Portfolio of Investments - First Investors

Portfolio Managers’ Letter (continued)INVESTMENT GRADE FUNDin the financial strength of corporate issuers. Deleveraging of corporate balance sheets,credit availability and accommodative monetary policy supported a favorable outlookfor corporate credit. However, the positive tone was offset by fears of the Fed taperingits stimulus program and increased shareholder-friendly activity by issuers, includingshare repurchases, dividend increases and mergers and acquisitions. In the last month ofthe review period, the Fed’s decision not to taper its stimulus program caused a rally inthe bond market and increased demand for corporate credit, which tightened spreads.The Fund outperformed the Bank of America Merrill Lynch U.S. Corporate MasterIndex during the review period. It also benefited from an overweight in BBB-ratedcorporate bonds, which had the highest returns during the review period. The Fund’sunderweight in corporate bonds with maturities greater than 10 years — which werenegatively impacted by rising long-term Treasury yields — further benefited performanceduring the review period. This was partially offset by the Fund’s underweightin corporate bonds with maturities ranging from 1–3 years, which were less sensitiveto interest-rate risk.Thank you for placing your trust in First Investors. As always, we appreciate theopportunity to serve your investment needs.Sincerely,Rajeev SharmaPortfolio ManagerOctober 31, 2013Clark D. WagnerPortfolio Manager andDirector of Fixed Income,First Investors Management Company, Inc.16