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
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: DECEMBER 31, 2004
DATE OF REPORTING PERIOD: JUNE 30, 2004
Item 1. Reports to Stockholders
The Semi-Annual Report to Stockholders follows
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, 2004
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, 2004
- -------------------------------------------------------------------------------------------------------
Amount
Principal Invested
Amount For Each
or $10,000 of
Shares Security Value Net Assets
- -------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES--92.7%
$850M Treasury STRIPS, due 11/15/2004 (cost $819,370) $845,374 $9,269
- -------------------------------------------------------------------------------------------------------
COMMON STOCKS--2.5%
Consumer Discretionary--.5%
150 Movie Gallery, Inc. 2,933 32
100 Pier 1 Imports, Inc. 1,769 20
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4,702 52
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Consumer Staples--.3%
100 * Chiquita Brands International, Inc. 2,092 23
100 * Pathmark Stores, Inc. 762 8
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2,854 31
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Health Care--1.0%
150 * Centene Corporation 5,782 63
200 * Province Healthcare Company 3,430 37
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9,212 100
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Industrials--.3%
100 * Mobile Mini, Inc. 2,841 31
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Information Technology--.4%
100 * Manhattan Associates, Inc. 3,088 35
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Total Value of Common Stocks (cost $14,548) 22,697 249
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Total Value of Investments (cost $833,918) 95.2% 868,071 9,518
Other Assets, Less Liabilities 4.8 43,932 482
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Net Assets 100.0% $912,003 $10,000
=======================================================================================================
* Non-income producing
See notes to financial statements
Statement of Assets and Liabilities
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
June 30, 2004
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Assets
Investments in securities:
At identified cost $ 833,918
===========
At value (Note 1A) $868,071
Cash 42,842
Other assets 2,793
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Total Assets 913,706
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Liabilities
Accrued professional fees 860
Accrued reports to shareholders 208
Accrued shareholder servicing costs 152
Accrued expenses 483
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Total Liabilities 1,703
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Net Assets $ 912,003
===========
Net Assets Consist of:
Capital paid in $ 839,788
Undistributed net investment income 36,114
Accumulated net realized gain on investment transactions 1,948
Net unrealized appreciation in value of investments 34,153
-----------
Total $ 912,003
===========
Shares of beneficial interest outstanding (Note 3) 114,494
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Net Asset Value and Redemption Price Per Share
(Net assets divided by shares of beneficial interest outstanding) $7.97
=====
Maximum Offering Price Per Share
(Net asset value /.92) $8.66
=====
See notes to financial statements
Statement of Operations
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
Six Months Ended June 30, 2004
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Investment Income
Income:
Interest $ 41,165
Dividends 27
-----------
Total income 41,192
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Expenses (Notes 1 and 4):
Advisory fee 4,615
Professional fees 4,480
Shareholder servicing costs 947
Registration fees 931
Reports to shareholders 537
Custodian fees 300
Trustees' fees 18
Other expenses 1,321
-----------
Total expenses 13,149
Less: Expenses waived or assumed (7,991)
Custodian fees paid indirectly (80)
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Net expenses 5,078
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Net investment income 36,114
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Realized and Unrealized Gain (Loss) on Investments (Note 2):
Net realized gain on investments 1,948
Net unrealized depreciation of investments (36,428)
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Net loss on investments (34,480)
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Net Increase in Net Assets Resulting from Operations $ 1,634
===========
See notes to financial statements
Statement of Changes in Net Assets
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1st FUND
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1/1/2004 to 1/1/2003 to
6/30/2004 12/31/2003
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Increase (Decrease) in Net Assets from Operations
Net investment income $ 36,114 $ 71,592
Net realized gain on investments 1,948 10,876
Net unrealized depreciation of investments (36,428) (68,183)
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Net increase in net assets resulting from operations 1,634 14,285
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Distributions to Shareholders
Net investment income -- (71,594)
Net realized gains -- (10,933)
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Total distributions -- (82,527)
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Trust Share Transactions *
Reinvestment of distributions -- 81,937
Cost of shares redeemed (30,602) (90,211)
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Net decrease from trust share transactions (30,602) (8,274)
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Net decrease in net assets (28,968) (76,516)
Net Assets
Beginning of period 940,971 1,017,487
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End of period (includes undistributed net investment income
of $36,114 and $0, respectively $912,003 $940,971
========== ==========
* Trust Shares Issued and Redeemed
Issued for distributions reinvested -- 10,307
Redeemed (3,847) (10,404)
---------- ----------
Net decrease in trust shares outstanding (3,847) (97)
========== ==========
See notes to financial statements
Notes to Financial Statements
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND -- 1ST FUND
June 30, 2004
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 also be priced by a
pricing service approved by the Trust's Board of 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. 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.
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, 2004, the Fund's custodian has provided credits in the
amount of $80 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, 2004
2. Security Transactions -- For the six months ended June 30, 2004,
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
---------- ---------------------------
Purchases $ -- $ --
Proceeds of sales 1,849 49,695
At June 30, 2004, the cost of investments for federal income tax purposes
was $833,918. Accumulated net unrealized appreciation on investments was
$34,153, consisting of $35,159 gross unrealized appreciation and $1,006
gross unrealized depreciation.
3. Trust Shares -- The Declaration of Trust permits the Trust to issue an
unlimited number of no par value 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 ("FIC"), 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, 2004, total trustees fees accrued by the Fund
amounted to $18.
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. For the six months ended June 30, 2004,
FIMCO has voluntarily waived $7,991 in advisory fees to limit the Fund's
overall expense ratio to 1.10%.
For the six months ended June 30, 2004, shareholder servicing costs
included $632 in transfer agent fees paid to ADM and $235 in retirement
accounts 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 period indicated.
-----------------------------------------------------
Year Ended December 31
1/1/04 to -----------------------------------------------------
6/30/04 2003 2002 2001 2000 1999
-------- -------- -------- -------- -------- ---------
Per Share Data
- --------------
Net Asset Value, Beginning of Period $ 7.95 $ 8.59 $ 8.97 $ 9.06 $ 8.88 $10.23
======== ======== ======== ======== ======== =========
Income from Investment Operations:
Net Investment Income .315 .663 .695 .682 .680 .681
Net Realized and Unrealized
Gain (Loss) on Investments (.295) (.539) (.098) .002 .317 (1.205)
-------- -------- -------- -------- -------- ---------
Total from Investment Operations .020 .124 .597 .684 .997 (.524)
-------- -------- -------- -------- -------- ---------
Less Distributions from:
Net Investment Income -- .663 .695 .682 .681 .681
Net Realized Gains -- .101 .282 .092 .136 .145
-------- -------- -------- -------- -------- ---------
Total Distributions -- .764 .977 .774 .817 .826
-------- -------- -------- -------- -------- ---------
Net Asset Value, End of Period $ 7.97 $ 7.95 $ 8.59 $ 8.97 $ 9.06 $ 8.88
======== ======== ======== ======== ======== =========
Total Return (%)+ .25 1.44 6.65 7.55 11.22 (5.12)
- -----------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (in thousands) $912 $941 $1,017 $1,098 $1,093 $1,090
Ratio to Average Net Assets (%)*:
Expenses 1.10(a) 1.10 1.10 1.10 1.10 1.10
Net Investment Income 7.83(a) 7.32 7.08 7.04 7.18 6.65
Ratio to Average Net Assets Before Expenses
Waived or Assumed (%):
Expenses 2.86(a) 2.45 2.61 2.24 2.26 2.08
Net Investment Income 6.07(a) 5.97 5.57 5.90 6.02 5.67
Portfolio Turnover Rate (%) 0 0 2 0 0 1
+ Calculated without sales charges
* Net of expenses waived or assumed (Note 4)
(a) Annualized
See notes to financial statements
Report of Independent Registered Public Accounting Firm
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, 2004, and the related statement of
operations, the statement of changes in net assets, and the financial
highlights for each of the periods indicated thereon. These financial
statements and financial highlights are the responsibility of the 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 the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements and financial highlights are free of
material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
June 30, 2004, 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,
2004, 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 2, 2004
FIRST INVESTORS U.S. GOVERNMENT PLUS FUND
Trustees
- --------
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 Advisor
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 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 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.
The Statement of Additional Information includes additional information
about the Trust's 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 Fund uses to vote
proxies relating to its portfolio securities is available, without charge,
upon request by calling toll free 1-800-423-4026 or can be viewed online or
downloaded from the EDGAR database on the SEC's internet website at
http://www.sec.gov. In addition, commencing on August 31, 2004,
information regarding how the Fund voted proxies relating to its portfolio
securities during the most recent 12-month period ended June 30, will be
available, without charge, upon request by calling 1-800-423-4026 and on
the SEC's internet website at http://www.sec.gov.
Item 2. Code of Ethics
The Registrant's Board of Directors/Trustees ("Board") 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. The Code of Ethics is attached to this
report as Exhibit A.
During the period of the report, there have been no amendments to the
Code of Ethics or waivers, implicit or otherwise, from its provisions.
Item 3. Audit Committee Financial Expert
Not applicable to Semi-Annual Report
Item 4. Principal Accountant Fees and Services
Not applicable to Semi-Annual Report
Item 5. Audit Committee of Listed Registrants
Not applicable to Semi-Annual Report
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 to the Registrant
Item 8. Purchases of Equity Securities by Closed-End Management
Investment Companies and Affiliated Purchasers
Not applicable to the Registrant
Item 9. Submission of Matters to a Vote of Security Holders
Not applicable to the Registrant for this filing
Item 10. 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 11. Exhibits
(a) Code of Ethics - Filed herewith
(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 8, 2004
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 8, 2004