group PLC, 5%, 2014 1,589,240 75
U.S. Bank NA:
600M 4.95%, 2014 593,487 28
900M 6.3%, 2014 977,103 46
Washington Mutual, Inc.:
1,825M 8.25%, 2010 2,072,382 98
250M 4.625%, 2014 236,599 11
- ----------------------------------------------------------------------------------------------------------------------
26,097,849 1,229
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--3.5%
Coca-Cola Enterprises, Inc.:
$1,050M 7.125%, 2009 $1,153,462 $54
1,100M 7.125%, 2017 1,266,345 60
1,995M ConAgra Foods, Inc., 6.75%, 2011 2,195,428 103
700M Hershey Foods Corp., 6.7%, 2005 710,319 33
1,000M Pepsi Bottling Group, Inc., 7%, 2029 1,198,863 57
900M Philip Morris Companies, Inc., 6.95%, 2006 926,565 44
- ----------------------------------------------------------------------------------------------------------------------
7,450,982 351
- ----------------------------------------------------------------------------------------------------------------------
Food/Drug--2.5%
1,550M Delhaize America, Inc., 8.125%, 2011 1,730,608 82
1,600M Kroger Co., 7%, 2018 1,770,280 83
Safeway, Inc.:
510M 7%, 2007 536,449 25
450M 9.3%, 2007 483,460 23
700M 6.5%, 2011 742,742 35
- ----------------------------------------------------------------------------------------------------------------------
5,263,539 248
- ----------------------------------------------------------------------------------------------------------------------
Forest Products/Containers--2.7%
1,690M International Paper Co., 6.75%, 2011 1,855,284 87
1,725M Sappi Papier Holding AG, 6.75%, 2012+ 1,873,799 88
Weyerhaeuser Co.:
1,100M 7.25%, 2013 1,248,052 59
610M 7.5%, 2013 703,336 33
- ----------------------------------------------------------------------------------------------------------------------
5,680,471 267
- ----------------------------------------------------------------------------------------------------------------------
Gaming/Leisure--.8%
750M MGM Mirage, Inc., 8.5%, 2010 825,000 39
750M Park Place Entertainment Corp., 9.375%, 2007 799,688 38
- ----------------------------------------------------------------------------------------------------------------------
1,624,688 77
- ----------------------------------------------------------------------------------------------------------------------
Health Care--2.7%
1,880M Becton, Dickinson & Co., 7.15%, 2009 2,069,632 98
900M Columbia/HCA Healthcare, Inc., 7.5%, 2023 916,492 43
1,130M Tenet Healthcare Corp., 6.375%, 2011 1,048,075 49
1,500M Wyeth, 6.95%, 2011 1,646,998 78
- ----------------------------------------------------------------------------------------------------------------------
5,681,197 268
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Information Technology--.1%
$250M First Data Corp., 4.7%, 2013 $244,509 $12
- ----------------------------------------------------------------------------------------------------------------------
Manufacturing--3.1%
875M Ingersoll-Rand Co., 9%, 2021 1,197,291 56
1,600M Newell Rubbermaid, Inc., 6.75%, 2012 1,757,872 83
775M Rubbermaid, Inc, 6.6%, 2006 803,083 38
United Technologies Corp.:
900M 6.5%, 2009 969,761 46
1,600M 7.125%, 2010 1,790,360 84
- ----------------------------------------------------------------------------------------------------------------------
6,518,367 307
- ----------------------------------------------------------------------------------------------------------------------
Media-Broadcasting--2.1%
Comcast Cable Communications, Inc.:
1,300M 8.375%, 2007 1,400,998 66
1,350M 7.125%, 2013 1,504,216 71
Cox Communications, Inc.:
400M 4.625%, 2013 373,349 18
500M 5.5%, 2015 484,708 23
700M PanAmSat Corp., 6.375%, 2008 708,750 33
- ----------------------------------------------------------------------------------------------------------------------
4,472,021 211
- ----------------------------------------------------------------------------------------------------------------------
Media-Diversified--5.1%
1,575M AOL Time Warner, Inc., 6.875%, 2012 1,722,459 81
1,480M Cox Enterprises, Inc., 8%, 2007+ 1,560,633 74
500M Houghton Mifflin Co., 7.2%, 2011 517,500 24
New York Times Co.:
500M 6.95%, 2009 546,163 26
1,200M 5%, 2015 1,193,010 56
News America, Inc.:
500M 5.3%, 2014+ 490,718 23
1,600M 7.3%, 2028 1,788,064 84
1,000M Time Warner, Inc., 6.875%, 2018 1,101,856 52
Viacom, Inc.:
775M 7.75%, 2005 780,172 37
500M 8.625%, 2012 597,658 28
360M 8.875%, 2014 456,533 22
- ----------------------------------------------------------------------------------------------------------------------
10,754,766 507
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Metals/Mining--3.3%
$2,200M Alcan, Inc., 4.5%, 2013 $2,123,724 $100
1,300M Alcoa, Inc., 6%, 2012 1,387,814 65
1,846M Hanson PLC, 7.875%, 2010 2,098,586 99
1,350M Thiokol Corp., 6.625%, 2008 1,428,312 67
- ----------------------------------------------------------------------------------------------------------------------
7,038,436 331
- ----------------------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts--6.9%
1,654M Archstone-Smith Trust, 7.9%, 2016 1,899,144 89
AvalonBay Communities, Inc.:
1,900M 7.5%, 2010 2,135,378 101
200M 6.625%, 2011 217,127 10
1,800M Boston Properties, Inc., 5%, 2015 1,737,540 82
Duke Weeks Realty Corp.:
1,350M 7.75%, 2009 1,500,054 71
200M 4.625%, 2013 191,806 9
EOP Operating LP:
1,705M 8.1%, 2010 1,938,740 91
150M 7.25%, 2018 168,485 8
1,900M Mack-Cali Realty LP, 7.75%, 2011 2,150,507 101
Simon Property Group, Inc.:
1,875M 7.875%, 2016+ 2,156,543 102
425M 7.375%, 2018 476,489 22
- ----------------------------------------------------------------------------------------------------------------------
14,571,813 686
- ----------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--4.5%
1,750M Federated Department Stores, Inc., 7.45%, 2017 1,996,736 94
900M Lowe's Companies, Inc., 8.25%, 2010 1,046,767 49
1,675M RadioShack Corp., 7.375%, 2011 1,892,973 89
Target Corp.:
190M 5.375%, 2009 196,213 9
1,620M 7.5%, 2010 1,836,837 87
Wal-Mart Stores, Inc.:
850M 8%, 2006 896,712 42
1,800M 4.125%, 2011 1,745,854 82
- ----------------------------------------------------------------------------------------------------------------------
9,612,092 452
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--2.8%
$1,200M Deutsche Telekom AG, 8.5%, 2010 $1,381,568 $65
GTE Corp.:
909M 6.84%, 2018 1,001,507 47
500M 7.9%, 2027 538,429 25
800M New York Telephone Co., 6.125%, 2010 832,555 39
1,325M Sprint Capital Corp., 6.375%, 2009 1,400,752 66
750M Vodafone AirTouch PLC, 7.75%, 2010 847,935 40
- ----------------------------------------------------------------------------------------------------------------------
6,002,746 282
- ----------------------------------------------------------------------------------------------------------------------
Transportation--4.4%
Burlington Northern Santa Fe Corp.:
725M 7.875%, 2007 773,175 36
1,125M 7.125%, 2010 1,250,050 59
700M 6.75%, 2011 769,265 36
600M Caliber System, Inc., 7.8%, 2006 626,890 30
Canadian National Railway Co.:
1,015M 6.45%, 2006 1,043,616 49
850M 7.375%, 2031 1,057,011 50
650M FedEx Corp., 3.5%, 2009 625,700 29
800M Norfolk Southern Corp., 7.7%, 2017 964,738 45
1,700M Union Pacific Corp., 7.375%, 2009 1,864,643 88
300M Union Pacific Railroad, 7.28%, 2011 336,194 16
- ----------------------------------------------------------------------------------------------------------------------
9,311,282 438
- ----------------------------------------------------------------------------------------------------------------------
Utilities--8.1%
500M Cogentrix Energy, Inc., 8.75%, 2008+ 568,479 27
700M Columbia Energy Group, 6.8%, 2005 713,668 34
Consumers Energy Co.:
735M 6.375%, 2008 767,994 36
1,700M 6.875%, 2018 1,910,351 90
1,450M Dominion Resources, Inc., 5%, 2013 1,431,183 67
1,000M DPL, Inc., 6.875%, 2011 1,067,469 50
1,650M Duke Capital Corp., 8%, 2019 1,961,937 92
1,371M Eastern Energy Ltd., 6.75%, 2006+ 1,426,295 67
795M El Paso Energy Corp., 7.375%, 2012 773,138 36
500M Entergy Gulf States, Inc., 6.2%, 2033 499,937 24
700M Michigan Consolidated Gas Co., 7.06%, 2012 785,379 37
547M Niagara Mohawk Holdings, Inc., 7.625%, 2005 557,398 26
1,200M NiSource Finance Corp., 7.875%, 2010 1,370,029 65
1,350M PP&L Capital Funding, Inc., 8.375%, 2007 1,457,407 69
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Utilities (continued)
$775M PSI Energy, Inc., 8.85%, 2022 $1,037,279 $49
900M Wisconsin Power & Light Co., 7%, 2007 948,400 45
- ----------------------------------------------------------------------------------------------------------------------
17,276,343 814
- ----------------------------------------------------------------------------------------------------------------------
Waste Management--1.4%
Allied Waste NA, Inc.:
750M 8.875%, 2008 779,062 37
500M 5.75%, 2011 457,500 21
Waste Management, Inc.:
1,400M 6.875%, 2009 1,507,936 71
300M 7.375%, 2010 334,706 16
- ----------------------------------------------------------------------------------------------------------------------
3,079,204 145
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $164,750,973) 170,240,316 8,019
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--6.0%
U.S. Treasury Notes:
1,800M 5.875%, 2005 1,829,392 86
3,500M 6.625%, 2007 3,699,475 174
2,100M 5.625%, 2008 2,201,638 104
1,300M 6%, 2009 1,397,399 66
3,300M 6.5%, 2010 3,634,772 171
- ----------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Obligations (cost $12,938,693) 12,762,676 601
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--4.1%
Fannie Mae:
1,600M 6.125%, 2012 1,733,749 82
1,287M 5%, 2016 1,230,958 58
1,000M Federal Home Loan Bank, 7.23%, 2015 1,132,017 53
Freddie Mac:
1,400M 4.6%, 2018 1,320,185 62
900M 5%, 2018 867,732 41
2,300M Tennessee Valley Authority, 5.375%, 2008 2,387,418 113
- ----------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government
Agency Obligations (cost $8,812,366) 8,672,059 409
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
PASS THROUGH CERTIFICATES--3.8%
Real Estate--.7%
$1,281M FDA Queens LP, 6.99%, 2017+ $1,429,966 $67
- ----------------------------------------------------------------------------------------------------------------------
Transportation--3.1%
688M American Airlines, Inc., 7.377%, 2019 455,126 22
446M Canadian National Railway Co., 7.195%, 2016 512,577 24
Continental Airlines, Inc.:
521M 6.748%, 2017 425,824 20
1,510M 8.388%, 2020 1,253,661 59
1,358M FedEx Corp., 7.5%, 2018 1,550,192 73
702M Northwest Airlines, Inc., 8.072%, 2019 767,890 36
943M NWA Trust, 10.23%, 2012 834,963 39
825M Southwest Airlines Co., 6.126%, 2006 840,171 40
- ----------------------------------------------------------------------------------------------------------------------
6,640,404 313
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Pass Through Certificates (cost $8,687,671) 8,070,370 380
- ----------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS--.7%
Housing
Virginia State Housing Development Authority:
800M Series "A", 6.51%, 2019 845,904 39
710M Series "M", 7%, 2022 770,875 36
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $1,467,471) 1,616,779 75
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS--1.9%
4,000M U.S. Treasury Bills, 2.59%, 4/14/05
(cost $3,996,259) 3,996,259 189
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT
AGENCY OBLIGATIONS--1.4%
3,000M Freddie Mac, 2.66%, 4/5/05 (cost $2,999,112) 2,999,112 141
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $203,652,545) 98.1% 208,357,571 9,814
Other Assets, Less Liabilities 1.9 3,942,774 186
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $212,300,345 $10,000
======================================================================================================================
+ Security exempt from registration under Rule 144A of the Securities Act
of 1933 (see Note 4)
See notes to financial statements
Fund Expenses
FIRST INVESTORS FUND FOR INCOME, 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 3 for a detailed explanation of the
information presented in these examples.
- ----------------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(10/1/04) (3/31/05) (10/1/04-3/31/05)*
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,016.54 $6.44
Hypothetical
(5% annual return before expenses) $1,000.00 $1,018.55 $6.44
- ----------------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,012.80 $9.94
Hypothetical
(5% annual return before expenses) $1,000.00 $1,015.06 $9.95
- ----------------------------------------------------------------------------------------------------------------------
* Expenses are equal to the annualized expense ratio of 1.28% for Class A
shares and 1.98% for Class B shares, multiplied by the average account
value over the period, multiplied by 182/365 (to reflect the one-half
year period).
Portfolio Composition
TOP TEN SECTORS
(BAR CHART DATA:)
Consumer Discretionary 24.5%
Consumer Staples 22.2%
Materials 16.2%
Energy 8.6%
Industrials 8.4%
Health Care 7.5%
Financials 5.0%
Telecommunication Services 4.0%
U.S. Government Obligations 0.9%
Information Technology 0.3%
Portfolio holdings and allocations are subject to change. Percentages are
as of March 31, 2005, and are based on the total value of investments.
Portfolio of Investments
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS--93.0%
Aerospace/Defense--4.0%
$3,450M Alliant Techsystems, Inc., 8.5%, 2011 $3,674,250 $60
DRS Technologies, Inc.:
900M 6.875%, 2013 904,500 15
4,350M 6.875%, 2013+ 4,371,750 72
6,000M DynCorp International, 9.5%, 2013+ 5,857,500 96
1,747M GenCorp, Inc., 9.5%, 2013 1,956,640 32
L-3 Communications Corp.:
1,600M 7.625%, 2012 1,708,000 28
3,600M 6.125%, 2014 3,564,000 58
2,300M 5.875%, 2015 2,219,500 36
- ----------------------------------------------------------------------------------------------------------------------
24,256,140 397
- ----------------------------------------------------------------------------------------------------------------------
Automotive--7.5%
2,700M Accuride Corp., 8.5%, 2015+ 2,659,500 44
Asbury Automotive Group, Inc.:
3,400M 9%, 2012 3,485,000 57
5,400M 8%, 2014 5,265,000 86
4,208M Cambridge Industries Liquidating Trust, 2007++** 8,417 --
Collins & Aikman Products Co.:
3,750M 10.75%, 2011 3,103,125 51
8,750M 12.875%, 2012+ 3,981,250 65
5,450M Dana Corp., 9%, 2011 5,997,660 98
Delco Remy International, Inc.:
5,800M 11%, 2009 5,365,000 88
3,250M 9.375%, 2012 2,746,250 45
2,000M Navistar International Corp., 6.25%, 2012+ 1,910,000 31
2,500M Special Devices, Inc., 11.375%, 2008 2,400,000 39
500M Tenneco Automotive, Inc., 8.625%, 2014+ 488,750 8
4,693M TRW Automotive, Inc., 9.375%, 2013 5,068,440 83
3,600M United Components, Inc., 9.375%, 2013 3,609,000 59
- ----------------------------------------------------------------------------------------------------------------------
46,087,392 754
- ----------------------------------------------------------------------------------------------------------------------
Chemicals--11.7%
1,940M BCP Caylux Holding Lux SCA, 9.625%, 2014+ 2,221,300 36
3,500M Equistar Chemicals LP, 10.625%, 2011 3,946,250 65
450M Ethyl Corp., 8.875%, 2010 483,750 8
3,500M FMC Corp., 10.25%, 2009 3,920,000 64
6,550M Huntsman International LLC, 7.375%, 2015+ 6,550,000 107
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Chemicals (continued)
Huntsman, LLC:
$1,636M 11.625%, 2010 $1,922,300 $31
2,765M 11.5%, 2012+ 3,248,875 53
7,000M IMC Global, Inc., 10.875%, 2013 8,400,000 138
Lyondell Chemical Co.:
1,000M 9.625%, 2007 1,077,500 18
8,000M 10.875%, 2009 8,340,000 137
Millennium America, Inc.:
900M 7%, 2006 918,000 15
4,375M 9.25%, 2008 4,714,063 77
250M Nalco Co., 8.875%, 2013 268,750 4
4,900M Omnova Solutions, Inc., 11.25%, 2010 5,145,000 84
1,000M PQ Corp., 7.5%, 2013+ 990,000 16
8,150M Resolution Performance Products, LLC, 13.5%,
2010 8,842,750 145
2,250M Southern States Cooperative, Inc., 10.5%, 2010+ 2,345,625 38
5,526M Terra Capital, Inc., 11.5%, 2010 6,382,530 105
622M Texas Petrochemicals Corp., 7.25%, 2009 1,122,710 18
592M Westlake Chemical Corp., 8.75%, 2011 650,460 11
- ----------------------------------------------------------------------------------------------------------------------
71,489,863 1,170
- ----------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--4.6%
1,700M Broder Brothers Co., 11.25%, 2010+ 1,870,000 31
4,000M GFSI, Inc., 9.625%, 2007 3,860,000 63
Levi Strauss & Co.:
3,480M 11.625%, 2008 3,706,200 61
4,600M 7.73%, 2012+*** 4,542,500 74
4,000M 9.75%, 2015+ 3,950,000 65
7,200M Playtex Products, Inc., 9.375%, 2011 7,524,000 123
2,500M Remington Arms Co., 10.5%, 2011 2,475,000 40
- ----------------------------------------------------------------------------------------------------------------------
27,927,700 457
- ----------------------------------------------------------------------------------------------------------------------
Energy--8.4%
7,000M Bluewater Finance, Ltd., 10.25%, 2012 7,630,000 125
Chesapeake Energy Corp.:
4,500M 9%, 2012 4,989,375 81
1,800M 7.5%, 2014 1,912,500 31
3,394M Compagnie Generale de Geophysique, 10.625%,
2007 3,589,155 59
4,075M Dresser, Inc., 9.375%, 2011 4,339,875 71
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Energy (continued)
$13,750M El Paso Production Holding Co., 7.75%, 2013 $13,990,625 $229
1,800M Energy Partners, Ltd., 8.75%, 2010 1,935,000 32
Giant Industries, Inc.:
6,289M 11%, 2012 7,200,905 118
2,600M 8%, 2014 2,613,000 43
1,000M Hanover Compressor Co. Zero Coupon
(effective yield 11.37%), 2007## 885,000 14
250M Hornbeck Offshore Services, Inc., 6.125%, 2014 247,500 4
1,750M Tesoro Petroleum Corp., 9.625%, 2008 1,885,625 31
- ----------------------------------------------------------------------------------------------------------------------
51,218,560 838
- ----------------------------------------------------------------------------------------------------------------------
Financial Services--3.3%
14,500M Dow Jones CDX, High Yield, Trust 1,
Series 3-1, 7.75%, 2009+ 14,173,750 232
6,000M Dow Jones CDX, High Yield, Trust 4,
Series 3-4, 10.5%, 2009+ 5,722,500 94
- ----------------------------------------------------------------------------------------------------------------------
19,896,250 326
- ----------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--3.0%
Land O'Lakes, Inc.:
1,800M 9%, 2010 1,953,000 32
7,300M 8.75%, 2011 7,318,250 120
6,150M Merisant Co., 9.5%, 2013+ 5,319,750 87
1,800M Pierre Foods, Inc., 9.875%, 2012 1,894,500 31
Pilgrim's Pride Corp.:
1,550M 9.625%, 2011 1,689,500 28
150M 9.25%, 2013 165,750 3
- ----------------------------------------------------------------------------------------------------------------------
18,340,750 301
- ----------------------------------------------------------------------------------------------------------------------
Food/Drug--2.0%
Great Atlantic & Pacific Tea Company, Inc.:
2,610M 7.75%, 2007 2,636,100 43
1,740M 9.125%, 2011 1,718,250 28
4,000M Ingles Markets, Inc., 8.875%, 2011 4,120,000 67
3,500M Roundy's, Inc., 8.875%, 2012 3,762,500 62
- ----------------------------------------------------------------------------------------------------------------------
12,236,850 200
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Forest Products/Containers--3.3%
$9,300M AEP Industries, Inc., 9.875%, 2007 $9,453,069 $155
1,250M Pliant Corp., 0%-11.125%, 2009# 1,131,250 18
4,300M Stone Container Corp., 9.75%, 2011 4,622,500 76
Tekni-Plex, Inc.:
3,625M 12.75%, 2010 3,045,000 50
2,000M 8.75%, 2013+ 1,905,000 31
- ----------------------------------------------------------------------------------------------------------------------
20,156,819 330
- ----------------------------------------------------------------------------------------------------------------------
Gaming/Leisure--3.1%
4,250M Circus & Eldorado/Silver Legacy, 10.125%,
2012 4,579,375 75
500M Herbst Gaming, Inc., 8.125%, 2012 522,500 8
1,800M Isle of Capri Casinos, Inc., 7%, 2014 1,791,000 29
3,000M John Q. Hammons Hotels, LP, 8.875%, 2012 3,232,500 53
Park Place Entertainment Corp.:
3,500M 9.375%, 2007 3,731,875 61
5,000M 7%, 2013 5,387,500 88
- ----------------------------------------------------------------------------------------------------------------------
19,244,750 314
- ----------------------------------------------------------------------------------------------------------------------
Health Care--7.4%
450M Alliance Imaging Inc., 7.25%, 2012+ 427,500 7
4,000M Encore Medical IHC, Inc., 9.75%, 2012+ 3,920,000 64
755M Fisher Scientific International, Inc., 8.125%,
2012 822,950 14
4,400M Genesis Health Ventures, Inc., 9.75%, 2005++** 2,750 --
4,350M HCA, Inc., 5.25%, 2008 4,367,182 72
4,000M Insight Health Services Corp., 9.875%, 2011 3,940,000 64
500M Medex, Inc., 8.875%, 2013 567,500 9
4,500M MedQuest, Inc., 11.875%, 2012 4,432,500 73
2,800M Owens & Minor, Inc., 8.5%, 2011 2,996,000 49
3,600M PerkinElmer, Inc., 8.875%, 2013 4,050,000 66
1,725M Quintiles Transnational Corp., 10%, 2013 1,949,250 32
3,500M Rotech Healthcare, Inc., 9.5%, 2012 3,780,000 62
Tenet Healthcare Corp.:
12,400M 6.375%, 2011 11,501,000 188
2,250M 9.25%, 2015+ 2,255,625 37
- ----------------------------------------------------------------------------------------------------------------------
45,012,257 737
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Housing--2.7%
$1,740M Builders FirstSource, Inc., 7.024%, 2012+*** $1,722,600 $28
4,050M Integrated Electrical Services, Inc., 9.375%,
2009 3,908,250 64
900M NTK Holdings, 0%-10.75%, 2014+# 483,750 8
7,700M Ply Gem Industries, Inc., 9%, 2012 7,315,000 120
2,700M William Lyon Homes, Inc., 10.75%, 2013 2,983,500 49
- ----------------------------------------------------------------------------------------------------------------------
16,413,100 269
- ----------------------------------------------------------------------------------------------------------------------
Information Technology--.3%
3,000M Exodus Communications, Inc., 10.75%, 2009++** 1,875 --
Iron Mountain, Inc.:
1,000M 8.625%, 2013 1,015,000 17
1,000M 6.625%, 2016 917,500 15
- ----------------------------------------------------------------------------------------------------------------------
1,934,375 32
- ----------------------------------------------------------------------------------------------------------------------
Investment/Finance Companies--1.6%
1,638M Finova Group, Inc., 7.5%, 2009 716,625 12
3,400M General Motors Acceptance Corp., 4.5%, 2006 3,317,645 54
5,500M LaBranche & Co., Inc., 11%, 2012 5,857,500 96
- ----------------------------------------------------------------------------------------------------------------------
9,891,770 162
- ----------------------------------------------------------------------------------------------------------------------
Manufacturing--3.0%
Columbus McKinnon Corp.:
7,900M 8.5%, 2008 7,939,500 130
500M 10%, 2010 546,250 9
1,800M Eagle-Picher Industries, Inc., 9.75%, 2013 1,161,000 19
2,500M Itron, Inc., 7.75%, 2012+ 2,500,000 41
Wolverine Tube, Inc.:
3,000M 7.375%, 2008+ 2,910,000 47
3,000M 10.5%, 2009 3,180,000 52
- ----------------------------------------------------------------------------------------------------------------------
18,236,750 298
- ----------------------------------------------------------------------------------------------------------------------
Media-Broadcasting--2.6%
650M Block Communications, Inc., 9.25%, 2009 695,500 11
5,000M Nexstar Finance Holding LLC, 0%-11.375%,
2013 # 3,950,000 65
450M Nexstar Finance, Inc., 7%, 2014 427,500 7
3,000M Sinclair Broadcasting Group, Inc., 8.75%, 2011 3,165,000 52
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Media-Broadcasting (continued)
Young Broadcasting, Inc.:
$2,920M 10%, 2011 $3,000,300 $49
4,900M 8.75%, 2014 4,667,250 76
- ----------------------------------------------------------------------------------------------------------------------
15,905,550 260
- ----------------------------------------------------------------------------------------------------------------------
Media-Cable TV--11.5%
8,745M Adelphia Communications Corp. , 10.25%,
2011++ 8,110,987 133
6,250M Atlantic Broadband Finance, LLC, 9.375%,
2014+ 6,031,250 99
18,000M Cablevision Systems Corp., 8%, 2012+ 18,585,000 304
Charter Communications Holdings, LLC:
8,500M 10%, 2009 6,927,500 113
1,000M 10.75%, 2009 825,000 14
2,000M 10.25%, 2010 1,615,000 26
7,250M 0%-11.75%, 2011# 5,038,750 82
2,000M 8%, 2012+ 2,000,000 33
5,476M Loral Cyberstar, Inc., 10%, 2006++ 3,970,100 65
Mediacom LLC/Mediacom Capital Corp.:
6,500M 8.5%, 2008 6,613,750 108
4,000M 7.875%, 2011 3,880,000 64
2,000M 9.5%, 2013 2,005,000 33
4,300M Quebecor Media, Inc., 11.125%, 2011 4,773,000 78
- ----------------------------------------------------------------------------------------------------------------------
70,375,337 1,152
- ----------------------------------------------------------------------------------------------------------------------
Media-Diversified--2.4%
5,200M Cenveo, Inc., 7.875%, 2013 4,667,000 76
1,500M R.H. Donnelley Financial Corp., 10.875%,
2012+ 1,736,250 29
Six Flags, Inc.:
2,500M 8.875%, 2010 2,362,500 39
1,800M 9.625%, 2014 1,669,500 27
3,400M Universal City Development Partners, Ltd.,
11.75%, 2010 3,893,000 64
250M Universal City Florida Holding Co., 7.49%, 2010+*** 260,000 4
- ----------------------------------------------------------------------------------------------------------------------
14,588,250 239
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Metals/Mining--.3%
$1,840M Euramax International, Inc., 8.5%, 2011 $1,904,400 $31
3,000M Murrin Murrin Holdings Property, Ltd., 9.375%,
2007++** -- --
- ----------------------------------------------------------------------------------------------------------------------
1,904,400 31
- ----------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--2.2%
1,000M General Nutrition Centers, Inc., 8.5%, 2010 855,000 14
9,000M Gregg Appliances, Inc., 9%, 2013+ 8,595,000 141
4,000M Michaels Stores, Inc., 9.25%, 2009 4,245,000 69
- ----------------------------------------------------------------------------------------------------------------------
13,695,000 224
- ----------------------------------------------------------------------------------------------------------------------
Services--3.8%
Allied Waste NA, Inc.:
3,450M 5.75%, 2011 3,156,750 52
2,700M 9.25%, 2012 2,902,500 47
1,800M 7.875%, 2013 1,804,500 30
6,000M 7.375%, 2014 5,460,000 89
1,680M Hydrochem Industrial Services, Inc., 9.25%,
2013+ 1,654,800 27
United Rentals, Inc.:
5,000M 6.5%, 2012 4,887,500 80
3,600M 7%, 2014 3,312,000 54
- ----------------------------------------------------------------------------------------------------------------------
23,178,050 379
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--.0%
6,050M E. Spire Communications, Inc., 13%, 2005++** 605 --
2,400M ICG Services, Inc., 10%, 2008++** 1,500 --
XO Communications, Inc.:
7,000M 12.5%, 2006++** 4,375 --
2,750M 9.45%, 2008++** 1,719 --
- ----------------------------------------------------------------------------------------------------------------------
8,199 --
- ----------------------------------------------------------------------------------------------------------------------
Transportation--1.3%
1,750M American Commercial Lines, LLC, 9.5%, 2015+ 1,815,625 30
2,700M General Maritime Corp., 10%, 2013 3,017,250 49
500M Great Lakes Dredge & Dock Corp., 7.75%, 2013 417,500 7
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
Principal For Each
Amount $10,000 of
or Shares Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Transportation (continued)
$1,750M Overseas Shipholding Group, Inc., 8.25%, 2013 $1,881,250 $31
500M Titan Petrochemicals Ltd., 8.5%, 2012+ 470,000 8
- ----------------------------------------------------------------------------------------------------------------------
7,601,625 125
- ----------------------------------------------------------------------------------------------------------------------
Utilities--.2%
5,500M AES Drax Energy, Ltd., 11.5%, 2010++ 55,000 1
1,000M Pacific Energy Partners, LP, 7.125%, 2014 1,040,000 17
250M Reliant Energy, Inc., 6.75%, 2014 234,375 4
- ----------------------------------------------------------------------------------------------------------------------
1,329,375 22
- ----------------------------------------------------------------------------------------------------------------------
Wireless Communications--2.8%
5,000M Crown Castle International Corp., 9.375%, 2011 5,462,500 89
5,000M Nextel Communications, Inc., 5.95%, 2014 5,000,000 82
9,600M Triton Communications, LLC, 9.375%, 2011 6,840,000 112
- ----------------------------------------------------------------------------------------------------------------------
17,302,500 283
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $591,500,582) 568,231,612 9,300
- ----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--1.8%
Automotive--.0%
37,387 * Safelite Glass Corporation - Class "B"+** 186,935 3
2,523 * Safelite Realty Corporation** 25 --
- ----------------------------------------------------------------------------------------------------------------------
186,960 3
- ----------------------------------------------------------------------------------------------------------------------
Chemicals--.5%
181,689 * Texas Petrochemicals Corporation** 2,816,180 46
14,634 * Texas Petrochemicals Corporation** 170,120 3
- ----------------------------------------------------------------------------------------------------------------------
2,986,300 49
- ----------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--.0%
25,200 * Worldtex, Inc.** 252 --
- ----------------------------------------------------------------------------------------------------------------------
Food/Drug--.2%
111,700 Ingles Markets, Inc. 1,487,844 24
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
March 31, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Shares, Invested
Principal For Each
Amount $10,000 of
or Warrants Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--1.1%
276,134 * RCN Corporation $5,495,067 $90
9,515 * RCN Corporation** 189,348 3
24,120 * TelCove, Inc.+** 850,712 14
2,533 * Viatel Holding (Bermuda), Ltd. 1,710 --
18,224 * World Access, Inc. 24 --
- ----------------------------------------------------------------------------------------------------------------------
6,536,861 107
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $22,828,958) 11,198,217 183
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--.9%
$5,000M U.S. Treasury Notes, 7%, 2006 (cost $5,060,403) 5,212,895 85
- ----------------------------------------------------------------------------------------------------------------------
WARRANTS--.1%
Aerospace/Defense--.0%
3,000 * DeCrane Aircraft Holdings, Inc. (expiring 9/30/08)+** 30 --
- ----------------------------------------------------------------------------------------------------------------------
Automotive--.0%
Safelite Glass Corporation:
91,625 * Class "A" (expiring 9/29/06)+** 916 --
61,084 * Class "B" (expiring 9/29/07)+** 611 --
- ----------------------------------------------------------------------------------------------------------------------
1,527 --
- ----------------------------------------------------------------------------------------------------------------------
Media-Cable TV--.0%
54,020 * Loral Cyberstar, Inc. (expiring 12/26/06)** -- --
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--.1%
3,500 * GT Group Telecom, Inc. (expiring 2/1/10)+** -- --
5,600 * Powertel, Inc. (expiring 2/1/06)** 218,388 4
9,045 * TelCove, Inc. (expiring 4/8/08)+** 54,270 1
- ----------------------------------------------------------------------------------------------------------------------
272,658 5
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $5,310,831) 274,215 5
- ----------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.0%
Consumer Non-Durables
7,714 * Worldtex, Inc., 12%, 2049** (cost $527,885) 77 --
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--1.8%
$1,500M ChevronTexaco Corp., 2.74%, 4/26/05 $1,497,145 $25
3,000M General Electric Capital Corp., 2.76%, 4/6/05 2,998,849 49
New York Times Co.:
1,000M 2.74%, 4/4/05 999,771 16
1,500M 2.81%, 5/11/05 1,495,316 25
4,000M USAA Capital Corp., 2.75%, 4/8/05 3,997,861 65
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $10,988,942) 10,988,942 180
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT
AGENCY OBLIGATIONS--.3%
2,000M Freddie Mac, 2.66%, 4/5/05 (cost $1,999,408) 1,999,408 33
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $638,217,009) 97.9% 597,905,366 9,786
Other Assets, Less Liabilities 2.1 13,123,501 214
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $611,028,867 $10,000
======================================================================================================================
+ Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4)
++ In default as to principal and/or interest payment
* Non-income producing
** Security valued at fair value (see Note 1A)
*** Interest Rates on Adjustable Rate Bonds are determined and reset quarterly by the indentures.
The interest rates shown are the rates in effect on March 31, 2005.
# Denotes a stepbond (a zero coupon bond that converts to a fixed interest rate at a designated future date)
## Zero coupon bond reflecting effective yield on the date of purchase
See notes to financial statements
Statements of Assets and Liabilities
FIRST INVESTORS
March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------------
CASH INVESTMENT
MANAGEMENT GOVERNMENT GRADE INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Assets
Investments in securities:
At identified cost $168,449,023 $195,149,007 $203,652,545 $638,217,009
============ ============ ============ ============
At value (Note 1A) $168,449,023 $194,785,939 $208,357,571 $597,905,366
Cash 1,725,451 640,713 577,160 118,266
Receivables:
Interest and dividends 711,868 915,240 3,566,991 14,259,162
Shares sold -- 94,373 393,072 509,119
Other assets 52,016 58,211 36,291 327,551
------------ ------------ ------------ ------------
Total Assets 170,938,358 196,494,476 212,931,085 613,119,464
------------ ------------ ------------ ------------
Liabilities
Payables:
Dividends payable 15,072 99,332 142,422 931,842
Shares redeemed 154,787 230,598 328,781 620,841
Accrued advisory fees 17,640 98,493 122,258 384,329
Accrued shareholder servicing costs 57,181 33,371 37,279 107,596
Accrued expenses 41,201 23,796 -- 45,989
------------ ------------ ------------ ------------
Total Liabilities 285,881 485,590 630,740 2,090,597
------------ ------------ ------------ ------------
Net Assets $170,652,477 $196,008,886 $212,300,345 $611,028,867
============ ============ ============ ============
Net Assets Consist of:
Capital paid in $170,652,477 $203,648,242 $214,430,337 $772,185,164
Undistributed net investment income (deficit) -- (732,375) (3,334,614) 531,787
Accumulated net realized loss on investments -- (6,543,913) (3,500,404) (121,376,441)
Net unrealized appreciation (depreciation) in value
of investments -- (363,068) 4,705,026 (40,311,643)
------------ ------------ ------------ ------------
Total $170,652,477 $196,008,886 $212,300,345 $611,028,867
============ ============ ============ ============
Net Assets:
Class A $166,888,216 $179,955,623 $183,745,960 $571,618,779
Class B $ 3,764,261 $ 16,053,263 $ 28,554,385 $ 39,410,088
Shares outstanding (Note 6):
Class A 166,888,216 16,433,801 18,667,872 183,097,818
Class B 3,764,261 1,466,905 2,903,756 12,646,321
Net asset value and redemption price per share--Class A $ 1.00* $10.95 $ 9.84 $ 3.12
============ ============ ============ ============
Maximum offering price per share--Class A
(Net asset value/.9425)** N/A $11.62 $10.44 $ 3.31
============ ============ ============ ============
Net asset value and offering price per share--Class B (Note 6) $ 1.00 $10.94 $ 9.83 $ 3.12
============ ============ ============ ============
* Also maximum offering price per share.
** On purchases of $100,000 or more, the sales charge is reduced.
See notes to financial statements
Statements of Operations
FIRST INVESTORS
Year Ended March 31, 2005
- -----------------------------------------------------------------------------------------------------------------------------
CASH INVESTMENT
MANAGEMENT GOVERNMENT GRADE INCOME
- -----------------------------------------------------------------------------------------------------------------------------
Investment Income
Income (Note 1F):
Interest $1,840,063 $4,778,834 $5,510,198 $26,671,789
Dividends -- -- -- 59,651
------------ ------------ ------------ ------------
Total income 1,840,063 4,778,834 5,510,198 26,731,440
------------ ------------ ------------ ------------
Expenses (Notes 1 and 3):
Advisory fees 437,659 978,915 775,583 2,236,980
Distribution plan expenses - Class A -- 224,267 221,796 862,906
Distribution plan expenses - Class B 14,813 81,846 146,926 203,050
Shareholder servicing costs 313,253 191,130 217,125 588,298
Professional fees 32,773 21,472 15,325 38,475
Registration fees 15,127 22,358 17,317 18,780
Custodian fees 11,574 17,247 9,805 26,296
Reports to shareholders 17,007 15,547 12,945 24,826
Directors/trustees' fees 3,300 3,654 3,825 11,723
Other expenses 31,586 23,235 23,705 66,706
------------ ------------ ------------ ------------
Total expenses 877,092 1,579,671 1,444,352 4,078,040
Less: Expenses waived (242,637) (438,284) (188,540) --
Expenses paid indirectly (6,821) (3,357) (8,615) (10,720)
------------ ------------ ------------ ------------
Net expenses 627,634 1,138,030 1,247,197 4,067,320
------------ ------------ ------------ ------------
Net investment income 1,212,429 3,640,804 4,263,001 22,664,120
------------ ------------ ------------ ------------
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain (loss) on investments -- 238,439 6,614 3,933,520
Net unrealized depreciation of investments -- (2,634,017) (4,471,799) (16,839,076)
------------ ------------ ------------ ------------
Net loss on investments -- (2,395,578) (4,465,185) (12,905,556)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations $1,212,429 $1,245,226 $(202,184) $9,758,564
============ ============ ============ ============
See notes to financial statements
Statements of Changes in Net Assets
FIRST INVESTORS
- --------------------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT GOVERNMENT
---------------------------- ----------------------------
10/1/2004 to 10/1/2003 to 10/1/2004 to 10/1/2003 to
3/31/2005 9/30/2004 3/31/2005 9/30/2004
- --------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations
Net investment income $1,212,429 $879,808 $3,640,804 $7,330,747
Net realized gain (loss) on investments -- -- 238,439 (341,641)
Net unrealized appreciation (depreciation) of investments -- -- (2,634,017) (1,302,024)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations 1,212,249 879,808 1,245,226 5,687,082
------------ ------------ ------------ ------------
Dividends to Shareholders
Net investment income - Class A (1,199,980) (879,808) (4,107,528) (8,259,090
Net investment income - Class B (12,449) -- (312,760) (695,693)
------------ ------------ ------------ ------------
Total dividends (1,212,429) (879,808) (4,420,288) (8,954,783)
------------ ------------ ------------ ------------
Share Transactions *
Class A:
Proceeds from shares sold 114,241,778 230,381,626 12,514,627 24,724,756
Reinvestment of dividends 1,181,427 866,316 3,528,418 7,024,588
Cost of shares redeemed (119,535,353) (239,688,565) (12,035,544) (34,302,401)
------------ ------------ ------------ ------------
(4,112,148) (8,440,623) 4,007,501 (2,553,057)
------------ ------------ ------------ ------------
Class B:
Proceeds from shares sold 1,008,291 4,173,253 878,611 2,096,784
Reinvestment of dividends 11,761 -- 291,822 646,291
Cost of shares redeemed (2,477,702) (4,756,069) (1,691,376) (6,503,702)
------------ ------------ ------------ ------------
(1,457,650) (582,816) (520,943) (3,760,627)
------------ ------------ ------------ ------------
Net increase (decrease) from share transactions (5,569,798) (9,023,439) 3,486,558 (6,313,684)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets (5,569,798) (9,023,439) 311,496 (9,581,385)
Net Assets 176,222,275 185,245,714 195,697,390 205,278,775
Beginning of period ------------ ------------ ------------ ------------
$170,652,477 $176,222,275 $196,008,886 $195,697,390
End of period+ ============ ============ ============ ============
$-- $-- $(732,375) $47,109
+ Includes undistributed net investment income (deficit) of ============ ============ ============ ============
* Shares Issued and Redeemed
Class A: 114,241,778 230,381,626 1,129,747 2,210,207
Sold 1,181,427 866,316 318,893 628,957
Issued for dividends reinvested (119,535,353) (239,688,565) (1,086,274) (3,067,827)
Redeemed ------------ ------------ ------------ ------------
(4,112,148) (8,440,623) 362,366 (228,663)
Net increase (decrease) in Class A shares outstanding ============ ============ ============ ============
Class B: 1,008,291 4,173,253 79,367 187,448
Sold 11,761 -- 26,396 57,886
Issued for dividends reinvested (2,477,702) (4,756,069) (152,718) (581,334)
Redeemed ------------ ------------ ------------ ------------
(1,457,650) (582,816) (46,955) (336,000)
Net increase (decrease) in Class B shares outstanding ============ ============ ============ ============
Statements of Changes in Net Assets (continued)
FIRST INVESTORS
- --------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE INCOME
---------------------------- ----------------------------
10/1/2004 to 10/1/2003 to 10/1/2004 to 10/1/2003 to
3/31/2005 9/30/2004 3/31/2005 9/30/2004
- --------------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations
Net investment income $4,263,001 $8,124,036 $22,664,120 $42,139,614
Net realized gain (loss) on investments 6,614 302,465 3,933,520 (8,251,858)
Net unrealized appreciation (depreciation) of investments (4,471,799) (2,195,623) (16,839,076) 30,961,559
------------ ------------ ------------ ------------
Net increase (decrease) in net assets resulting from operations (202,184) 6,230,878 9,758,564 64,849,315
------------ ------------ ------------ ------------
Dividends to Shareholders
Net investment income - Class A (4,700,140) (8,099,196) (20,434,769) (39,075,051)
Net investment income - Class B (672,732) (1,336,388) (1,293,178) (2,588,132)
------------ ------------ ------------ ------------
Total dividends (5,372,872) (9,435,584) (21,727,947) (41,663,183)
------------ ------------ ------------ ------------
Share Transactions *
Class A:
Proceeds from shares sold 26,820,336 50,364,030 38,642,126 63,662,598
Reinvestment of dividends 3,935,722 6,793,101 15,230,025 28,659,730
Cost of shares redeemed (11,897,650) (28,437,258) (31,666,728) (62,497,536)
------------ ------------ ------------ ------------
18,858,408 28,719,873 22,205,423 29,824,792
------------ ------------ ------------ ------------
Class B:
Proceeds from shares sold 1,737,996 5,712,034 3,328,249 7,671,407
Reinvestment of dividends 587,728 1,164,424 950,427 1,824,251
Cost of shares redeemed (2,693,933) (7,346,111) (4,436,056) (7,724,800)
------------ ------------ ------------ ------------
(368,209) (469,653) (157,380) 1,770,858
------------ ------------ ------------ ------------
Net increase (decrease) from share transactions 18,490,199 28,250,220 22,048,043 31,595,650
------------ ------------ ------------ ------------
Net increase (decrease) in net assets 12,915,143 25,045,514 10,078,660 54,781,782
Net Assets
Beginning of period 199,385,202 174,339,688 600,950,207 546,168,425
------------ ------------ ------------ ------------
End of period+ $212,300,345 $199,385,202 $611,028,867 $600,950,207
============ ============ ============ ============
+ Includes undistributed net investment income (deficit) of $(3,334,614) $(2,224,743) $531,787 $(404,386)
============ ============ ============ ============
* Shares Issued and Redeemed
Class A:
Sold 2,668,342 4,971,218 12,002,168 20,179,230
Issued for dividends reinvested 392,986 671,503 4,750,725 9,084,550
Redeemed (1,184,296) (2,815,735) (9,845,527) (19,825,583)
------------ ------------ ------------ ------------
Net increase (decrease) in Class A shares outstanding 1,877,032 2,826,986 6,907,366 9,438,197
============ ============ ============ ============
Class B:
Sold 172,828 562,738 1,036,488 2,440,270
Issued for dividends reinvested 58,727 115,116 296,738 579,255
Redeemed (268,126) (725,530) (1,381,381) (2,457,779)
------------ ------------ ------------ ------------
Net increase (decrease) in Class B shares outstanding (36,571) (47,676) (48,155) 561,746
============ ============ ============ ============
See notes to financial statements
Notes to Financial Statements
March 31, 2005
1. Significant Accounting Policies--First Investors Cash Management Fund,
Inc. ("Cash Management Fund"), First Investors Government Fund, Inc.
("Government Fund"), First Investors Investment Grade Fund ("Investment
Grade Fund"), a series of First Investors Series Fund, and First Investors
Fund For Income, Inc. ("Income Fund"), (collectively, "the Funds"), are
registered under the Investment Company Act of 1940 ("the 1940 Act") as
diversified, open-end management investment companies. Each Fund accounts
separately for its assets, liabilities and operations. First Investors
Series Fund offers four additional series which are not included in this
report. The objective of each Fund is as follows:
Cash Management Fund seeks to earn a high rate of current income consistent
with the preservation of capital and maintenance of liquidity.
Government Fund seeks to achieve a significant level of current income
which is consistent with security and liquidity of principal.
Investment Grade Fund seeks to generate a maximum level of income
consistent with investment in investment grade debt securities.
Income Fund primarily seeks high current income and secondarily seeks
capital appreciation.
A. Security Valuation--The Cash Management Fund values its portfolio
securities in accordance with the amortized cost method of valuation under
Rule 2a-7 of the 1940 Act. Amortized cost is an approximation of market
value of an instrument, whereby the difference between its acquisition cost
and market value at maturity is amortized on a straight-line basis over the
remaining life of the instrument. The effect of changes in the market value
of a security as a result of fluctuating interest rates is not taken into
account and thus the amortized cost method of valuation may result in the
value of a security being higher or lower than its actual market value.
With respect to each of the other Funds, 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 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.
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 March 31, 2005,
the Income Fund held twenty-three securities that were fair valued by its
Valuation Committee with an aggregate value of $4,509,105 representing .7%
of the Fund's net assets.
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, federal income
taxes.
At September 30, 2004, capital loss carryovers were as follows:
Year Capital Loss Carryovers Expire
--------------------------------------------------------------------------------------------------------
Fund Total 2005 2007 2008 2009 2010 2011 2012
- ---- ----- ---- ---- ---- ---- ---- ---- ----
Government $ 5,337,388 $ -- $ -- $1,017,364 $ 2,144,197 $ -- $ 54,921 $ 2,120,906
Investment
Grade 3,507,018 -- -- -- 1,715,940 27,419 407,283 1,356,376
Income 115,943,713 3,055,280 842,581 1,832,458 13,810,649 18,563,112 52,099,335 25,740,298
C. Distributions to Shareholders--The Cash Management Fund declares
distributions daily and pays distributions monthly. Distributions are
declared from the total of net investment income plus or minus all realized
short-term gains and losses on investments. Dividends from net investment
income of each of the other Funds are generally declared daily and paid
monthly and distributions from net realized capital gains, if any, are
generally 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 mortgage-backed securities, capital loss carryforwards and
post-October capital losses.
D. 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.
E. Expense Allocation--Expenses directly charged or attributable to a Fund
are paid from the assets of that Fund. General expenses of First Investors
Series Fund are
Notes to Financial Statements (continued)
March 31, 2005
allocated among and charged to the assets of each Fund in First Investors
Series Fund 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.
F. 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.
Interest income on zero-coupon bonds and stepbonds is accrued daily at the
effective interest rate. For the six months ended March 31, 2005, the Bank
of New York, custodian for the Funds, has provided total credits in the
amount of $20,530 against custodian charges based on the uninvested cash
balances of the Funds. The Funds also reduced expenses through brokerage
service arrangements. For the six months ended March 31, 2005, the Funds
expenses were reduced by $8,983 under these arrangements.
2. Security Transactions--For the six months ended March 31, 2005,
purchases and sales (including pay-downs on Government Fund) of securities
and long-term U. S. Government obligations (excluding short-term U. S.
Government obligations and short-term securities) were as follows:
Long-Term U.S.
Securities Government Obligations
--------------------------- ---------------------------
Cost of Proceeds Cost of Proceeds
Fund Purchases from Sales Purchases from Sales
- ---- ------------ ------------ ------------ ------------
Government $ -- $ -- $36,805,731 $30,884,854
Investment Grade 19,158,003 8,202,885 8,696,746 2,786,415
Income 123,687,121 87,802,418 -- --
At March 31, 2005, aggregate cost and net unrealized appreciation
(depreciation) of securities for federal income tax purposes were as
follows:
Net
Gross Gross Unrealized
Aggregate Unrealized Unrealized Appreciation
Fund Cost Appreciation Depreciation (Depreciation)
- ---- ------------ ------------ ------------ ------------
Government $195,149,007 $ 1,101,943 $ 1,465,011 $ (363,068)
Investment Grade 206,868,463 5,450,595 3,961,487 1,489,108
Income 639,998,076 25,592,057 67,684,767 (42,092,710)
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 six months ended March 31, 2005, total
directors/trustees fees accrued by the Funds amounted to $22,502.
The Investment Advisory Agreements provide as compensation to FIMCO an
annual fee, payable monthly, at the following rates:
Cash Management Fund--.50% of the Fund's average daily net assets. FIMCO
has voluntarily waived $242,637 in advisory fees to limit the Fund's
overall expense ratio to .70% on Class A shares and 1.45% on Class B
shares.
Government Fund-- 1% on the first $200 million of the Fund's average daily
net assets, .75% on the next $300 million, declining by .03% on each $250
million thereafter, down to .66% on average daily net assets over $1
billion. FIMCO has voluntarily waived $438,284 in advisory fees to limit
the Fund's overall expense ratio to 1.10% on Class A shares and 1.85% on
Class B shares.
Investment Grade Fund--.75% on the first $300 million of the 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. FIMCO has
voluntarily waived $188,540 in advisory fees to limit the Fund's overall
expense ratio to 1.10% on Class A shares and 1.85% on Class B shares.
Income Fund--.75% on the first $250 million of the Fund's average daily net
assets, declining by .03% on each $250 million thereafter, down to .66% on
average daily net assets over $750 million.
For the six months ended March 31, 2005, total advisory fees accrued to
FIMCO by the Funds were $4,429,137 of which $869,461 was waived as noted
above.
For the six months ended March 31, 2005, FIC, as underwriter, received
$3,472,675 in commissions from the sale of shares of the Funds after
allowing $49,451 to other dealers. Shareholder servicing costs included
$1,037,714 in transfer agent fees accrued to ADM and $201,650 in retirement
accounts custodian fees accrued to FIFSB.
Pursuant to Distribution Plans adopted under Rule 12b-1 of the 1940 Act,
each Fund, other than the Cash Management Fund, is authorized to pay FIC a
fee up to .30% of
Notes to Financial Statements (continued)
March 31, 2005
the average daily net assets of the Class A shares on an annual basis,
payable monthly. Each Fund, including the Cash Management Fund, is
authorized to pay FIC a fee up to 1% of the average daily net assets of the
Class B shares on an annual basis, 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 six months
ended March 31, 2005, the fees paid under the distribution plans by
Government Fund and Investment Grade Fund were limited to .25% on Class A
shares and 1% on Class B shares. The distribution fees paid by Cash
Management Fund were limited to .75% on Class B shares.
4. Restricted Securities--Certain restricted securities are exempt from the
registration requirements under Rule 144A of the Securities Act of 1933 and
may only be sold to qualified institutional investors. At March 31, 2005,
Investment Grade Fund held ten 144A securities with an aggregate value of
$13,754,927 representing 6.5% of the Fund's net assets and Income Fund held
forty-one 144A securities with an aggregate value of $128,568,924
representing 21.0% of the Fund's net assets. Certain restricted securities
are exempt from the registration requirements under Section 4(2) of the
Securities Act of 1933 and may only be sold to qualified investors. At
March 31, 2005, Cash Management Fund held eleven Section 4(2) securities
with an aggregate value of $38,797,129 representing 22.7% of the Fund's net
assets. These securities are valued as set forth in Note 1A.
5. High Yield Credit Risk--The investments of Income Fund in high yield
securities whether rated or unrated may be considered speculative and
subject to greater market fluctuations and risks of loss of income and
principal than lower-yielding, higher-rated, fixed-income securities. The
risk of loss due to default by the issuer may be significantly greater for
holders of high-yielding securities, because such securities are generally
unsecured and are often subordinated to other creditors of the issuer.
6. Capital--Cash Management Fund sells two classes of shares, Class A and
Class B, each without an initial sales charge. Class B shares may only be
acquired through an exchange of Class B shares from another First Investors
eligible Fund or through the reinvestment of dividends on Class B shares
and are generally subject to a contingent deferred sales charge at the rate
of 4% in the first year and declining to 0% over a six-year period, which
is payable to FIC as underwriter of the Funds. Each of the other Funds also
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) are
allocated daily to each class of shares based upon the relative proportion
of net assets to each class. Of the 5,000,000,000 $.01 par value shares
originally authorized by the Cash Management Fund, the Fund has designated
2,500,000,000 shares as Class A and 2,500,000,000 shares as Class B. Of the
1,000,000,000 $.01 par value shares originally authorized by the Government
Fund and of the 1,000,000,000 $1.00 par value shares originally authorized
by the Income Fund, each Fund has designated 500,000,000 shares as Class A
and 500,000,000 shares as Class B. First Investors Series Fund, of which
Investment Grade Fund is a series, has established an unlimited number of
no par value shares of beneficial interest for both Class A and Class B
shares.
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 Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gain (Loss) on Investment Investment Realized Total End of
of Period Income Investments Operations Income Gain Distributions Period
- ---------------------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT FUND
- --------------------
Class A
- -------
2000 $ 1.00 $.054 -- $.054 $.054 -- $.054 $ 1.00
2001 1.00 .050 -- .050 .050 -- .050 1.00
2002 1.00 .014 -- .014 .014 -- .014 1.00
2003 1.00 .006 -- .006 .006 -- .006 1.00
2004 1.00 .005 -- .005 .005 -- .005 1.00
2005(a) 1.00 .007 -- .007 .007 -- .007 1.00
Class B
- -------
2000 1.00 .046 -- .046 .046 -- .046 1.00
2001 1.00 .040 -- .040 .040 -- .040 1.00
2002 1.00 .006 -- .006 .006 -- .006 1.00
2003 1.00 .001 -- .001 .001 -- .001 1.00
2004 1.00 -- -- -- -- -- -- 1.00
2005(a) 1.00 .003 -- .003 .003 -- .003 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT FUND
- ---------------
Class A
- -------
2000 $10.93 $ .65 $ .02 $ .67 $ .66 -- $ .66 $10.94
2001 10.94 .64 .48 1.12 .65 -- .65 11.41
2002 11.41 .59 .09 .68 .59 -- .59 11.50
2003 11.50 .54 (.19) .35 .54 -- .54 11.31
2004 11.31 .51 (.18) .33 .51 -- .51 11.13
2005(a) 11.13 .25 (.18) .07 .25 -- .25 10.95
Class B
- -------
2000 10.92 .57 .02 .59 .58 -- .58 10.93
2001 10.93 .55 .49 1.04 .56 -- .56 11.41
2002 11.41 .50 .09 .59 .51 -- .51 11.49
2003 11.49 .45 (.19) .26 .45 -- .45 11.30
2004 11.30 .43 (.18) .25 .43 -- .43 11.12
2005(a) 11.12 .21 (.18) .03 .21 -- .21 10.94
- ---------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
R A T I O S / S U P P L E M E N T A L D A T A
------------------------------------------------------------------------------------------------
Ratio to Average Net
Ratio to Average Net Assets Before Expenses
Assets** Waived or Assumed
----------------------- -----------------------
Net Assets Net Net Portfolio
Total End of Period Investment Investment Turnover
Return* (in millions) Expenses Income Expenses Income (Loss) Rate
- ------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT FUND
- --------------------
Class A
- -------
2000 5.50% $182 .80% 5.36% 1.08% 5.08% --
2001 4.63 204 .80 4.52 .99 4.33 --
2002 1.38 193 .80 1.38 .90 1.28 --
2003 .62 179 .78 .62 .97 .43 --
2004 .50 171 .70 .50 1.05 .15 --
2005(a) .71 167 .70+ 1.40+ .98+ 1.12+ --
Class B
- -------
2000 4.72 2 1.55 4.61 1.83 4.33 --
2001 3.85 4 1.55 3.77 1.74 3.58 --
2002 .63 6 1.55 .63 1.65 .53 --
2003 .05 6 1.34 .06 1.53 (.13) --
2004 -- 5 1.20 -- 1.55 (.35) --
2005(a) .33 4 1.45+ .65+ 1.73+ .37+ --
- ------------------------------------------------------------------------------------------------------------------
GOVERNMENT FUND
- ---------------
Class A
- -------
2000 6.38% $124 1.12% 6.05% 1.55% 5.62% 26%
2001 10.49 137 1.10 5.70 1.53 5.27 59
2002 6.16 168 1.10 5.21 1.56 4.75 75
2003 3.08 184 1.10 4.69 1.58 4.21 65
2004 3.01 179 1.10 4.59 1.56 4.13 60
2005(a) .65 180 1.10+ 4.52+ 1.55+ 4.07+ 16
Class B
- -------
2000 5.56 3 1.87 5.30 2.30 4.87 26
2001 9.77 6 1.85 4.95 2.28 4.52 59
2002 5.29 16 1.85 4.46 2.31 4.00 75
2003 2.33 21 1.85 3.94 2.33 3.46 65
2004 2.25 17 1.85 3.84 2.31 3.38 60
2005(a) .28 16 1.85+ 3.77+ 2.30+ 3.32+ 16
- ------------------------------------------------------------------------------------------------------------------
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 Realized Net Asset
Value, Net and Unrealized Total from Net Net Value,
Beginning Investment Gain (Loss) on Investment Investment Realized Total End of
of Period Income Investments Operations Income Gain Distributions Period
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
- ---------------------
Class A
- -------
2000 $ 9.66 $ .60 $(.14) $ .46 $ .58 $.01 $ .59 $ 9.53
2001 9.53 .61 .41 1.02 .63 -- .63 9.92
2002+ 9.92 .55 .07 .62 .58 -- .58 9.96
2003 9.96 .51 .35 .86 .54 -- .54 10.28
2004 10.28 .47 (.11) .36 .53 -- .53 10.11
2005(a) 10.11 .26 (.27) (.01) .26 -- .26 9.84
Class B
- -------
2000 9.67 .54 (.14) .40 .52 .01 .53 9.54
2001 9.54 .54 .41 .95 .56 -- .56 9.93
2002+ 9.93 .48 .06 .54 .51 -- .51 9.96
2003 9.96 .43 .36 .79 .47 -- .47 10.28
2004 10.28 .38 (.11) .27 .45 -- .45 10.10
2005(a) 10.10 .22 (.26) (.04) .23 -- .23 9.83
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FUND
- -----------
Class A
- -------
2000 $ 3.92 $ .35 $ (.26) $ .09 $ .38 -- $ .38 $ 3.63
2001 3.63 .33 (.68) (.35) .35 -- .35 2.93
2002+ 2.93 .26 (.29) (.03) .26 -- .26 2.64
2003 2.64 .24 .41 .65 .24 -- .24 3.05
2004 3.05 .23 .13 .36 .23 -- .23 3.18
2005(a) 3.18 .12 (.07) .05 .11 -- .11 3.12
Class B
- -------
2000 3.90 .33 (.26) .07 .36 -- .36 3.61
2001 3.61 .31 (.67) (.36) .33 -- .33 2.92
2002+ 2.92 .24 (.30) (.06) .23 -- .23 2.63
2003 2.63 .23 .41 .64 .22 -- .22 3.05
2004 3.05 .21 .12 .33 .20 -- .20 3.18
2005(a) 3.18 .11 (.07) .04 .10 -- .10 3.12
- ---------------------------------------------------------------------------------------------------------------------------------
* Calculated without sales charges
** Net of expenses waived or assumed (Note 3)
+ Annualized
++ Prior to October 1, 2001, the Income Fund and the Investment Grade
Fund did not amortize premiums on debt securities. The per share data
and ratios prior to October 1, 2001 have not been restated. The
cumulative effect of this accounting change had no impact on the total
net assets of the Funds.
(a) For the period October 1, 2004 to March 31, 2005
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 Assets Net Net Portfolio
Total End of Period Investment Investment Turnover
Return* (in millions) Expenses Income Expenses Income Rate
- ------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
- ---------------------
Class A
- -------
2000 5.03% $ 47 1.10% 6.36% 1.35% 6.11% 62%
2001 10.93 65 1.10 6.22 1.28 6.04 21
2002+ 6.48 102 1.10 5.63 1.33 5.40 13
2003 8.94 144 1.10 4.85 1.35 4.60 6
2004 3.57 170 1.10 4.49 1.32 4.27 9
2005(a) (.08) 184 1.10+ 4.22+ 1.29+ 4.03+ 6
Class B
- -------
2000 4.31 8 1.80 5.66 2.05 5.41 62
2001 10.15 13 1.84 5.48 2.02 5.30 21
2002+ 5.61 23 1.85 4.88 2.08 4.65 13
2003 8.17 31 1.85 4.10 2.10 3.85 6
2004 2.74 30 1.85 3.74 2.07 3.52 9
2005(a) (.43) 29 1.85+ 3.47+ 2.04+ 3.28+ 6
- ------------------------------------------------------------------------------------------------------------------
INCOME FUND
- -----------
Class A
- -------
2000 2.46% $501 1.29% 9.55% N/A N/A 14%
2001 (10.20) 418 1.30 9.81 N/A N/A 18
2002+ (1.52) 397 1.35 8.90 N/A N/A 20
2003 25.78 509 1.34 8.38 N/A N/A 31
2004 12.06 561 1.29 7.35 N/A N/A 37
2005(a) 1.65 572 1.28+ 7.38+ N/A N/A 15
Class B
- -------
2000 1.81 23 1.99 8.85 N/A N/A 14
2001 (10.62) 22 2.00 9.11 N/A N/A 18
2002+ (2.33) 24 2.05 8.20 N/A N/A 20
2003 25.24 37 2.04 7.68 N/A N/A 31
2004 11.22 40 1.99 6.65 N/A N/A 37
2005(a) 1.28 39 1.98+ 6.68+ N/A N/A 15
- ------------------------------------------------------------------------------------------------------------------
Report of Independent Registered Public Accounting Firm
To the Shareholders and Boards of Directors/Trustees of
First Investors Cash Management Fund, Inc.
First Investors Government Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the First Investors Cash
Management Fund, Inc., First Investors Government Fund, Inc., First
Investors Investment Grade Fund (a series of First Investors Series Fund)
and First Investors Fund For Income, Inc., as of March 31, 2005, the
related statements of operations, the statements of changes in net assets
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. 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
March 31, 2005, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of First Investors Cash Management Fund, Inc., First Investors Government
Fund, Inc., First Investors Investment Grade Fund and First Investors Fund
For Income, Inc., as of March 31, 2005, and the results of their
operations, changes in their net assets and their financial highlights for
the periods presented, in conformity with accounting principles generally
accepted in the United States of America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
May 2, 2005
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Directors/Trustees
- ------------------
Robert M. Grohol
Kathryn S. Head
Rex R. Reed
Herbert Rubinstein
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- --------
Kathryn S. Head
President
George V. Ganter
Vice President 1
Michael J. O'Keefe
Vice President 2
Clark D. Wagner
Vice President 1
Larry R. Lavoie
Chief Compliance Officer
Joseph I. Benedek
Treasurer
Mark S. Spencer
Assistant Treasurer
Carol Lerner Brown
Assistant Secretary
- --------------------
1 First Investors Series Fund only
2 First Investors Cash Management Fund, Inc. only
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Shareholder Information
- -----------------------
Investment Adviser
First Investors Management Company, Inc.
95 Wall Street
New York, NY 10005
Underwriter
First Investors Corporation
95 Wall Street
New York, NY 10005
Custodian
The Bank of New York
One Wall Street
New York, NY 10286
Transfer Agent
Administrative Data Management Corp.
Raritan Plaza I - 8th Floor
Edison, NJ 08837-3620
Legal Counsel
Kirkpatrick & Lockhart
Nicholson Graham LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
1818 Market Street
Philadelphia, PA 19103
The Cash Management Fund is a money market fund and seeks to maintain a
stable net asset value of $1.00 per share. However, there can be no
assurance that the Fund will be able to do so or achieve its investment
objective. An investment in the Fund is neither insured nor guaranteed by
the Federal Deposit Insurance Corporation (FDIC) or any other government
agency.
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, D.C. 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
Not applicable
Item 3. Audit Committee Financial Expert
Not applicable
Item 4. Principal Accountant Fees and Services
Not applicable
Item 5. Audit Committee of Listed Registrants
Not applicable
Item 6. Schedule of Investments
Schedule of Investments is included as part of
the Report to Stockholders 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
The Nominating and Compensation Committee (the "Committee") of the Board of
Directors/Trustees of the First Investors Family of Funds (the "Board") was
established in November 2004. The Committee is comprised of all the
Independent Directors/Trustees. The Committee is responsible for, among
other things, selecting and nominating persons to serve as Independent
Directors/Trustees on the Board, evaluating candidates' qualifications,
reviewing the composition of the Board to determine whether it may be
appropriate to add other Independent Directors/Trustees, and reviewing
director/trustee compensation. When the Board has, or expects to have,
vacancies, the Committee shall consider shareholder recommendations for
nominations to fill such vacancies if such recommendations are submitted in
writing and addressed to the Committee at the Funds' offices at: First
Investors Funds, 95 Wall Street, New York, NY 10005.
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 significant changes in the Registrant's internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
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 have duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
First Investors Cash Management Fund, Inc.
First Investors Government Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
(Registrant)
By /S/ KATHRYN S. HEAD
Kathryn S. Head
President and Principal Executive Officer
Date: June 8, 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 Cash Management Fund, Inc.
First Investors Government Fund, Inc.
First Investors Series Fund
First Investors Fund For Income, Inc.
(Registrant)
By /S/ JOSEPH I. BENEDEK
Joseph I. Benedek
Treasurer and Principal Financial Officer
Date: June 8, 2005