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 NUMBER 811-4181
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
(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.
581 Main Street
Woodbridge, NJ 07095
(Name and address of agent for service)
Registrant'S TELEPHONE NUMBER, INCLUDING AREA CODE:
1-212-858-8000
DATE OF FISCAL YEAR END: DECEMBER 31, 2003
DATE OF REPORTING PERIOD: JUNE 30, 2003
The words "First Investors" in a box across the top of the page.
FIRST INVESTORS
U.S. GOVERNMENT PLUS FUND
SEMI-ANNUAL REPORT
JUNE 30, 2003
First Investors Logo
The words "A MEMBER OF THE FIRST INVESTORS FINANCIAL NETWORK"
under the First Investors logo.
F16146
Portfolio of Investments
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
June 30, 2003
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Amount
Principal Invested
Amount For Each
or $10,000 of
Shares Security Value Net Assets
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U.S. GOVERNMENT SECURITIES--97.0%
$980M Treasury STRIPS, due 11/15/2004 (cost $856,704) $964,700 $9,705
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COMMON STOCKS--2.1%
Consumer Discretionary--.5%
150 * Movie Gallery, Inc. 2,768 28
100 Pier 1 Imports, Inc. 2,040 20
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4,808 48
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Consumer Staples--.2%
100 * Chiquita Brands International, Inc. 1,450 14
100 * Pathmark Stores, Inc. 765 8
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2,215 22
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Health Care--.6%
100 * Centene Corporation 3,890 39
200 * Province Healthcare Company 2,214 22
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6,104 61
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Industrials--.2%
100 * Mobile Mini, Inc. 1,633 17
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Information Technology--.6%
150 * Intergraph Corporation 3,225 33
100 * Manhattan Associates, Inc. 2,597 26
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5,822 59
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Total Value of Common Stocks (cost $17,210) 20,582 207
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Total Value of Investments (cost $873,914) 99.1% 985,282 9,912
Other Assets, Less Liabilities .9 8,780 88
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Net Assets 100.0% $994,062 $10,000
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* Non-income producing
See notes to financial statements
Statement of Assets and Liabilities
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
June 30, 2003
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Assets
Investments in securities:
At identified cost $ 873,914
At value (Note 1A) $ 985,282
Cash 8,885
Other assets 2,771
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Total Assets 996,938
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Liabilities
Accrued expenses 2,366
Accrued advisory fees 510
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Total Liabilities 2,876
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Net Assets $ 994,062
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Net Assets Consist of:
Capital paid in $ 843,637
Undistributed net investment income 36,711
Accumulated net realized gain on investments 2,346
Net unrealized appreciation in value of investments 111,368
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Total $ 994,062
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Shares of Beneficial Interest Outstanding (Note 3) 114,388
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Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest outstanding) $8.69
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Maximum Offering Price Per Share
(Net asset value /.92)* $9.45
======
* On purchases of $10,000 or more, the sales charge is reduced.
See notes to financial statements
Statement of Operations
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
Six Months Ended June 30, 2002
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Investment Income
Interest income $ 42,209
Dividends income 12
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Total income 42,221
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Expenses (Notes 1 and 4):
Advisory fee 5,007
Professional fees 4,404
Shareholder servicing costs 1,113
Custodian fees 213
Other expenses 1,986
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Total expenses 12,723
Less: Expenses waived or assumed (7,103)
Custodian fees paid indirectly (110)
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Net expenses 5,510
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Net investment income 36,711
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Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain on investments 2,303
Net unrealized depreciation of investments (27,396)
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Net loss on investments (25,093)
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Net Increase in Net Assets Resulting from Operations $ 11,618
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See notes to financial statements
Statement of Changes in Net Assets
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
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Six Months Ended Year Ended
June 30, 2003 December 31, 2002
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Increase (Decrease) in Net Assets from Operations
Net investment income $36,711 $73,929
Net realized gain on investments 2,303 30,439
Net unrealized depreciation of investments (27,396) (37,187)
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Net increase in net assets resulting from operations 11,618 67,181
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Distributions to Shareholders
Net investment income -- (73,929)
Net realized gains -- (30,036)
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Total distributions -- (103,965)
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Trust Share Transactions *
Reinvestment of distributions -- 103,210
Cost of shares redeemed (35,043) (147,275)
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Net decrease from trust share transactions (35,043) (44,065)
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Net decrease in net assets (23,425) (80,849)
Net Assets
Beginning of period 1,017,487 1,098,336
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End of period (Includes undistibuted net investment income
of $36,711 and $0 respectively) $994,062 $1,017,487
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* Trust Shares Issued and Redeemed
Issued for distributions reinvested -- 12,015
Redeemed (4,050) (16,045)
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Net decrease in trust shares outstanding (4,050) (4,030)
========== ==========
See notes to financial statements
Notes to Financial Statements
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND - 1ST FUND
June 30, 2003
1. Significant Accounting Policies -- First Investors U.S. Government
Plus Fund (the "Trust") is organized as a Massachusetts business trust
and is registered under the Investment Company Act of 1940 (the "1940
Act") as a diversified open-end management investment company. The Trust
operates as a series fund, currently issuing shares of beneficial
interest of the 1st Fund (the "Fund") only. The Fund's objective is
first to generate income, and, to a lesser extent, achieve long-term
capital appreciation.
A. Security Valuation -- Except as provided below, a security listed or
traded on an exchange or the Nasdaq Stock Market is valued at its last
sale price on the exchange or market where the security is principally
traded. Securities which have no sales on a particular day and
securities traded in the over-the-counter market are valued at the mean
between the closing bid and asked prices. The Treasury STRIPS in which
the Fund invests are traded primarily in the over-the-counter market.
Such securities 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 be priced by a pricing service approved by
the Fund's Board of Trustees. 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. 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 Fund's Board of Trustees.
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 the 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 the Fund from all, or substantially
all, federal income taxes.
C. Distributions to Shareholders -- Distributions to shareholders 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 post-October capital losses.
D. Security Transactions and Investment Income -- 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 common stocks and the amortized cost basis for Treasury STRIPS
for both financial statement and federal income tax purposes. Dividend
income is recorded on the ex-dividend date. Interest income (consisting
of accreted discount) and estimated expenses are accrued daily. For the
six months ended June 30, 2003, the Fund's custodian has provided
credits in the amount of $110 against custodian charges based on the
uninvested cash balances of the Fund.
E. 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)
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND - 1ST FUND
June 30, 2003
2. Security Transactions -- For the six months ended June 30, 2003,
purchases and sales of securities and long-term U.S. Government
Obligations, excluding short-term notes, were as follows:
Long-Term
Securities U S Government Obligations
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Purchases $ -- $ --
Proceeds of sales -- 19,683
At June 30, 2003, the cost of investments for federal income tax
purposes was $873,914. Accumulated net unrealized appreciation on
investments was $111,368, consisting of $112,524 gross unrealized
appreciation and $1,156 gross unrealized depreciation.
3. Trust Shares -- The Declaration of Trust permits the Trust to issue an
unlimited number of shares of beneficial interest of the Fund.
4. Advisory Fee and Other Transactions With Affiliates -- Certain
officers and trustees of the Trust are officers and directors of its
investment adviser, First Investors Management Company, Inc. ("FIMCO"),
its underwriter, First Investors Corporation, its transfer agent,
Administrative Data Management Corp. ("ADM") and/or First Investors
Federal Savings Bank ("FIFSB"), custodian of the Trust's individual
retirement accounts ("IRA"). Trustees of the Trust who are not
"interested persons" of the Trust as defined in the 1940 Act are
remunerated by the Fund. For the six months ended June 30, 2003, total
trustees fees accrued by the Fund amounted to $150.
The Investment Advisory Agreement provides as compensation to FIMCO, an
annual fee, payable monthly, at the rate of 1% of 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. The total advisory fee
accrued to FIMCO for the six months ended June 30, 2003, was $5,007 of
which $2,003 was waived. In addition, expenses of $5,100 were assumed by
FIMCO.
For the six months ended June 30, 2003, shareholder servicing costs
included $748 in transfer agent fees paid to ADM and $260 in IRA
custodian fees paid to FIFSB.
Financial Highlights
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND - 1st FUND
The following table sets forth the operating performance data for a share of beneficial interest outstanding,
total return, ratios to average net assets and other supplemental data for each year indicated.
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Year Ended December 31
1/1/03 to -----------------------------------------------------
6/30/03 2002 2001 2000 1999 1998
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Per Share Data
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Net Asset Value, Beginning of Period $ 8.59 $ 8.97 $ 9.06 $ 8.88 $10.23 $10.25
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Income from Investment Operations:
Net Investment Income .321 .695 .682 .680 .681 .723
Net Realized and Unrealized Gain
(Loss) on Investments (.221) (.098) .002 .317 (1.205) .453
-------- -------- -------- -------- -------- ---------
Total from Investment Operations .100 .597 .684 .997 (0.524) 1.176
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Less Distributions from:
Net Investment Income -- .695 .682 .681 .681 .723
Net Realized Gain -- .282 .092 .136 .145 .473
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Total Distributions -- .977 .774 .817 .826 1.196
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Net Asset Value, End of Period $ 8.69 $ 8.59 $ 8.97 $ 9.06 $ 8.88 $10.23
======== ======== ======== ======== ======== =========
Total Return (%)+ 1.16 6.65 7.55 11.22 (5.12) 11.47
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Ratios/Supplemental Data
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Net Assets, End of Period (in thousands) $994 $1,017 $1,098 $1,093 $1,090 $1,235
Ratio to Average Net Assets (%)*:
Expenses 1.10(a) 1.10 1.10 1.10 1.10 1.10
Net Investment Income 7.35(a) 7.08 7.04 7.18 6.65 6.35
Ratio to Average Net Assets Before Expenses
Waived or Assumed (%):
Expenses 2.54(a) 2.61 2.24 2.26 2.08 1.93
Net Investment Income 5.91(a) 5.57 5.90 6.02 5.67 5.52
Portfolio Turnover Rate (%) 0 2 0 0 1 1
+ Calculated without sales charges
* Net of expenses waived or assumed (Note 4)
(a) Annualized
See notes to financial statements
Independent Auditors' Report
To the Shareholders and Trustees of
First Investors U.S. Government Plus Fund - 1st Fund
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of the 1st Fund of First
Investors U.S. Government Plus Fund as of June 30, 2003, and the related
statement of operations, the statement of changes in net assets and
financial highlights for each of the periods indicated thereon. These
financial statements and financial highlights are the responsibility of
the Trust's 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 auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as
of June 30, 2003, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of the 1st Fund of First Investors U.S. Government
Plus Fund as of June 30, 2003, and the results of its operations,
changes in its net assets and financial highlights for the periods
presented, in conformity with accounting principles generally accepted
in the United States of America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
August 1, 2003
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Trustees
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Robert M. Grohol
Glenn O. Head
Kathryn S. Head
Larry R. Lavoie
Rex R. Reed
Herbert Rubinstein
James M. Srygley
John T. Sullivan
Robert F. Wentworth
Officers
- --------
Kathryn S. Head
President
Joseph I. Benedek
Treasurer
Mark S. Spencer
Assistant Treasurer
Carol Lerner Brown
Assistant Secretary
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
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.
581 Main Street
Woodbridge, NJ 07095-1198
Legal Counsel
Kirkpatrick & Lockhart LLP
1800 Massachusetts Avenue, N.W.
Washington, DC 20036
Auditors
Tait, Weller & Baker
1818 Market Street
Philadelphia, PA 19103
It is the Fund's practice to mail only one copy of its annual and
semi-annual reports to any address at which more than one shareholder
with the same last name has indicated that mail is to be delivered.
Additional copies of the reports will be mailed if requested by any
shareholder in writing or by calling 800-423-4026. The Fund 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 Fund's prospectus.
Item 1. Reports to Stockholders - Filed herewith
Item 2. Code of Ethics - Not applicable to Semi-Annual Report
Item 3. Audit Committee Financial Expert - Not applicable to Semi-
Annual Report
Item 4. Principal Accountant Fees and Services - Not applicable to
Semi-Annual Report
Item 5. [Reserved]
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies & Procedures for
Closed-End Management Investment Companies - Not applicable
for this filing
Item 8. [Reserved]
Item 9. Controls and Procedures
(a) The Registrant's Principal Executive Officer and Principal
Financial Officer have concluded that the Registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940, as amended) are effective, based on their evaluation of these
disclosure controls and procedures as of a date within 90 days of the
filing date of this report.
(b) There were no significant changes in the Registrant's internal
controls or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Item 10. Exhibits
(a) Code of Ethics - Not applicable to Semi-Annual Report
(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 U.S. Government Plus Fund
(Registrant)
By /S/ KATHRYN S. HEAD
Kathryn S. Head
President and Principal Executive Officer
Date: September 4, 2003
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 U.S. Government Plus Fund
(Registrant)
By /S/ JOSEPH I. BENEDEK
Joseph I. Benedek
Treasurer and Principal Financial Officer
Date: September 4, 2003