First Investors California Tax Exempt Fund
Your Home-Field Advantage
The Fund seeks to generate a high level of income that is exempt from federal and California state income tax and is not a tax preference item for purposes of the federal Alternative Minimum tax (“AMT”).
Investor Profile: This Fund can be used as a base or core holding for your portfolio. It might be appropriate for investors seeking a conservative investment with high credit quality and a high level of tax-exempt income. If you choose to invest in this Fund, you should be willing to accept some market volatility.
Focus: The Fund generally concentrates its investments in municipal bonds issued by California. The Fund may also invest significantly in municipal securities that are issued by U.S. commonwealths, possessions or territories as long as they do not produce income that is subject to state income tax. The Fund will generally attempt to purchase high quality municipal securities that are: (a) rated as investment grade, at the time of purchase, by at least one nationally recognized statistical rating organization, such as Moody's Investors Service, Inc., Standard & Poor's Ratings Service, or Fitch Ratings; or (b) if unrated, are determined by the Fund's Adviser to be of investment grade quality. The Fund generally invests in long-term bonds with maturities of fifteen years or more. The Fund may also invest in derivatives, such as futures contracts, options on futures contracts, interest rate swaps and floaters, to increase income, hedge against changes in interest rates or to enhance potential return. Derivatives are instruments that derive their values from other instruments, securities or indices.
Portfolio Composition as of June 30, 2010
Sector Breakdown
| Sector | Pct. of Total Net Assets |
|---|---|
| General Obligation | 27.7% |
| COP | 17.9% |
| Healthcare | 17.0% |
| Airport | 10.3% |
| Lease | 9.7% |
| Electric | 3.5% |
| Other Tax | 3.3% |
| Housing | 3.3% |
| Water/Sewer | 2.6% |
| Other Revenue | 1.8% |
| Total | 97.1% |
This information is for illustrative purposes only and includes only invested cash; therefore, the sum of all sectors as a percentage of net assets may not equal 100%.
Top Ten Holdings
| Security | Pct. of Total Net Assets |
|---|---|
| San Bernardino CA CCD, 6.500%, 08/01/2028 | 3.8% |
| California Health Facs Fing Auth Rev Bonds, 6.500%, 10/01/2033 | 3.7% |
| Long Beach Financing Authority Revenue, 6.000%, 11/01/2017 | 3.6% |
| San Francisco Ca City & Cnty Arpts Commn Intl Arpt Rev. Bnds, 5.250%, 05/01/2025 | 3.5% |
| Los Angeles CA Mun Impt Corp Lease Rev, 5.500%, 04/01/2028 | 3.5% |
| El Dorado CA Irr Dist COP, 6.250%, 08/01/2029 | 3.5% |
| Tuolumne Wind Proj. Auth. CA Rev., 5.625%, 01/01/2029 | 3.5% |
| Lake Tahoe CA Uni Sch Dist, 5.375%, 08/01/2029 | 3.5% |
| Alhambra CA USD, 5.250%, 08/01/2028 | 3.5% |
| College of the Sequoias GO, 5.250%, 08/01/2029 | 3.5% |
| Total | 35.6% |
This information is solely for illustrative purposes. The portfolio as of the date of this report may or may not be the same as the portfolio on the date this material is used.
Performance
Class A (Inception February 23, 1987)
| Yields and Distributions August 31, 2010 |
Average Annual Total returns | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Latest Month August 31, 2010 |
Latest Quarter June 30, 2010 |
||||||||
| SEC Yield | 2.73% | 1 yr | 5 yrs | 10 yrs | 1 yr | 5 yrs | 10 yrs | ||
| Dist. Rate | 3.84% | At NAV | 9.26% | 4.41% | 5.13% | 8.51% | 3.77% | 5.14% | |
| Taxable Equiv. Yield | 4.50% | With sales charge | 2.94% | 3.18% | 4.50% | 2.28% | 2.55% | 4.52% | |
Class B (Inception January 12, 1995)
| Yields and Distributions August 31, 2010 |
Average Annual Total returns | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Latest Month August 31, 2010 |
Latest Quarter June 30, 2010 |
||||||||
| SEC Yield | 2.21% | 1 yr | 5 yrs | 10 yrs | 1 yr | 5 yrs | 10 yrs | ||
| Dist. Rate | 3.18% | At NAV | 8.51% | 3.69% | 4.51% | 7.86% | 3.05% | 4.49% | |
| Taxable Equiv. Yield | 3.65% | With sales charge | 4.51% | 3.34% | 4.51% | 3.86% | 2.70% | 4.49% | |
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. Performance of Class A shares will differ from Class B shares because each class is sold pursuant to different sales arrangements and bears different expenses. Redemptions of Class B shares may be subject to a deferred sales charge.
Fees and Expenses
| Class A | Class B | |
|---|---|---|
| Max sales charge | 5.75% * | None |
| Max deferred sales charge | None ** | 4.00% *** |
| Total Annual Fund Operating Expenses | 1.08% | 1.78% |
* Due to rounding of numbers in calculating a sales charge, you may pay more or less than what is shown above.
** A CDSC of 1.00% will be assessed on certain redemptions of Class A shares that are purchased without a sales charge.
*** 4.00% in the first year, declining to 0% after the sixth year. Class B shares convert to Class A shares after eight years.
How to Obtain a Prospectus: Download or
For more complete information on any First Investors fund, you may obtain a free prospectus by contacting your registered representative, calling (800) 423-4026, or writing to the following address: First Investors Corporation, 110 Wall Street, New York, NY 10005. You should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus contains this and other information about the fund, and should be read carefully before you invest or send money. An investment in a fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Portfolio Management: Clark D. Wagner serves as Portfolio Manager of the Government Fund, Tax Exempt Fund, Tax Exempt Fund II, Single State Tax Exempt Funds, Life Series Government Fund, Life Series Target Maturity 2010 Fund and Life Series Target Maturity 2015 Fund. He also serves as Co-Portfolio Manager of the Total Return Fund, the Investment Grade Fund and the Life Series Investment Grade Fund. Mr. Wagner is the Director of Fixed Income for First Investors Management Company, Inc. ("FIMCO"). Mr. Wagner was Chief Investment Officer of FIMCO from 1992-2001. Mr. Wagner joined FIMCO in 1991 as a Portfolio Manager.
