UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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
Edison, NJ 08837-3620
1-732-855-2712
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
1-212-858-8000
DATE OF FISCAL YEAR END: SEPTEMBER 30, 2005
DATE OF REPORTING PERIOD: SEPTEMBER 30, 2005
Item 1. Reports to Stockholders
The Annual Report to Stockholders follows
[First Investors Logo]
TAXABLE BOND & MONEY MARKET FUNDS
CASH MANAGEMENT
GOVERNMENT
INVESTMENT GRADE
FUND FOR INCOME
ANNUAL REPORT
September 30, 2005
Portfolio Manager's Letter
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
Dear Investor:
This is the annual report for the First Investors Cash Management Fund for
the fiscal year ended September 30, 2005. During the period, the Fund's
return on a net asset value basis was 1.9% for Class A shares and 1.2% for
Class B shares. The Fund maintained a $1.00 net asset value per share for
each class of shares throughout the year.
The primary factor that drove the Fund's performance during the reporting
period was an increase in short-term interest rates.
Short-term rates rose steadily during the fiscal year, as the Federal
Reserve raised its target federal funds rate by 25 basis points at each of
its meetings for a total increase of 200 basis points (2%). The money market
yield curve remained positively sloped during this period, indicating that
the market anticipated further hikes.
The Fund maintained significant liquidity throughout the reporting period,
while taking advantage of the steepness of the money market yield curve by
selectively purchasing longer maturity money market instruments. Corporate
bonds and notes, along with various types of callable securities, helped the
Fund reap incremental returns. Increased holdings in floating rate
securities also added marginally to performance. To mitigate credit risk,
corporate security investments were limited to those with shorter maturities
and smaller position sizes.
Although money market funds are relatively conservative vehicles, there can
be no assurance that they will be able to maintain a stable net asset value
of $1.00 per share. Money market mutual funds are neither insured nor
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
Thank you for placing your trust in First Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ MICHAEL J. O'KEEFE
Michael J. O'Keefe
Vice President
and Portfolio Manager
October 31, 2005
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 a sales charge (load) on purchase payments (on Class A
shares only), a contingent deferred sales charge on redemptions (on Class B
shares only); and (2) ongoing costs, including advisory fees; distribution
and service fees (12b-1); and other expenses. This example is intended to
help you understand your ongoing costs (in dollars) of investing in the
Funds and to compare these costs with the ongoing costs of investing in
other mutual funds.
The examples are based on an investment of $1,000 in each Fund at the
beginning of the period, April 1, 2005, and held for the entire six-month
period ended September 30, 2005. The calculations assume that no shares were
bought or sold during the period. Your actual costs may have been higher or
lower, depending on the amount of your investment and the timing of any
purchases or redemptions.
Actual Expenses Example:
These amounts help you to estimate the actual expenses that you paid over
the period. The "Ending Account Value" shown is derived from the Fund's
actual return, and the "Expenses Paid During Period" shows the dollar amount
that would have been paid by an investor who started with $1,000 in the
Fund. You may use the information here, together with the amount you
invested, to estimate the expenses that you paid over the period.
To estimate the expenses you paid on your account during this period, simply
divide your ending account value by $1,000 (for example, an $8,600 account
value divided by $1,000 = 8.60), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period".
Hypothetical Expenses Example:
These amounts provide information about hypothetical account values and
hypothetical expenses based on the Fund's actual expense ratio for Class A
and Class B shares, and an assumed rate of return of 5% per year before
expenses, which is not the Fund's actual return. The hypothetical account
values and expenses may not be used to estimate the actual ending account
balance or expenses you paid for the period. You may use this information to
compare the ongoing costs of investing in the Fund and other funds. To do
so, compare this 5% hypothetical example with the 5% hypothetical examples
that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight and
help you compare your ongoing costs only and do not reflect any transaction
costs, such as front-end or contingent deferred sales charges (loads).
Therefore, the hypothetical expenses example is useful in comparing ongoing
costs only and will not help you determine the relative total costs of
owning different funds. In addition, if these transaction costs were
included, your costs would have been higher.
Board Considerations of Advisory Contracts and Fees
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
At a meeting held on May 19, 2005 ("May Meeting"), the Boards of Directors
or Trustees ("Board"), as the case may be, including a majority of the
non-interested or independent Directors/Trustees (hereinafter, "Directors"),
approved the renewal of the investment advisory agreements (each an
"Advisory Agreement") between First Investors Management Company, Inc.
("FIMCO") and each of the following funds (each, a "Fund" and collectively,
the "Funds"): Cash Management Fund, Government Fund, Investment Grade Fund
and Fund For Income. In reaching its decisions, the Board reviewed and
considered information furnished and discussed throughout the year at
regularly scheduled Board meetings as well as information provided
specifically in relation to the renewal of the Advisory Agreements for the
May Meeting.
Information furnished at Board meetings throughout the year included FIMCO's
analysis of each Fund's investment performance, presentations given by
FIMCO's Director of Fixed Income and various reports on compliance and other
services provided by FIMCO and its affiliates. In response to specific
requests from the Directors in connection with the May Meeting, FIMCO
furnished, and the Board reviewed, information concerning a variety of
aspects of its operations, including: (1) the nature, extent and quality of
services provided by FIMCO and its affiliates to the Funds, including
investment advisory and administrative services; (2) the investment
performance of each Fund, including comparisons to a group of mutual funds
based on the category assigned to the Fund, and data published, by Lipper,
Inc. ("Peer Group"); (3) the management fees paid by each Fund and total
expense ratios of each Fund compared to the management fees and total
expense ratios of each Fund's Peer Group; (4) the costs of providing
services to each Fund and the profits realized by FIMCO and its affiliate,
Administrative Data Management Corporation ("ADM"), the Funds' affiliated
transfer agent, from the relationship with each Fund; and (5) any "fall out"
or ancillary benefits enjoyed by FIMCO or its affiliates as a result of the
relationship with each Fund. In addition to evaluating, among other things,
the written information provided by FIMCO, the Board also evaluated the
answers to questions posed by the Board to representatives of FIMCO at the
May Meeting.
In considering the information and materials described above, the Directors
received assistance from and met separately with independent counsel.
Although the Advisory Agreements for all of the Funds were considered at the
same Board meeting, the Directors addressed each Fund separately during the
May Meeting. In view of the broad scope and variety of factors and
information, the Directors did not find it practicable to, and did not,
assign relative weights to the specific factors considered in reaching their
conclusions and determinations to approve the continuance of each Advisory
Agreement. Rather, the approval determinations were made on the basis of
each Director's business judgment after consideration of all of the factors
taken in their entirety. Although not meant to be all-inclusive, the
following discusses some of
Board Considerations of Advisory Contracts and Fees (continued)
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
the factors relevant to the Board's decisions to approve the continuance of
the Advisory Agreements.
Nature, Extent and Quality of Services
In examining the nature, extent and quality of the services provided by
FIMCO, the Board recognized that FIMCO is dedicated to providing investment
management services exclusively to the Funds and the other funds in the
First Investors fund complex and that, unlike many other mutual fund
managers, FIMCO does not provide management services to hedge funds, pension
funds or separately managed accounts. As a result, the Directors considered
that FIMCO's personnel devote substantially all of their time to serving the
funds in the First Investors fund complex, and emphasized that FIMCO's
senior management sets a tone for the organization that is aimed at the
protection of Fund shareholders and that this focus permeates the entire
organization. The Board noted that FIMCO has undertaken extensive
responsibilities as manager of the Funds, including: (i) the provision of
investment advice to the Funds; (ii) implementing policies and procedures
designed to ensure compliance with each Fund's investment objectives and
policies; (iii) the review of brokerage arrangements; (iv) oversight of
general portfolio compliance with applicable laws; (v) the provision of
certain administrative services to the Funds, including fund accounting; and
(vi) the implementation of Board directives as they relate to the Funds. The
Board also acknowledged that FIMCO has devoted substantial time and
resources to ensure that the Funds and FIMCO are in compliance with a wide
array of new regulatory initiatives that have been aimed at mutual funds and
their service providers. With regard to compliance, the Board noted that
FIMCO's and the Funds' overall compliance records were good.
The Board also considered the nature, extent and quality of the services
provided to the Funds by FIMCO's affiliates, including transfer agency and
distribution services. The Board took into account the fact that ADM is
dedicated to providing transfer agency services exclusively to the Funds and
the other funds in the First Investors fund complex. As a result, ADM can
tailor its processes and services to satisfy the needs of the Funds'
shareholder base. The Board noted that the Funds' shares are distributed
primarily through First Investors Corporation ("FIC"), which is an affiliate
of FIMCO.
Based on the totality of the information considered, the Directors concluded
that the Funds were likely to benefit from the nature, extent and quality
of FIMCO's services as well as the services of its affiliates, and that
FIMCO and its affiliates have the ability to continue to provide these
services based on their respective experience, operations and resources.
Investment Performance
The Board placed significant emphasis on the investment performance of each
of the Funds. While consideration was given to performance reports and
discussions held at prior Board meetings, particular attention was given to
the performance reports prepared by FIMCO specifically for the May Meeting.
In particular, the Directors reviewed the performance of the Funds for each
of the past five calendar years and gave more weight to each Fund's
performance over the most recent calendar year ("1-year period") and average
performance over the most recent three calendar year period ("3-year
period"). In this regard, the Board considered the performance of each Fund
on a percentile and quintile basis as compared to its Peer Group. In
reviewing this data, the Board particularly focused on whether a Fund's
performance was in the top three quintiles versus the Fund's Peer Group for
the 3-year period. On a Fund-by-Fund basis, the performance reports
indicated, and the Board noted, that:
* Fund For Income and Government Fund were in the third quintile of their
respective Peer Group for both the 1-year period and 3-year period.
* Cash Management Fund was in the second highest quintile of its Peer Group
for the 1-year period and the third quintile for the 3-year period.
* Investment Grade Fund was in the third quintile of its Peer Group for the
3-year period, although the more recent 1-year period performance was not
as favorable.
Fund Expenses, Costs of Services, Economies of Scale and Related Benefits
Management Fees and Expenses. The Board gave substantial consideration to
the fees payable under each Fund's Advisory Agreement. The Board reviewed
reports prepared by FIMCO comparing each Fund's effective management fee
rates, operating expense ratios, and total expense ratios to its Peer Group.
The Board noted the effect of the management fee waivers in place for the
Investment Grade Fund, Government Fund and Cash Management Fund during the
periods presented, and discussed with FIMCO whether the fee schedules should
be modified in light of these fee waivers. With regard to the effective
management fee rates for the 2004 fiscal year, on a Fund-by-Fund basis, the
Board noted that:
* The level of management fee rates for Government Fund and Cash Management
Fund, taking into account the fee waivers, were lower than their respective
Peer Group median.
* The level of management fee rates for Fund For Income and Investment Grade
Fund, taking into account the fee waivers (as applicable), were higher than
their respective Peer Group median.
Board Considerations of Advisory Contracts and Fees (continued)
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
With regard to overall expense ratios, the Board noted that Cash Management
Fund's total expense ratio (Class A Shares) for the most recent calendar
year, taking into account FIMCO's expense limitation, was lower than the
median of its Peer Group. The Board noted that the total expense ratios,
taking into account FIMCO's expense limitations (as applicable), of the Fund
For Income, Government Fund and Investment Grade Fund for the most recent
calendar year were higher than the median of their respective Peer Groups.
The Board acknowledged the effect on the Funds' total operating expense
ratios of transfer agency fees and further acknowledged the nature and
quality of the services provided by the Funds' transfer agent. In addition,
management explained, and the Board considered, the benefits to the Funds
from investment by shareholders who maintain retirement accounts in the
Funds. The Board recognized management's efforts to control operating
expenses, noting that these Funds' total expense ratios had either declined
or remained the same from the previous calendar year.
Profitability. The Board reviewed the materials it received from FIMCO
regarding its revenues and costs in providing investment management and
certain administrative services to the Funds. In particular, the Board
considered the detailed analysis of FIMCO's profitability with respect to
each Fund, calculated for the year ended December 31, 2004, as well as
profitability information relating to the past five calendar years. The
Board also considered FIMCO's expectation that its fixed costs will increase
in the future due to, among other things, new regulatory requirements. In
reviewing the profitability information, the Directors also considered the
"fall-out" or ancillary benefits that may accrue to FIMCO and its affiliates
as a result of their relationship with the Funds, which are discussed below.
The Directors recognized that, as a business matter, FIMCO was entitled to
earn reasonable profits for its services to the Funds.
Economies of Scale. With respect to whether economies of scale are realized
by FIMCO as a Fund's assets increase and the extent to which any economies
of scale are reflected in the level of management fees charged, the Board
considered that the Advisory Agreement for each Fund, except Cash Management
Fund, currently includes "breakpoints" (i.e., reductions in the management
fee rate as assets increase) to account for management economies of scale.
The Board noted that Fund For Income has reached an asset size at which the
Fund and its shareholders are benefiting from reduced management fee rate.
With regard to Government Fund and Investment Grade Fund, the Board
recognized that, although these Funds have not reached a size at which they
can take advantage of the breakpoints contained in their fee schedule, each
schedule is structured so that when the assets of these Funds grow,
economies of scale may be shared for the benefit of shareholders. With
respect to Cash Management Fund, the Board concluded that the fee structure
is appropriate at current asset levels.
"Fall Out" or Ancillary Benefits. The Board considered the "fall-out" or
ancillary benefits that may accrue to FIMCO as a result of its relationship
with the Funds. In that regard, the Board noted that FIMCO may direct Fund
transactions to certain brokers to obtain research and other services, which
may be used in servicing all funds in the First Investors fund complex.
However, the Board noted that FIMCO must select brokers based on each Fund's
requirements for seeking best execution. The Board also considered
information relating to ADM's fees and profitability and the income received
by FIC and FIMCO's affiliated bank as a result of FIMCO's management of the
Funds. After review of this information, the Board concluded that the
benefits accruing to FIMCO and its affiliates by virtue of their
relationship to the Funds are fair and reasonable.
After evaluation of the comparative performance, fee and expense information
and the profitability, ancillary benefits and other considerations as
described above, and in light of the nature, extent and quality of services,
including any non-management services, to be provided by FIMCO, the Board
concluded that the level of fees paid to FIMCO with respect to each Fund is
reasonable.
* * *
In summary, based on the various considerations discussed above, the Board
determined that approval of each Fund's Advisory Agreement was in the best
interests of that Fund. As a result, the Board, including a majority of the
independent Directors, approved each Advisory Agreement.
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 2 for a detailed explanation of the information
presented in these examples.
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Beginning Ending
Account Account Expenses Paid
Value Value During Period
(4/1/05) (9/30/05) (4/1/05-9/30/05)*
- --------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,012.27 $3.53
Hypothetical
(5% annual return before expenses) $1,000.00 $1,021.56 $3.55
- --------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,008.47 $7.30
Hypothetical
(5% annual return before expenses) $1,000.00 $1,017.80 $7.33
- --------------------------------------------------------------------------------------------------------------
* 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 183/365
(to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
Portfolio Composition
BY SECTOR
Corporate Notes 55.7%
U.S. Government Agency Obligations 25.8%
Floating Rate Notes 15.0%
Bankers' Acceptances 3.5%
Portfolio holdings and allocations are subject to change. Percentages are as
of September 30, 2005, and are based on total amortized cost of
investments.
Portfolio of Investments
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
September 30, 2005
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Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE NOTES--55.0%
$5,000M 3M Co., 10/11/05 3.62% $4,994,965 $302
5,000M Abbott Laboratories, 10/19/05 + 3.70 4,990,746 302
4,000M American General Finance Corp., 11/3/05 3.73 3,986,311 241
3,700M ChevronTexaco Corp., 10/28/05 3.70 3,689,729 223
5,000M Coca-Cola Co., 10/21/05 3.56 4,990,081 302
5,000M Colgate-Palmolive Co., 10/7/05 + 3.54 4,997,041 302
5,000M DuPont (E.I.) de Nemours & Co., 10/12/05 3.70 4,994,340 302
5,000M Gannett Co., Inc., 10/4/05 + 3.55 4,998,516 302
General Electric Capital Corp.:
2,300M 11/1/05 3.61 2,292,829 139
4,800M 11/1/05 3.72 4,784,622 290
2,000M JPMorgan Chase & Co., 2/1/06 3.15 2,022,046 122
Madison Gas & Electric Co.:
2,700M 10/20/05 3.70 2,694,722 163
2,500M 10/26/05 3.72 2,493,538 151
2,000M Merrill Lynch & Co., 3/10/06 3.45 1,991,474 121
4,100M New York Times Co., 10/31/05 3.62 4,087,578 247
5,000M PepsiCo, Inc., 10/27/05 + 3.71 4,986,597 302
6,000M Pfizer, Inc., 10/6/05 + 3.55 5,997,035 363
3,000M Pitney Bowes, Inc., 10/11/05 + 3.70 2,996,913 181
4,000M Procter & Gamble Co., 10/17/05 + 3.65 3,993,501 242
5,000M Prudential Funding Corp., 11/8/05 3.71 4,980,399 301
5,000M Shell International Finance BV, 10/3/05 3.56 4,999,006 302
5,000M Toyota Motor Credit Corp., 11/9/05 3.76 4,979,614 301
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Notes (cost $90,941,603) 90,941,603 5,501
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U.S. GOVERNMENT AGENCY
OBLIGATIONS--25.5%
Fannie Mae:
550M 10/21/05 2.85 549,763 33
495M 11/14/05 2.85 494,590 30
1,000M 12/15/05 2.88 998,949 60
500M 2/28/06 3.65 497,091 30
2,000M 3/17/06 3.31 1,999,537 121
628M 7/3/06 3.64 627,997 38
1,000M Federal Farm Credit Bank, 7/21/06 3.83 986,764 60
Federal Home Loan Bank:
1,500M 10/7/05 3.53 1,499,116 91
4,000M 10/14/05 3.59 3,994,807 242
1,000M 10/27/05 2.43 999,687 61
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Portfolio of Investments (continued)
FIRST INVESTORS CASH MANAGEMENT FUND, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank: (continued)
$1,850M 11/4/05 2.53% $1,849,980 $112
815M 11/10/05 3.34 813,778 49
1,375M 11/15/05 2.52 1,377,959 83
500M 11/15/05 3.54 500,434 30
3,000M 12/30/05 3.12 2,989,578 181
1,000M 1/10/06 3.56 994,983 60
1,500M 2/27/06 3.53 1,492,252 90
1,500M 2/28/06 3.76 1,496,224 91
2,000M 3/13/06 3.31 1,992,829 121
1,000M 3/24/06 3.60 993,222 60
1,000M 4/28/06 3.65 990,769 60
1,425M 5/5/06 3.85 1,410,666 85
1,500M 6/30/06 3.75 1,500,000 91
1,200M 7/10/06 4.29 1,179,059 71
2,000M 7/28/06 4.17 1,973,225 119
Freddie Mac:
300M 11/17/05 2.54 299,903 18
2,000M 4/28/06 3.56 1,990,160 120
1,000M 4/28/06 3.65 994,394 60
1,850M 6/2/06 4.12 1,827,303 111
1,900M 6/9/06 4.10 1,874,280 113
1,000M 7/7/06 3.83 986,217 60
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Total Value of U.S. Government Agency Obligations
(cost $42,175,516) 42,175,516 2,551
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FLOATING RATE NOTES--14.8%
2,000M Bank One Corp., 8/11/06 3.90 2,002,899 121
Federal Home Loan Bank:
3,000M 10/5/05 3.41 2,999,978 182
2,400M 5/24/06 3.60 2,400,000 145
2,000M Fifth Third Bancorp, 9/22/06 ++ 3.79 2,000,000 121
2,100M Merrill Lynch & Co., 4/18/06 3.89 2,103,604 127
5,000M US Bank NA, 12/5/05 3.76 4,999,916 303
4,750M Wal-Mart Stores, Inc., 3/16/06 3.73 4,748,391 287
3,240M Wells Fargo & Co., 9/15/06 3.96 3,243,295 196
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Total Value of Floating Rate Notes (cost $24,498,083) 24,498,083 1,482
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal Interest $10,000 of
Amount Security Rate* Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
BANKERS' ACCEPTANCES--3.4%
$5,637M Bank of America, NA, 10/3/05
(cost $5,636,083) 3.56% $5,636,083 $341
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $163,251,285)** 98.7% 163,251,285 9,875
Other Assets, Less Liabilities 1.3 2,050,848 125
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $165,302,133 $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
September 30, 2005.
** Aggregate cost for federal income tax purposes is the same.
+ Security exempt from registration under Secton 4(2) of the Securities Act of 1933 (see Note 4).
++ Security exempt from registration under rule 144A of the Securities Act of 1933 (see Note 4).
See notes to financial statements
Portfolio Manager's Letter
FIRST INVESTORS GOVERNMENT FUND, INC.
Dear Investor:
This is the annual report for the First Investors Government Fund for the
fiscal year ended September 30, 2005. During the period, the Fund's return
on a net asset value basis was 2.3% for Class A shares and 1.5% for Class B
shares, including dividends of 49.6 cents per share on Class A shares and
41.2 cents per share on Class B shares.
The Fund invests primarily in Government National Mortgage Association
(GNMA) mortgage-backed bonds. The primary factors that drove the Fund's
performance were rising interest rates and a flattening yield curve.
Both short- and long-term interest rates rose during the reporting period.
As measured by the two-year U.S. Treasury note, short-term interest rates
increased from 2.61% to 4.17%. Long-term rates, as benchmarked by the
10-year U.S. Treasury note, rose from 4.12% to 4.33%. Rising interest rates
decreased the value of the securities in the Fund.
Short-term interest rates rose more than long-term rates, leading to a
flattening of the yield curve. This led to higher coupon mortgage-backed
bonds underperforming lower coupon mortgage-backed bonds. Since the Fund was
underweight versus the Merrill Lynch GNMA Master Index in lower coupon bonds
during the reporting period, the flattening of the yield curve hurt the
Fund's performance.
Nevertheless, the relatively low level of volatility of long-term interest
rates helped the performance of GNMAs and other mortgage-backed bonds. Yield
spreads between Treasury securities and GNMAs narrowed. This allowed GNMAs
to outperform the Treasury market, as well as other investment-grade bond
markets, during the reporting period.
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
and Portfolio Manager
October 31, 2005
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 2 for a detailed explanation of the information
presented in these examples.
- ----------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(4/1/05) (9/30/05) (4/1/05-9/30/05)*
- ----------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,015.83 $5.56
Hypothetical
(5% annual return before expenses) $1,000.00 $1,019.55 $5.57
- ----------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,011.96 $9.33
Hypothetical
(5% annual return before expenses) $1,000.00 $1,015.79 $9.35
- ----------------------------------------------------------------------------------------------------------------
* 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 183/365 (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 85.0%
Fannie Mae 11.8%
Freddie Mac 2.5%
Short-Term U.S. Government Obligations 0.7%
Portfolio holdings and allocations are subject to change. Percentages are as
of September 30, 2005, and are based on the total value of investments.
Cumulative Performance Information
FIRST INVESTORS GOVERNMENT FUND, INC.
Comparison of change in value of $10,000 investment in the First Investors
Government Fund, Inc. (Class A shares) and the Merrill Lynch GNMA Master
Index.
First Investors Government Fund
Graph Plot Points
for the periods Ended 9/30/05
Merrill Lynch
Government GNMA
Fund Index
Dec-95 $ 9,425 $10,000
Dec-96 9,756 10,557
Dec-97 10,575 11,565
Sep-98 11,213 12,279
Sep-99 11,167 12,586
Sep-00 11,988 13,563
Sep-01 13,246 15,201
Sep-02 14,012 16,359
Sep-03 14,443 16,981
Sep-04 14,879 17,665
Sep-05 15,213 18,279
(INSET BOX IN CHART READS:)
Average Annual Total Returns*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 2.25% (3.64%)
Five Years 4.96% 3.71%
Ten Years 5.31% 4.68%
S.E.C. 30-Day Yield 3.61%
Class B Shares
One Year 1.48% (2.52%)
Five Years 4.18% 3.84%
Ten Years 4.69% 4.69%
S.E.C. 30-Day Yield 3.08%
The graph compares a $10,000 investment in the First Investors Government
Fund, Inc. (Class A shares) beginning 12/31/95 with a theoretical
investment in the Merrill Lynch GNMA Master Index (the "Index"). The Index
is a market capitalization-weighted index, including generic-coupon GNMA
mortgages, with at least $150 million principal amounts outstanding. Every
issue included in the Index is trader-priced, and the Index follows
consistent and realistic availability limits, including only those
securities with sufficient amounts outstanding. It is not possible to
invest directly in this Index. In addition, the Index does not take into
account fees and expenses that an investor would incur in purchasing
securities in this Index. For purposes of the graph and the accompanying
table, unless otherwise indicated, it has been assumed that the maximum
sales charge was deducted from the initial $10,000 investment in the Fund
and all dividends and distributions were reinvested. Class B shares
performance may be greater than or less than that shown in the line graph
above for Class A shares based on differences in sales loads and fees paid
by shareholders investing in the different classes.
* Average Annual Total Return figures (for the periods ended 9/30/05)
include the reinvestment of all dividends and distributions. "N.A.V.
Only" returns are calculated without sales charges. The Class A "S.E.C.
Standardized" returns shown are based on the maximum sales charge of
5.75% (prior to 6/17/02, the maximum sales charge was 6.25%). The Class B
"S.E.C. Standardized" returns are adjusted for the applicable deferred
sales charge (maximum of 4% in the first year). During the periods shown,
some of the expenses of the Fund were waived or assumed. If such expenses
had been paid by the Fund, the Class A "S.E.C. Standardized" Average
Annual Total Return for One Year, Five Years and Ten Years would have
been (4.08%), 3.27% and 4.26%, respectively, and the S.E.C. 30-Day Yield
for September 2005 would have been 3.11%. The Class B "S.E.C.
Standardized" Average Annual Total Return for One Year, Five Years and
Ten Years would have been (2.97%), 3.36% and 4.27%, respectively, and the
S.E.C. 30-Day Yield for September 2005 would have been 2.55%. Results
represent past performance and do not indicate future results. The graph
and the returns shown do not reflect the deduction of taxes that a
shareholder would pay on distributions or the redemption of fund shares.
Investment return and principal value of an investment will fluctuate so
that an investor's shares, when redeemed, may be worth more or less than
the original cost. Merrill Lynch GNMA Master Index figures are from
Merrill Lynch & Co. and all other figures are from First Investors
Management Company, Inc.
Portfolio of Investments
FIRST INVESTORS GOVERNMENT FUND, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
MORTGAGE-BACKED CERTIFICATES--98.8%
Fannie Mae--11.8%
$23,232M 5.5%, 4/1/2033-7/1/2034 $23,259,850 $1,180
- ----------------------------------------------------------------------------------------------------------------------
FreddieMac--2.5%
4,898M 5.5%, 2/1/2035 4,902,441 248
- ----------------------------------------------------------------------------------------------------------------------
Government National Mortgage Association
I Program--84.5%
21,506M 5%, 4/15/2034-10/15/2035 21,300,788 1,080
46,453M 5.5%, 5/15/2026-9/15/2035 46,986,118 2,383
56,986M 6%, 3/15/2031-6/15/2035 58,580,190 2,971
27,263M 6.5%, 10/15/2028-8/15/2035 28,494,997 1,445
6,142M 7%, 4/15/2032-4/15/2034 6,480,000 329
4,483M 7.5%, 7/15/2023-6/15/2034 4,768,076 242
- ----------------------------------------------------------------------------------------------------------------------
166,610,169 8,450
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Mortgage-Backed Certificates
(cost $196,231,574) 194,772,460 9,878
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT
OBLIGATIONS--.6%
1,300M U.S. Treasury Bills, 3.09%, 10/6/05 (cost $1,299,441) 1,299,441 66
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $197,531,015) 99.4% 196,071,901 9,944
Other Assets, Less Liabilities .6 1,106,611 56
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $197,178,512 $10,000
======================================================================================================================
See notes to financial statements
Portfolio Manager's Letter
FIRST INVESTORS INVESTMENT GRADE FUND
Dear Investor:
This is the annual report for the First Investors Investment Grade Fund for
the fiscal year ended September 30, 2005. During the period, the Fund's
return on a net asset value basis was 1.7% for Class A shares and 1.0% for
Class B shares, including dividends of 52.0 cents per share on Class A
shares and 44.8 cents per share on Class B shares.
The most important drivers of the Fund's performance during the reporting
period were a narrowing of credit spreads between corporate and government
bonds, as well as a flattening of the yield curve.
Nonetheless, the corporate bond market had a volatile year, as GM and Ford
were downgraded by the ratings agencies to below investment grade. Benchmark
interest rates, as represented by the 10-year U.S. Treasury note, rose by
only .21% to end September at 4.33%. In the end, corporate bonds in general
outperformed similar maturity Treasury bonds. This can be attributed to a
corresponding narrowing of credit quality spreads between corporate and
government bonds.
The Fund anticipated that longer-term interest rates would rise in response
to the Federal Reserve's continued tightening of short-term rates and lead
to market depreciation of longer-term securities. Accordingly, it reduced
its holdings in these securities. But, even though short-term rates rose
steadily, as expected, longer-term interest rates rose only slightly. The
Fund was thus unable to capitalize as much as it might have from the
resulting relatively strong performance of longer-term bonds.
Thank you for placing your trust in First Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ GEORGE V. GANTER
George V. Ganter
Vice President
and Portfolio Manager
October 31, 2005
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 2 for a detailed explanation of the information
presented in these examples.
- ----------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(4/1/05) (9/30/05) (4/1/05-9/30/05)*
- ----------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,017.78 $5.56
Hypothetical
(5% annual return before expenses) $1,000.00 $1,019.55 $5.57
- ----------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,014.15 $9.34
Hypothetical
(5% annual return before expenses) $1,000.00 $1,015.79 $9.35
- ----------------------------------------------------------------------------------------------
* 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 183/365 (to reflect the one-half year period). Expenses paid during the period are
net of expenses waived.
Portfolio Composition
TOP TEN SECTORS
(BAR CHART DATA:)
Financials 24.3%
Consumer Staples 17.5%
Industrials 11.7%
Utilities 10.8%
Consumer Discretionary 8.0%
Materials 6.5%
U.S. Government Agency Obligations 5.8%
U.S. Government Obligligations 5.5%
Telecommunication Services 3.1%
Health Care 2.5%
Portfolio holdings and allocations are subject to change. Percentages are as
of September 30, 2005, and are based on the total value of investments.
Cumulative Performance Information
FIRST INVESTORS INVESTMENT GRADE FUND
Comparison of change in value of $10,000 investment in the First Investors
Investment Grade Fund (Class A shares), the Lehman Brothers U.S. Credit
Index and the Merrill Lynch U.S. Corporate Master Index.+
First Investors Investment Grade Fund
Graph Plot Points
for the periods Ended 9/30/05
Investment Lehman Merrill Lynch
Grade U.S. Credit U.S. Corporate
Fund Index Master Index
Dec-95 $ 9,425 $10,000 $10,000
Dec-96 9,651 10,328 10,339
Dec-97 10,533 11,385 11,413
Sep-98 11,407 12,287 12,290
Sep-99 11,154 12,115 12,163
Sep-00 11,715 12,821 12,855
Sep-01 12,996 14,501 14,597
Sep-02 13,839 15,689 15,704
Sep-03 15,076 17,332 17,437
Sep-04 15,615 18,102 18,250
Sep-05 15,880 18,598 18,775
(INSET BOX IN CHART READS:)
Average Annual Total Returns*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 1.70% (4.18%)
Five Years 6.27% 5.02%
Ten Years 5.81% 5.19%
S.E.C. 30-Day Yield 3.78%
Class B Shares
One Year 0.97% (3.03%)
Five Years 5.48% 5.15%
Ten Years 5.20% 5.20%
S.E.C. 30-Day Yield 3.26%
The graph compares a $10,000 investment in the First Investors Investment
Grade Fund (Class A shares) beginning 12/31/95 with theoretical investments
in the Lehman Brothers U.S. Credit Index and the Merrill Lynch U.S.
Corporate Master Index (the "Indices"). The Indices include publicly issued,
fixed-rate, nonconvertible investment grade dollar-denominated,
S.E.C.-registered corporate debt. All issues have at least one year to
maturity and an outstanding par value of at least $250 million. It is not
possible to invest directly in these Indices. In addition, the Indices do
not take into account fees and expenses that an investor would incur in
purchasing securities in these Indices. For purposes of the graph and the
accompanying table, unless otherwise indicated, it has been assumed that the
maximum sales charge was deducted from the initial $10,000 investment in the
Fund and all dividends and distributions were reinvested. Class B shares
performance may be greater than or less than that shown in the line graph
above for Class A shares based on differences in sales loads and fees paid
by shareholders investing in the different classes.
* Average Annual Total Return figures (for the periods ended 9/30/05)
include the reinvestment of all dividends and distributions. "N.A.V. Only"
returns are calculated without sales charges. The Class A "S.E.C.
Standardized" returns shown are based on the maximum sales charge of 5.75%
(prior to 6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C.
Standardized" returns are adjusted for the applicable deferred sales charge
(maximum of 4% in the first year). During the periods shown, some of the
expenses of the Fund were waived or assumed. If such expenses had been paid
by the Fund, the Class A "S.E.C. Standardized" Average Annual Total Return
for One Year, Five Years and Ten Years would have been (4.37%), 4.82% and
4.92%, respectively, and the S.E.C. 30-Day Yield for September 2005 would
have been 3.49%. The Class B "S.E.C. Standardized" Average Annual Total
Return for One Year, Five Years and Ten Years would have been (3.23%), 4.92%
and 4.93%, respectively, and the S.E.C. 30-Day Yield for September 2005
would have been 2.95%. Results represent past performance and do not
indicate future results.The graph and the returns shown do not reflect the
deduction of taxes that a shareholder would pay on distributions or the
redemption of fund shares. Investment return and principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost. Lehman Brothers U.S. Credit
Index figures are from Lehman Brothers, Inc., Merrill Lynch U.S. Corporate
Master Index figures are from Merrill Lynch & Co. and all other figures are
from First Investors Management Company, Inc.
+ We have added a comparison to the Merrill Lynch U.S. Corporate Master
Index because that Index is more readily available to the Fund. After this
year, we will not show a comparison to the Lehman Brothers U.S. Credit
Index.
Portfolio of Investments
FIRST INVESTORS INVESTMENT GRADE FUND
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS--81.0%
Aerospace/Defense--1.7%
Honeywell International, Inc.:
$1,500M 7.5%, 2010 $1,670,650 $72
975M 6.125%, 2011 1,041,864 45
400M Precision Castparts Corp., 5.6%, 2013 407,992 18
717M TRW, Inc., 7.125%, 2009 771,358 33
- ----------------------------------------------------------------------------------------------------------------------
3,891,864 168
- ----------------------------------------------------------------------------------------------------------------------
Automotive--1.5%
2,000M DaimlerChrysler NA Holdings Corp., 8%, 2010 2,216,784 96
886M Ford Motor Co., 8.9%, 2032 750,885 32
500M Lear Corp., 8.11%, 2009 497,643 21
- ----------------------------------------------------------------------------------------------------------------------
3,465,312 149
- ----------------------------------------------------------------------------------------------------------------------
Chemicals--.3%
700M Lubrizol Corp., 7.25%, 2025 794,514 34
- ----------------------------------------------------------------------------------------------------------------------
Consumer Durables--.7%
1,650M Black & Decker Corp., 4.75%, 2014 1,598,513 69
- ----------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--4.0%
2,250M Avon Products, Inc., 4.2%, 2018 2,066,398 89
1,800M Colgate-Palmolive Co., 7.84%, 2007 1,892,806 82
1,600M Newell Rubbermaid, Inc., 6.75%, 2012 1,716,290 74
1,350M Procter & Gamble Co., 4.85%, 2015 1,352,155 58
775M Rubbermaid, Inc., 6.6%, 2006 792,080 34
1,415M Unilever Capital Corp., 6.875%, 2005 1,418,117 61
- ----------------------------------------------------------------------------------------------------------------------
9,237,846 398
- ----------------------------------------------------------------------------------------------------------------------
Energy--1.1%
500M Mobil Corp., 8.625%, 2021 704,394 30
975M Sunoco, Inc., 9.375%, 2016 1,004,191 43
800M Texaco Capital, Inc., 8.25%, 2006 822,578 36
- ----------------------------------------------------------------------------------------------------------------------
2,531,163 109
- ----------------------------------------------------------------------------------------------------------------------
Financial--5.7%
875M American General Finance Corp., 8.125%, 2009 971,505 42
300M Caterpillar Financial Services Corp., 4.6%, 2014 294,727 13
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Financial (continued)
CIT Group, Inc.:
$300M 6.875%, 2009 $323,045 $14
1,900M 7.75%, 2012 2,180,854 94
ERAC USA Finance Enterprise Co.:
1,775M 7.35%, 2008 + 1,882,616 81
1,170M 8%, 2011 + 1,322,175 57
General Electric Capital Corp.:
850M 7.875%, 2006 881,142 38
700M 8.5%, 2008 768,646 33
1,000M 5.45%, 2013 1,036,798 45
1,550M General Motors Acceptance Corp., 7.75%, 2010 1,503,767 65
1,825M Household Finance Corp., 6.5%, 2008 1,917,741 83
- ----------------------------------------------------------------------------------------------------------------------
13,083,016 565
- ----------------------------------------------------------------------------------------------------------------------
Financial Services--11.0%
Bank of America Corp.:
1,017M 7.8%, 2010 1,136,129 49
200M 7.4%, 2011 223,599 10
Bank One Corp.:
1,165M 7.6%, 2007 1,215,808 52
700M 7.875%, 2010 791,485 34
700M Chase Manhattan Corp., 7.875%, 2010 785,848 34
1,750M Comerica, 7.125%, 2013 1,863,622 80
1,200M First Union National Bank, 7.8%, 2010 1,363,178 59
1,000M Fleet Capital Trust II, 7.92%, 2026 1,070,470 46
1,500M Florida Windstorm Underwriting Assoc.,
7.125%, 2019 + 1,752,858 76
1,200M Greenpoint Bank, 9.25%, 2010 1,427,075 62
775M Huntington National Bank, 8%, 2010 869,920 38
795M Manufacturers & Traders Trust Co., 8%, 2010 913,679 39
1,875M MetLife, Inc., 5%, 2015 1,854,330 80
1,200M National City Bank of Pennsylvania,
7.25%, 2011 1,346,051 58
1,450M Nationsbank Corp., 7.8%, 2016 1,768,508 76
288M NBD Bancorp, Inc., 7.125%, 2007 298,752 13
1,298M Republic NY Corp., 7.75%, 2009 1,424,010 61
1,600M Royal Bank of Scotland Group PLC, 5%, 2014 1,612,077 70
U.S. Bank NA:
600M 4.95%, 2014 601,723 26
900M 6.3%, 2014 984,771 43
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Financial Services (continued)
Washington Mutual, Inc.:
$1,825M 8.25%, 2010 $2,049,939 $88
250M 4.625%, 2014 239,654 10
- ----------------------------------------------------------------------------------------------------------------------
25,593,486 1,104
- ----------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--3.6%
910M Bottling Group, LLC Series "B", 5%, 2013 925,427 40
Coca-Cola Enterprises, Inc.:
1,050M 7.125%, 2009 1,145,749 50
1,355M 7.125%, 2017 1,588,980 69
1,745M Conagra Foods, Inc., 6.75%, 2011 1,878,648 81
700M Hershey Foods Corp., 6.7%, 2005 700,000 30
1,000M Pepsi Bottling Group, Inc., 7%, 2029 1,214,892 52
900M Philip Morris Companies, Inc., 6.95%, 2006 913,687 39
- ----------------------------------------------------------------------------------------------------------------------
8,367,383 361
- ----------------------------------------------------------------------------------------------------------------------
Food/Drug--3.1%
2,000M CVS Corp., 4.875%, 2014 1,961,614 85
1,550M Delhaize America, Inc., 8.125%, 2011 1,687,659 73
1,600M Kroger Co., 7%, 2018 1,755,342 76
Safeway, Inc.:
510M 7%, 2007 529,183 23
450M 9.3%, 2007 471,656 20
700M 6.5%, 2011 731,004 31
- ----------------------------------------------------------------------------------------------------------------------
7,136,458 308
- ----------------------------------------------------------------------------------------------------------------------
Forest Products/Containers--2.4%
1,690M International Paper Co., 6.75%, 2011 1,813,490 78
1,725M Sappi Papier Holding AG, 6.75%, 2012 + 1,756,961 76
Weyerhaeuser Co.:
1,100M 7.25%, 2013 1,215,456 52
610M 7.5%, 2013 682,952 30
- ----------------------------------------------------------------------------------------------------------------------
5,468,859 236
- ----------------------------------------------------------------------------------------------------------------------
Gaming/Leisure--.7%
750M MGM Mirage, Inc., 8.5%, 2010 819,375 35
750M Park Place Entertainment Corp., 9.375%, 2007 793,125 34
- ----------------------------------------------------------------------------------------------------------------------
1,612,500 69
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Health Care--2.4%
$1,880M Becton, Dickinson & Co., 7.15%, 2009 $2,051,101 $88
900M Columbia/HCA Healthcare, Inc., 7.5%, 2023 898,269 39
1,130M Tenet Healthcare Corp., 6.375%, 2011 1,059,375 46
1,500M Wyeth, 6.95%, 2011 1,649,605 71
- ----------------------------------------------------------------------------------------------------------------------
5,658,350 244
- ----------------------------------------------------------------------------------------------------------------------
Information Technology--.1%
250M First Data Corp., 4.7%, 2013 245,369 11
- ----------------------------------------------------------------------------------------------------------------------
Manufacturing--2.4%
Ingersoll-Rand Co.:
875M 9%, 2021 1,217,578 53
1,600M 4.75%, 2015 1,576,293 68
United Technologies Corp.:
900M 6.5%, 2009 958,470 41
1,600M 7.125%, 2010 1,777,915 77
- ----------------------------------------------------------------------------------------------------------------------
5,530,256 239
- ----------------------------------------------------------------------------------------------------------------------
Media-Broadcasting--2.5%
Comcast Cable Communications, Inc.:
1,300M 8.375%, 2007 1,372,125 59
2,000M 7.125%, 2013 2,228,908 96
Cox Communications, Inc.:
400M 4.625%, 2013 379,099 16
1,000M 5.5%, 2015 995,819 43
700M PanAmSat Corp., 6.375%, 2008 710,500 31
- ----------------------------------------------------------------------------------------------------------------------
5,686,451 245
- ----------------------------------------------------------------------------------------------------------------------
Media-Diversified--4.8%
1,575M AOL Time Warner, Inc., 6.875%, 2012 1,723,587 74
1,480M Cox Enterprises, Inc., 8%, 2007 + 1,536,910 66
500M Houghton Mifflin Co., 7.2%, 2011 519,375 22
New York Times Co.:
500M 6.95%, 2009 540,856 23
1,900M 5%, 2015 1,890,762 82
News America, Inc.:
500M 5.3%, 2014 499,827 22
1,600M 7.3%, 2028 1,781,338 77
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Media-Diversified (continued)
$1,500M Time Warner, Inc., 6.875%, 2018 $1,658,546 $71
Viacom, Inc.:
500M 8.625%, 2012 579,744 25
360M 8.875%, 2014 430,524 19
- ----------------------------------------------------------------------------------------------------------------------
11,161,469 481
- ----------------------------------------------------------------------------------------------------------------------
Metals/Mining--3.7%
Alcan, Inc.:
2,200M 4.5%, 2013 2,126,087 92
425M 5%, 2015 418,740 18
1,300M Alcoa, Inc., 6%, 2012 1,377,325 59
1,112M Hanson Australia Funding, Ltd., 5.25%, 2013 1,111,760 48
1,846M Hanson PLC, 7.875%, 2010 2,071,345 89
1,350M Thiokol Corp., 6.625%, 2008 1,408,177 61
- ----------------------------------------------------------------------------------------------------------------------
8,513,434 367
- ----------------------------------------------------------------------------------------------------------------------
Real Estate Investment Trusts--6.5%
1,654M Archstone-Smith Trust, 7.9%, 2016 1,898,751 82
AvalonBay Communities, Inc.:
1,900M 7.5%, 2010 2,118,293 91
200M 6.625%, 2011 215,555 9
1,800M Boston Properties, Inc., 5%, 2015 1,758,798 76
Duke Weeks Realty Corp.:
1,350M 7.75%, 2009 1,485,389 64
200M 4.625%, 2013 192,220 8
EOP Operating LP:
1,705M 8.1%, 2010 1,915,225 83
625M 7.25%, 2018 714,822 31
1,900M Mack-Cali Realty LP, 7.75%, 2011 2,127,333 92
Simon Property Group, Inc.:
1,875M 7.875%, 2016 + 2,218,954 96
425M 7.375%, 2018 491,910 21
- ----------------------------------------------------------------------------------------------------------------------
15,137,250 653
- ----------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--4.1%
1,750M Federated Department Stores, Inc., 7.45%, 2017 2,007,463 86
900M Lowe's Companies, Inc., 8.25%, 2010 1,036,111 45
1,675M RadioShack Corp., 7.375%, 2011 1,804,668 78
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise (continued)
Target Corp.:
$190M 5.375%, 2009 $194,529 $8
1,620M 7.5%, 2010 1,816,563 78
Wal-Mart Stores, Inc.:
850M 8%, 2006 874,866 38
1,800M 4.125%, 2011 1,752,964 76
100M 4.5%, 2015 96,941 4
- ----------------------------------------------------------------------------------------------------------------------
9,584,105 413
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--3.0%
1,200M Deutsche Telekom AG, 8.5%, 2010 1,361,818 59
GTE Corp.:
909M 6.84%, 2018 1,013,580 44
500M 7.9%, 2027 533,598 23
Sprint Capital Corp.:
1,325M 6.375%, 2009 1,392,303 60
900M 6.9%, 2019 1,009,871 43
800M Verizon New York, Inc., 6.875%, 2012 856,961 37
750M Vodafone AirTouch PLC, 7.75%, 2010 837,345 36
- ----------------------------------------------------------------------------------------------------------------------
7,005,476 302
- ----------------------------------------------------------------------------------------------------------------------
Transportation--3.8%
Burlington Northern Santa Fe Corp.:
1,125M 7.125%, 2010 1,245,341 54
700M 6.75%, 2011 762,705 33
1,000M 8.125%, 2020 1,271,320 55
600M Caliber System, Inc., 7.8%, 2006 613,568 27
850M Canadian National Railway Co., 7.375%, 2031 1,072,779 46
650M FedEx Corp., 3.5%, 2009 625,065 27
800M Norfolk Southern Corp., 7.7%, 2017 973,809 42
1,700M Union Pacific Corp., 7.375%, 2009 1,856,981 80
300M Union Pacific Railroad, 7.28%, 2011 334,270 14
- ----------------------------------------------------------------------------------------------------------------------
8,755,838 378
- ----------------------------------------------------------------------------------------------------------------------
Utilities--10.6%
700M Arizona Public Service Co., 5.5%, 2035 685,480 30
1,350M Carolina Power & Light, Inc., 5.15%, 2015 1,354,717 58
500M Cogentrix Energy, Inc., 8.75%, 2008 + 560,202 24
700M Columbia Energy Group, 6.8%, 2005 702,625 30
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Utilities (continued)
Consumers Energy Co.:
$735M 6.375%, 2008 $760,025 $33
1,800M 6.875%, 2018 2,037,157 88
1,450M Dominion Resources, Inc., 5%, 2013 1,431,978 62
720M DPL, Inc., 6.875%, 2011 779,400 34
1,650M Duke Capital Corp., 8%, 2019 2,007,938 87
1,371M Eastern Energy, Ltd., 6.75%, 2006 + 1,403,273 61
795M El Paso Energy Corp., 7.375%, 2012 802,950 35
500M Entergy Gulf States, Inc., 6.2%, 2033 469,207 20
1,325M Jersey Central Power & Light, 5.625%, 2016 1,375,432 59
700M Michigan Consolidated Gas Co., 7.06%, 2012 783,927 34
547M Niagara Mohawk Holdings, Inc., 7.625%, 2005 546,659 24
Nisource Finance Corp.:
1,200M 7.875%, 2010 1,350,583 58
600M 5.4%, 2014 605,099 26
1,400M OGE Energy Corporation, 5%, 2014 1,374,335 59
1,350M PP&L Capital Funding, Inc., 8.375%, 2007 1,426,263 61
775M PSI Energy, Inc., 8.85%, 2022 1,047,279 45
1,510M Public Service Electric & Gas Co., 6.75%, 2016 1,712,725 74
400M South Carolina Electric & Gas Co., 6.7%, 2011 437,270 19
900M Wisconsin Power & Light Co., 7%, 2007 931,619 40
- ----------------------------------------------------------------------------------------------------------------------
24,586,143 1,061
- ----------------------------------------------------------------------------------------------------------------------
Waste Management--1.3%
Allied Waste NA, Inc.:
750M 8.875%, 2008 785,625 34
500M 5.75%, 2011 468,750 20
Waste Management, Inc.:
1,400M 6.875%, 2009 1,490,756 65
300M 7.375%, 2010 330,234 14
- ----------------------------------------------------------------------------------------------------------------------
3,075,365 133
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $183,304,944) 187,720,420 8,097
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS INVESTMENT GRADE FUND
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS--5.7%
Fannie Mae:
$1,600M 6.125%, 2012 $1,739,328 $75
1,287M 5%, 2016 1,262,138 54
2,000M 5%, 2017 1,963,356 85
Federal Home Loan Bank:
1,900M 4.91%, 2012 1,878,606 81
1,000M 7.23%, 2015 1,124,996 48
Freddie Mac:
1,400M 4.6%, 2018 1,345,978 58
900M 5%, 2018 875,237 38
Tennessee Valley Authority:
1,300M 5.375%, 2008 1,336,204 58
1,400M 6.25%, 2017 1,592,158 69
- ----------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Agency Obligations
(cost $13,146,449) 13,118,001 566
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--5.4%
U.S. Treasury Notes:
1,800M 5.875%, 2005 1,805,344 78
3,500M 6.625%, 2007 3,636,857 157
2,100M 5.625%, 2008 2,174,731 94
1,300M 6%, 2009 1,382,927 59
3,300M 6.5%, 2010 3,596,743 155
- ----------------------------------------------------------------------------------------------------------------------
Total Value of U.S. Government Obligations (cost $12,794,974) 12,596,602 543
- ----------------------------------------------------------------------------------------------------------------------
PASS THROUGH CERTIFICATES--2.9%
Real Estate--.6%
1,244M FDA Queens LP, 6.99%, 2017 + 1,382,707 60
- ----------------------------------------------------------------------------------------------------------------------
Transportation--2.3%
647M American Airlines, Inc., 7.377%, 2019 458,477 20
446M Canadian National Railway Co., 7.195%, 2016 517,356 22
1,498M Continental Airlines, Inc., 8.388%, 2020 1,294,028 56
1,354M FedEx Corp., 7.5%, 2018 1,530,845 66
691M Northwest Airlines, Inc., 8.072%, 2019 693,395 30
825M Southwest Airlines Co., 6.126%, 2006 832,549 36
- ----------------------------------------------------------------------------------------------------------------------
5,326,650 230
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Pass Through Certificates (cost $7,110,079) 6,709,357 290
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
MUNICIPAL BONDS--.7%
Housing
Virginia State Housing Development Authority:
$800M Series "A", 6.51%, 2019 $844,168 $36
710M Series "M", 7%, 2022 770,194 34
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Municipal Bonds (cost $1,466,067) 1,614,362 70
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--2.0%
500M ChevronTexaco Corp., 3.7%, 10/4/05 499,846 22
General Electric Capital Corp.:
2,500M 3.72%, 11/1/05 2,491,987 107
1,000M 3.58%, 11/1/05 996,783 43
750M Prudential Funding Corp., 3.6%, 10/6/05 749,624 32
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $4,738,240) 4,738,240 204
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT AGENCY
OBLIGATIONS--.4%
1,000M Freddie Mac, 3.5%, 10/4/05 (cost $999,708) 999,708 43
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $223,560,461) 98.1% 227,496,690 9,813
Other Assets, Less Liabilities 1.9 4,331,256 187
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $231,827,946 $10,000
======================================================================================================================
+ Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4)
See notes to financial statements
Portfolio Managers' Letter
FIRST INVESTORS FUND FOR INCOME, INC.
Dear Investor:
This is the annual report for the First Investors Fund For Income for the
fiscal year ended September 30, 2005. During the period, the Fund's return
on a net asset value basis was 3.8% for Class A shares and 2.7% for Class B
shares, including dividends of 22.8 cents per share on Class A shares and
20.4 cents per share on Class B shares.
The two most important factors driving the Fund's performance during the
reporting period were the overall performance of the high yield market, and
the bankruptcy of auto parts maker Collins & Aikman, a large position in the
Fund.
After posting strong returns for the past two fiscal years and continuing
into the first fiscal quarter this year, the tide turned for the high yield
bond sector. After the lengthy run-up, high yield valuations reached a point
at which they were due for a correction, which has occurred over the past
three quarters. Compounding the correction was the poor performance of the
Treasury market. Economic and credit trends generally remained favorable,
but investors worried about the credit cycle following the downgrades by the
ratings agencies of GM and Ford and the high profile bankruptcies of Delta
Air Lines, Northwest Airlines and Delphi Corporation.
The most significant negative contributor to the Fund's performance was the
investment in Collins & Aikman, which filed for bankruptcy. A top performer
last year, Collins & Aikman faced a liquidity crisis after its primary
customers GM and Ford were downgraded to high yield. Additionally hurting
performance were several companies that failed to meet expectations. Delco
Remy, also an auto parts supplier, suffered from difficulties in integrating
an acquisition and from general weakness in the auto sector. Adelphia
Communications traded off with the cable sector on concerns about increased
competition from telecommunication providers. Merisant, a manufacturer and
marketer of tabletop sweetener products, performed poorly as its Equal
sweetener product continued to lose market share to Splenda.
Aiding the Fund's performance were investments in special situations and the
continued overweight of the chemical and energy sectors in anticipation of
continued strong cyclical results. Special situations included investments
in Charter Communications, which benefited from a debt exchange and Land
O'Lakes, which is expected to use proceeds from an IPO of an investment to
reduce debt. Chemical suppliers Texas Petrochemicals and Resolution
Performance Products posted strong results as the chemical cycle moves
towards a peak. High oil and natural gas prices aided the performance of El
Paso Production Holdings, an exploration and production company.
Thank you for placing your trust in First Investors. As always, we
appreciate the opportunity to serve your investment needs.
Sincerely,
/s/ RICHARD T. BOURKE
Richard T. Bourke
Co-Portfolio Manager
/s/ GREG MILLER
Greg Miller
Co-Portfolio Manager
October 31, 2005
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 2 for a detailed explanation of the information
presented in these examples.
- -----------------------------------------------------------------------------------------------------------------
Beginning Ending
Account Account Expenses Paid
Value Value During Period
(4/1/05) (9/30/05) (4/1/05-9/30/05)*
- -----------------------------------------------------------------------------------------------------------------
Expense Example - Class A Shares
Actual $1,000.00 $1,021.01 $6.74
Hypothetical
(5% annual return before expenses) $1,000.00 $1,018.40 $6.73
- -----------------------------------------------------------------------------------------------------------------
Expense Example - Class B Shares
Actual $1,000.00 $1,013.80 $10.25
Hypothetical
(5% annual return before expenses) $1,000.00 $1,014.89 $10.25
- -----------------------------------------------------------------------------------------------------------------
* Expenses are equal to the annualized expense ratio of 1.33% for Class A shares and 2.03% for Class B shares,
multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year
period).
Portfolio Composition
TOP TEN SECTORS
(BAR CHART DATA:)
Consumer Staples 23.3%
Consumer Discretionary 22.3%
Materials 13.3%
Energy 8.8%
Health Care 8.3%
Industrials 8.1%
Financials 3.5%
Telecommunication Services 3.4%
US Government Obligations 0.8%
Information Technology 0.3%
Portfolio holdings and allocations are subject to change. Percentages are as
of September 30, 2005, and are based on the total value of investments.
Cumulative Performance Information
FIRST INVESTORS FUND FOR INCOME, INC.
Comparison of change in value of $10,000 investment in the First Investors
Fund For Income, Inc. (Class A shares) and the CS First Boston High Yield
Index II.
First Investors Fund For Income
Graph Plot Points
for the periods Ended 9/30/05
Income CSFB
Fund Index
Dec-95 $ 9,425 $10,000
Dec-96 10,693 11,303
Dec-97 12,043 12,683
Sep-98 12,101 12,380
Sep-99 12,480 12,935
Sep-00 12,787 13,125
Sep-01 11,483 12,522
Sep-02 11,308 12,879
Sep-03 14,224 16,492
Sep-04 15,938 18,689
Sep-05 16,542 19,868
(INSET BOX IN CHART READS:)
Average Annual Total Returns*
Class A Shares N.A.V. Only S.E.C. Standardized
One Year 3.79% (2.06%)
Five Years 5.28% 4.05%
Ten Years 6.17% 5.54%
S.E.C. 30-Day Yield 6.65%
Class B Shares
One Year 2.68% (1.32%)
Five Years 4.54% 4.20%
Ten Years 5.68% 5.68%
S.E.C. 30-Day Yield 6.36%
The graph compares a $10,000 investment in the First Investors Fund For
Income, Inc. (Class A shares) beginning 12/31/95 with a theoretical
investment in the CS First Boston High Yield Index II (the "Index"). The
Index is designed to measure the performance of the high yield bond market.
As of 9/30/05, the Index consisted of 1,468 different issues, most of which
were cash pay, but also included in the Index were zero-coupon bonds, step
bonds, payment-in-kind bonds and bonds which were in default. As of 9/30/05,
approximately 3.10% of the market value of the Index was in default. The
bonds included in the Index had an average maturity of 7.7 years, an average
duration of 4.3 years and an average coupon of 8.52%. It is not possible to
invest directly in this Index. In addition, the Index does not take into
account fees and expenses that an investor would incur in purchasing
securities in the Index. For purposes of the graph and the accompanying
table, unless otherwise indicated, it has been assumed that the maximum
sales charge was deducted from the initial $10,000 investment in the Fund
and all dividends and distributions were reinvested. Class B shares
performance may be greater than or less than that shown in the line graph
above for Class A shares based on differences in sales loads and fees paid
by shareholders investing in the different classes.
* Average Annual Total Return figures (for the periods ended 9/30/05) include
the reinvestment of all dividends and distributions. "N.A.V. Only" returns
are calculated without sales charges. The Class A "S.E.C. Standardized"
returns shown are based on the maximum sales charge of 5.75% (prior to
6/17/02, the maximum sales charge was 6.25%). The Class B "S.E.C.
Standardized" returns are adjusted for the applicable deferred sales
charge (maximum of 4% in the first year). Results represent past
performance and do not indicate future results.The graph and the returns
shown do not reflect the deduction of taxes that a shareholder would pay
on distributions or the redemption of fund shares. Investment return and
principal value of an investment will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than the original cost.
The issuers of the high yield bonds, in which the Fund primarily invests,
pay higher interest rates because they have a greater likelihood of
financial difficulty, which could result in their inability to repay the
bonds fully when due. Prices of high yield bonds are also subject to
greater fluctuations. CS First Boston High Yield Index II figures are from
CS First Boston Corporation and all other figures are from First Investors
Management Company, Inc.
Portfolio of Investments
FIRST INVESTORS FUND FOR INCOME, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS--89.0%
Aerospace/Defense--3.1%
$3,450M Alliant Techsystems, Inc., 8.5%, 2011 $3,648,375 $60
5,250M DRS Technologies, Inc., 6.875%, 2013 5,092,500 84
6,000M Dyncorp International, 9.5%, 2013 + 6,300,000 104
1,747M GenCorp, Inc., 9.5%, 2013 1,923,884 31
1,600M L-3 Communications Corp., 7.625%, 2012 1,688,000 28
- ----------------------------------------------------------------------------------------------------------------------
18,652,759 307
- ----------------------------------------------------------------------------------------------------------------------
Automotive--6.2%
2,700M Accuride Corp., 8.5%, 2015 2,659,500 44
Asbury Automotive Group, Inc.:
3,400M 9%, 2012 3,434,000 57
5,400M 8%, 2014 5,157,000 85
4,208M Cambridge Industries Liquidating Trust, 2007 ++ ** 42,084 1
3,750M Collins & Aikman Products Co., 10.75%, 2011 ++ 1,668,750 27
5,450M Dana Corp., 9%, 2011 5,540,377 91
Delco Remy International, Inc.:
5,800M 11%, 2009 3,799,000 63
3,250M 9.375%, 2012 1,836,250 30
2,000M Navistar International Corp., 6.25%, 2012 1,910,000 31
2,500M Special Devices, Inc., 11.375%, 2008 2,187,500 36
500M Tenneco Automotive, Inc., 8.625%, 2014 506,250 8
4,693M TRW Automotive, Inc., 9.375%, 2013 5,115,370 84
3,600M United Components, Inc., 9.375%, 2013 3,600,000 59
- ----------------------------------------------------------------------------------------------------------------------
37,456,081 616
- ----------------------------------------------------------------------------------------------------------------------
Chemicals--11.1%
1,940M BCP Crystal US Holdings Corp., 9.625%, 2014 2,167,950 36
3,500M Equistar Chemicals LP, 10.625%, 2011 3,832,500 63
2,200M Ethyl Corp., 8.875%, 2010 2,318,250 38
6,550M Huntsman International, LLC, 7.375%, 2015 + 6,304,375 104
Huntsman, LLC:
1,636M 11.625%, 2010 1,877,310 31
2,765M 11.5%, 2012 3,172,838 52
7,000M IMC Global, Inc., 10.875%, 2013 8,295,000 137
Lyondell Chemical Co.:
1,000M 9.625%, 2007 1,055,000 17
8,000M 10.875%, 2009 8,280,000 136
4,375M Millennium America, Inc., 9.25%, 2008 4,725,000 78
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Chemicals (continued)
$4,900M Omnova Solutions, Inc., 11.25%, 2010 $5,267,500 $87
1,000M PQ Corp., 7.5%, 2013 + 975,000 16
8,150M Resolution Performance Products, LLC,
13.5%, 2010 8,700,125 143
2,250M Southern States Cooperative, Inc., 10.5%, 2010 + 2,373,750 39
5,526M Terra Capital, Inc., 11.5%, 2010 6,354,900 105
622M Texas Petrochemicals Corp., 7.25%, 2009 1,309,310 22
592M Westlake Chemical Corp., 8.75%, 2011 640,840 10
- ----------------------------------------------------------------------------------------------------------------------
67,649,648 1,114
- ----------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--3.9%
1,700M Broder Brothers Co., 11.25%, 2010 1,691,500 28
4,000M GFSI, Inc., 9.625%, 2007 3,660,000 60
Levi Strauss & Co.:
4,600M 8.254%, 2012 *** 4,611,500 76
4,000M 9.75%, 2015 4,100,000 67
7,200M Playtex Products, Inc., 9.375%, 2011 7,551,000 125
2,500M Remington Arms Co., 10.5%, 2011 2,387,500 39
- ----------------------------------------------------------------------------------------------------------------------
24,001,500 395
- ----------------------------------------------------------------------------------------------------------------------
Energy--8.7%
7,000M Bluewater Finance, Ltd., 10.25%, 2012 7,630,000 126
Chesapeake Energy Corp.:
1,800M 7.5%, 2014 1,930,500 32
4,350M 6.625%, 2016 4,426,125 73
750M Compagnie Generale de Geophysique,
7.5%, 2015 + 783,750 13
4,250M Delta Petroleum Corp., 7%, 2015 4,080,000 67
4,075M Dresser, Inc., 9.375%, 2011 4,319,500 71
13,750M El Paso Production Holding Co., 7.75%, 2013 14,437,500 238
1,800M Energy Partners, Ltd., 8.75%, 2010 1,890,000 31
Giant Industries, Inc.:
5,493M 11%, 2012 6,207,090 102
4,150M 8%, 2014 4,357,500 72
1,000M Hanover Compressor Co. Zero Coupon,
2007 (effective yield 11.37%) ## 905,000 15
250M Hornbeck Offshore Services, Inc., 6.125%, 2014 249,375 4
1,750M Tesoro Petroleum Corp., 9.625%, 2008 1,840,563 30
- ----------------------------------------------------------------------------------------------------------------------
53,056,903 874
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Financial Services--1.8%
$8,613M Dow Jones CDX, High Yield, Trust 1, Series 4,
8.25%, 2010 + $8,569,935 $141
2,410M Targeted Return Index Securities Trust,
7.651%, 2015 + *** 2,459,038 40
- ----------------------------------------------------------------------------------------------------------------------
11,028,973 181
- ----------------------------------------------------------------------------------------------------------------------
Food/Beverage/Tobacco--2.2%
Land O'Lakes, Inc.:
1,800M 9%, 2010 1,993,500 33
7,300M 8.75%, 2011 7,683,250 125
1,800M Pierre Foods, Inc., 9.875%, 2012 1,863,000 31
Pilgrim's Pride Corp.:
1,550M 9.625%, 2011 1,674,000 28
150M 9.25%, 2013 165,750 3
- ----------------------------------------------------------------------------------------------------------------------
13,379,500 220
- ----------------------------------------------------------------------------------------------------------------------
Food/Drug--1.7%
6,250M Ingles Markets, Inc., 8.875%, 2011 6,343,750 104
3,500M Roundy's, Inc., 8.875%, 2012 3,885,000 64
- ----------------------------------------------------------------------------------------------------------------------
10,228,750 168
- ----------------------------------------------------------------------------------------------------------------------
Forest Products/Containers--1.2%
4,300M Stone Container Corp., 9.75%, 2011 4,386,000 72
Tekni-Plex, Inc.:
1,900M 12.75%, 2010 1,064,000 18
2,000M 8.75%, 2013 + 1,720,000 28
- ----------------------------------------------------------------------------------------------------------------------
7,170,000 118
- ----------------------------------------------------------------------------------------------------------------------
Gaming/Leisure--4.3%
4,250M Circus & Eldorado/Silver Legacy, 10.125%, 2012 4,462,500 73
500M Herbst Gaming, Inc., 8.125%, 2012 525,000 9
1,800M Isle of Capri Casinos, Inc., 7%, 2014 1,734,750 29
2,600M Mandalay Resort Group, 6.375%, 2011 2,593,500 43
6,960M MGM Mirage, Inc., 6.625%, 2015 + 6,916,500 114
Park Place Entertainment Corp.:
3,500M 9.375%, 2007 3,701,250 61
5,000M 7%, 2013 5,430,825 89
500M Station Casinos, Inc., 6.875%, 2016 + 509,375 8
- ----------------------------------------------------------------------------------------------------------------------
25,873,700 426
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Health Care--8.3%
$450M Alliance Imaging, Inc., 7.25%, 2012 $414,000 $7
4,000M Encore Medical IHC, Inc., 9.75%, 2012 4,000,000 66
3,480M Fisher Scientific International, Inc.,
6.125%, 2015 + 3,506,100 58
4,400M Genesis Health Ventures, Inc., 9.75%, 2008 ++** 2,750 --
HCA, Inc.:
4,350M 5.25%, 2008 4,295,307 71
6,100M 6.75%, 2013 6,237,268 103
4,000M Insight Health Services Corp., 9.875%, 2011 3,250,000 52
4,500M MedQuest, Inc., 11.875%, 2012 4,770,000 79
2,800M Owens & Minor, Inc., 8.5%, 2011 2,989,000 49
3,600M PerkinElmer, Inc., 8.875%, 2013 3,960,000 65
1,725M Quintiles Transnational Corp., 10%, 2013 1,949,250 32
900M Res-Care, Inc., 7.75%, 2013 + 909,000 15
Tenet Healthcare Corp.:
12,400M 6.375%, 2011 11,625,000 191
2,250M 9.25%, 2015 + 2,283,750 38
- ----------------------------------------------------------------------------------------------------------------------
50,191,425 826
- ----------------------------------------------------------------------------------------------------------------------
Housing--4.3%
4,360M Beazer Homes USA, Inc., 6.875%, 2015 + 4,251,000 70
4,350M Builders FirstSource, Inc., 8.04%, 2012 + *** 4,415,250 73
4,050M Integrated Electrical Services, Inc., 9.375%, 2009 3,341,250 55
900M NTK Holdings, Inc., 0%-10.75%, 2014 # 508,500 8
7,700M Ply Gem Industries, Inc., 9%, 2012 6,506,500 107
William Lyon Homes, Inc.:
4,500M 7.625%, 2012 4,286,250 71
2,700M 10.75%, 2013 2,922,750 48
- ----------------------------------------------------------------------------------------------------------------------
26,231,500 432
- ----------------------------------------------------------------------------------------------------------------------
Information Technology--.3%
3,000M Exodus Communications, Inc., 10.75%, 2009 ++ ** 1,875 --
Iron Mountain, Inc.:
1,000M 8.625%, 2013 1,052,500 17
1,000M 6.625%, 2016 945,000 16
- ----------------------------------------------------------------------------------------------------------------------
1,999,375 33
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Investment/Finance Companies--1.7%
$1,508M Finova Group, Inc., 7.5%, 2009 $595,660 $10
3,400M General Motors Acceptance Corp., 4.5%, 2006 3,375,146 56
5,500M LaBranche & Co., Inc., 11%, 2012 6,105,000 100
- ----------------------------------------------------------------------------------------------------------------------
10,075,806 166
- ----------------------------------------------------------------------------------------------------------------------
Manufacturing--1.4%
500M Columbus McKinnon Corp., 10%, 2010 548,750 9
2,500M Itron, Inc., 7.75%, 2012 2,600,000 43
Wolverine Tube, Inc.:
3,500M 7.375%, 2008 + 3,027,500 50
2,500M 10.5%, 2009 2,381,250 39
- ----------------------------------------------------------------------------------------------------------------------
8,557,500 141
- ----------------------------------------------------------------------------------------------------------------------
Media-Broadcasting--3.9%
650M Block Communications, Inc., 9.25%, 2009 692,250 11
8,920M Clear Channel Communications, Inc., 5.5%, 2014 8,612,581 142
5,000M Nexstar Finance Holding, LLC, 0%-11.375%, 2013 # 3,725,000 61
450M Nexstar Finance, Inc., 7%, 2014 407,250 7
3,000M Sinclair Broadcasting Group, Inc., 8.75%, 2011 3,165,000 52
Young Broadcasting, Inc.:
2,920M 10%, 2011 2,774,000 46
4,900M 8.75%, 2014 4,373,250 72
- ----------------------------------------------------------------------------------------------------------------------
23,749,331 391
- ----------------------------------------------------------------------------------------------------------------------
Media-Cable TV--11.0%
8,745M Adelphia Communications Corp., 10.25%, 2011 ++ 6,689,925 110
6,250M Atlantic Broadband Finance, LLC, 9.375%, 2014 5,937,500 98
13,375M Cablevision Systems Corp., 8%, 2012 13,040,625 215
Charter Communications Holdings, LLC:
8,500M 10%, 2009 7,373,750 121
1,000M 10.75%, 2009 885,000 15
2,000M 10.25%, 2010 1,670,000 27
7,250M 0%-11.75%, 2011 # 5,220,000 86
2,000M 8%, 2012 + 2,025,000 33
4,625M CSC Holdings, Inc., 8.125%, 2009 4,682,813 77
8,690M Echostar DBS Corp., 6.375%, 2011 8,657,413 142
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Media-Cable TV (continued)
Mediacom LLC/Mediacom Capital Corp.:
$4,000M 7.875%, 2011 $3,800,000 $63
2,000M 9.5%, 2013 1,995,000 33
4,300M Quebecor Media, Inc., 11.125%, 2011 4,719,250 78
- ----------------------------------------------------------------------------------------------------------------------
66,696,276 1,098
- ----------------------------------------------------------------------------------------------------------------------
Media-Diversified--4.1%
5,200M Cenveo, Inc., 7.875%, 2013 5,044,000 83
1,500M R.H. Donnelley Financial Corp., 10.875%, 2012 + 1,691,250 28
Six Flags, Inc.:
2,500M 8.875%, 2010 2,487,500 41
1,800M 9.625%, 2014 1,782,000 29
9,745M Speedway Motorsports, Inc., 6.75%, 2013 10,049,531 165
3,400M Universal City Development Partners, Ltd.,
11.75%, 2010 3,859,000 64
250M Universal City Florida Holding Co., 7.96%, 2010 *** 260,625 4
- ----------------------------------------------------------------------------------------------------------------------
25,173,906 414
- ----------------------------------------------------------------------------------------------------------------------
Metals/Mining--.3%
3,000M Murrin Murrin Holdings Property, Ltd.,
9.375%, 2007 ++ ** -- --
1,740M Russell Metals, Inc., 6.375%, 2014 1,705,200 28
- ----------------------------------------------------------------------------------------------------------------------
1,705,200 28
- ----------------------------------------------------------------------------------------------------------------------
Retail-General Merchandise--2.7%
9,000M Gregg Appliances, Inc., 9%, 2013 + 8,505,000 140
1,800M GSC Holdings Corp., 7.875%, 2011 + *** 1,811,250 30
6,100M Neiman Marcus Group, Inc., 10.375%, 2015 + 6,100,000 100
- ----------------------------------------------------------------------------------------------------------------------
16,416,250 270
- ----------------------------------------------------------------------------------------------------------------------
Services--3.2%
Allied Waste NA, Inc.:
3,450M 5.75%, 2011 3,234,375 53
1,847M 9.25%, 2012 2,008,613 33
1,800M 7.875%, 2013 1,845,000 31
6,000M 7.375%, 2014 5,670,000 93
1,680M Hydrochem Industrial Services, Inc., 9.25%, 2013 + 1,572,900 26
5,000M United Rentals, Inc., 6.5%, 2012 4,850,000 80
- ----------------------------------------------------------------------------------------------------------------------
19,180,888 316
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Invested
For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
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 1,898,750 31
2,700M General Maritime Corp., 10%, 2013 2,983,500 49
500M Great Lakes Dredge & Dock Corp., 7.75%, 2013 461,250 8
1,750M Overseas Shipholding Group, Inc., 8.25%, 2013 1,890,000 31
500M Titan Petrochemicals Group, Ltd., 8.5%, 2012 + 483,750 8
- ----------------------------------------------------------------------------------------------------------------------
7,717,250 127
- ----------------------------------------------------------------------------------------------------------------------
Utilities--.2%
5,500M AES Drax Energy, Ltd., 11.5%, 2010 ++ 12,375 --
Pacific Energy Partners, LP:
1,000M 7.125%, 2014 1,042,500 17
250M 6.25%, 2015 + 251,875 4
250M Reliant Energy, Inc., 6.75%, 2014 246,875 4
- ----------------------------------------------------------------------------------------------------------------------
1,553,625 25
- ----------------------------------------------------------------------------------------------------------------------
Wireless Communications--2.1%
5,000M Nextel Communications, Inc., 5.95%, 2014 5,125,140 85
2,600M Rogers Wireless, Inc., 6.375%, 2014 2,626,000 43
6,120M Triton Communications, LLC, 9.375%, 2011 5,049,000 83
- ----------------------------------------------------------------------------------------------------------------------
12,800,140 211
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Corporate Bonds (cost $567,793,644) 540,554,485 8,897
- ----------------------------------------------------------------------------------------------------------------------
COMMON STOCKS--2.1%
Automotive--.0%
37,387 * Safelite Glass Corporation - Class "B" + ** 140,575 3
2,523 Safelite Realty Corporation ** 19,654 --
- ----------------------------------------------------------------------------------------------------------------------
160,229 3
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
Amount
Shares, Invested
Principal For Each
Amount or $10,000 of
Warrants Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Chemicals--.6%
181,689 * Texas Petrochemicals Corporation ** $3,642,864 $60
14,634 * Texas Petrochemicals Corporation ** 220,059 4
- ----------------------------------------------------------------------------------------------------------------------
3,862,923 64
- ----------------------------------------------------------------------------------------------------------------------
Consumer Non-Durables--.0%
25,200 * Worldtex, Inc. ** 252 --
- ----------------------------------------------------------------------------------------------------------------------
Food/Drug--.3%
111,700 Ingles Markets, Inc. 1,764,860 29
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--1.2%
304,197 * RCN Corporation 6,455,060 106
9,300 * RCN Corporation ** 93 --
11,620 * TelCove, Inc. + ** 639,100 11
2,533 * Viatel Holding (Bermuda), Ltd. ** 8 --
18,224 * World Access, Inc. 13 --
- ----------------------------------------------------------------------------------------------------------------------
7,094,274 117
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Common Stocks (cost $20,839,605) 12,882,538 213
- ----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS--.8%
$5,000M U.S. Treasury Notes, 7%, 2006 (cost $5,037,409) 5,110,940 84
- ----------------------------------------------------------------------------------------------------------------------
WARRANTS--.1%
Aerospace/Defense--.0%
3,000 * DeCrane Aircraft Holdings, Inc. (expiring 9/30/08) + ** 30 --
- ----------------------------------------------------------------------------------------------------------------------
Automotive--.0%
Safelite Glass Corp.:
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) ** -- --
- ----------------------------------------------------------------------------------------------------------------------
Portfolio of Investments (continued)
FIRST INVESTORS FUND FOR INCOME, INC.
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------
Amount
Warrants, Invested
Shares or For Each
Principal $10,000 of
Amount Security Value Net Assets
- ----------------------------------------------------------------------------------------------------------------------
Telecommunications--.1%
3,500 * GT Group Telecom, Inc. (expiring 2/1/10) + ** $-- $--
5,600 * Powertel, Inc. (expiring 2/1/06) ** 192,512 3
9,045 * TelCove, Inc. (expiring 4/8/08) + ** 183,885 3
- ----------------------------------------------------------------------------------------------------------------------
376,397 6
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Warrants (cost $5,310,832) 377,954 6
- ----------------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS--.0%
Consumer Non-Durables
7,714 * Worldtex, Inc., 12%, 2049 (cost $527,885) ** 77 --
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT AGENCY
OBLIGATIONS--4.0%
$6,000M Federal Home Loan Bank, 3.63%, 10/12/05 5,993,343 99
18,500M Freddie Mac, 3.5%, 10/4/05 18,494,592 304
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term U.S. Government Agency Obligations
(cost $24,487,935) 24,487,935 403
- ----------------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE NOTES--3.7%
4,000M ChevronTexaco Corp., 3.7%, 10/4/05 3,998,766 66
General Electric Capital Corp.:
1,000M 3.61%, 11/1/05 996,882 16
6,600M 3.72%, 11/1/05 6,578,836 108
2,250M 3.73%, 11/1/05 2,242,761 37
8,500M Prudential Funding Corp., 3.6%, 10/6/05 8,495,740 140
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Short-Term Corporate Notes (cost $22,312,985) 22,312,985 367
- ----------------------------------------------------------------------------------------------------------------------
Total Value of Investments (cost $646,310,295) 99.7% 605,726,914 9,970
Other Assets, Less Liabilities .3 1,834,750 30
- ----------------------------------------------------------------------------------------------------------------------
Net Assets 100.0% $607,561,664 $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 September 30, 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
Portfolio Composition (Unaudited)
FIRST INVESTORS FUND FOR INCOME, INC.
The dollar weighted average of credit ratings of all bonds held by the Fund
during the fiscal year ended September 30, 2005 and the dollar weighted
average of the total of the Fund's investments in zero coupon bonds and step
bonds during the 2005 fiscal year, computed on a monthly basis, are set
forth below. This information reflects the average composition of the Fund's
assets during the 2005 fiscal year and is not necessarily representative of
the Fund as of the end of its 2005 fiscal year, the current fiscal year or
at any other time in the future.
- ------------------------------------------------------------------
Comparable Quality of
Rated by Unrated Securities to
Moody's Bonds Rated by Moody's
- ------------------------------------------------------------------
AAA 0.87% 0.00%
A 0.10 0.00
Baa1 0.19 0.00
Baa2 0.33 0.00
Baa3 0.59 0.00
Ba1 2.90 0.00
Ba2 4.58 0.00
Ba3 7.65 0.00
B1 5.94 0.27
B2 15.91 0.00
B3 30.42 0.14
Ba 0.00 0.67
B 0.00 3.86
Caa1 12.75 0.39
Caa2 3.67 0.00
Caa3 0.90 0.00
Caa 0.00 1.53
Ca 3.62 2.37
C 0.00 0.18
- ------------------------------------------------------------------
Step Bonds 1.56%
Zero Coupon Bonds 0.50%
See notes to financial statements
Statements of Assets and Liabilities
FIRST INVESTORS
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
CASH INVESTMENT
MANAGEMENT GOVERNMENT GRADE INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
Assets
Investments in securities:
At identified cost $163,251,285 $197,531,015 $223,560,461 $646,310,295
============ ============ ============ ============
At value (Note 1A) $163,251,285 $196,071,901 $227,496,690 $605,726,914
Cash 1,881,126 1,466,933 548,617 829,967
Receivables:
Interest and dividends 369,091 926,367 3,872,551 12,822,791
Shares sold -- 259,927 593,973 418,505
Investment securities sold -- -- -- 2,067,617
Other assets 33,953 38,257 10,955 266,139
------------ ------------ ------------ ------------
Total Assets 165,535,455 198,763,385 232,522,786 622,131,933
------------ ------------ ------------ ------------
Liabilities
Payables:
Investment securities purchased -- 996,076 -- 12,545,895
Dividends payable 17,543 93,592 148,712 788,322
Shares redeemed 104,557 348,160 398,977 723,493
Accrued advisory fees 170 76,476 85,440 365,370
Accrued shareholder servicing costs 59,850 32,287 39,926 104,868
Accrued expenses 51,202 38,282 21,785 42,321
------------ ------------ ------------ ------------
Total Liabilities 233,322 1,584,873 694,840 14,570,269
------------ ------------ ------------ ------------
Net Assets $165,302,133 $197,178,512 $231,827,946 $607,561,664
============ ============ ============ ============
Net Assets Consist of:
Capital paid in $165,302,133 $206,157,522 $236,097,490 $776,738,049
Undistributed net investment income (deficit) -- 39,006 (3,989,344) 552,379
Accumulated net realized loss on investments -- (7,558,902) (4,216,429) (129,145,383)
Net unrealized appreciation (depreciation) in value of investments -- (1,459,114) 3,936,229 (40,583,381)
------------ ------------ ------------ ------------
Total $165,302,133 $197,178,512 $231,827,946 $607,561,664
============ ============ ============ ============
Net Assets:
Class A $162,119,410 $181,697,292 $203,450,422 $570,925,033
Class B $ 3,182,723 $ 15,481,220 $ 28,377,524 $ 36,636,631
Shares outstanding (Note 6):
Class A 162,119,410 16,705,236 20,850,752 186,243,541
Class B 3,182,723 1,424,147 2,911,503 11,969,545
Net asset value and redemption price per share--Class A $ 1.00* $10.88 $ 9.76 $ 3.07
============ ============ ============ ============
Maximum offering price per share--Class A
(Net asset value/.9425)** N/A $11.54 $10.36 $ 3.26
============ ============ ============ ============
Net asset value and offering price per share--Class B (Note 6) $ 1.00 $10.87 $ 9.75 $ 3.06
============ ============ ============ ============
* 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
September 30, 2005
- ----------------------------------------------------------------------------------------------------------------------------------
CASH INVESTMENT
MANAGEMENT GOVERNMENT GRADE INCOME
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Income
Income (Note 1F):
Interest $ 4,411,201 $ 9,596,084 $ 11,435,961 $ 52,700,779
Dividends -- -- -- 102,207
------------ ------------ ------------ ------------
Total Income 4,411,201 9,596,084 11,435,961 52,802,986
------------ ------------ ------------ ------------
Expenses (Notes 1 and 3):
Advisory fees 847,685 1,967,403 1,616,522 4,446,555
Distribution plan expenses - Class A -- 451,618 466,141 1,717,577
Distribution plan expenses - Class B 27,729 160,933 290,798 392,939
Shareholder servicing costs 681,472 399,052 458,229 1,234,124
Professional fees 37,711 51,819 40,476 101,792
Registration fees 44,541 45,772 39,838 45,234
Custodian fees 21,723 34,158 20,134 43,429
Reports to shareholders 59,735 30,032 38,304 104,471
Directors/trustees' fees 6,037 6,916 7,462 21,520
Other expenses 58,614 52,667 57,468 132,676
------------ ------------ ------------ ------------
Total expenses 1,785,247 3,200,370 3,035,372 8,240,317
Less: Expenses waived (560,300) (904,958) (428,379) --
Expenses paid indirectly (10,362) (10,887) (19,110) (24,168)
------------ ------------ ------------ ------------
Net expenses 1,214,585 2,284,525 2,587,883 8,216,149
------------ ------------ ------------ ------------
Net investment income 3,196,616 7,311,559 8,848,078 44,586,837
------------ ------------ ------------ ------------
Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain (loss) on investments -- 631,796 (267,229) (6,651,104)
Net unrealized depreciation of investments -- (3,730,063) (5,240,595) (17,110,814)
------------ ------------ ------------ ------------
Net loss on investments -- (3,098,267) (5,507,824) (23,761,918)
------------ ------------ ------------ ------------
Net Increase in Net Assets Resulting from Operations $ 3,196,616 $ 4,213,292 $ 3,340,254 $ 20,824,919
============ ============ ============ ============
See notes to financial statements
Statements of Changes in Net Assets
FIRST INVESTORS
- ----------------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT GOVERNMENT
---------------------------- ----------------------------
Year Ended September 30 2005 2004 2005 2004
- ----------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations
Net investment income $ 3,196,616 $ 879,808 $ 7,311,559 $ 7,330,747
Net realized gain (loss) on investments -- -- 631,796 (341,641)
Net unrealized appreciation (depreciation) of investments -- -- (3,730,063) (1,302,024)
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 3,196,616 879,808 4,213,292 5,687,082
------------ ------------ ------------ ------------
Dividends to Shareholders
Net investment income - Class A (3,155,474) (879,808) (8,125,876) (8,259,090)
Net investment income - Class B (41,142) -- (602,132) (695,693)
------------ ------------ ------------ ------------
Total dividends (3,196,616) (879,808) (8,728,008) (8,954,783)
------------ ------------ ------------ ------------
Share Transactions *
Class A:
Proceeds from shares sold 225,191,078 230,381,626 25,491,260 24,724,756
Reinvestment of dividends 3,105,081 866,316 6,993,703 7,024,588
Cost of shares redeemed (237,177,113) (239,688,565) (25,500,703) (34,302,401)
------------ ------------ ------------ ------------
(8,880,954) (8,440,623) 6,984,260 (2,553,057)
------------ ------------ ------------ ------------
Class B:
Proceeds from shares sold 2,334,919 4,173,253 1,753,391 2,096,784
Reinvestment of dividends 37,941 -- 561,459 646,291
Cost of shares redeemed (4,412,048) (4,756,069) (3,303,272) (6,503,702)
------------ ------------ ------------ ------------
(2,039,188) (582,816) (988,422) (3,760,627)
------------ ------------ ------------ ------------
Net increase (decrease) from share transactions (10,920,142) (9,023,439) 5,995,838 (6,313,684)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets (10,920,142) (9,023,439) 1,481,122 (9,581,385)
Net Assets
Beginning of year 176,222,275 185,245,714 195,697,390 205,278,775
------------ ------------ ------------ ------------
End of year+ $165,302,133 $176,222,275 $197,178,512 $195,697,390
============ ============ ============ ============
+Includes undistributed net investment income (deficit) of $ -- $ -- $ 39,006 $ 47,109
============ ============ ============ ============
*Shares Issued and Redeemed
Class A:
Sold 225,191,078 230,381,626 2,313,120 2,210,207
Issued for dividends reinvested 3,105,081 866,316 634,924 628,957
Redeemed (237,177,113) (239,688,565) (2,314,243) (3,067,827)
------------ ------------ ------------ ------------
Net increase (decrease) in Class A shares outstanding (8,880,954) (8,440,623) 633,801 (228,663)
============ ============ ============ ============
Class B:
Sold 2,334,919 4,173,253 159,145 187,448
Issued for dividends reinvested 37,941 -- 51,004 57,886
Redeemed (4,412,048) (4,756,069) (299,862) (581,334)
------------ ------------ ------------ ------------
Net increase (decrease) in Class B shares outstanding (2,039,188) (582,816) (89,713) (336,000)
============ ============ ============ ============
Statements of Changes in Net Assets
FIRST INVESTORS
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE INCOME
---------------------------- ----------------------------
Year Ended September 30 2005 2004 2005 2004
- ------------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets From Operations
Net investment income $ 8,848,078 $ 8,124,036 $ 44,586,837 $ 42,139,614
Net realized gain (loss) on investments (267,229) 302,465 (6,651,104) (8,251,858)
Net unrealized appreciation (depreciation) of investments (5,240,595) (2,195,623) (17,110,814) 30,961,559
------------ ------------ ------------ ------------
Net increase in net assets resulting from operations 3,340,254 6,230,878 20,824,919 64,849,315
------------ ------------ ------------ ------------
Dividends to Shareholders
Net investment income - Class A (9,743,057) (8,099,196) (41,327,828) (39,075,051)
Net investment income - Class B (1,311,803) (1,336,388) (2,541,843) (2,588,132)
------------ ------------ ------------ ------------
Total dividends (11,054,860) (9,435,584) (43,869,671) (41,663,183)
------------ ------------ ------------ ------------
Share Transactions *
Class A:
Proceeds from shares sold 58,265,215 50,364,030 67,802,783 63,662,598
Reinvestment of dividends 8,182,635 6,793,101 31,078,336 28,659,730
Cost of shares redeemed (25,999,627) (28,437,258) (66,983,667) (62,497,536)
------------ ------------ ------------ ------------
40,448,223 28,719,873 31,897,452 29,824,792
------------ ------------ ------------ ------------
Class B:
Proceeds from shares sold 3,767,335 5,712,034 5,395,191 7,671,407
Reinvestment of dividends 1,150,885 1,164,424 1,872,646 1,824,251
Cost of shares redeemed (5,209,093) (7,346,111) (9,509,080) (7,724,800)
------------ ------------ ------------ ------------
(290,873) (469,653) (2,241,243) 1,770,858
------------ ------------ ------------ ------------
Net increase (decrease) from share transactions 40,157,350 28,250,220 29,656,209 31,595,650
------------ ------------ ------------ ------------
Net increase (decrease) in net assets 32,442,744 25,045,514 6,611,457 54,781,782
Net Assets
Beginning of year 199,385,202 174,339,688 600,950,207 546,168,425
------------ ------------ ------------ ------------
End of year+ $231,827,946 $199,385,202 $607,561,664 $600,950,207
============ ============ ============ ============
+Includes undistributed net investment income (deficit) of $ (3,989,344) $ (2,224,743) $ 552,379 $ (404,386)
============ ============ ============ ============
*Shares Issued and Redeemed
Class A:
Sold 5,849,008 4,971,218 21,460,627 20,179,230
Issued for dividends reinvested 822,105 671,503 9,902,008 9,084,550
Redeemed (2,611,201) (2,815,735) (21,309,546) (19,825,583)
------------ ------------ ------------ ------------
Net increase (decrease) in Class A shares outstanding 4,059,912 2,826,986 10,053,089 9,438,197
============ ============ ============ ============
Class B:
Sold 378,111 562,738 1,709,202 2,440,270
Issued for dividends reinvested 115,677 115,116 596,997 579,255
Redeemed (522,612) (725,530) (3,031,130) (2,457,779)
------------ ------------ ------------ ------------
Net increase (decrease) in Class B shares outstanding (28,824) (47,676) (724,931) 561,746
============ ============ ============ ============
See notes to financial statements
Notes to Financial Statements
September 30, 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 September 30,
2005, the Income Fund held twenty-four securities that were fair valued by
its Valuation Committee with an aggregate value of $5,095,544 representing
..8% 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, 2005, capital loss carryovers were as follows:
Year Capital Loss Carryovers Expire
----------------------------------------------------------------------------------------------------------
Fund Total 2007 2008 2009 2010 2011 2012 2013
- ---- ----- ---- ---- ---- ---- ---- ---- ----
Government $ 6,938,282 $ -- $1,017,364 $ 2,144,197 $ -- $ 54,921 $ 2,120,906 $ 1,600,894
Investment
Grade 3,507,032 -- -- 1,715,940 27,419 407,283 1,356,376 14
Income 123,088,445 842,581 1,832,458 13,810,649 18,563,112 52,099,335 25,740,298 10,200,012
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.
Notes to Financial Statements (continued)
September 30, 2005
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 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 step bonds is accrued daily at the
effective interest rate. For the year ended September 30, 2005, the Bank of
New York, custodian for the Funds, has provided total credits in the amount
of $55,544 against custodian charges based on the uninvested cash balances
of the Funds. The Funds also reduced expenses through brokerage service
arrangements. For the year ended September 30, 2005, the Funds expenses
were reduced by $8,983 under these arrangements.
2. Security Transactions--For the year ended September 30, 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 $ -- $ -- $107,167,209 $93,325,653
Investment Grade 47,254,287 18,243,459 14,153,952 3,852,686
Income 245,125,781 225,866,868 -- --
At September 30, 2005, aggregate cost and net unrealized depreciation of
securities for federal income tax purposes were as follows:
Gross Gross Net
Aggregate Unrealized Unrealized Unrealized
Fund Cost Appreciation Depreciation Depreciation
- ---- ------------ ------------ ------------ ------------
Government $197,531,015 $ 328,884 $ (1,787,998) $ (1,459,114)
Investment Grade 227,652,577 4,783,285 (4,939,172) (155,887)
Income 648,251,465 20,649,783 (63,174,334) (42,524,551)
3. Advisory Fee and Other Transactions With Affiliates--Certain officers
and directors/trustees of the Funds are officers and directors of the
Funds' investment adviser, First Investors Management Company, Inc.
("FIMCO"), their underwriter, First Investors Corporation ("FIC"), their
transfer agent, Administrative Data Management Corp. ("ADM") and/or First
Investors Federal Savings Bank ("FIFSB"), custodian of the Funds'
retirement accounts. Directors/trustees of the Funds who are not
"interested persons" of the Funds as defined in the 1940 Act are
remunerated by the Funds. For the year ended September 30, 2005, total
directors/trustees fees accrued by the Funds amounted to $41,935.
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 $560,300 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 $904,958 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 $428,379 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 year ended September 30, 2005, total advisory fees accrued to FIMCO
by the Funds were $8,878,165 of which $1,893,637 was waived as noted above.
For the year ended September 30, 2005, FIC, as underwriter, received
$5,004,578 in commissions from the sale of shares of the Funds after
allowing $66,727 to other dealers. Shareholder servicing costs included
$2,083,956 in transfer agent fees accrued to ADM and $398,812 in retirement
accounts custodian fees accrued to FIFSB.
Notes to Financial Statements (continued)
September 30, 2005
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 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 year ended September 30, 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 September 30,
2005, Cash Management Fund held one 144A security with a value of
$2,000,000 representing 1.2% of the Fund's net assets, Investment Grade
Fund held nine 144A securities with an aggregate value of $13,816,656
representing 6.0% of the Fund's net assets and Income Fund held thirty-one
144A securities with an aggregate value of $78,710,465 representing 13.0%
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 September 30, 2005, Cash
Management Fund held seven Section 4(2) securities with an aggregate value
of $32,960,349 representing 19.9% 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 sell 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.
7. Tax Components of Capital and Distributions to Shareholders--The tax
character of distributions declared for the years ended September 30, 2005
and September 30, 2004 consisted entirely of ordinary income as follows:
Distributions Declared
from Ordinary Income
---------------------------------
Fund in 2005 in 2004
- ---- -------------- --------------
Cash Management $ 3,196,616 $ 879,808
Government 8,728,008 8,954,783
Investment Grade 11,054,860 9,435,584
Income 43,869,671 41,663,183
As of September 30, 2005, the components of distributable earnings on a tax
basis were:
Total
Undistributed Capital Distributable
Ordinary Loss Unrealized Earnings
Fund Income Carryover (Depreciation) (Deficit)
- ---- ------------ ------------ ------------ ------------
Government $ 39,006 $ (6,938,282) $ (2,079,734) $ (8,979,010)
Investment Grade 102,772 (3,507,032) (865,284) (4,269,544)
Income 2,331,738 (123,088,445) (48,419,678) (169,176,385)
Notes to Financial Statements (continued)
September 30, 2005
8. Fund Reorganizations--On August 18, 2005, the Board of Directors or
Trustees of each First Investors Fund covered by this report approved,
subject to shareholder approval, an Agreement and Plan of Conversion and
Termination pursuant to which each Fund would be reorganized into a
corresponding series of the First Investors Income Funds, a
newly-established Delaware statutory trust (the "Reorganizations"). The
Reorganizations will offer a number of benefits to the Funds, including,
among other things, allowing the Funds to operate under uniform, modern and
flexible governing documents that will increase operating efficiency by
streamlining the governance process and updating, standardizing and
streamlining certain of the Funds' outdated investment restrictions. If
approved by shareholders, it is expected that the Reorganizations will take
effect after the close of business on or about January 27, 2006, although
the date may be adjusted in accordance with the Agreement and Plan of
Conversion and Termination.
This page intentionally left blank.
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.
- ---------------------------------------------------------------------------------------------------------------------------------
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 Year Income Investments Operations Income Gain Distributions Year
- ---------------------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT FUND
- --------------------
Class A
- -------
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 1.00 .019 -- .019 .019 -- .019 1.00
Class B
- -------
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 1.00 .012 -- .012 .012 -- .012 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT FUND
- ---------------
Class A
- -------
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 11.13 .50 (.25) .25 .50 -- .50 10.88
Class B
- -------
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 11.12 .41 (.25) .16 .41 -- .41 10.87
- ---------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
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 Year Investment Investment Turnover
Return* (in millions) Expenses Income Expenses Income (Loss) Rate
- ------------------------------------------------------------------------------------------------------------------
CASH MANAGEMENT FUND
- --------------------
Class A
- -------
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 1.94 162 .70 1.90 1.04 1.56 --
Class B
- -------
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 1.18 3 1.45 1.15 1.79 .81 --
- ------------------------------------------------------------------------------------------------------------------
GOVERNMENT FUND
- ---------------
Class A
- -------
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 2.25 182 1.10 4.49 1.57 4.02 48
Class B
- -------
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 1.48 15 1.85 3.74 2.32 3.27 48
- ------------------------------------------------------------------------------------------------------------------
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 Year Income Investments Operations Income Gain Distributions Year
- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
- ---------------------
Class A
- -------
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 10.11 .45 (.28) .17 .52 -- .52 9.76
Class B
- -------
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 10.10 .34 (.24) .10 .45 -- .45 9.75
- ---------------------------------------------------------------------------------------------------------------------------------
INCOME FUND
- -----------
Class A
- -------
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 3.18 .23 (.11) .12 .23 -- .23 3.07
Class B
- -------
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 3.18 .21 (.13) .08 .20 -- .20 3.06
- ---------------------------------------------------------------------------------------------------------------------------------
* Calculated without sales charges.
** Net of expenses waived or assumed (Note 3).
+ Prior to October 1, 2001, the Investment Grade Fund and the Income
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
net assets of the Funds.
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 Year Investment Investment Turnover
Return* (in millions) Expenses Income Expenses Income Rate
- ------------------------------------------------------------------------------------------------------------------
INVESTMENT GRADE FUND
- ---------------------
Class A
- -------
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 1.70 203 1.10 4.21 1.31 4.00 11
Class B
- -------
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 .97 28 1.85 3.46 2.06 3.25 11
- ------------------------------------------------------------------------------------------------------------------
INCOME FUND
- -----------
Class A
- -------
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 3.79 571 1.30 7.33 N/A N/A 39
Class B
- -------
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 2.68 37 2.00 6.63 N/A N/A 39
- ------------------------------------------------------------------------------------------------------------------
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 September 30, 2005, the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended. 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 audits to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. We were not engaged to perform audits of the Funds'
internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Funds' internal control over financial reporting. Accordingly, we express
no such opinion. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned as of September 30,
2005, by correspondence with the custodian and brokers. Where brokers have
not replied to our confirmation requests, we have carried out other
appropriate auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of 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 September 30, 2005, and the results of their
operations for the year then ended and changes in their net assets for each
of the two years in the period then ended and their financial highlights
for the five years in the period then ended, in conformity with accounting
principles generally accepted in the United States of America.
Tait, Weller & Baker LLP
Philadelphia, Pennsylvania
November 1, 2005
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Directors/Trustees and Officers*
Position(s)
Held with Principal Number of Other
Funds and Occupation(s) Portfolios in Trusteeships
Name, Year of Birth Length of During Past Fund Complex Directorships
and Address Service 5 Years Overseen Held
- ----------- ------- ------- -------- ----
DISINTERESTED DIRECTORS/TRUSTEES
Robert M. Grohol 1932 Director/Trustee None/Retired 49 None
c/o First Investors since 6/30/00
Management Company, Inc.
95 Wall Street
New York, NY 10005
Rex R. Reed 1922 Director/Trustee None/Retired 49 None
c/o First Investors since 3/31/84
Management Company, Inc.
95 Wall Street
New York, NY 10005
Herbert Rubinstein 1921 Director/Trustee None/Retired 49 None
c/o First Investors since 9/20/79
Management Company, Inc.
95 Wall Street
New York, NY 10005
James M. Srygley 1932 Director/Trustee Owner 49 None
c/o First Investors since 1/19/95 Hampton
Management Company, Inc. Properties
95 Wall Street
New York, NY 10005
Robert F. Wentworth 1929 Director/Trustee None/Retired 49 None
c/o First Investors since 10/15/92
Management Company, Inc.
95 Wall Street
New York, NY 10005
Position(s)
Held with Principal Number of Other
Funds and Occupation(s) Portfolios in Trusteeships
Name, Year of Birth Length of During Past Fund Complex Directorships
and Address Service 5 Years Overseen Held
- ----------- ------- ------- -------- ----
INTERESTED DIRECTORS/TRUSTEES**
Kathryn S. Head 1955 Director/Trustee Chairman, Officer 49 None
c/o First Investors since 3/17/94 and Director of
Management Company, Inc. First Investors
Raritan Plaza I President Corporation;
Edison, NJ 08837 since 11/15/01 First Investors
Consolidated
Chairman Corporation;
since 1/1/05 First Investors
Management
Company, Inc.;
Administrative Data
Management Corp.;
First Investors
Federal Savings
Bank; School
Financial
Management
Services, Inc.;
and other affiliated
companies***
John T. Sullivan 1932 Director/Trustee Of Counsel 49 None
c/o First Investors since 9/20/79 Hawkins,
Management Company, Inc. Delafield &
95 Wall Street Wood; Director
New York, NY 10005 of First Investors
Corporation,
First Investors
Consolidated
Corporation,
First Investors
Management
Company, Inc.,
Administrative Data
Management Corp.,
and other affiliated
companies***
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Directors/Trustees and Officers* (continued)
* Each Director/Trustee serves for an indefinite term with the Funds,
until his/her successor is elected.
** Ms. Head is an interested director/trustee because (a) she
indirectly owns more than 5% of the voting stock of the adviser and
principal underwriter of the Funds, (b) she is an officer, director and
employee of the adviser and principal underwriter of the Funds, and (c)
she is an officer of the Funds. Mr. Sullivan is an interested
director/trustee because he is a director and he indirectly owns
securities issued by the adviser and principal underwriter of the
Funds.
*** Other affiliated companies consist of: First Investors Realty
Company, Inc., First Investors Life Insurance Company, First Investors
Leverage Corporation, Route 33 Realty Corporation, First Investors
Credit Funding Corporation, N.A.K. Realty Corporation, Real Property
Development Corporation, First Investors Credit Corporation and First
Investors Resources, Inc.
Position(s)
Held with Principal Number of Other
Funds and Occupation(s) Portfolios in Trusteeships
Name, Year of Birth Length of During Past Fund Complex Directorships
and Address Service 5 Years Overseen Held
- ----------- ------- ------- -------- ----
OFFICERS WHO ARE NOT DIRECTORS/TRUSTEES
Joseph I. Benedek 1957 Treasurer Treasurer 49 None
c/o First Investors since 1988 and Principal
Management Company, Inc. Accounting Officer
Raritan Plaza I
Edison, NJ 08837
George V. Ganter 1952 Vice President Portfolio Manager 2 None
c/o First Investors since 2000 of First Investors
Management Company, Inc. Management
95 Wall Street Company, Inc.
New York, NY 10005
Larry R. Lavoie 1947 Chief Compliance General Counsel 49 None
c/o First Investors Officer since of First Investors
Management Company, Inc. 8/19/04 Corporation
95 Wall Street and its affiliates
New York, NY 10005
Director/Trustee
from 9/17/98
to 8/18/04
Michael J. O'Keefe 1965 Vice President Portfolio Manager 3 None
c/o First Investors since 1996 of First Investors
Management Company, Inc. Management
95 Wall Street Company, Inc.
New York, NY 10005
Clark D. Wagner 1959 Vice President Director of 27 None
c/o First Investors since 1991 Fixed Income
Management Company, Inc. (previously, Chief
95 Wall Street Investment Officer)
New York, NY 10005 of First Investors
Management
Company, Inc.
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
Independent Registered
Public Accounting Firm
Tait, Weller & Baker LLP
1818 Market Street
Philadelphia, PA 19103
Legal Counsel
Kirkpatrick & Lockhart
Nicholson Graham LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
FIRST INVESTORS TAXABLE BOND AND MONEY MARKET FUNDS
Shareholder Information
- -----------------------
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.
NOTES
NOTES
NOTES
NOTES
NOTES
Item 2. Code of Ethics
As of the end of the period, September 30, 2005, the Registrant has
adopted a Code of Ethics that applies to the First Investors Funds'
("Funds") principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the Funds or a third party. See Item 12(a) below for a copy of the
code of ethics.
During the period of the report, there have been no amendments to the
Code of Ethics or waivers, implicit or otherwise, from its provisions.
Item 3. Audit Committee Financial Expert
The independent director currently serving as the audit committee
financial expert is Robert F. Wentworth.
The Registrant's Board has unanimously determined that Mr. Wentworth
satisfied the definition of an audit committee financial expert as
set forth in the instructions to Form N-CSR under the Investment
Company Act of 1940. Specifically, the Board determined that
Mr. Wentworth has all of the following: (i) an understanding of
generally accepted accounting principles and financial
statements; (ii) the ability to assess the general application of such
principles in connection with the accounting for estimates, accruals,
and reserves; (iii) experience preparing, auditing, analyzing or
evaluating financial statements that present the breadth and level of
complexity of accounting issues that are generally comparable to the
breadth and complexity of issues that can reasonably be expected to be
raised by the Funds' financial statements, or experience actively
supervising one or more persons engaged in such activities; (iv) an
understanding of internal controls and procedures for financial reports;
and (v) an understanding of audit committee functions. Furthermore, he
had acquired these attributes through education and many years of
relevant experience in various financial positions with American
Telephone and Telegraph Company, including the positions of
Director - Accounting, Director - Finance, Director - Financial
Reporting and Analysis, Controller, and Director of Business Planning.
Mr. Wentworth also has many years experience serving on the Audit
Committees of the First Investors Funds and other organizations. Finally,
Mr. Wentworth is independent as defined in the instructions to the Form.
Item 4. Principal Accountant Fees and Services
Fiscal Year Ended
September 30,
-----------------
2005 2004
---- ----
(a) Audit Fees
First Investors
Cash Management Fund, Inc. $ 18,100 $ 17,400
Government Fund, Inc. 21,300 20,400
Investment Grade Fund (a series of
First Investors Series Fund) 12,500 11,900
Fund For Income, Inc. 36,400 34,900
(b) Audit-Related Fees
First Investors
Cash Management Fund, Inc. $ 0 $ 0
Government Fund, Inc. 0 0
Investment Grade Fund (a series of
First Investors Series Fund) 0 0
Fund For Income, Inc. 0 0
(c) Tax Fees
First Investors
Cash Management Fund, Inc. $ 2,600 $ 2,500
Government Fund, Inc. 3,600 3,500
Investment Grade Fund (a series of
First Investors Series Fund) 3,600 3,500
Fund For Income, Inc. 3,600 3,500
Nature of fees: tax returns preparation and tax compliance
(d) All Other Fees
First Investors
Cash Management Fund, Inc. $ 0 $ 0
Government Fund, Inc. 0 0
Investment Grade Fund (a series of
First Investors Series Fund) 0 0
Fund For Income, Inc. 0 0
(e)(1) Audit committee's pre-approval policies
The Audit Committee has adopted a charter under which it has the duties,
among other things:
(a) to pre-approve, and to recommend to the full Board, the
selection, retention or termination of the independent auditors to provide
audit, review or attest services to the Funds and, in connection therewith,
evaluate the independence of the auditors and to obtain the auditors'
specific representations as to their independence;
(b) to pre-approve all non-audit services to be provided to
the Funds by the independent auditor;
(c) to pre-approve all non-audit services to be provided by
the Funds' independent auditor to the Funds' investment adviser or to any
entity that controls, is controlled by or is under common control with the
Funds investment adviser ("adviser affiliate") and that provides ongoing
services to the Funds, if the engagement relates directly to the operations
and financial reporting of the Funds;
(d) to establish, if deemed necessary or appropriate as an
alternative to Audit Committee pre-approval of services to be provided by
the independent auditor as required by paragraphs (b) and (c) above,
policies and procedures to permit such services to be pre-approved by other
means, such as by action of a designated member and members of the Audit
Committee, subject to subsequent Committee review and oversight;
(e) to consider whether the non-audit services provided by the
Funds' independent auditors to the Funds' investment adviser or any adviser
affiliate that provides ongoing services to the Funds, which services were
not pre-approved by the Audit Committee, are compatible with maintaining the
auditors' independence;
(f) to meet with the Funds' independent auditors, including
meetings without management representatives, as necessary (i) to review the
arrangements for, and scope of, the annual audit, any special audits and any
other services to be provided to the Funds by the auditors; (ii) to discuss
any matters of concern relating to the Funds' financial statements,
including any adjustments to such statements recommended by the auditors, or
other results of said audit(s); and (iii) to review the form of opinion the
auditors propose to render to the Board and shareholders;
(g) to receive and consider (i) information and comments from
the auditors with respect to the Funds' accounting and financial reporting
policies, procedures and internal control over financial reporting
(including the Funds' critical accounting policies and practices) and to
consider management's responses to any such comments; (ii) reports from the
auditors regarding any material written communications between the auditors
and management; and (iii) reports from the auditors regarding all non-audit
services provided to any entity in the Funds' investment company complex
that were not pre-approved by the Audit Committee or pursuant to
pre-approved policies and procedures established by the Audit Committee and
associated fees;
(h) to consider the effect upon the Funds of any changes in
accounting principles or practices proposed by management or the auditors;
(i) to review and approve the fees proposed to be charged to the
Funds by the auditors for each audit and non-audit service;
(j) to receive reports from Fund management in connection with
the required certifications on Form N-CSR under the 1940 Act of any
significant deficiencies in the design or operation of the Funds' internal
control over financial reporting or material weakness therein and any
reported evidence of fraud, whether or not material, involving management or
other employees of the Funds who have a significant role in the Funds'
internal control over financial reporting;
(k) to investigate improprieties or suspected improprieties in
the Funds' accounting or financial reporting brought to the attention of the
Audit Committee;
(l) to receive and consider reports from attorneys, in
accordance with the "Up-the-Ladder" Reporting Policies for attorneys who
appear or practice before the Securities and Exchange Commission in the
representation of the Funds and in accordance with applicable federal law,
and auditors relating to possible material violations of federal or state
law or fiduciary duty;
(m) to report its activities to the full Board on a regular
basis and to make such recommendations with respect to the above and other
matters as the Audit Committee may deem necessary or appropriate;
(n) to meet with the Treasurer of the Funds and, as necessary,
with internal auditors, if any, for the management company; and
(o) to perform such other functions and to have such powers as
may be necessary or appropriate in the efficient and lawful discharge of the
powers provided in this Charter.
(e)(2) None, or 0%, of the services relating to the Audit-Related Fees,
Tax Fees and All Other Fees paid by the Registrant and Related Entities
disclosed above were approved by the audit committee pursuant to paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee
approval after the start of the engagement with respect to services other
than audit review or attest services, if certain conditions are satisfied).
(f) Not Applicable
(g) Aggregate non-audit fees billed by the Registrant's accountant
for services rendered to the Registrant and the Registrant's investment
adviser or any entity controlling, controlled by, or under common
control with the adviser that provides ongoing services to the
Registrant for the two fiscal years ended September 30, 2005 and 2004
were $68,000 and $66,500, respectively.
(h) Not Applicable
Item 5. Audit Committee of Listed Registrants
Audit Committee Members:
Robert M. Grohol
Rex R. Reed
Herbert Rubinstein
James M. Srygley
Robert F. Wentworth
Item 6. Schedule of Investments
Schedule is included as part of the report to
shareholders filed under Item 1 of this Form.
Item 7. Disclosure of Proxy Voting Policies & Procedures for
Closed-End Management Investment Companies
Not applicable
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable
Item 9. Purchases of Equity Securities by Closed-End Management
Investment Companies and Affiliated Purchasers
Not applicable
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedure by which shareholders
may recommend nominees to the Registrant's Board of Directors/Trustees.
Item 11. Controls and Procedures
(a) The Registrant's Principal Executive Officer and Principal
Financial Officer have concluded that the Registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940, as amended) are effective, based on their evaluation of these
disclosure controls and procedures as of a date within 90 days of the
filing date of this report.
(b) There were no changes in the Registrant's internal controls over
financial reporting that occurred during the second fiscal quarter of the
period covered by this report that has materially affected, or is reasonably
likely to materially affect, the Registrant's internal control over
financial reporting.
Item 12. Exhibits
(a) Code of Ethics - Previously filed on the Registrant's Form N-CSR
on December 8, 2004
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002 - Filed herewith
(c) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 - Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
First Investors 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: December 6, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by
the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.
First Investors 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: December 6, 2005