N-CSRS 1 a_equityfund.htm FIRST INVESTORS EQUITY FUNDS a_equityncsrsacvr.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
 
FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
 
INVESTMENT COMPANY ACT FILE NUMBERS 811-6618
 
FIRST INVESTORS EQUITY FUNDS
(Exact name of registrant as specified in charter)
 
110 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, 2008
 
DATE OF REPORTING PERIOD: MARCH 31, 2008

Item 1. Reports to Stockholders
  
                        The semi-annual report to stockholders follows


FOREWORD    
 
 
This report is for the information of the shareholders of the Trusts. It is each
Trust’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 1-800-423-4026. Each Trust will ensure that separate reports are sent
to any shareholder who subsequently changes his or her mailing address.
 
The views expressed in the Market Overview letter reflect those views of the
Director of Equities and Director of Fixed Income of First Investors Manage-
ment Company, Inc. through the end of the period covered. Any such views
are subject to change at any time based upon market or other conditions and
we disclaim any responsibility to update such views. These views may not be
relied on as investment advice.
 
You may obtain a free prospectus for any of the Funds by contacting your
representative, calling 1-800-423-4026, writing to us at the following ad-
dress: First Investors Corporation, 110 Wall Street, New York, NY 10005,
or by visiting our website at www.firstinvestors.com. You should consider
the investment objectives, risks, charges and expenses of a Fund care-
fully before investing. The prospectus contains this and other information
about the Fund, and should be read carefully before investing.
 
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. Although the Cash Management Fund seeks to
preserve a net asset value at $1.00 per share, it is possible to lose money
by investing in it, just as it is possible to lose money by investing in any of
the other Funds. Past performance is no guarantee of future results.
 
A Statement of Additional Information (“SAI”) for any of the Funds may also
be obtained, without charge, upon request by calling 1-800-423-4026, writing to
us at our address or by visiting our website listed above. The SAI contains more
detailed information about the Fund, including information about its Trustees.

Market Overview
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
 
 
Dear Investor:
 
The financial markets were extremely volatile during the past six months. Subprime
mortgage problems, which had begun to impact the financial markets last summer,
became a major factor for investors in the fourth quarter by creating two major chal-
lenges. The first was a crisis of confidence that occurred as financial firms conserved
their dwindling capital because of their subprime exposure or fears of counterparties’
subprime exposure. As a result, there was very little liquidity in the markets — mean-
ing firms were not willing to take risk or make markets. Markets had big swings,
trading off of supply and demand instead of fundamentals. At times during the last
few months, certain markets stopped functioning, while others were operating under
extreme stress. The crisis probably peaked with the bailout of Bear Stearns in March.
The extraordinary actions taken by the Federal Reserve (the “Fed”) in response to
Bear Stearns’s near-failure appeared to have restored some stability to the markets as
the first quarter ended.
 
The second challenge for investors was a substantial slowing in the economy. Fourth
quarter growth slowed to an anemic 0.6% pace, followed by an equally anemic
0.06% in the first quarter of this year. Consumers, facing tighter credit conditions
and rising gasoline and food prices, reduced spending. Corporations responded by
cutting back spending as well. The unemployment rate rose to 5.1% in March, its
highest level since 2005. The lone bright spot in the economy was the export sec-
tor, as overseas economies remained relatively strong. By the end of the first quarter,
most economic forecasters agreed that the U.S. was in a recession. This by itself —
without a financial crisis — created a difficult environment for investors, especially
in riskier markets. The combination of a financial crisis and an economic slowdown
created an extraordinarily challenging environment.
 
The Fed was very active as it tried to both restore liquidity to the markets and head
off recession. During the reporting period, it has cut the benchmark federal funds rate
from 5.25% to 2.25%, an unprecedented pace of monetary easing. In addition to low-
ering rates, the Fed also made its discount lending window available to more firms.
The Fed and other regulators have taken a number of steps to help the housing market
and the financial markets.
 
 
 
 
                                                                                                                                                                                                                                               1

Market Overview (continued)
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
 
 
Congress and the President also agreed to a fiscal stimulus package that should eventu-
ally help the economy. The mailing of rebate checks began in May. These efforts have
restored some stability to the markets, although the economy continues to look weak.
 
Bond market returns in the aggregate were positive: the Merrill Lynch Broad Market
Index was up over 5% for the two quarters. But returns by sector varied substantially,
from up 8.5% in the Treasury sector to down 4.2% in the high yield bond market.
High quality bonds benefited from the substantial decline in benchmark U.S. Trea-
sury rates. Specifically, the two-year U.S. Treasury note yield fell from 3.99% to
1.59%, its lowest quarterly close since 2004, and the ten-year note yield fell from
4.59% to 3.41%, its lowest quarterly close in over ten years.
 
Riskier sectors of the bond market generally underperformed the Treasury market
due to both a reduced desire on the part of investors to take risk and the slowing
economy. While reduced liquidity in the market adversely affected high quality mort-
gage-backed bonds, the sector nonetheless had a relatively strong showing, returning
5.7%. In contrast, the investment grade corporate bond market returned only 1.8%
as the slowing economy and concern about financial issuers hurt performance. Not
surprisingly, given the investment environment, high yield corporate bonds were one
of the worse performing sectors in the bond market. Lastly, money market yields fell
substantially during the review period, reflecting the Fed’s easing of monetary policy.
 
Given the challenges in the financial system and the economic environment, the stock
market was very volatile over the reporting period. Most segments of the market post-
ed losses: large-cap stocks, as measured by the S&P 500 Index were down 12.5%;
mid-cap stocks, as measured by the S&P MidCap 400 Index, were off 11.3%; and
small-cap stocks, as measured by the Russell 2000 Index, lost 14.0%. Performance
was not much better in international markets, as the MSCI-EAFE Index, an index that
measures performance in developed markets, excluding the U.S., was down 10.4%.
 
 
 
 
2

Thank you for placing your trust in First Investors. As always, we appreciate the
opportunity to serve your investment needs.
 
Sincerely,


Edwin D. Miska
Director of Equities
First Investors Management Company, Inc.


Clark D. Wagner
Director of Fixed Income
First Investors Management Company, Inc.
 
May 1, 2008
 
This Market Overview is not part of the Funds’ financial report and is submitted for
the general information of the shareholders of the Funds. It is not authorized for
distribution to prospective investors in the Funds, unless preceded or accompanied
by an effective prospectus. The Market Overview reflects conditions through the end
of the period as stated on the cover. Market conditions are subject to change. This
Market Overview may not be relied upon as investment advice or an indication of
current or future trading intent on behalf of any Fund.
 
There are a variety of risks associated with investing in mutual funds. For stock funds,
the risks include market risk (the risk that the entire stock market will decline because
of an event such as a deterioration in the economy or a rise in interest rates), as well as
special risks associated with investing in certain types of stock funds, such as small-
cap, global and international funds. For bond funds, the risks include interest rate risk
and credit risk. Interest rate risk is the risk that bonds will decrease in value as interest
rates rise. As a general matter, longer-term bonds fluctuate more than shorter-term
bonds in reaction to changes in interest rates. Credit risk is the risk that bonds will de-
cline in value as the result of a decline in the credit rating of the bonds or the economy
as a whole, or that the issuer will be unable to pay interest and/or principal when due.
You should consult your prospectus for a precise explanation of the risks associated
with your fund.
 
                                                                                                                                                                                                                                               3

Understanding Your Fund’s Expenses
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
 
 
As a mutual fund shareholder, you incur two types of costs: (1) transaction costs, in-
cluding a sales charge (load) on purchase payments (on Class A shares only), a contin-
gent 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, October 1, 2007, and held for the entire six-month period ended March 31,
2008. 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 hypotheti-
cal 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.
 
 
4

Fund Expenses      
CASH MANAGEMENT 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 4 for
a detailed explanation of the information presented in these examples.  
  
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07–3/31/08)*
 Expense Example–Class A Shares      
 Actual $1,000.00 $1,017.93 $4.04
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,021.00 $4.04
 Expense Example–Class B Shares      
 Actual $1,000.00 $1,014.15 $7.80
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,017.25 $7.82
 
*Expenses are equal to the annualized expense ratio of .80% for Class A shares and 1.55% for
 Class B shares, multiplied by the average account value over the period, multiplied by 183/366 (to
 reflect the one-half year period). Expenses paid during the period are net of expenses waived.
 
 
 
Portfolio Composition      
BY SECTOR      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total value of investments.
 
                                                                                                                                                                                                                                               5

Portfolio of Investments      
CASH MANAGEMENT FUND      
March 31, 2008         
 
 
 
 
Principal   Interest    
Amount     Security      Rate*      Value
 
  CORPORATE NOTES—65.5%      
$ 1,000 M Abbott Laboratories, 9/15/08      4.54 %  $ 1,003,655
10,000 M Anheuser-Busch Cos., Inc., 6/5/08 (a)      2.65   9,952,057
  Archer-Daniels-Midland Co.:      
2,000 M      4/8/08 (a)      4.27   1,998,319
4,000 M      6/20/08 (a)      2.72   3,975,784
2,000 M      6/26/08 (a)      2.85   1,986,349
  Chevron Funding Corp.:      
7,000 M      4/18/08      2.15   6,992,888
5,000 M      4/25/08      2.15   4,992,832
9,600 M Coca Cola Co., 4/18/08 (a)      2.63   9,588,056
  Dupont (E.I.) de Nemours & Co.:      
6,500 M      4/25/08 (a)      2.22   6,490,376
5,000 M      4/29/08 (a)      2.22   4,991,364
2,000 M Federal Home Loan Bank, 4/25/08      2.14   1,997,146
1,000 M Fifth Third Bank, 8/15/08      4.76   994,884
  General Electric Capital Corp.:      
500 M      4/1/08 (b)      5.32   500,000
500 M      4/1/08 (b)      5.10   500,000
1,000 M      4/1/08 (b)      4.44   1,000,000
500 M      5/1/08      4.75   499,477
4,500 M      7/2/08      2.78   4,467,961
4,000 M      7/14/08      2.45   3,971,681
1,000 M      7/24/08      4.63   1,011,714
  Hershey Foods Co.:      
8,000 M      4/2/08 (a)      2.85   7,999,364
4,500 M      4/10/08 (a)      2.70   4,496,957
5,000 M IBM International Group Capital, LLC, 5/12/08 (a)      2.19   4,987,523
10,000 M Illinois Tool Works, Inc., 4/4/08      2.70   9,997,746
2,000 M International Business Machines Corp., 2/1/09      2.81   2,040,926
7,490 M Kimberly Clark Worldwide, 4/11/08 (a)      2.10   7,485,630
6,500 M Madison Gas & Electric Co., 4/11/08      2.35   6,495,756
6,955 M Pepsi Bottling Holdings, Inc., 2/17/09 (c)      2.85   7,118,416
  Pfizer, Inc.:      
8,500 M      4/7/08 (a)      4.40   8,493,674
3,500 M      5/1/08 (a)      4.37   3,487,014
1,500 M Procter & Gamble Co., 8/15/08      3.51   1,504,123
3,000 M Procter & Gamble International Funding,      
       SCA, 4/10/08 (a)      2.70   2,997,971
  Prudential Funding Corp.:      
5,000 M      4/10/08      2.90   4,996,365
5,000 M        6/4/08      2.30      4,979,554
 
 
6        

          
 
 
 
 
Principal   Interest    
Amount     Security      Rate*      Value
 
  CORPORATE NOTES (continued)      
  Stanley Works.:      
$ 3,000 M      4/3/08 (a)      4.10 % $ 2,999,310
2,000 M      6/18/08 (a)      2.10   1,990,893
4,500 M      6/24/08 (a)      2.15   4,477,407
  Toyota Motor Credit Corp.:      
6,000M M      6/3/08      2.79   5,970,646
6,500 M        6/3/08      2.80      6,468,083
 
Total Value of Corporate Notes (cost $165,901,901)        165,901,901
 
U.S. GOVERNMENT AGENCY OBLIGATIONS—15.9%
5,000 M Fannie Mae, 5/9/08      3.54   4,981,178
  Federal Home Loan Bank:      
6,000 M      5/5/08      4.40   6,008,912
2,000 M      5/23/08      3.56   1,989,639
5,000 M      8/20/08      2.13   5,051,330
3,000 M      1/7/09      4.12   3,000,000
3,750 M      1/22/09      3.65   3,750,000
1,000 M      3/3/09      2.73   1,000,692
500 M      3/17/09      2.58   500,415
  Freddie Mac:      
2,408 M      4/15/08      4.25   2,409,252
4,500 M      1/14/09      3.54   4,513,706
3,250 M      1/30/09      2.81   3,250,000
3,700 M         2/19/09      2.80      3,700,288
 
Total Value of U.S. Government Agency Obligations (cost $40,155,412)      40,155,412
 
  CERTIFICATES OF DEPOSIT—7.9%      
  Citibank, NA:      
6,900 M      4/16/08      3.85   6,900,000
5,000 M      5/28/08      3.07   5,000,000
8,000 M   JPMorgan Chase & Co., 8/19/08      2.85      8,000,000
 
Total Value of Certificates of Deposit (cost $19,900,000)        19,900,000
 
 
 
 
        7

Portfolio of Investments (continued)        
CASH MANAGEMENT FUND        
March 31, 2008           
 
 
 
 
     Principal     Interest    
         Amount     Security        Rate*     Value
 
  FLOATING RATE NOTES—6.7%        
         $ 5,450 M Advanced Packaging Corp., 10/1/36        
       (LOC; Fifth Third Bank)        3.65 % $ 5,450,000
               3,800 M Genesys Medsports, LLC, 1/1/27        
       (LOC; Fifth Third Bank)        3.65   3,800,000
               4,750 M International Business Machines Corp., 9/8/08 (c)      3.09   4,748,413
               3,000 M   Procter & Gamble International Funding, SCA, 2/19/09      3.14     3,000,000
 
Total Value of Floating Rate Notes (cost $16,998,413)          16,998,413
 
  BANKERS’ ACCEPTANCES—3.9%        
  Bank of America, NA:        
               1,094 M      5/16/08        3.15   1,089,622
               2,106 M      5/19/08        3.15   2,097,269
               1,699 M      5/21/08        3.15   1,691,927
               5,000 M        7/14/08        3.55      4,948,340
 
Total Value of Bankers’ Acceptances (cost $9,827,158)         9,827,158
 
Total Value of Investments (cost $252,782,884) **   99.9 %   252,782,884
Other Assets, Less Liabilities   .1      269,543
 
Net Assets         100.0 % $ 253,052,427
 
   * The interest rates shown are the effective rates at the time of purchase by the Fund. The interest
       rates shown on floating rate notes are adjusted periodically; the rates shown are the rates in
       effect at March 31, 2008.        
** Aggregate cost for federal income tax purposes is the same.      
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
(b) Denotes a step bond (a zero coupon bond that converts to a fixed interest rate at a    
       designated date).        
(c) Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:        
       LOC    Letters of Credit        
 
 
 
 
8 See notes to financial statements

Fund Expenses      
GOVERNMENT 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 4 for
a detailed explanation of the information presented in these examples.  
  
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07–3/31/08)*
 Expense Example–Class A Shares      
 Actual $1,000.00 $1,051.38 $5.64
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,019.50 $5.55
 Expense Example–Class B Shares      
 Actual $1,000.00 $1,047.72 $9.21
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,016.00 $9.07
 
*Expenses are equal to the annualized expense ratio of 1.10% for Class A shares and 1.80% for
 Class B shares, multiplied by the average account value over the period, multiplied by 183/366 (to
 reflect the one-half year period). Expenses paid during the period are net of expenses waived.
 
 
 
Portfolio Composition      
BY SECTOR      

 
Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total value of investments.
 
                                                                                                                                                                                                                                               9

Portfolio of Investments  
GOVERNMENT FUND    
March 31, 2008        
 
 
 
Principal      
Amount     Security        Value
  MORTGAGE-BACKED CERTIFICATES—99.6%  
  Fannie Mae—16.3%    
$15,183  M 5.5%, 4/1/2033–2/1/2038   $  15,374,469
21,463  M   6%, 1/1/2037–4/1/2038       22,010,832
              37,385,301
 
  Government National Mortgage    
  Association I Program—83.3%    
32,357 M 5%, 5/15/2033–5/15/2036   32,413,863
46,523 M 5.5%, 3/15/2033–4/15/2037   47,577,730
68,543 M 6%, 3/15/2031–9/15/2037   71,008,550
31,318 M 6.5%, 10/15/2028–3/15/2038   32,770,987
4,423 M   7%, 4/15/2032–8/15/2035   4,744,767
1,789 M   7.5%, 7/15/2023–6/15/2034       1,926,529
               190,442,426
Total Value of Mortgage-Backed Certificates (cost $225,031,924)       227,827,727
 
  SHORT-TERM U.S. GOVERNMENT  
  OBLIGATIONS—4.0%    
9,200 M   U.S. Treasury Bills, 1.41%, 4/15/08 (cost $9,194,955)      9,194,955
Total Value of Investments (cost $234,226,879) 103.6 % 237,022,682
Excess of Liabilities Over Other Assets (3.6 )   (8,240,724)
 
Net Assets        100.0 %   $ 228,781,958
 
 
 
 
10                                See notes to financial statements  

Fund Expenses      
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 4 for
a detailed explanation of the information presented in these examples.  
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07–3/31/08)*
 Expense Example–Class A Shares      
 Actual $1,000.00 $1,030.19 $5.58
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,019.50 $5.55
 Expense Example–Class B Shares      
 Actual $1,000.00 $1,026.69 $9.12
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,016.00 $9.07
 
*Expenses are equal to the annualized expense ratio of 1.10% for Class A shares and 1.80% for
 Class B shares, multiplied by the average account value over the period, multiplied by 183/366
 (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
 
 
 
Portfolio Composition      
TOP TEN SECTORS      

 
Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total value of investments.
 
                                                                                                                                                                                                                                           11

Portfolio of Investments    
INVESTMENT GRADE FUND    
March 31, 2008         
 
 
 
 
Principal      
Amount     Security        Value
 
  CORPORATE BONDS—67.4%    
  Aerospace/Defense—1.7%    
$ 2,000 M Boeing Co., 7.25%, 2025 $ 2,350,126
  Honeywell International, Inc.:    
975 M      6.125%, 2011     1,056,420
900 M      4.25%, 2013   910,112
400 M Precision Castparts Corp., 5.6%, 2013   444,754
717 M   TRW, Inc., 7.125%, 2009        745,576
 
               5,506,988
 
  Automotive—.5%    
1,700 M   Daimler Chrysler NA Holdings Corp., 5.75%, 2009        1,716,323
 
  Chemicals—1.7%    
1,700 M Air Products & Chemicals, Inc., 4.125%, 2010   1,760,328
1,700 M Cabot Corp., 5.25%, 2013 (a)   1,830,067
1,800 M   Praxair, Inc., 5.375%, 2016        1,831,131
 
               5,421,526
 
  Consumer Durables—.5%    
1,650 M   Black & Decker Corp., 5.75%, 2016        1,589,699
 
  Consumer Non-Durables—2.1%    
1,800 M Avon Products, Inc., 4.8%, 2013   1,829,444
1,000 M Colgate-Palmolive Co., 5.98%, 2012   1,079,459
1,600 M Newell Rubbermaid, Inc., 6.75%, 2012   1,677,298
2,000 M    Procter & Gamble Co., 4.85%, 2015       2,096,640
  
               6,682,841
 
  Energy—5.3%    
1,700 M Anadarko Petroleum Corp., 5.95%, 2016   1,760,962
2,700 M Canadian Natural Resources, Ltd., 5.9%, 2018   2,767,519
1,550 M Husky Oil Ltd., 8.9%, 2028   1,572,898
850 M Kinder Morgan Finance Co., 5.35%, 2011   847,875
2,800 M Nabors Industries, Inc., 6.15%, 2018 (a)   2,871,602
2,000 M Nexen, Inc., 5.05%, 2013   2,013,218
2,000 M Northern Border Pipeline Co., 7.1%, 2011   2,133,954
2,150 M Pacific Energy Partners LP, 7.125%, 2014   2,277,504
500 M   Tesoro Corp., 6.5%, 2017        450,000
 
               16,695,532
 
 
 
12      

            
 
 
 
 
Principal      
Amount     Security        Value
 
  Financial Services—7.3%    
$ 1,800 M Compass Bank, 6.4%, 2017 $ 1,761,849
1,200 M Endurance Specialty Holdings, Ltd., 7%, 2034   1,151,526
2,000 M  Fifth Third Bancorp, 5.45%, 2017   1,837,272
1,000 M Fleet Capital Trust II, 7.92%, 2026   1,034,630
600 M GATX Financial Corp., 5.5%, 2012   630,722
625 M Greenpoint Bank, 9.25%, 2010   653,556
2,420 M Hibernia Corp., 5.35%, 2014   2,160,583
1,880 M Independence Community Bank Corp., 4.9%, 2010   1,875,606
2,000 M JPMorgan Chase & Co., 5.25%, 2015   1,990,418
1,200 M National City Bank of Pennsylvania, 7.25%, 2011   1,153,391
1,298 M Republic NY Corp., 7.75%, 2009   1,339,575
2,000 M Royal Bank of Scotland Group PLC, 5%, 2014   1,993,308
1,600 M SunTrust Bank, Inc., 7.25%, 2018   1,639,170
1,800 M Wachovia Corp., 5.75%, 2018   1,766,335
2,565 M   Washington Mutual Bank, 5.95%, 2013        2,195,398
 
                 23,183,339
 
  Financials—11.7%    
395 M American Express Co., 6.15%, 2017   393,873
  American General Finance Corp.:    
875 M      8.125%, 2009   918,285
1,800 M      6.9%, 2017   1,762,151
3,500 M Bear Stearns Cos., Inc., 7.25%, 2018   3,623,211
900 M Caterpillar Financial Services Corp., 4.6%, 2014   908,991
  ERAC USA Finance Enterprise Co.:    
1,775 M      7.35%, 2008 (a)   1,787,594
1,170 M      8%, 2011 (a)   1,248,933
2,363 M Ford Motor Credit Co., 9.75%, 2010   2,105,984
2,625 M General Motors Acceptance Corp., 7.75%, 2010   2,271,431
  Goldman Sachs Group, Inc.:    
2,700 M      5.95%, 2018   2,678,578
2,300 M      6.15%, 2018   2,300,830
1,600 M      6.45%, 2036   1,446,349
900 M HSBC Finance Corp., 5%, 2015   848,369
  International Lease Finance Corp.:    
2,000 M      5.625%, 2013   1,960,598
2,600 M        6.375%, 2013        2,600,730
 
 
 
 
      13

Portfolio of Investments (continued)    
INVESTMENT GRADE FUND    
March 31, 2008           
 
 
 
 
Principal      
Amount     Security        Value
 
  Financials (continued)    
  Lehman Brothers Holdings, Inc.:    
$ 1,800 M      5.625%, 2013 $ 1,752,071
3,200 M      6.75%, 2017   3,081,584
2,500 M Merrill Lynch & Co., 5.45%, 2013   2,462,228
3,100 M   Morgan Stanley, 5.95%, 2017        3,001,457
 
                  37,153,247
 
  Food/Beverage/Tobacco—5.1%    
900 M Anheuser-Busch Cos., Inc., 4.375%, 2013   914,710
1,980 M Bunge Limited Finance Corp., 5.875%, 2013   2,066,211
  Cargill, Inc.:    
900 M      5.6%, 2012 (a)   923,263
1,900 M      6%, 2017 (a)   1,919,920
1,350 M Coca-Cola Co., 5.35%, 2017   1,411,331
1,500 M Coca-Cola Enterprises, Inc., 7.125%, 2017   1,740,638
1,949 M ConAgra Foods, Inc., 6.75%, 2011   2,103,143
900 M Diageo Capital PLC, 5.2%, 2013   932,082
900 M Kellogg Co., 4.25%, 2013   898,194
910 M Pepsi Bottling Group, LLC, 5%, 2013   951,369
1,000 M Pepsi Bottling Group, Inc., 7%, 2029   1,163,666
1,225 M   UST, Inc., 7.25%, 2009        1,274,409
 
               16,298,936
 
  Food/Drug—.9%    
2,000 M Kroger Co., 6.75%, 2012   2,143,318
700 M   Safeway, Inc., 6.5%, 2011        744,602
 
               2,887,920
 
  Forest Products/Containers—.5%    
1,725 M   Sappi Papier Holding AG, 6.75%, 2012 (a)        1,566,631
 
  Gaming/Leisure—.9%    
2,000 M International Speedway Corp., 4.2%, 2009   2,011,674
750 M   MGM Mirage, Inc., 8.5%, 2010        778,125
 
                 2,789,799
 
 
 
 
14      

            
 
 
 
 
Principal      
Amount     Security         Value
 
  Health Care—2.9%    
$ 2,000 M Abbott Laboratories, 5.875%, 2016 $ 2,135,386
2,364 M Baxter International, Inc., 5.9%, 2016   2,499,372
1,880 M Becton, Dickinson & Co., 7.15%, 2009   2,007,003
2,500 M   Fisher Scientific International, Inc., 6.75%, 2014         2,552,335
 
               9,194,096
 
  Housing—.6%    
1,970 M   D.R. Horton, Inc., 8%, 2009        1,945,375
 
  Information Technology—2.5%    
2,645 M International Business Machines Corp., 7%, 2025   2,925,106
2,000 M Oracle Corp., 5.25%, 2016   2,002,132
1,000 M Pitney Bowes, Inc., 5.75%, 2017   1,019,306
1,750 M   Xerox Corp., 6.875%, 2011        1,831,463
 
               7,778,007
 
  Manufacturing—2.3%    
1,750 M Briggs & Stratton Corp., 8.875%, 2011   1,837,500
2,500 M Crane Co., 6.55%, 2036   2,330,943
1,112 M Hanson Australia Funding, Ltd., 5.25%, 2013   1,119,522
646 M Hanson PLC, 7.875%, 2010   700,617
875 M   Ingersoll-Rand Co., 9%, 2021        1,186,749
 
                7,175,331
 
  Manufacturing Diversified—.3%    
900 M   Siemens Financieringsmaatschappij NV, 5.75%, 2016 (a)         922,845
 
  Media-Broadcasting—1.3%    
2,000 M Comcast Cable Communications, Inc., 7.125%, 2013   2,127,116
2,000 M   Cox Communications, Inc., 4.625%, 2013        1,923,148
 
               4,050,264
 
  Media-Diversified—2.7%    
1,575 M AOL Time Warner, Inc., 6.875%, 2012   1,627,366
1,800 M McGraw-Hill Cos., Inc., 5.9%, 2017   1,788,957
1,800 M News America, Inc., 5.3%, 2014   1,802,718
1,000 M   Time Warner, Inc., 9.125%, 2013        1,121,820
 
 
 
 
      15

Portfolio of Investments (continued)    
INVESTMENT GRADE FUND    
March 31, 2008           
 
 
 
 
Principal      
Amount     Security         Value
 
  Media-Diversified (continued)    
  Viacom, Inc.:    
$ 1,200 M      5.75%, 2011 $ 1,213,620
500 M      8.625%, 2012   540,523
360 M        8.875%, 2014        393,515
 
               8,488,519
 
  Metals/Mining—1.1%    
1,300 M Alcoa, Inc., 6%, 2012   1,350,835
2,000 M   Vale Overseas, Ltd., 6.25%, 2017        1,996,756
 
                 3,347,591
 
  Real Estate Investment Trusts—2.1%    
  AvalonBay Communities, Inc.:    
1,900 M      7.5%, 2010   2,030,142
200 M      6.625%, 2011   207,417
1,350 M Duke Weeks Realty Corp., 7.75%, 2009   1,399,291
1,200 M Health Care Property Investors, Inc., 6%, 2017   981,314
1,900 M   Mack-Cali Realty LP, 7.75%, 2011        1,992,496
 
                 6,610,660
 
  Retail—.9%    
  McDonald’s Corp.:    
1,800 M      4.3%, 2013   1,823,267
1,000 M         5.8%, 2017          1,051,925
 
                 2,875,192
 
  Telecommunications—4.3%    
2,000 M Deutsche Telekom AG, 8%, 2010   2,140,486
1,359 M GTE Corp., 6.84%, 2018   1,459,452
2,000 M SBC Communications, Inc., 6.25%, 2011   2,095,456
1,725 M Sprint Capital Corp., 6.375%, 2009   1,699,558
3,600 M Verizon Communications, Inc., 5.5%, 2018   3,512,851
800 M Verizon New York, Inc., 6.875%, 2012   842,094
1,750 M    Vodafone AirTouch PLC, 7.75%, 2010         1,855,404
 
                 13,605,301
 
 
 
 
16      

     
             
 
 
 
 
Principal      
Amount     Security         Value
 
  Transportation—1.7%    
$ 2,000 M Burlington Northern Santa Fe Corp., 4.3%, 2013 $ 1,965,338
2,000 M Canadian National Railway Co., 6.25%, 2034   1,947,446
1,000 M Norfolk Southern Corp., 7.7%, 2017   1,158,906
300 M   Union Pacific Railroad, 7.28%, 2011        337,315
 
                 5,409,005
 
  Utilities—5.7%    
1,350 M Carolina Power & Light, Inc., 5.15%, 2015   1,376,584
1,800 M Consumers Energy Co., 6.875%, 2018   1,957,637
1,450 M Dominion Resources, Inc., 5%, 2013   1,482,268
2,650 M Entergy Gulf States, Inc., 5.25%, 2015   2,507,573
1,550 M Florida Power & Light Co., 5.85%, 2033   1,540,216
750 M Great River Energy Co., 5.829%, 2017 (a)   780,935
1,325 M Jersey Central Power & Light Co., 5.625%, 2016   1,305,536
  NiSource Finance Corp.:    
900 M      7.875%, 2010   978,928
600 M      5.4%, 2014   593,992
570 M NY State Gas & Electric Co., 6.15%, 2017 (a)   580,140
1,400 M OGE Energy Corp., 5%, 2014   1,364,930
775 M PSI Energy, Inc., 8.85%, 2022   996,671
1,510 M Public Service Electric & Gas Co., 6.75%, 2016   1,667,103
400 M South Carolina Electric & Gas Co., 6.7%, 2011   430,874
570 M   Southwestern Electric Power Co., 5.875%, 2018        558,252
 
                     18,121,639
 
  Waste Management—.8%    
500 M Allied Waste NA, Inc., 5.75%, 2011   491,250
2,000 M   Waste Management, Inc., 6.875%, 2009        2,052,306
 
                 2,543,556
 
Total Value of Corporate Bonds (cost $212,261,040)        213,560,162
 
 
 
 
      17

Portfolio of Investments (continued)    
INVESTMENT GRADE FUND    
March 31, 2008         
 
 
 
Principal      
Amount      
or Shares     Security        Value
 
  AUCTION RATE SECURITIES (b) —10.1%    
$ 1,500 M Burke Cnty., GA Dev. Auth. Pollution Ctl., Rev., 8%, 2039 $ 1,500,000
1,500 M Charlotte-Mecklenburg, NC Hosp. Auth. Health Care Sys.    
       Rev., 6.14%, 2041   1,500,000
  Citizens Property Ins. Corp. FL:    
4,000 M      8%, 2021   4,000,000
1,000 M      6%, 2023   1,000,000
1,500 M Coastal Bend, TX Health Facs. Dev. Corp., 7.14%, 2031   1,500,000
975 M Colorado Health Facs. Auth. Rev., 5.64%, 2041   975,000
1,000 M Colorado Springs, CO Hosp. Rev., 7%, 2032   1,000,000
  District of Columbia Hosp. Rev.:    
1,500 M      7.23%, 2035   1,500,000
3,000 M      7.49%, 2035   3,000,000
  Illinois Finance Auth. Rev.:    
1,600 M      6%, 2025   1,600,000
1,000 M      6.92%, 2029   1,000,000
1,000 M Indiana Health & Edl. Facs. Fing. Auth. Rev., 7.15%, 2030   1,000,000
1,500 M Lorain Cnty., OH Hosp. Rev. (Catholic Healthcare Partners),    
       8.2%, 2029   1,500,000
975 M Louisiana Public Facs. Auth. Rev., 5.9%, 2041   975,000
1,000 M Lynchburg, VA Indl. Dev. Auth. Rev., 7.89%, 2035   1,000,000
1,000 M Missouri State Health & Edl. Facs. Auth., 6.14%, 2035   1,000,000
  New Jersey Health Care Facs. Fing. Auth. Rev.:    
2,525 M      6%, 2037   2,525,000
1,000 M      7%, 2038   1,000,000
560 M New Mexico State Hosp. Equip. Loan Council Rev., 7%, 2031   560,000
2,000 M North Carolina Municipal Pwr. Agy., 7.4%, 2014   2,000,000
1,000 M Washington State Health Care Facs. Auth. Rev., 6.24%, 2034   1,000,000
1,000 M   West Virginia State Hosp. Fing. Auth. Rev., 7%, 2034          1,000,000
 
Total Value of Auction Rate Securities (cost $32,135,000)         32,135,000
 
  PREFERRED STOCKS—9.7%    
  Financial Services—6.4%    
6,300,000 Bank of America Corp., 8%, 2049   6,318,207
320,000 Citigroup, Inc., 8.125%, 2049–Series “AA”   7,692,800
176,000 Lehman Brothers Holdings, Inc., 7.95%, 2013–Series “J”   3,622,080
  Wachovia Corp.:    
1,600,000      7.98%, 2049   1,576,853
45,000          8%, 2049         1,111,500
 
                20,321,440
 
 
 
18      

          
 
 
 
Shares or      
Principal      
Amount     Security        Value
 
  U.S. Government Agency—3.3%    
324,000 Fannie Mae, 8.25%, 2045 $ 7,792,200
108,000     Freddie Mac, 8.375%, 2047–Series “Z”       2,623,000
 
               10,415,200
 
Total Value of Preferred Stocks (cost $32,451,550)        30,736,640
 
  MORTGAGE-BACKED CERTIFICATES—3.3%    
  Fannie Mae—1.3%    
$ 2,039 M 5.5%, 1/1/2037   2,061,256
2,136 M   6.5%, 7/1/2037        2,213,880
 
               4,275,136
 
  Freddie Mac—2.0%    
3,253 M 5.5%, 6/1/2036   3,342,810
2,841 M   6%, 11/1/2037         2,916,825
 
                6,259,635
 
Total Value of Mortgage-Backed Certificates (cost $10,231,795)        10,534,771
 
U.S. GOVERNMENT AGENCY OBLIGATIONS—3.0%    
  Fannie Mae:    
2,000 M      5.65%, 2014   2,007,202
2,600 M      6%, 2016   2,634,102
1,000 M Federal Home Loan Bank, 7.23%, 2015   1,101,413
3,500 M   Freddie Mac, 6%, 2017        3,612,045
 
Total Value of U.S. Government Agency Obligations (cost $9,162,350)        9,354,762
 
  PASS THROUGH CERTIFICATES—.9%    
  Transportation    
495 M American Airlines, Inc., 7.377%, 2019   405,819
1,207 M Continental Airlines, Inc., 8.388%, 2020   1,134,203
1,257 M   FedEx Corp., 7.5%, 2018        1,366,852
 
Total Value of Pass Through Certificates (cost $4,062,789)        2,906,874
 
 
 
 
      19

Portfolio of Investments (continued)      
INVESTMENT GRADE FUND      
March 31, 2008      
 
 
 
     Principal        
         Amount     Security     Value
  MUNICIPAL BONDS—.5%      
         $ 1,750 M Tobacco Settlement Fin. Auth. West Virginia Series “A”,    
           7.467%, 2047 (cost $1,750,000)   $ 1,670,568
 
  U.S. GOVERNMENT OBLIGATIONS—.4%    
               1,042 M   FDA Queens LP, 6.99%, 2017 (cost $1,128,781) (a)   1,211,840
Total Value of Investments (cost $303,183,305) 95.3 %  302,110,617
Other Assets, Less Liabilities 4.7   14,898,877
 
Net Assets       100.0 % $  317,009,494
 
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4).
(b) Interest rates on auction rate securities are determined and reset periodically by the issuer and
       are the rates in effect on March 31, 2008      
 
 
 
 
20                                See notes to financial statements    

Fund Expenses      
FUND FOR INCOME      
 
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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07–3/31/08)*
 Expense Example–Class A Shares      
 Actual $1,000.00 $943.91 $6.37
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,018.45 $6.61
 Expense Example–Class B Shares      
 Actual $1,000.00 $940.43 $9.75
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.95 $10.13
 
*Expenses are equal to the annualized expense ratio of 1.31% for Class A shares and 2.01% for
 Class B shares, multiplied by the average account value over the period, multiplied by 183/366 (to
 reflect the one-half year period).      

Portfolio Composition
TOP TEN SECTORS


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total value of investments.
 
                                                                                                                                                                                                                                           21

Portfolio of Investments    
FUND FOR INCOME    
March 31, 2008        
 
 
 
 
Principal      
Amount     Security        Value
 
  CORPORATE BONDS—89.8%    
  Aerospace/Defense—4.3%    
$ 150 M Alion Science & Technology Corp., 10.25%, 2015 $ 85,500
4,775 M Alliant Techsystems, Inc., 6.75%, 2016   4,667,563
  DRS Technologies, Inc.:    
5,250 M      6.875%, 2013   5,171,250
1,000 M      6.625%, 2016   982,500
5,508 M DynCorp International, LLC, 9.5%, 2013   5,631,930
1,747 M GenCorp, Inc., 9.5%, 2013   1,742,633
4,375 M   L-3 Communications Corp., 7.625%, 2012         4,500,775
 
                22,782,151
 
  Automotive—4.5%    
2,700 M Accuride Corp., 8.5%, 2015 (a)   2,214,000
250 M American Axle & Manufacturing, Inc., 7.875%, 2017   213,125
  Asbury Automotive Group, Inc.:    
5,400 M      8%, 2014   4,725,000
2,000 M      7.625%, 2017   1,590,000
6,975 M Avis Budget Car Rental, LLC, 7.75%, 2016   5,719,500
4,208 M Cambridge Industries Liquidating Trust, 2008 (b)(c)   2,630
500 M Tenneco Automotive, Inc., 8.625%, 2014   493,750
6,575 M United Auto Group, Inc., 7.75%, 2016   5,720,250
3,600 M    United Components, Inc., 9.375%, 2013         3,316,500
  
                23,994,755
 
  Chemicals—4.5%    
  Huntsman, LLC:    
1,636 M      11.625%, 2010   1,734,160
2,765 M      11.5%, 2012   2,958,550
5,250 M Nell AF S.a.r.l., 8.375%, 2015 (a)(d)   3,858,750
4,800 M Newmarket Corp., 7.125%, 2016   4,704,000
4,500 M Terra Capital, Inc., 7%, 2017   4,460,625
3,900 M Tronox Worldwide, LLC, 9.5%, 2012 (a)   3,354,000
3,075  M   Westlake Chemical Corp., 6.625%, 2016        2,706,000
 
               23,776,085
 
 
 
 
22      

Principal      
Amount     Security        Value
 
  Consumer Non-Durables—2.1%    
$4,000 M GFSI, Inc., 10.5%, 2011 (d)(e) $ 3,740,000
  Levi Strauss & Co.:    
4,000 M      9.75%, 2015   4,005,000
3,500 M        8.875%, 2016 (a)         3,360,000
 
               11,105,000
 
  Energy—11.7%    
5,275 M Basic Energy Services, Inc., 7.125%, 2016   5,050,813
3,600 M Calfrac Holdings, 7.75%, 2015 (d)   3,384,000
  Chesapeake Energy Corp.:    
1,800M M      7.5%, 2014 (a)   1,854,000
8,850 M      6.625%, 2016   8,717,250
4,500 M Cimarex Energy Co., 7.125%, 2017   4,488,750
4,350 M Compagnie Generale de Geophysique, 7.5%, 2015   4,437,000
4,375 M Complete Production Services, Inc., 8%, 2016   4,221,875
1,800 M Connacher Oil & Gas, Ltd., 10.25%, 2015 (d)   1,822,500
8,500 M Delta Petroleum Corp., 7%, 2015   7,607,500
164 M Grant Prideco, Inc., 6.125%, 2013   168,253
1,350 M Hilcorp Energy I, LP, 9%, 2016 (d)   1,366,875
  Pacific Energy Partners LP:    
3,070 M      7.125%, 2014   3,252,063
1,920 M      6.25%, 2015   1,911,122
  Petroplus Finance, Ltd.:    
900 M      6.75%, 2014 (d)   825,750
3,950 M      7%, 2017 (d)   3,545,125
3,600 M Stallion Oilfield Services, Ltd., 9.75%, 2015 (d)   2,484,000
2,600 M Stewart & Stevenson, LLC, 10%, 2014   2,509,000
1,400 M Swift Energy Co., 7.125%, 2017   1,291,500
3,490 M   Tesoro Corp., 6.25%, 2012        3,306,775
 
               62,244,151
 
  Financial Services—2.2%    
11,954 M   Targeted Return Index Securities Trust, 7.548%, 2016 (d)        11,414,122
 
  Financials—.6%    
4,350 M   General Motors Acceptance Corp., 6.75%, 2014       3,082,258
 
 
 
 
      23

Portfolio of Investments (continued)    
FUND FOR INCOME    
March 31, 2008         
 
 
 
 
Principal      
Amount     Security        Value
 
  Food/Beverage/Tobacco—3.1%    
$ 9,000 M Constellation Brands, Inc., 7.25%, 2016 $ 8,797,500
  Land O’Lakes, Inc.:    
1,800 M      9%, 2010   1,876,500
775 M      8.75%, 2011   796,313
1,800 M Pierre Foods, Inc., 9.875%, 2012   999,000
4,125 M   Southern States Cooperative, Inc., 10.5%, 2010 (d)        4,228,125
 
                16,697,438
 
  Food/Drug—1.2%    
6,250 M   Ingles Markets, Inc., 8.875%, 2011        6,343,750
 
  Forest Products/Containers—2.0%    
2,150 M Jefferson Smurfit Corp., 8.25%, 2012   1,948,438
115 M New Page Corp., 10%, 2012 (d)   117,300
4,400 M Sappi Papier Holding, AG, 6.75%, 2012 (d)   3,996,045
2,000 M Tekni-Plex, Inc., 8.75%, 2013 (a)   1,770,000
3,275 M   Verso Paper Holding, LLC, 6.989%, 2014 (e)        2,783,750
 
               10,615,533
 
  Gaming/Leisure—6.2%    
4,250 M Circus & Eldorado/Silver Legacy, 10.125%, 2012   4,303,125
2,200 M Herbst Gaming, Inc., 8.125%, 2012 (a)   412,500
4,500 M Isle of Capri Casinos, Inc., 7%, 2014 (a)   3,228,750
5,220 M Mandalay Resort Group, 6.375%, 2011   4,985,100
6,960 M MGM Mirage, Inc., 6.625%, 2015   6,090,000
1,800 M Pinnacle Entertainment, Inc., 7.5%, 2015 (a)(d)   1,426,500
9,745 M Speedway Motorsports, Inc., 6.75%, 2013   9,550,100
4,500 M   Station Casinos, Inc., 6.875%, 2016 (a)        2,643,750
 
                32,639,825
  
  Health Care—6.2%    
  Alliance Imaging, Inc.:    
3,150 M      7.25%, 2012   2,976,750
1,800 M      7.25%, 2012   1,701,000
4,375 M Community Health Systems, Inc., 8.875%, 2015   4,413,281
4,350 M DaVita, Inc., 7.25%, 2015   4,263,000
3,480 M Fisher Scientific International, Inc., 6.125%, 2015   3,470,862
4,400 M   Genesis Health Ventures, Inc., 9.75%, 2008 (b)(c)         2,750
 
 
 
 
24      

Principal      
Amount     Security        Value
 
  Health Care (continued)    
  HCA, Inc.:    
$ 879 M      6.95%, 2012 (a) $ 830,655
3,930 M      6.75%, 2013   3,497,700
4,000 M Omnicare, Inc., 6.875%, 2015   3,500,000
3,025 M Res-Care, Inc., 7.75%, 2013   2,888,875
  Tenet Healthcare Corp.:    
3,450 M      6.375%, 2011   3,130,875
2,250 M        9.25%, 2015         2,115,000
  
                 32,790,748
 
  Housing—3.1%    
2,180 M Beazer Homes USA, Inc., 6.875%, 2015 (a)   1,569,600
6,100 M Builders FirstSource, Inc., 7.315%, 2012 (e)   4,300,500
900 M NTK Holdings, Inc., 0%-10.75%, 2014 (a)(f)   441,000
6,760 M Ply Gem Industries, Inc., 9%, 2012 (a)   4,968,600
3,500 M Realogy Corp., 12.375%, 2015 (a)   1,575,000
  William Lyon Homes, Inc.:    
4,500 M      7.625%, 2012   2,272,500
2,700 M        10.75%, 2013        1,417,500
 
               16,544,700
 
  Information Technology—3.9%    
7,650 M Belden CDT, Inc., 7%, 2017   7,420,500
3,000 M Exodus Communications, Inc., 10.75%, 2009 (b)(c)   1,875
2,700 M First Data Corp., 9.875%, 2015 (a)(d)   2,224,125
  Freescale Semiconductor, Inc.:    
5,250 M      9.125%, 2014   3,858,750
875 M      10.125%, 2016 (a)   595,000
  Iron Mountain, Inc.:    
1,000 M      8.625%, 2013   1,015,000
1,000 M      6.625%, 2016   957,500
1,000 M NXP BV/NXP Funding, LLC, 7.875%, 2014   920,000
  Sanmina–SCI Corp.:    
875 M      5.55%, 2014 (d)(e)   791,875
1,300 M      8.125%, 2016 (a)   1,157,000
  Xerox Corp.:    
500 M      6.4%, 2016   518,068
1,000 M        6.75%, 2017        1,057,378
 
                 20,517,071
 
 
 
      25

Portfolio of Investments (continued)    
FUND FOR INCOME    
March 31, 2008         
 
 
 
 
Principal      
Amount     Security        Value
 
  Investment/Finance Companies—1.4%    
$ 7,300 M    LaBranche & Co., Inc., 11%, 2012     $ 7,446,000
 
  Manufacturing—2.2%    
2,740 M Case New Holland, Inc., 7.125%, 2014   2,698,900
  ESCO Corp.:    
250 M      6.675%, 2013 (d)(e)   216,250
2,000 M      8.625%, 2013 (d)   1,950,000
2,500 M Itron, Inc., 7.75%, 2012   2,425,000
4,500 M   Terex Corp., 8%, 2017        4,500,000
 
               11,790,150
 
  Media-Broadcasting—3.7%    
5,250 M Block Communications, Inc., 8.25%, 2015 (d)   4,961,250
1 M Canwest Media, Inc., 8%, 2012   573
4,400 M LBI Media, Inc., 8.5%, 2017 (d)   3,833,500
5,000 M Nexstar Finance Holding, LLC, 0%-11.375%, 2013 (f)   4,881,250
1,357 M Sinclair Broadcasting Group, Inc., 8%, 2012   1,373,963
  Young Broadcasting, Inc.:    
2,920 M      10%, 2011 (a)   1,846,900
4,900 M        8.75%, 2014 (a)          2,915,500
 
               19,812,936
 
  Media-Cable TV—9.0%    
8,745 M Adelphia Communications Escrow Bond, 2011 (b)   699,600
6,250 M Atlantic Broadband Finance, LLC, 9.375%, 2014   5,531,250
6,900 M Cablevision Systems Corp., 8%, 2012   6,744,750
  Charter Communications Holdings, LLC:    
8,500 M      10%, 2009   7,703,125
2,000 M      10.25%, 2010   1,712,500
8,250 M      11.75%, 2011   5,001,563
2,000 M      8%, 2012 (d)   1,845,000
4,625 M CSC Holdings, Inc., 8.125%, 2009   4,682,813
6,940 M Echostar DBS Corp., 6.375%, 2011   6,679,750
  Mediacom LLC/Mediacom Capital Corp.:    
4,000 M      7.875%, 2011   3,580,000
2,000 M      9.5%, 2013   1,850,000
  Quebecor Media, Inc.:    
800 M      7.75%, 2016   734,000
1,000 M        7.75%, 2016        917,500
 
                47,681,851
 
 
26      

        
 
 
 
 
Principal      
Amount     Security       Value
 
  Media-Diversified—4.6%    
 $ 5,200 M Cenveo, Inc., 7.875%, 2013 $ 4,238,000
2,000 M Deluxe Corp., 7.375%, 2015   1,875,000
7,875 M Idearc, Inc., 8%, 2016   5,138,438
  MediaNews Group, Inc.:    
2,625 M      6.875%, 2013   1,292,813
3,100 M      6.375%, 2014   1,457,000
6,450 M R.H. Donnelley Corp., 8.875%, 2017 (a)(d)   4,063,500
  Six Flags, Inc.:    
2,500 M      8.875%, 2010 (a)   1,712,500
1,800 M      9.625%, 2014   1,026,000
3,400 M Universal City Development Partners, Ltd., 11.75%, 2010   3,502,000
250 M   Universal City Florida Holding Co., 7.98938%, 2010 (e)        243,750
 
               24,549,001
 
  Metals/Mining—1.5%    
500 M Freeport-McMoRan Copper & Gold, Inc., 8.375%, 2017   531,875
1,750 M Metals USA, Inc., 11.125%, 2015   1,723,750
6,010 M   Russell Metals, Inc., 6.375%, 2014        5,589,300
 
                7,844,925
 
  Retail-General Merchandise—2.7%    
4,400 M Claire’s Stores, Inc., 9.625%, 2015, PIK (a)   2,288,000
1,950 M GSC Holdings Corp., 8%, 2012   2,071,875
6,100 M Neiman Marcus Group, Inc., 10.375%, 2015 (a)   6,130,500
4,750 M   Yankee Acquisition Corp., 9.75%, 2017 (a)        3,800,000
 
               14,290,375
 
  Services—4.3%    
  Allied Waste NA, Inc.:    
1,800 M      7.875%, 2013   1,860,750
6,000 M      7.375%, 2014 (a)   5,932,500
5,250 M      6.875%, 2017   5,171,250
4,700 M Ashtead Capital, Inc., 9%, 2016 (a)(d)   3,830,500
  United Rentals, Inc.:    
2,863 M      6.5%, 2012   2,605,330
4,350 M        7%, 2014        3,436,500
 
               22,836,830
  
 
 
 
      27

Portfolio of Investments (continued)    
FUND FOR INCOME    
March 31, 2008         
 
 
 
Principal      
Amount      
or Shares     Security        Value
 
  Transportation—1.2%    
$ 1,750 M Overseas Shipholding Group, Inc., 8.25%, 2013 $ 1,765,313
4,200 M Roadway Corp., 8.25%, 2008   4,116,000
500 M   Titan Petrochemicals Group, Ltd., 8.5%, 2012 (d)        362,500
 
                 6,243,813
 
  Utilities—1.5%    
102 M AES Corp., 8.75%, 2013 (d)   106,590
4,400 M Dynegy Holdings, Inc., 7.75%, 2019   4,136,000
164 M Energy Future Holdings (TXU Corp.), 5.55%, 2014   128,681
  NRG Energy, Inc.:    
163 M 7.375%, 2016   160,148
3,500 M 7.375%, 2017   3,412,500
250 M    Reliant Energy, Inc., 6.75%, 2014        255,625
 
                  8,199,544
 
  Wireless Communications—2.1%    
8,000 M Nextel Communications, Inc., 5.95%, 2014   5,926,880
5,200 M      Rogers Wireless, Inc., 6.375%, 2014        5,161,858
 
                     11,088,738
 
Total Value of Corporate Bonds (cost $542,541,421)        476,331,750
 
  COMMON STOCKS—3.2%    
  Automotive—.0%    
37,387 * Safelite Glass Corporation–Class “B” (c)(d)   23,180
2,523     * Safelite Realty Corporation (c)        30,528
 
               53,708
 
  Chemicals—1.0%    
14,634 * Texas Petrochemicals Corporation (c)   346,416
180,613    * Texas Petrochemicals Corporation (c)        4,858,490
 
               5,204,906
 
  Food/Drug—.1%    
27,925      Ingles Markets, Inc.        686,676
 
 
 
 
28      

           
 
 
Shares or      
Principal      
Amount      
or Warrants     Security         Value
 
  Media-Broadcasting—1.1%    
105,000 Clear Channel Communications, Inc. $ 3,068,100
325,000     Sinclair Broadcasting Group, Inc.            2,895,750
 
                   5,963,850
 
  Media-Cable TV—1.0%    
8,731,521 * Adelphia Recovery Trust   571,915
178,083    * Time Warner Cable, Inc.–Class "A"          4,448,513
 
                     5,020,428
 
  Telecommunications—.0%    
2,533 * Viatel Holding (Bermuda), Ltd. (c)   30
18,224      * World Access, Inc.         11
 
                 41
 
Total Value of Common Stocks (cost $20,878,018)         16,929,609
 
  AUCTION RATE SECURITIES (g) —.9%    
$ 2,500 M Citizens Property Ins. Corp., FL, 10.74%, 2026   2,500,000
2,500 M Lorain County, OH Hosp. Rev. (Catholic Healthcare Partners),    
          8.2%, 2029         2,500,000
 
Total Value of Auction Rate Securities (cost $5,000,000)         5,000,000
 
  WARRANTS—.0%    
  Aerospace/Defense—.0%    
3,000     * DeCrane Aircraft Holdings, Inc. (expiring 9/30/08) (c)(d)         30
 
  Telecommunication Services—.0%    
3,500   * GT Group Telecom, Inc. (expiring 2/1/10) (c)(d)              —
 
Total Value of Warrants (cost $319,221)            30
  
  REPURCHASE AGREEMENTS—7.0%    
$16,903 M Barclays Bank PLC, 2.3%, dated 3/31/08, to be repurchased    
   at $16,904,080 on 4/1/08 (collateralized by Federal Home
     Loan Bank, 4.33%, 7/10/09, valued at $17,243,771) (h)   16,903,000
20,000 M Deutsche Bank, 2.25%, dated 3/31/08, to be repurchased    
     at $20,001,250 on 4/1/08 (collateralized by Federal    
           Home Loan Bank, 2.58%, 9/17/08, valued at $20,417,575) (h)         20,000,000
 
Total Value of Repurchase Agreements (cost $36,903,000)         36,903,000
  
 
 
      29

Portfolio of Investments (continued)      
FUND FOR INCOME      
March 31, 2008          
 
 
 
     Principal        
         Amount     Security           Value
  SHORT-TERM CORPORATE NOTES—3.8%    
         $ 1,750 M Australia & New Zealand Banking Corp., 3.02%, 5/19/08 (h) $ 1,743,296
               5,000 M General Electric Capital Corp., 2.33%, 4/24/08   4,992,554
               1,750 M Macquarie Bank, Ltd., 3.05%, 5/23/08 (h)     1,742,666
           10,000 M PepsiCo, Inc., 2.15%, 4/23/08 (i)     9,986,857
               1,750 M   WestPac Banking Corp., 3.03%, 5/12/08 (h)         1,744,211
Total Value of Short-Term Corporate Notes (cost $20,209,584)       20,209,584
 
  CERTIFICATES OF DEPOSIT—2.0%      
               1,750 M Banco Bilbao Vizcaya, 3.06%, 5/29/08 (h)     1,750,535
               1,750 M Banco Santander SA, 2.99%, 6/3/08 (h)     1,749,901
               1,750 M Bank of America NA, 3%, 6/6/08 (h)     1,753,646
               1,750 M HSBC Bank USA, 2.99%, 6/4/08 (h)     1,749,869
               1,750 M Royal Bank of Canada, 3.08%, 5/2/08 (h)     1,752,637
               1,750 M   Royal Bank of Scotland Group PLC, 3.04%, 5/28/08 (h)          1,750,441
Total Value of Certificates of Deposit (cost $10,507,029)            10,507,029
 
  SHORT-TERM U.S. GOVERNMENT AGENCY    
  OBLIGATIONS—.6%      
               3,000 M   Federal Home Loan Bank, 1.75%, 4/8/08 (cost $2,998,979)     2,998,979
Total Value of Investments (cost $639,357,252) 107.3 %   568,879,981
Excess of Liabilities Over Other Assets (7.3)      (38,653,724)
 
Net Assets        100.0 % $ 530,226,257
 
   * Non-income producing      
(a) Loaned security; a portion or all of the security is on loan as of March 31, 2008.    
(b) In default as to principal and/or interest payment      
(c) Securities valued at fair value (see Note 1A)      
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4).
(e) Interest rates on adjustable rate bonds are determined and reset quarterly by the indentures. The
       interest rates shown are the rates in effect on March 31, 2008.    
(f) Denotes a stepbond (a zero coupon bond that converts to a fixed interest rate at a    
       designated date).      
(g) Interest rates on auction rate securities are determined and reset periodically by the issuer and
       are the rates in effect on March 31, 2008.      
(h) Issued as collateral for securities on loan      
(i) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
 
 
 
30 See notes to financial statements    

Fund Expenses      
TOTAL RETURN 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $935.53 $6.49
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,018.30 $6.76
 Expense Example – Class B Shares      
 Actual $1,000.00 $931.87 $9.85
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.80 $10.28
 
* Expenses are equal to the annualized expense ratio of 1.34% for Class A shares and 2.04% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
 
Portfolio Composition      
TOP TEN SECTORS      

 
Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
                                                                                                                                                                                                                                           31

Portfolio of Investments    
TOTAL RETURN FUND    
March 31, 2008          
 
 
 
 
Shares        Security       Value
 
  COMMON STOCKS—55.4%    
  Consumer Discretionary—7.7%    
41,200 bebe stores, inc. $ 442,900
29,800 BorgWarner, Inc.   1,282,294
69,000 Brown Shoe Company, Inc.   1,039,830
32,100 * Carter’s, Inc.   518,415
53,100 CBS Corporation – Class "B"   1,172,448
50,600 * CEC Entertainment, Inc.   1,461,328
40,000 Cinemark Holdings, Inc.   511,600
49,600 Clear Channel Communications, Inc.   1,449,312
35,500 * Coach, Inc.   1,070,325
26,800 * Eddie Bauer Holdings, Inc.   104,252
19,100 Genuine Parts Company   768,202
23,600 H&R Block, Inc.   489,936
64,200 Home Depot, Inc.   1,795,674
14,900 J.C. Penney Company, Inc.   561,879
36,100 Leggett & Platt, Inc.   550,525
55,500 * Lincoln Educational Services Corporation   666,000
47,500 McDonald’s Corporation   2,649,075
102,700 * Morgans Hotel Group Company   1,522,014
60,000 Movado Group, Inc.   1,169,400
67,600 Newell Rubbermaid, Inc.   1,546,012
13,200 Polo Ralph Lauren Corporation – Class "A"   769,428
67,500 Ruby Tuesday, Inc.   506,250
18,300 Sherwin-Williams Company   934,032
55,100 Staples, Inc.   1,218,261
26,800 * Steiner Leisure, Ltd.   884,400
30,750 * Viacom, Inc. – Class "B"   1,218,315
56,000 Westwood One, Inc.   117,600
66,160       Wyndham Worldwide Corporation        1,368,189
 
                27,787,896
 
  Consumer Staples—6.2%    
47,400 Altria Group, Inc.   1,052,280
35,200 Avon Products, Inc.   1,391,808
16,200 * Chattem, Inc.   1,074,708
18,100 Coca-Cola Company   1,101,747
62,800 CVS Caremark Corporation   2,544,028
29,349     Kraft Foods, Inc. – Class "A"        910,112
 
 
 
 
32      

Shares     Security         Value
 
  Consumer Staples (continued)    
132,200 Nu Skin Enterprises, Inc. – Class "A" $ 2,382,244
13,500 PepsiCo, Inc.   974,700
47,400 * Philip Morris International, Inc.   2,397,492
21,000 Procter & Gamble Company   1,471,470
50,000 Safeway, Inc.   1,467,500
23,818 Tootsie Roll Industries, Inc.   600,207
68,700 Walgreen Company   2,616,783
40,800     Wal-Mart Stores, Inc.        2,149,344
 
               22,134,423
 
  Energy—5.7%    
16,000 Anadarko Petroleum Corporation   1,008,480
67,500 * Cal Dive International, Inc.   700,650
12,950 Chesapeake Energy Corporation   597,643
23,800 ConocoPhillips   1,813,798
30,800 ExxonMobil Corporation   2,605,064
1,897 Hugoton Royalty Trust   52,319
8,386 Marathon Oil Corporation   382,401
42,600 Noble Corporation   2,115,942
36,500 Sasol, Ltd. (ADR)   1,766,235
40,500 Suncor Energy, Inc.   3,902,175
7,200 * Swift Energy Company   323,928
16,670 * Transocean, Inc.   2,253,784
20,600 World Fuel Services Corporation   578,242
39,532     XTO Energy, Inc.        2,445,449
 
                 20,546,110
 
  Financials—6.2%    
13,700 American Express Company   598,964
29,100 American International Group, Inc.   1,258,575
2,580 Ameriprise Financial, Inc.   133,773
29,100 Astoria Financial Corporation   790,356
39,200 Bank of America Corporation   1,486,072
48,600 Brookline Bancorp, Inc.   557,928
17,092 Capital One Financial Corporation   841,268
29,800 Citigroup, Inc.   638,316
53,700 Colonial BancGroup, Inc.   517,131
26,550 Discover Financial Services   434,624
48,750 * First Mercury Financial Corporation   848,738
13,750 * Guaranty Financial Group, Inc.   146,025
13,324     Hartford Financial Services Group, Inc.         1,009,559
 
      33

Portfolio of Investments (continued)    
TOTAL RETURN FUND    
March 31, 2008        
 
 
 
 
Shares     Security        Value
 
  Financials (continued)    
48,200 JPMorgan Chase & Company $ 2,070,190
24,499 KeyCorp   537,753
6,500 Lehman Brothers Holdings, Inc.   244,660
10,100 Merrill Lynch & Company, Inc.   411,474
19,100 Morgan Stanley   872,870
53,900 New York Community Bancorp, Inc.   982,058
73,200 NewAlliance Bancshares, Inc.   897,432
12,200 Plum Creek Timber Company, Inc. (REIT)   496,540
34,800 South Financial Group, Inc.   517,128
59,975 Sovereign Bancorp, Inc.   558,967
71,400 Sunstone Hotel Investors, Inc. (REIT)   1,143,114
14,100 SunTrust Banks, Inc.   777,474
53,400 U.S. Bancorp   1,728,024
10,200 Wachovia Corporation   275,400
16,700 Webster Financial Corporation   465,429
36,800      Wells Fargo & Company         1,070,880
 
                 22,310,722
 
  Health Care—5.8%    
38,000 Abbott Laboratories   2,095,700
27,400 Aetna, Inc.   1,153,266
12,600 * Amgen, Inc.   526,428
5,900 Baxter International, Inc.   341,138
12,975 Covidien, Ltd.   574,144
5,300 * Genentech, Inc.   430,254
47,200 Johnson & Johnson   3,061,864
13,400 * Laboratory Corporation of America Holdings   987,312
20,200 Medtronic, Inc.   977,074
26,700 Merck & Company, Inc.   1,013,265
114,680 Pfizer, Inc.   2,400,252
33,700 Sanofi-Aventis (ADR)   1,265,098
33,200 * St. Jude Medical, Inc.   1,433,908
26,900 * Thermo Fisher Scientific, Inc.   1,528,996
24,200 * TriZetto Group, Inc.   403,898
16,250 UnitedHealth Group, Inc.   558,350
47,300     Wyeth        1,975,248
 
                 20,726,195
 
 
 
 
34      

Shares      Security            Value
 
  Industrials—10.9%    
41,700 3M Company $ 3,300,555
57,000 * AAR Corporation   1,554,390
22,700 Alexander & Baldwin, Inc.   977,916
92,504 * Altra Holdings, Inc.   1,244,179
41,200 Armstrong World Industries, Inc.   1,469,192
42,400 Avery Dennison Corporation   2,088,200
55,000 Barnes Group, Inc.   1,262,250
25,450 * BE Aerospace, Inc.   889,478
21,600 Burlington Northern Santa Fe Corporation   1,991,952
21,800 Dover Corporation   910,804
4,700 * Gardner Denver, Inc.   174,370
73,400 General Electric Company   2,716,534
34,100 Harsco Corporation   1,888,458
48,000 Honeywell International, Inc.   2,708,160
34,100 IDEX Corporation   1,046,529
37,300 Illinois Tool Works, Inc.   1,798,979
14,300 Lockheed Martin Corporation   1,419,990
85,100 * Mobile Mini, Inc.   1,616,900
24,600 Northrop Grumman Corporation   1,914,126
30,200 * PGT, Inc.   82,748
27,000 * Pinnacle Airlines Corporation   235,710
14,400 Precision Castparts Corporation   1,469,952
81,200 TAL International Group, Inc.   1,913,884
39,700 Textainer Group Holdings, Ltd.   598,676
27,175 Tyco International, Ltd.   1,197,059
40,800     United Technologies Corporation        2,807,856
 
                     39,278,847
 
  Information Technology—8.4%    
7,900 * CACI International, Inc. – Class "A"   359,845
106,200 * Cisco Systems, Inc.   2,558,358
41,500 * Electronics for Imaging, Inc.   619,180
99,400 * EMC Corporation   1,425,396
79,400 * Entrust, Inc.   198,500
51,000 Harris Corporation   2,475,030
40,200 Hewlett-Packard Company   1,835,532
49,600 Intel Corporation   1,050,528
31,000 International Business Machines Corporation   3,569,340
27,000 * Macrovision Corporation   364,500
107,900 Microsoft Corporation   3,062,202
72,400     Motorola, Inc.       673,320
 
 
      35

Portfolio of Investments (continued)    
TOTAL RETURN FUND    
March 31, 2008                     
 
 
 
 
Shares     Security             Value
 
  Information Technology (continued)    
48,300 * NCI, Inc. – Class "A" $ 909,006
52,200 Nokia Corporation – Class "A" (ADR)   1,661,526
54,600 * Parametric Technology Corporation   872,508
50,600 QUALCOMM, Inc.   2,074,600
34,000 * SI International, Inc.   652,460
79,500 * Symantec Corporation   1,321,290
129,700 * TIBCO Software, Inc.   926,058
13,175 Tyco Electronics, Ltd.   452,166
23,000 * ValueClick, Inc.   396,750
31,676 Western Union Company   673,748
26,700 * Wright Express Corporation   820,491
53,700     Xilinx, Inc.         1,275,375
 
                30,227,709
 
  Materials—3.3%    
8,200 Ashland, Inc.   387,860
52,600 Celanese Corporation – Series "A"   2,054,030
23,100 Dow Chemical Company   851,235
20,900 Freeport-McMoRan Copper & Gold, Inc.   2,010,998
38,200 Lubrizol Corporation   2,120,482
18,800 PPG Industries, Inc.   1,137,588
17,000 Praxair, Inc.   1,431,910
57,700 RPM International, Inc.   1,208,238
41,550       Temple-Inland, Inc.        528,516
 
                 11,730,857
 
  Telecommunication Services—.8%    
53,100 AT&T, Inc.   2,033,730
20,500     Verizon Communications, Inc.         747,225
 
                2,780,955
 
  Utilities—.4%    
30,700 Atmos Energy Corporation   782,850
13,700     Consolidated Edison, Inc.        543,890
 
               1,326,740
 
Total Value of Common Stocks (cost $167,476,450)        198,850,454
 
 
 
 
36      

Principal      
Amount     Security         Value
 
  CORPORATE BONDS—14.2%    
  Aerospace/Defense—.3%    
$ 500 M Boeing Co., 7.25%, 2025 $ 587,532
500 M   Precision Castparts Corp., 5.6%, 2013       555,942
 
                1,143,474
 
  Automotive—.1%    
500 M   Daimler Chrysler NA Holdings Corp., 5.75%, 2009         504,801
 
  Chemicals—.2%    
900 M   Praxair, Inc., 5.375%, 2016          915,565
 
  Consumer Non Durables—.2%    
700 M   Newell Rubbermaid, Inc., 6.75%, 2012         733,818
 
  Energy—1.4%    
1,000 M Canadian Natural Resources, Ltd., 5.9%, 2018   1,025,007
500 M ConocoPhillips, 5.625%, 2016   524,846
750 M Husky Oil, 8.9%, 2028   761,080
500 M Kinder Morgan Finance Co., 5.35%, 2011   498,750
1,000 M Northern Border Pipeline Co., 7.1%, 2011     1,066,977
1,000 M   Pacific Energy Partners LP, 7.125%, 2014        1,059,304
 
               4,935,964
 
  Financial Services—2.0%    
1,000 M Endurance Specialty Holdings, Ltd., 7%, 2034   959,605
1,000 M Fifth Third Bancorp, 5.45%, 2017   918,636
310 M GATX Financial Corp., 5.5%, 2012   325,873
500 M Hibernia Corp., 5.35%, 2014   446,401
760 M Independence Community Bank Corp., 4.9%, 2010   758,224
500 M JPMorgan Chase & Co., 5.25%, 2015   497,604
1,000 M Nationsbank Corp., 7.8%, 2016   1,143,491
1,000 M Prudential Financial, Inc., 6%, 2017   1,009,743
1,000 M Wachovia Corp., 5.75%, 2018   981,297
335 M   Washington Mutual Bank, 5.95%, 2013         286,729
 
               7,327,603
 
 
 
 
      37

Portfolio of Investments (continued)    
TOTAL RETURN FUND    
March 31, 2008         
 
 
 
 
Principal      
Amount     Security        Value
 
  Financials—1.8%    
$ 1,000 M American General Finance Corp., 6.9%, 2017 $ 978,973
1,000 M Bear Stearns Cos., Inc., 7.25%, 2018   1,035,203
927 M Ford Motor Credit Co., 9.75%, 2010   826,173
1,000 M General Motors Acceptance Corp., 7.75%, 2010   865,307
1,000 M Goldman Sachs Group, Inc., 6.45%, 2036   903,968
1,000 M Merrill Lynch & Co., 5.45%, 2013   984,891
1,000 M   Morgan Stanley, 5.95%, 2017        968,212
 
               6,562,727
 
  Food/Beverage/Tobacco—1.1%    
500 M Anheuser-Busch Cos., Inc., 4.375%, 2013   508,172
200 M Bottling Group, LLC, 5%, 2013   209,092
1,170 M Bunge Limited Finance Corp., 5.875%, 2013   1,220,943
900 M Cargill, Inc., 6%, 2017 (a)   909,436
1,000 M   Coca-Cola Enterprises, Inc., 7.125%, 2017        1,160,425
 
                4,008,068
 
  Food/Drug—.2%    
700 M   Kroger Co., 6.75%, 2012        750,161
 
  Gaming/Leisure—.4%    
700 M International Speedway Corp., 4.2%, 2009   704,086
750 M   MGM Mirage, Inc., 8.5%, 2010        778,125
 
                1,482,211
 
  Health Care—.2%    
500 M Abbott Laboratories, 5.875%, 2016   533,846
336 M   Baxter International, Inc., 5.9%, 2016       355,241
 
               889,087
 
  Information Technology—.3%    
1,000 M   International Business Machines Corp., 7%, 2025        1,105,900
 
  Manufacturing—.3%    
1,000 M   Crane Co., 6.55%, 2036        932,377
 
  Manufacturing-Diversified—.5%    
1,200 M General Electric Co., 5.25%, 2017   1,200,596
500 M   Siemens Financieringsmaatschappij NV, 5.75%, 2016 (a)         512,692
 
               1,713,288
 
 
       

Principal      
Amount     Security        Value
 
  Media-Broadcasting—.4%    
$ 750 M Comcast Cable Communications, Inc., 7.125%, 2013 $ 797,668
800 M    Cox Communications, Inc., 5.5%, 2015        782,914
 
                1,580,582
 
  Media-Diversified—1.1%    
  AOL Time Warner, Inc.:    
750 M      6.75%, 2011   771,780
1,000 M      6.875%, 2012   1,033,249
1,000 M McGraw-Hill Cos., Inc., 5.9%, 2017   993,865
500 M News America, Inc., 5.3%, 2014   500,755
705 M     Viacom, Inc., 8.625%, 2012        762,139
 
               4,061,788
 
  Metals/Mining—.4%    
1,000 M Alcoa, Inc., 6%, 2012   1,039,104
500 M   Vale Overseas, Ltd., 6.875%, 2036        490,358
 
                 1,529,462
 
    Real Estate Investment Trusts—.4%    
625 M   Health Care Property Investors, Inc., 6%, 2017   511,101
700 M     Mack-Cali Realty LP, 7.75%, 2011        734,077
 
                1,245,178
 
    Retail—.2%    
500 M    McDonald’s Corp., 5.8%, 2017        525,962
 
    Telecommunications—1.2%    
800 M   GTE Corp., 6.84%, 2018   859,133
600 M   SBC Communications, Inc., 6.25%, 2011   628,637
1,000 M   Verizon Communications, Inc., 5.5%, 2018   975,792
600 M   Verizon New York, Inc., 6.875%, 2012   631,571
1,000 M     Vodafone AirTouch PLC, 7.75%, 2010        1,060,231
  
               4,155,364
 
  Transportation—.1%    
500 M   Burlington Northern Santa Fe Corp., 4.3%, 2013        491,334
 
 
 
 
      39

Portfolio of Investments (continued)    
TOTAL RETURN FUND    
March 31, 2008         
 
 
 
 
Principal      
Amount     Security         Value
 
  Utilities—1.1%    
$ 1,000 M Carolina Power & Light, Inc., 5.15%, 2015 $ 1,019,692
350 M Entergy Gulf States, Inc., 5.25%, 2015   331,189
1,000 M Great River Energy, 5.829%, 2017 (a)   1,041,246
350 M NY State Gas & Electric Co., 6.15%, 2017 (a)   356,226
900 M Public Service Electric & Gas Co., 6.75%, 2016   993,638
350 M   Southwestern Electric Power Co., 5.875%, 2018        342,786
 
               4,084,777
 
  Waste Management—.3%    
1,000 M    Waste Management, Inc., 6.875%, 2009           1,026,153
 
Total Value of Corporate Bonds (cost $51,933,506)        51,705,644
 
  MORTGAGE-BACKED CERTIFICATES—13.6%    
  Fannie Mae—12.8%    
1,954 M 5%, 7/1/2033   1,940,083
13,154 M 5.5%, 4/1/2033–3/1/2038   13,323,031
22,788 M 6%, 5/1/2036–1/1/2038   23,372,032
5,202 M 6.5%, 11/1/2033–7/1/2037   5,402,414
1,786 M   7%, 3/1/2032–8/1/2032         1,917,646
 
                45,955,206
 
  Freddie Mac—.8%    
2,670 M   6%, 9/1/2032–9/1/2037         2,745,716
 
Total Value of Mortgage-Backed Certificates (cost $47,795,660)         48,700,922
 
  MUNICIPAL BONDS—6.0%    
5,000 M Connecticut State General Obligation, 5%, 2013   5,449,550
5,000 M Georgia State General Obligation, Series "G", 5%, 2024   5,221,750
3,005 M Maryland St. Trans. Auth. Trans. Fac., 5%, 2022   3,172,529
5,000 M New Jersey St. Trans. Trust Fund Auth. Rev. Bonds,    
       5.25%, 2015 (b)   5,630,300
2,000 M Tobacco Settlement Fin. Auth., West Virginia, Series "A",    
           7.467%, 2047        1,909,220
 
Total Value of Municipal Bonds (cost $21,396,926)        21,383,349
 
 
 
 
       

 Principal      
   Amount      
or Shares     Security        Value
U.S. GOVERNMENT AGENCY OBLIGATIONS—3.8%
  $ 5,000 M Fannie Mae, 5%, 2011 $ 5,371,000
  Federal Home Loan Bank:    
         5,000 M      6%, 2013   5,037,685
         2,000 M      5%, 2018   2,035,314
         1,000 M   Freddie Mac, 6%, 2017         1,042,282
 
Total Value of U.S. Government Agency Obligations (cost $13,303,460)         13,486,281
 
  AUCTION RATE SECURITIES (c) —2.8%    
  Citizens Property Ins. Corp. FL:    
         2,000 M      11%, 2025   2,000,000
         1,000 M      10.74%, 2026   1,000,000
         1,000 M Connecticut St. Hlth. & Educ. Facs. Rev., 11.255%, 2028   1,000,000
         2,000 M Delaware River Toll Bridge, 6.125%, 2032   2,000,000
         1,975 M North Carolina Municipal Power Agency, 5.5%, 2020   1,975,000
  Philadelphia PA School District:    
         1,000 M      10%, 2021   1,000,000
         1,000 M        11.99%, 2021           1,000,000
 
Total Value of Auction Rate Securities (cost $9,975,000)           9,975,000
 
  PREFERRED STOCKS—1.3%    
  Financials—.8%    
1,000,000 Bank of America Corp., 8%, 2049   1,002,890
     40,000 Citigroup, Inc., 8.125%, Series "AA"   961,600
     40,000 Lehman Brothers Holdings, 7.95%, Series "J"   823,200
   200,000       Wachovia Corp., 7.98%, 2049         197,107
 
                 2,984,797
 
  U.S. Government Agency—.5%    
     40,000 Fannie Mae, 8.25%   962,000
     40,000        Freddie Mac, 8.375%, Series "Z"           976,000
 
                    1,938,000
 
Total Value of Preferred Stocks (cost $5,267,750)        4,922,797
 
  U.S. GOVERNMENT OBLIGATIONS—1.1%    
         3,500  M   U.S. Treasury Notes, 5.375%, 2031 (cost $3,691,316)         4,049,066
 
 
 
 
      41

 
Portfolio of Investments (continued)      
TOTAL RETURN FUND      
March 31, 2008           
 
 
 
Principal        
Amount     Security         Value
  PASS THROUGH CERTIFICATES—.2%    
  Transportation      
$ 601 M   Continental Airlines, Inc., 8.388%, 2020 (cost $620,784)   $ 564,799
 
  SHORT-TERM CORPORATE NOTES—.3%    
1,100 M   General Electric Capital Corp., 2.3%, 4/10/08 (cost $1,099,367)      1,099,367
 
  SHORT-TERM TAX EXEMPT INVESTMENTS—.3%    
  Adjustable Rate Notes (d)      
1,000 M   Berks Cnty., PA, 6.6%, 2023 (c) (cost $1,000,000)       1,000,000
Total Value of Investments (cost $323,560,219) 99.0 %   355,737,679
Other Assets, Less Liabilities 1.0       3,482,508
 
Net Assets       100.0 % $ 359,220,187
 
   * Non-income producing      
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4).
(b) Municipal Bonds which have been prerefunded are shown maturing at the prerefunded call date.
(c) Interest rates on auction rate securities are determined and reset periodically by the issuer and
are the rates in effect on March 31, 2008.      
(d) Interest rates on adjustable rate notes are determined and reset periodically by the issuer and are
the rates in effect on March 31, 2008.      
Summary of Abbreviations:      
ADR    American Depositary Receipts      
REIT    Real Estate Investment Trusts      
 
 
 
 
42                                    See notes to financial statements    

Fund Expenses      
VALUE 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $879.96 $6.34
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,018.25 $6.81
 Expense Example – Class B Shares      
 Actual $1,000.00 $877.30 $9.62
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.75 $10.33
 
* Expenses are equal to the annualized expense ratio of 1.35% for Class A shares and 2.05% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
 
Portfolio Composition      
TOP TEN SECTORS      

 
Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
                                                                                                                                                                                                                                           43

Portfolio of Investments    
VALUE FUND      
March 31, 2008          
 
 
 
 
Shares     Security         Value
 
  COMMON STOCKS—92.0%    
  Consumer Discretionary—13.6%    
123,600 bebe stores, inc. $ 1,328,700
24,500 Best Buy Company, Inc.   1,015,770
58,900 Bob Evans Farms, Inc.   1,625,051
55,800 Carnival Corporation   2,258,784
34,300 CBS Corporation – Class "B"   757,344
94,700 Cinemark Holdings, Inc.   1,211,213
102,500 Clear Channel Communications, Inc.   2,995,050
131,400 Family Dollar Stores, Inc.   2,562,300
58,300 Gannett Company, Inc.   1,693,615
46,000 Genuine Parts Company   1,850,120
62,000 H&R Block, Inc.   1,287,120
96,400 Home Depot, Inc.   2,696,308
36,800 J.C. Penney Company, Inc.   1,387,728
61,200 Kenneth Cole Productions, Inc. – Class "A"   1,036,728
129,700 Lee Enterprises, Inc.   1,298,297
118,300 Leggett & Platt, Inc.   1,804,075
50,900 Lowe’s Companies, Inc.   1,167,646
16,400 Magna International, Inc. – Class "A"   1,183,260
91,900 Marine Products Corporation   742,552
71,500 McDonald’s Corporation   3,987,555
101,700 New York Times Company – Class "A"   1,920,096
42,500 Newell Rubbermaid, Inc.   971,975
113,400 Pearson PLC (ADR)   1,539,972
112,400 Ruby Tuesday, Inc.   843,000
78,000 Staples, Inc.   1,724,580
68,700 Tiffany & Company   2,874,408
170,800 Time Warner, Inc.   2,394,616
132,700 Walt Disney Company   4,164,126
39,220     Wyndham Worldwide Corporation         811,069
 
                    51,133,058
 
  Consumer Staples—13.7%    
88,800 Anheuser-Busch Companies, Inc.   4,213,560
76,400 Avon Products, Inc.   3,020,856
32,400 B&G Foods, Inc. – Class "A"   356,400
84,300 Coca-Cola Company   5,131,341
59,400 ConAgra Foods, Inc.   1,422,630
34,141 Del Monte Foods Company   325,364
45,200 Diageo PLC (ADR)   3,675,664
34,100     Estee Lauder Companies, Inc. – Class "A"         1,563,485
 
 
44      

Shares     Security        Value
 
  Consumer Staples (continued)    
41,400 Fomento Economico Mexicano SA de CV (ADR) $ 1,729,692
32,125 General Mills, Inc.   1,923,645
53,600 H.J. Heinz Company   2,517,592
91,900 Hershey Corporation   3,461,873
59,600 Kimberly-Clark Corporation   3,847,180
160,700 Kraft Foods, Inc. – Class "A"   4,983,307
30,400 Ruddick Corporation   1,120,544
148,200 Sara Lee Corporation   2,071,836
18,100 Tasty Baking Company   103,170
37,100 UST, Inc.   2,022,692
78,300 Walgreen Company   2,982,447
100,900     Wal-Mart Stores, Inc.        5,315,412
 
               51,788,690
 
  Energy—8.6%    
53,900 Anadarko Petroleum Corporation   3,397,317
49,200 BP PLC (ADR)   2,983,980
65,917 Chevron Corporation   5,626,675
59,300 ConocoPhillips   4,519,253
33,100 Diamond Offshore Drilling, Inc.   3,852,840
8,100 Hess Corporation   714,258
101,600 Marathon Oil Corporation   4,632,960
54,100 Royal Dutch Shell PLC – Class "A" (ADR)   3,731,818
57,600     Tidewater, Inc.         3,174,336
 
                        32,633,437
 
  Financials—20.0%    
18,000 ACE, Ltd.   991,080
31,900 Allstate Corporation   1,533,114
44,300 Aon Corporation   1,780,860
45,000 Aspen Insurance Holdings, Ltd.   1,187,100
35,000 Assured Guaranty, Ltd.   830,900
166,200 Bank Mutual Corporation   1,784,988
91,866 Bank of America Corporation   3,482,640
93,028 Bank of New York Mellon Corporation   3,882,058
69,821 Brookfield Asset Management, Inc. – Class "A"   1,873,297
25,903 Capital One Financial Corporation   1,274,946
43,456 Chubb Corporation   2,150,203
54,047 Cincinnati Financial Corporation   2,055,948
99,400 Citigroup, Inc.   2,129,148
44,800     Comerica, Inc.         1,571,584
 
      45

Portfolio of Investments (continued)    
VALUE FUND      
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  Financials (continued)    
41,400 EMC Insurance Group, Inc. $ 1,113,246
39,149 Erie Indemnity Company – Class "A"   2,004,037
85,900 First Potomac Realty Trust (REIT)   1,320,283
91,200 Hudson City Bancorp, Inc.   1,612,416
73,500 Invesco, Ltd.   1,790,460
197,200 Investors Real Estate Trust (REIT)   1,928,616
100,300 JPMorgan Chase & Company   4,307,885
58,600 KeyCorp   1,286,270
44,074 Lincoln National Corporation   2,291,848
49,300 Merrill Lynch & Company, Inc.   2,008,482
53,600 Morgan Stanley   2,449,520
118,300 NewAlliance Bancshares, Inc.   1,450,358
33,900 One Liberty Properties, Inc. (REIT)   545,451
120,600 People’s United Financial, Inc.   2,087,586
47,300 Plum Creek Timber Company, Inc. (REIT)   1,925,110
48,800 PNC Financial Services Group, Inc.   3,199,816
49,300 Protective Life Corporation   1,999,608
115,117 Regions Financial Corporation   2,273,561
33,993 State Street Corporation   2,685,447
41,300 SunTrust Banks, Inc.   2,277,282
116,400 U-Store-It Trust (REIT)   1,318,812
64,913 Wachovia Corporation   1,752,651
54,000 Waddell & Reed Financial, Inc. – Class "A"   1,735,020
96,300 Wells Fargo & Company   2,802,330
97,300     Westfield Financial, Inc.        950,621
 
                 75,644,582
 
  Health Care—5.5%    
71,400 Abbott Laboratories   3,937,710
27,875 Covidien, Ltd.   1,233,469
55,600 GlaxoSmithKline PLC (ADR)   2,359,108
90,800 Johnson & Johnson   5,890,196
49,700 Novartis AG (ADR)   2,546,131
179,500 Pfizer, Inc.   3,756,935
81,700     Schering-Plough Corporation          1,177,297
 
               20,900,846
 
 
 
 
46      

Shares     Security        Value
 
  Industrials—10.0%    
36,900 3M Company $ 2,920,635
2,600 Alexander & Baldwin, Inc.   112,008
51,700 Avery Dennison Corporation   2,546,225
73,300 Dover Corporation   3,062,474
37,600 General Dynamics Corporation   3,134,712
115,700 General Electric Company   4,282,057
65,400 Honeywell International, Inc.   3,689,868
17,800 Hubbell, Inc. – Class "B"   777,682
46,800 Illinois Tool Works, Inc.   2,257,164
36,230 Lawson Products, Inc.   998,137
86,200 Masco Corporation   1,709,346
32,900 Norfolk Southern Corporation   1,787,128
65,900 Pitney Bowes, Inc.   2,307,818
57,400 Textainer Group Holdings, Ltd.   865,592
30,375 Tyco International, Ltd.   1,338,019
47,400 United Parcel Service, Inc. – Class "B"   3,461,148
139,600     Werner Enterprises, Inc.        2,590,976
 
               37,840,989
 
  Information Technology—6.7%    
74,700 Automatic Data Processing, Inc.   3,166,533
76,300 AVX Corporation   977,403
36,465 Bel Fuse, Inc. – Class "B"   1,015,915
19,100 Broadridge Financial Solutions, Inc.   336,160
76,400 Hewlett-Packard Company   3,488,424
64,700 Intel Corporation   1,370,346
12,200 International Business Machines Corporation   1,404,708
159,100 Methode Electronics, Inc.   1,859,879
120,500 Microsoft Corporation   3,419,790
66,300 Molex, Inc.   1,535,508
130,700 Motorola, Inc.   1,215,510
67,200 Nokia Corporation – Class "A" (ADR)   2,138,976
38,600 Texas Instruments, Inc.   1,091,222
35,275 Tyco Electronics, Ltd.   1,210,638
38,500     Xilinx, Inc.        914,375
 
               25,145,387
 
 
 
 
      47

Portfolio of Investments (continued)    
VALUE FUND      
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  Materials—6.8%    
31,500 Air Products & Chemicals, Inc. $ 2,898,000
63,200 Alcoa, Inc.   2,278,992
38,600 Bemis Company, Inc.   981,598
31,200 Compass Minerals International, Inc.   1,840,176
106,700 Dow Chemical Company   3,931,895
83,200 DuPont (E.I.) de Nemours & Company   3,890,432
72,300 Glatfelter   1,092,453
46,100 Lubrizol Corporation   2,559,011
47,200 MeadWestvaco Corporation   1,284,784
73,830 Myers Industries, Inc.   969,388
144,800 Sappi, Ltd. (ADR)   1,663,752
73,100     Sonoco Products Company        2,092,853
 
               25,483,334
 
  Telecommunication Services—3.5%    
135,430 AT&T, Inc.   5,186,969
55,200 D&E Communications, Inc.   491,280
21,420 Embarq Corporation   858,942
17,600 Nippon Telegraph and Telephone Corporation (ADR)   381,568
134,400 Sprint Nextel Corporation   899,136
24,000 Telephone & Data Systems, Inc.   942,480
30,000 Telephone & Data Systems, Inc. – Special Shares   1,119,000
86,328     Verizon Communications, Inc.        3,146,656
  
               13,026,031
 
  Utilities—3.6%    
20,150 American States Water Company   725,400
5,339 Brookfield Infrastructure Partners LP   90,496
30,300 FPL Group, Inc.   1,901,022
6,600 Integrys Energy Group, Inc.   307,824
84,250 MDU Resources Group, Inc.   2,068,337
130,600 NiSource, Inc.   2,251,544
40,200 ONEOK, Inc.   1,794,126
56,700 Southwest Gas Corporation   1,585,332
48,700 United Utilities PLC (ADR)   1,336,698
50,300     Vectren Corporation        1,349,549
 
               13,410,328
 
Total Value of Common Stocks (cost $300,520,088)        347,006,682
 
 
 
48      

Shares or        
Principal        
Amount       Security            Value
  PREFERRED STOCKS—.7%      
  Financials—.2%      
44,000       Citigroup Capital XVI, 6.45%, 2066 – Series "W"      $ 893,200
 
  Telecommunication Services—.3%      
44,800       AT&T, Inc., 6.375%, 2056            1,119,104
 
    Utilities—.2%      
31,600        Entergy Louisiana, LLC, 7.6%, 2032              796,952
Total Value of Preferred Stocks (cost $3,035,046)             2,809,256
 
  CORPORATE BONDS—.1%      
  Utilities      
$ 500 M   Union Electric Co., 6.75%, 2008 (cost $499,982)       500,961
 
  SHORT-TERM CORPORATE NOTES—5.2%    
2,000 M General Electric Capital Corp., 2.3%, 4/10/08   1,998,850
17,500 M   PepsiCo, Inc., 2.15%, 4/23/08 (a)           17,477,000
Total Value of Short-Term Corporate Notes (cost $19,475,850)       19,475,850
 
  SHORT-TERM U.S. GOVERNMENT AGENCY    
  OBLIGATIONS—1.7%      
6,500 M   Federal Home Loan Bank, 1.75%, 4/8/08 (cost $6,497,788)       6,497,788
Total Value of Investments (cost $330,028,754) 99.7 %   376,290,537
Other Assets, Less Liabilities .3      1,301,924
 
Net Assets       100.0 % $ 377,592,461
 
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:      
ADR      American Depositary Receipts      
REIT      Real Estate Investment Trust      
 
 
 
  
                                   See notes to financial statements   49

Fund Expenses      
BLUE CHIP 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $874.96 $6.52
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,018.05 $7.01
 Expense Example – Class B Shares      
 Actual $1,000.00 $872.19 $9.78
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.55 $10.53
 
* Expenses are equal to the annualized expense ratio of 1.39% for Class A shares and 2.09% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
 
Portfolio Composition      
TOP TEN SECTORS      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
50

Portfolio of Investments    
BLUE CHIP FUND    
March 31, 2008              
 
 
 
 
Shares         Security           Value
 
  COMMON STOCKS—97.9%    
  Consumer Discretionary—9.5%    
41,200 Best Buy Company, Inc. $ 1,708,152
45,100 Carnival Corporation   1,825,648
89,295 CBS Corporation – Class "B"   1,971,634
56,800 Clear Channel Communications, Inc.   1,659,696
47,394 Comcast Corporation – Class "A"   916,600
84,350 * Comcast Corporation – Special Class "A"   1,600,119
57,200 H&R Block, Inc.   1,187,472
151,500 Home Depot, Inc.   4,237,455
35,600 * Kohl’s Corporation   1,526,884
127,100 Lowe’s Companies, Inc.   2,915,674
67,400 McDonald’s Corporation   3,758,898
162,400 News Corporation – Class "A"   3,045,000
34,000 NIKE, Inc. – Class "B"   2,312,000
64,100 Staples, Inc.   1,417,251
63,500 Target Corporation   3,218,180
283,300 Time Warner, Inc.   3,971,866
70,600 * Viacom, Inc. – Class "B"   2,797,172
147,000 Walt Disney Company   4,612,860
30,920         Wyndham Worldwide Corporation       639,426
 
                       45,321,987
 
  Consumer Staples—14.5%    
81,600 Altria Group, Inc.   1,811,520
75,800 Anheuser-Busch Companies, Inc.   3,596,710
85,600 Avon Products, Inc.   3,384,624
143,700 Coca-Cola Company   8,747,019
24,200 Colgate-Palmolive Company   1,885,422
29,200 Costco Wholesale Corporation   1,897,124
91,600 CVS Caremark Corporation   3,710,716
36,400 General Mills, Inc.   2,179,632
34,100 Hershey Company   1,284,547
61,800 Kimberly-Clark Corporation   3,989,190
123,724 Kraft Foods, Inc. – Class "A"   3,836,681
106,900 PepsiCo, Inc.   7,718,180
81,600 * Philip Morris International, Inc.   4,127,328
140,940 Procter & Gamble Company   9,875,666
80,200 Walgreen Company   3,054,818
161,730         Wal-Mart Stores, Inc.                8,519,936
 
                              69,619,113
 
 
      51

Portfolio of Investments (continued)    
BLUE CHIP FUND    
March 31, 2008         
 
 
 
 
Shares        Security         Value
 
  Energy—12.9%    
23,500 BP PLC (ADR) $ 1,425,275
153,100 Chevron Corporation   13,068,616
89,870 ConocoPhillips   6,848,993
229,600 ExxonMobil Corporation   19,419,568
105,790 Halliburton Company   4,160,721
17,500 Hess Corporation   1,543,150
84,200 Schlumberger, Ltd.   7,325,400
80,350 Spectra Energy Corporation   1,827,963
32,251 * Transocean, Inc.   4,360,335
33,500     Valero Energy Corporation         1,645,185
 
                   61,625,206
 
  Financials—13.7%    
38,000 ACE, Ltd.   2,092,280
31,200 Allstate Corporation   1,499,472
98,500 American Express Company   4,306,420
111,200 American International Group, Inc.   4,809,400
17,900 Ameriprise Financial, Inc.   928,115
171,966 Bank of America Corporation   6,519,231
147,187 Bank of New York Mellon Corporation   6,142,114
850 * Berkshire Hathaway, Inc. – Class "B"   3,801,965
48,600 Capital One Financial Corporation   2,392,092
37,300 Chubb Corporation   1,845,604
174,800 Citigroup, Inc.   3,744,216
58,750 Discover Financial Services   961,737
174,068 JPMorgan Chase & Company   7,476,221
10,200 Lehman Brothers Holdings, Inc.   383,928
55,300 Marsh & McLennan Companies, Inc.   1,346,555
53,300 Merrill Lynch & Company, Inc.   2,171,442
65,300 Morgan Stanley   2,984,210
20,000 PNC Financial Services Group, Inc.   1,311,400
22,500 SunTrust Banks, Inc.   1,240,650
41,000 Travelers Companies, Inc.   1,961,850
64,500 U.S. Bancorp   2,087,220
73,400 Wachovia Corporation   1,981,800
 117,400       Wells Fargo & Company         3,416,340
 
                    65,404,262
 
 
 
 
52      

Shares   Security         Value
 
  Health Care—12.3%    
93,100 Abbott Laboratories $ 5,134,465
33,200 Aetna, Inc.   1,397,388
76,500 * Amgen, Inc.   3,196,170
27,300 Baxter International, Inc.   1,578,486
136,300 Bristol-Myers Squibb Company   2,903,190
46,725 Covidien, Ltd.   2,067,581
19,100 * Genentech, Inc.   1,550,538
184,800 Johnson & Johnson   11,987,976
90,700 Medtronic, Inc.   4,387,159
81,700 Merck & Company, Inc.   3,100,515
80,300 Novartis AG (ADR)   4,113,769
403,560 Pfizer, Inc.   8,446,511
31,700 * St. Jude Medical, Inc.   1,369,123
44,200 Teva Pharmaceutical Industries, Ltd. (ADR)   2,041,598
87,800 UnitedHealth Group, Inc.   3,016,808
66,100     Wyeth        2,760,336
 
                59,051,613
 
  Industrials—11.6%    
56,100 3M Company   4,440,315
21,200 Boeing Company   1,576,644
29,600 Caterpillar, Inc.   2,317,384
45,600 Dover Corporation   1,905,168
84,200 Emerson Electric Company   4,332,932
454,200 General Electric Company   16,809,942
44,600 Honeywell International, Inc.   2,516,332
39,400 Illinois Tool Works, Inc.   1,900,262
24,800 ITT Corporation   1,284,888
33,700 Lockheed Martin Corporation   3,346,410
34,500 Northrop Grumman Corporation   2,684,445
41,225 Tyco International, Ltd.   1,815,961
46,600 United Parcel Service, Inc. – Class "B"   3,402,732
102,700     United Technologies Corporation        7,067,814
 
              55,401,229
 
 
 
 
      53

Portfolio of Investments (continued)    
BLUE CHIP FUND    
March 31, 2008            
 
 
 
 
Shares          Security            Value
 
  Information Technology—17.3%    
36,320 Accenture, Ltd. – Class "A" $ 1,277,374
44,300 Analog Devices, Inc.   1,307,736
17,400 * Apple, Inc.   2,496,900
72,100 Applied Materials, Inc.   1,406,671
31,800 Automatic Data Processing, Inc.   1,348,002
272,200 * Cisco Systems, Inc.   6,557,298
92,000 Corning, Inc.   2,211,680
183,700 * Dell, Inc.   3,659,304
31,500 * eBay, Inc.   939,960
226,625 * EMC Corporation   3,249,803
100,900 Hewlett-Packard Company   4,607,094
286,000 Intel Corporation   6,057,480
70,100 International Business Machines Corporation   8,071,314
555,945 Microsoft Corporation   15,777,719
160,100 Motorola, Inc.   1,488,930
135,600 Nokia Corporation – Class "A" (ADR)   4,316,148
183,300 * Oracle Corporation   3,585,348
69,170 QUALCOMM, Inc.   2,835,970
82,500 * Symantec Corporation   1,371,150
109,900 Texas Instruments, Inc.   3,106,873
50,225 Tyco Electronics, Ltd.   1,723,722
103,200 Western Union Company   2,195,064
80,200 Xerox Corporation   1,200,594
68,100    * Yahoo!, Inc.          1,970,133
  
                82,762,267
 
  Materials—2.8%    
58,600 Alcoa, Inc.   2,113,116
96,900 Dow Chemical Company   3,570,765
55,900 DuPont (E.I.) de Nemours & Company   2,613,884
72,700 International Paper Company   1,977,440
21,300 Newmont Mining Corporation   964,890
19,700 PPG Industries, Inc.   1,192,047
18,900     Weyerhaeuser Company        1,229,256
 
               13,661,398
 
 
 
 
54      

     Shares or        
     Principal        
         Amount     Security         Value
 
  Telecommunication Services—2.3%    
         164,700 AT&T, Inc.   $ 6,308,010
           29,638 Sprint Nextel Corporation     198,278
         129,700     Verizon Communications, Inc.         4,727,565
 
                11,233,853
 
  Utilities—1.0%      
         177,700 Duke Energy Corporation     3,171,945
           23,500     FPL Group, Inc.         1,474,390
 
                 4,646,335
 
Total Value of Common Stocks (cost $346,119,301)          468,727,263
 
  SHORT-TERM CORPORATE NOTES—2.0%    
           $1,200 M General Electric Capital Corp., 2.3%, 4/10/08   1,199,310
               2,300 M Madison Gas & Electric Co., 2.35%, 4/11/08   2,298,498
  PepsiCo, Inc.:      
               1,500 M      2.54%, 4/10/08 (a)     1,499,046
               4,500 M        2.15%, 4/23/08 (a)           4,494,086
 
Total Value of Short-Term Corporate Notes (cost $9,490,940)         9,490,940
 
Total Value of Investments (cost $355,610,241) 99.9 %   478,218,203
Other Assets, Less Liabilities .1       370,842
 
Net Assets       100.0 % $ 478,589,045
 
   * Non-income producing      
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:      
       ADR    American Depositary Receipts      
 
 
 
 
                                 See notes to financial statements   55

Fund Expenses      
GROWTH & INCOME 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $866.29 $6.30
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,018.25 $6.81
 Expense Example – Class B Shares      
 Actual $1,000.00 $863.19 $9.55
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.75 $10.33
 
* Expenses are equal to the annualized expense ratio of 1.35% for Class A shares and 2.05% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
 
Portfolio Composition      
TOP TEN SECTORS      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
56

Portfolio of Investments    
GROWTH & INCOME FUND    
March 31, 2008          
 
 
 
 
Shares     Security          Value
 
  COMMON STOCKS—99.5%    
    Consumer Discretionary—13.9%    
155,000 bebe stores, inc. $ 1,666,250
110,000 BorgWarner, Inc.   4,733,300
255,000 Brown Shoe Company, Inc.   3,842,850
120,000 * Carter’s, Inc.   1,938,000
200,000 CBS Corporation – Class "B"   4,416,000
186,600 * CEC Entertainment, Inc.   5,389,008
150,000 Cinemark Holdings, Inc.   1,918,500
190,000 Clear Channel Communications, Inc.   5,551,800
130,300 * Coach, Inc.   3,928,545
100,000 * Eddie Bauer Holdings, Inc.   389,000
70,000 Genuine Parts Company   2,815,400
100,000 H&R Block, Inc.   2,076,000
235,000 Home Depot, Inc.   6,572,950
55,000 J.C. Penney Company, Inc.   2,074,050
140,000 Leggett & Platt, Inc.   2,135,000
203,900 * Lincoln Educational Services Corporation   2,446,800
175,000 McDonald’s Corporation   9,759,750
385,000 * Morgans Hotel Group Company   5,705,700
221,700 Movado Group, Inc.   4,320,933
245,000 Newell Rubbermaid, Inc.   5,603,150
50,000 Polo Ralph Lauren Corporation – Class "A"   2,914,500
245,000 Ruby Tuesday, Inc.   1,837,500
67,500 Sherwin-Williams Company   3,445,200
200,000 Staples, Inc.   4,422,000
100,000 * Steiner Leisure, Ltd.   3,300,000
112,500 * Viacom, Inc. – Class "B"   4,457,250
212,100 Westwood One, Inc.   445,410
240,000     Wyndham Worldwide Corporation        4,963,200
 
               103,068,046
 
  Consumer Staples—10.9%    
175,000 Altria Group, Inc.   3,885,000
130,000 Avon Products, Inc.   5,140,200
60,000 * Chattem, Inc.   3,980,400
67,500 Coca-Cola Company   4,108,725
230,000 CVS Caremark Corporation   9,317,300
107,263 Kraft Foods, Inc. – Class "A"   3,326,225
485,000 Nu Skin Enterprises, Inc. – Class "A"   8,739,700
50,000 PepsiCo, Inc.   3,610,000
175,000   * Philip Morris International, Inc.        8,851,500
 
 
      57

Portfolio of Investments (continued)    
GROWTH & INCOME FUND    
March 31, 2008             
 
 
 
 
Shares     Security         Value
 
  Consumer Staples (continued)    
77,500 Procter & Gamble Company $ 5,430,425
185,000 Safeway, Inc.   5,429,750
87,050 Tootsie Roll Industries, Inc.   2,193,671
250,000 Walgreen Company     9,522,500
150,000     Wal-Mart Stores, Inc.       7,902,000
 
               81,437,396
 
  Energy—10.4%    
60,000 Anadarko Petroleum Corporation   3,781,800
255,000 * Cal Dive International, Inc.   2,646,900
50,000 Chesapeake Energy Corporation   2,307,500
90,000 ConocoPhillips   6,858,900
115,000 ExxonMobil Corporation   9,726,700
7,153 Hugoton Royalty Trust   197,280
33,096 Marathon Oil Corporation   1,509,178
160,000 Noble Corporation   7,947,200
140,000 Sasol, Ltd. (ADR)   6,774,600
150,000 Suncor Energy, Inc.   14,452,500
28,200 * Swift Energy Company   1,268,718
62,964 * Transocean, Inc.   8,512,733
75,000 World Fuel Services Corporation   2,105,250
150,000     XTO Energy, Inc.        9,279,000
  
               77,368,259
 
  Financials—11.2%    
52,000 American Express Company   2,273,440
110,000 American International Group, Inc.   4,757,500
10,000 Ameriprise Financial, Inc.   518,500
110,000 Astoria Financial Corporation   2,987,600
150,000 Bank of America Corporation   5,686,500
182,000 Brookline Bancorp, Inc.   2,089,360
65,380 Capital One Financial Corporation   3,218,004
114,000 Citigroup, Inc.   2,441,880
200,000 Colonial BancGroup, Inc.   1,926,000
100,000 Discover Financial Services   1,637,000
180,000 * First Mercury Financial Corporation   3,133,800
50,000 * Guaranty Financial Group, Inc.   531,000
50,000     Hartford Financial Services Group, Inc.        3,788,500
 
 
 
 
58      

Shares     Security         Value
 
  Financials (continued)    
177,500 JPMorgan Chase & Company $ 7,623,625
91,000 KeyCorp   1,997,450
25,000 Lehman Brothers Holdings, Inc.   941,000
40,000 Merrill Lynch & Company, Inc.   1,629,600
70,000 Morgan Stanley   3,199,000
200,000 New York Community Bancorp, Inc.   3,644,000
265,000 NewAlliance Bancshares, Inc.   3,248,900
44,400 Plum Creek Timber Company, Inc. (REIT)   1,807,080
130,000 South Financial Group, Inc.   1,931,800
221,000 Sovereign Bancorp, Inc.   2,059,720
260,000 Sunstone Hotel Investors, Inc. (REIT)   4,162,600
50,000 SunTrust Banks, Inc.   2,757,000
200,000 U.S. Bancorp   6,472,000
40,000 Wachovia Corporation   1,080,000
60,000 Webster Financial Corporation   1,672,200
140,000     Wells Fargo & Company         4,074,000
 
                83,289,059
 
  Health Care—10.3%    
140,000 Abbott Laboratories   7,721,000
100,000 Aetna, Inc.   4,209,000
46,700 * Amgen, Inc.   1,951,126
22,417 Baxter International, Inc.   1,296,151
48,750 Covidien, Ltd.   2,157,187
20,000 * Genentech, Inc.   1,623,600
175,000 Johnson & Johnson   11,352,250
50,000 * Laboratory Corporation of America Holdings   3,684,000
75,000 Medtronic, Inc.   3,627,750
100,000 Merck & Company, Inc.   3,795,000
425,000 Pfizer, Inc.   8,895,250
125,000 Sanofi-Aventis (ADR)   4,692,500
125,000 * St. Jude Medical, Inc.   5,398,750
100,000 * Thermo Fisher Scientific, Inc.   5,684,000
90,000 * TriZetto Group, Inc.   1,502,100
60,000 UnitedHealth Group, Inc.   2,061,600
175,000     Wyeth        7,308,000
  
               76,959,264
 
 
 
 
      59

Portfolio of Investments (continued)    
GROWTH & INCOME FUND    
March 31, 2008          
 
 
 
 
Shares     Security         Value
 
  Industrials—19.7%    
155,000 3M Company $ 12,268,250
210,000 * AAR Corporation   5,726,700
84,600 Alexander & Baldwin, Inc.   3,644,568
342,600 * Altra Holdings, Inc.   4,607,970
155,000 Armstrong World Industries, Inc.   5,527,300
155,000 Avery Dennison Corporation   7,633,750
210,000 Barnes Group, Inc.   4,819,500
100,000 * BE Aerospace, Inc.   3,495,000
80,000 Burlington Northern Santa Fe Corporation   7,377,600
80,000 Dover Corporation   3,342,400
20,000 * Gardner Denver, Inc.   742,000
270,000 General Electric Company   9,992,700
130,000 Harsco Corporation   7,199,400
180,000 Honeywell International, Inc.   10,155,600
125,000 IDEX Corporation   3,836,250
137,500 Illinois Tool Works, Inc.   6,631,625
55,000 Lockheed Martin Corporation   5,461,500
315,000 * Mobile Mini, Inc.   5,985,000
90,000 Northrop Grumman Corporation   7,002,900
110,000 * PGT, Inc.   301,400
100,000 * Pinnacle Airlines Corporation   873,000
55,000 Precision Castparts Corporation   5,614,400
300,000 TAL International Group, Inc.   7,071,000
137,800 Textainer Group Holdings, Ltd.   2,078,024
100,000 Tyco International, Ltd.   4,405,000
155,000     United Technologies Corporation        10,667,100
 
                146,459,937
 
  Information Technology—15.1%    
30,000 * CACI International, Inc. – Class "A"   1,366,500
400,000 * Cisco Systems, Inc.   9,636,000
150,900 * Electronics for Imaging, Inc.   2,251,428
371,000 * EMC Corporation   5,320,140
300,000 * Entrust, Inc.   750,000
190,000 Harris Corporation   9,220,700
150,000 Hewlett-Packard Company   6,849,000
185,000 Intel Corporation   3,918,300
115,000 International Business Machines Corporation   13,241,100
100,000 * Macrovision Corporation   1,350,000
400,000 Microsoft Corporation   11,352,000
275,000      Motorola, Inc.        2,557,500
 
 
60      

Shares     Security        Value
 
  Information Technology (continued)    
175,360 * NCI, Inc. – Class "A" $ 3,300,275
200,000 Nokia Corporation – Class "A" (ADR)   6,366,000
200,000 * Parametric Technology Corporation   3,196,000
190,000 QUALCOMM, Inc.   7,790,000
125,000 * SI International, Inc.   2,398,750
300,000 * Symantec Corporation   4,986,000
475,000 * TIBCO Software, Inc.   3,391,500
48,750 Tyco Electronics, Ltd.   1,673,100
85,000 * ValueClick, Inc.   1,466,250
120,000 Western Union Company   2,552,400
100,000 * Wright Express Corporation   3,073,000
200,000       Xilinx, Inc.        4,750,000
 
               112,755,943
 
  Materials—5.9%    
30,000 Ashland, Inc.   1,419,000
200,000 Celanese Corporation – Series "A"   7,810,000
85,000 Dow Chemical Company   3,132,250
80,000 Freeport-McMoRan Copper & Gold, Inc.   7,697,600
141,300 Lubrizol Corporation   7,843,563
70,000 PPG Industries, Inc.   4,235,700
65,000 Praxair, Inc.   5,474,950
212,700 RPM International, Inc.   4,453,938
150,000     Temple-Inland, Inc.        1,908,000
 
                  43,975,001
 
  Telecommunication Services—1.4%    
200,000 AT&T, Inc.   7,660,000
75,000     Verizon Communications, Inc.        2,733,750
 
               10,393,750
 
  Utilities—.7%    
115,400 Atmos Energy Corporation   2,942,700
50,000     Consolidated Edison, Inc.         1,985,000
 
               4,927,700
 
Total Value of Common Stocks (cost $623,808,860)         740,634,355
 
 
 
 
      61

Portfolio of Investments (continued)      
GROWTH & INCOME FUND      
March 31, 2008             
 
 
 
Principal        
Amount     Security         Value
  SHORT-TERM CORPORATE NOTES—.3%    
$1,000 M General Electric Capital Corp., 2.3%, 4/10/08 $ 999,425
1,300 M   PepsiCo, Inc., 2.54%, 4/10/08 (a)         1,299,173
Total Value of Short-Term Corporate Notes (cost $2,298,598)       2,298,598
Total Value of Investments (cost $626,107,458) 99.8 %   742,932,953
Other Assets, Less Liabilities .2     1,478,565
Net Assets        100.0 %  $ 744,411,518
   * Non-income producing      
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:      
ADR    American Depositary Receipts      
REIT    Real Estate Investment Trust      
 
 
 
 
62 See notes to financial statements    

Fund Expenses      
GLOBAL 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 4 for
a detailed explanation of the information presented in these examples.  
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $903.81 $8.04
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,016.55 $8.52
 Expense Example – Class B Shares      
 Actual $1,000.00 $899.51 $11.35
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,013.05 $12.03
 
* Expenses are equal to the annualized expense ratio of 1.69% for Class A shares and 2.39% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
 
 
 
Portfolio Composition      
TOP TEN SECTORS      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
                                                                                                                                                                                                                                             63

Portfolio of Investments    
GLOBAL FUND    
March 31, 2008         
 
 
 
 
Shares        Security         Value
 
  COMMON STOCKS—97.3%    
  United States—42.1%    
18,415 Abbott Laboratories $ 1,015,587
17,800 Accenture, Ltd. – Class "A"   626,026
17,270 ACE, Ltd.   950,886
11,900 * Adobe Systems, Inc.   423,521
5,000 * Affiliated Managers Group, Inc.   453,700
25,290 Altria Group, Inc.   561,438
72,320 American Eagle Outfitters, Inc.   1,266,323
66,820 American Electric Power Company, Inc.   2,781,717
27,873 American International Group, Inc.   1,205,507
39,380 * Amgen, Inc.   1,645,296
19,865 Apache Corporation   2,400,089
3,000 * Apple, Inc.   430,500
34,980 Applied Materials, Inc.   682,460
78,325 AT&T, Inc.   2,999,847
123,225 Bank of America Corporation   4,671,460
5,915 Boeing Company   439,899
3,900 Cardinal Health, Inc.   204,789
33,700 * Carter’s, Inc.   544,255
41,835 Caterpillar, Inc.   3,275,262
133,135 * Cisco Systems, Inc.   3,207,222
690 CME Group, Inc.   323,679
7,300 Colgate-Palmolive Company   568,743
13,355 ConocoPhillips   1,017,785
103,530 Corning, Inc.   2,488,861
33,200 * Coventry Health Care, Inc.   1,339,620
30,860 Covidien, Ltd.   1,365,555
10,000 Darden Restaurants, Inc.   325,500
12,775 Eli Lilly & Company   659,062
172,290 * EMC Corporation   2,470,639
28,020 EOG Resources, Inc.   3,362,400
40,190 Exelon Corporation   3,266,241
40,935 ExxonMobil Corporation   3,462,282
4,000 Franklin Resources, Inc.   387,960
37,110 Freeport-McMoRan Copper & Gold, Inc.   3,570,724
29,005 Gap, Inc.   570,818
23,735 * Genentech, Inc.   1,926,807
114,645 General Electric Company   4,243,011
9,400 * Genzyme Corporation   700,676
2,865 * Google, Inc. – Class "A"   1,261,947
22,500      Graco, Inc.        815,850
 
 
64      

Shares         Security         Value
 
  United States (continued)    
19,000 * Gymboree Corporation $ 757,720
18,081 Halliburton Company   711,126
63,200 * Hercules Offshore, Inc.   1,587,584
1,600 Hess Corporation   141,088
64,130 Hewlett-Packard Company   2,928,176
2,000 International Business Machines Corporation   230,280
203,884 Invesco PLC   4,966,614
13,565 * Iron Mountain, Inc.   358,659
25,660 JPMorgan Chase & Company   1,102,097
50,135 * Kohl’s Corporation   2,150,290
10,805 Lockheed Martin Corporation   1,072,936
43,505 Manpower, Inc.   2,447,591
37,720 Medtronic, Inc.   1,824,516
6,900 * MEMC Electronic Materials, Inc.   489,210
24,500 Merck & Company, Inc.   929,775
13,600 Merrill Lynch & Company, Inc.   554,064
122,565 Microsoft Corporation   3,478,395
15,900 NIKE, Inc. – Class "B"   1,081,200
17,900 Northrop Grumman Corporation   1,392,799
107,920 * Oracle Corporation   2,110,915
14,700 Oshkosh Truck Corporation   533,316
43,295 PepsiCo, Inc.   3,125,899
25,290 * Philip Morris International, Inc.   1,279,168
35,415 PNC Financial Services Group, Inc.   2,322,162
14,000 Precision Castparts Corporation   1,429,120
5,300 * Priceline.com, Inc.   640,558
30,960 Procter & Gamble Company   2,169,367
37,110 QUALCOMM, Inc.   1,521,510
46,510 Schering-Plough Corporation   670,209
14,600 Schlumberger, Ltd.   1,270,200
17,200 St. Mary Land & Exploration Company   662,200
17,100 * St. Jude Medical, Inc.   738,549
69,190 Staples, Inc.   1,529,791
18,480 State Street Corporation   1,459,920
15,800 * Terex Corporation   987,500
45,060 * Thomas & Betts Corporation   1,638,832
19,528 Transocean, Inc.   2,640,186
4,700 Union Pacific Corporation   589,286
5,395 United States Steel Corporation   684,464
10,585 United Technologies Corporation   728,460
44,885     UnitedHealth Group, Inc.        1,542,249
 
 
      65

Portfolio of Investments (continued)    
GLOBAL FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  United States (continued)    
26,535 * Viacom, Inc. – Class "B" $ 1,051,317
30,200 W.R. Berkley Corporation   836,238
43,465 Wachovia Corporation   1,173,555
39,055 Wal-Mart Stores, Inc.   2,057,417
15,700 * Waters Corporation   874,490
20,200 * WellPoint, Inc.   891,426
16,310     Williams Companies, Inc.        537,904
 
                129,814,272
 
  United Kingdom—8.4%    
80,561 BG Group PLC   1,868,559
36,857 Johnson Matthey PLC   1,468,742
62,387 Man Group PLC   687,554
50,745 Reckitt Benckiser PLC   2,814,908
129,845 SABMiller PLC   2,849,085
151,027 Smith & Nephew PLC   2,000,626
9,575 Smith & Nephew PLC (ADR)   631,854
102,164 Standard Chartered PLC   3,496,570
882,719 Vodafone Group PLC   2,647,420
108,117     Xstrata PLC         7,578,977
 
               26,044,295
 
  Germany—6.0%    
12,537 Allianz AG   2,498,699
26,230 Continental AG   2,704,505
36,249 Daimler AG – Registered   3,114,902
17,435 Deutsche Boerse AG   2,836,444
19,590 Deutsche Postbank AG   1,882,669
16,172 E.ON AG   3,028,935
21,808     Siemens AG        2,390,936
 
                18,457,090
 
  France—5.4%    
50,039 Axa   1,822,873
19,781 BNP Paribas SA   2,002,580
22,050 Bouygues SA   1,405,967
39,963 Essilor International SA   2,620,971
86,014     France Telecom SA        2,903,070
 
 
 
 
66      

Shares     Security        Value
 
  France (continued)    
31,663 Sanofi-Aventis $ 2,384,170
12,451 Schneider Electric SA   1,617,018
28,479     Veolia Environment        1,992,794
 
                16,749,443
 
  Japan—5.1%    
65,250 Canon, Inc.   3,008,967
38,700 Honda Motor Company, Ltd.   1,106,159
1,059 Japan Tobacco, Inc.   5,309,097
64,000 Mitsubishi Estate Company, Ltd.   1,556,036
179,000 Mitsui & Co., Ltd.   3,632,692
172,000     Toshiba Corporation        1,150,872
 
                15,763,823
 
  Switzerland—4.4%    
15,700 ABB, Ltd. (ADR)   422,644
75,250 ABB, Ltd. – Registered   2,028,376
52,436 Julius Baer Holding, Ltd. AG – Registered   3,880,810
10,553 Nestle SA – Registered   5,294,905
12,629     Synthes, Inc.        1,773,589
 
               13,400,324
 
  Netherlands—3.8%    
29,227 ArcelorMittal   2,403,126
105,572 * ASML Holding NV   2,606,303
70,225 Koninklijke (Royal) Philips Electronics NV   2,696,211
116,223     Unilever NV        3,917,133
 
               11,622,773
 
  Brazil—3.4%    
103,300 All America Latina Logistica   1,039,794
24,400 Banco Itau Holding Financeira SA (ADR)   555,344
104,000 Bolsa de Mercadorias e Futuros   940,372
68,970 Companhia Vale do Rio Doce (ADR)   2,389,121
4,100 * MMX Mineracao e Metalicos SA   2,215,899
31,800     Petroleo Brasileiro SA (ADR)        3,247,098
 
               10,387,628
 
 
 
 
      67

Portfolio of Investments (continued)    
GLOBAL FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  Canada—3.0%    
24,500 Canadian Imperial Bank of Commerce $ 1,578,096
59,400 Canadian Natural Resources, Ltd.   4,066,907
44,200 EnCana Corporation   3,363,516
1,815    * Research in Motion, Ltd.        203,697
 
               9,212,216
 
  China—1.9%    
2,926,000 Bank of China, Ltd.   1,248,170
662,000 China Communications Construction Company, Ltd.   1,463,012
372,500 China Merchants Bank Company, Ltd.   1,289,871
7,200 PetroChina Company, Ltd. (ADR)   902,232
1,458,000 Shanghai Electric Group Company, Ltd.   889,841
4,400   * Suntech Power Holdings Company, Ltd. (ADR)         178,464
 
                5,971,590
 
  Finland—1.7%    
20,600 Nokia Corporation – Class "A" (ADR)   655,698
148,275     Nokia OYJ        4,708,411
 
               5,364,109
 
  Norway—1.6%    
56,750 Aker Kvaerner ASA   1,295,420
85,300 Norsk Hydro ASA   1,245,488
118,000     Telenor ASA        2,263,984
 
               4,804,892
 
  Spain—1.5%    
171,378 Banco Santander SA   3,427,071
179,995   * Iberdrola Removables         1,257,789
 
               4,684,860
 
  Italy—1.0%    
106,471 Bulgari SpA   1,234,955
285,456     UniCredito Italiano SpA        1,917,846
 
                3,152,801
 
 
 
 
68      

Shares     Security        Value
  
  Ireland—.9%    
41,900 * Elan Corporation PLC (ADR) $ 874,034
67,900   * Ryanair Holdings PLC (ADR)        1,920,212
 
                 2,794,246
 
  South Africa—.8%    
38,637 Impala Platinum Holdings, Ltd.   1,488,141
73,314     MTN Group, Ltd.        1,109,656
 
               2,597,797
 
  Hong Kong—.8%    
910,888     Shangri-La Asia, Ltd.        2,457,795
 
  Sweden—.7%    
128,200     Sandvik AB        2,232,169
 
  Austria—.7%    
32,206     OMV AG         2,136,214
 
  Mexico—.7%    
17,200 America Movil SAB de CV (ADR) – Series "L"   1,095,468
41,700     Grupo Aeroportuario del Centro Norte SA de CV (ADR)        929,910
 
              2,025,378
 
  Israel—.6%    
41,500      Teva Pharmaceutical Industries, Ltd. (ADR)         1,916,885
 
  Australia—.6%    
346,596 * Lihir Gold, Ltd.   1,135,841
10,300 * Lihir Gold, Ltd. (ADR)   327,746
7,200     Woodside Petroleum, Ltd. (ADR)         358,202
 
                1,821,789
 
  Egypt—.6%    
26,100     Orascom Telecom Holding SAE (GDR)        1,774,800
 
  Denmark—.5%    
21,775     Novo Nordisk A/S – Series "B"         1,494,465
 
 
 
 
      69

Portfolio of Investments (continued)      
GLOBAL FUND      
March 31, 2008          
 
 
 
Shares or        
Principal        
Amount     Security         Value
  Russia—.4%      
           11,250 Evraz Group SA (GDR)   $ 970,875
           11,000     TMK OAO (GDR) (a)        357,500
                1,328,375
 
  India—.3%      
           26,700     Infosys Technologies, Ltd. (ADR)        955,059
 
  South Korea—.2%      
5,247     LG Electronics, Inc.        672,862
 
      Belgium—.2%         
           14,284      UCB SA          498,058
Total Value of Common Stocks (cost $273,161,421)        300,136,008
 
  REPURCHASE AGREEMENT—2.6%      
           $8,110 M UBS Securities, 1.35%, dated 3/31/08, to be repurchased    
       at $8,110,304 on 4/1/08 (collaterized by U.S. Treasury    
       Bonds, 6.875%, 8/15/2025, valued at $8,279,151)    
           (cost $8,110,000)           8,110,000
Total Value of Investments (cost $281,271,421) 99.9 % 308,246,008
Other Assets, Less Liabilities .1       242,236
 
Net Assets         100.0 % $ 308,488,244
 
   * Non-income producing      
(a) Security exempt from registration under Rule 144A of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:      
       ADR American Depositary Receipts      
       GDR Global Depositary Receipts      
       REIT Real Estate Investment Trust      
 
 
 
 
70 See notes to financial statements    

Fund Expenses      
SELECT GROWTH 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $853.85 $6.72
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,017.75 $7.31
 Expense Example – Class B Shares      
 Actual $1,000.00 $850.00 $9.94
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.25 $10.83
 
* Expenses are equal to the annualized expense ratio of 1.45% for Class A shares and 2.15% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
 
Portfolio Composition      
BY SECTOR      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
                                                                                                                                                                                                                                           71

Portfolio of Investments    
SELECT GROWTH FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  COMMON STOCKS—96.9%    
  Consumer Discretionary—9.4%    
238,000 * Aeropostale, Inc. $ 6,452,180
145,400 * Fossil, Inc.   4,440,516
178,100 Guess?, Inc.   7,207,707
110,400     Omnicom Group, Inc.        4,877,472
  
               22,977,875
 
  Consumer Staples—9.0%    
115,400 Church & Dwight Company, Inc.   6,259,296
120,650 Colgate-Palmolive Company   9,399,842
87,400     PepsiCo, Inc.        6,310,280
 
               21,969,418
 
  Energy—8.5%    
54,400 ExxonMobil Corporation   4,601,152
85,000 Marathon Oil Corporation   3,876,000
101,800 * National-Oilwell Varco, Inc.   5,943,084
86,600     Occidental Petroleum Corporation        6,336,522
 
                20,756,758
 
  Financials—8.3%    
100,660 Bank of New York Mellon Corporation   4,200,542
154,800 * Nasdaq OMX Group, Inc.   5,984,568
68,600 Northern Trust Corporation   4,559,842
251,100     Unum Group        5,526,711
 
               20,271,663
 
  Health Care—18.8%    
156,475 Applera Corporation – Applied Biosystems Group   3,383,538
90,400 Becton, Dickinson & Company   4,972,870
83,400 Cigna Corporation   5,141,768
112,600 * Express Scripts, Inc.   5,166,452
122,100 * Gilead Sciences, Inc.   6,072,370
133,000 * OSI Pharmaceuticals, Inc.   6,291,813
189,600 Perrigo Company   7,153,608
110,300   *  Varian Medical Systems, Inc.        7,760,840
 
               45,943,259
 
 
 
 
72      

Shares or        
Principal        
Amount     Security         Value
 
  Industrials—12.7%      
81,100 Danaher Corporation   $ 6,166,033
80,900 * Jacobs Engineering Group, Inc.     5,953,431
170,260 Manitowoc Company, Inc.     6,946,608
61,100 Northrop Grumman Corporation     4,754,191
44,215 Republic Services, Inc.     1,292,847
86,000     United Technologies Corporation         5,918,520
  
                 31,031,630
 
  Information Technology—24.9%      
122,470 Amphenol Corporation – Class "A"     4,562,007
181,700 * BMC Software, Inc.     5,908,884
95,000 FactSet Research Systems, Inc.     5,117,650
138,600 Harris Corporation     6,726,258
152,300 Hewlett-Packard Company     6,954,018
56,000 International Business Machines Corporation     6,447,840
237,600 Microsoft Corporation     6,743,088
407,000 * Oracle Corporation     7,960,920
365,000 * Parametric Technology Corporation     5,832,700
157,500     Texas Instruments, Inc.         4,452,525
 
                   60,705,890
 
  Materials—3.0%      
101,800     Sigma-Aldrich Corporation            7,242,432
 
  Telecommunication Services—2.3%      
149,100     AT&T, Inc.              5,710,530
 
Total Value of Common Stocks (cost $234,683,026)        236,609,455
 
  SHORT-TERM CORPORATE NOTES—3.0%    
$7,300  M   PepsiCo, Inc., 2.15%, 4/23/08 (cost $7,290,406) (a)      7,290,406
  
Total Value of Investments (cost $241,973,432) 99.9 %   243,899,861
Other Assets, Less Liabilities .1      123,196
 
Net Assets         100.0 % $ 244,023,057
 
   * Non-income producing      
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
 
 
 
 
  See notes to financial statements   73

Fund Expenses      
OPPORTUNITY 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $892.25 $6.58
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,018.05 $7.01
 Expense Example – Class B Shares      
 Actual $1,000.00 $889.12 $9.87
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.55 $10.53
 
* Expenses are equal to the annualized expense ratio of 1.39% for Class A shares and 2.09% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
 
Portfolio Composition      
TOP TEN SECTORS      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
74

Portfolio of Investments    
OPPORTUNITY FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  COMMON STOCKS—97.9%    
  Consumer Discretionary—13.0%    
185,000 BorgWarner, Inc. $ 7,960,550
220,000 Brown Shoe Company, Inc.   3,315,400
45,000 * CEC Entertainment, Inc.   1,299,600
225,000 Cinemark Holdings, Inc.   2,877,750
150,000 * Coach, Inc.   4,522,500
73,000 Gannett Company, Inc.   2,120,650
210,000 * Morgans Hotel Group Company   3,112,200
170,000 Movado Group, Inc.   3,313,300
135,000 Nordstrom, Inc.   4,401,000
65,000 Polo Ralph Lauren Corporation – Class "A"   3,788,850
122,500 * Red Robin Gourmet Burgers, Inc.   4,602,325
117,500 Tiffany & Company   4,916,200
250,000 * Warnaco Group, Inc.   9,860,000
126,000     Wolverine World Wide, Inc.        3,655,260
 
                59,745,585
 
  Consumer Staples—5.9%    
50,000 Altria Group, Inc.   1,110,000
167,500 Dean Foods Company   3,365,075
100,000 Kraft Foods, Inc. – Class "A"   3,101,000
320,000 Nu Skin Enterprises, Inc. – Class "A"   5,766,400
50,000 * Philip Morris International, Inc.   2,529,000
132,500 Safeway, Inc.   3,888,875
325,000 Sara Lee Corporation   4,543,500
119,480     Tootsie Roll Industries, Inc.        3,010,896
  
              27,314,746
 
  Energy—10.8%    
280,000 * Cal Dive International, Inc.   2,906,400
70,000 Chesapeake Energy Corporation   3,230,500
50,000 EOG Resources, Inc.   6,000,000
85,000 * Grant Prideco, Inc.   4,183,700
71,000 Hess Corporation   6,260,780
85,000 * Plains Exploration & Production Company   4,516,900
50,000 * Swift Energy Company   2,249,500
200,000     Talisman Energy, Inc.        3,540,000
 
 
 
 
      75

Portfolio of Investments (continued)    
OPPORTUNITY FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  Energy (continued)    
51,769 * Transocean, Inc. $ 6,999,169
70,000 * Weatherford International, Ltd.   5,072,900
75,000     XTO Energy, Inc.       4,639,500
  
                49,599,349
 
  Financials—10.6%    
75,000 City National Corporation   3,709,500
222,500 Colonial BancGroup, Inc.   2,142,675
160,000 Discover Financial Services   2,619,200
150,000 Douglas Emmett, Inc. (REIT)   3,309,000
32,500 Federal Realty Investment Trust (REIT)   2,533,375
95,000 HCP, Inc. (REIT)   3,211,950
132,000 Lazard, Ltd. – Class "A"   5,042,400
125,000 * Nasdaq OMX Group, Inc.   4,832,500
220,000 NewAlliance Bancshares, Inc.   2,697,200
105,000 Protective Life Corporation   4,258,800
230,000 Sovereign Bancorp, Inc.   2,143,600
180,000 Sunstone Hotel Investors, Inc. (REIT)   2,881,800
200,000 Waddell & Reed Financial, Inc. – Class "A"   6,426,000
71,000     Zions Bancorporation        3,234,050
 
                49,042,050
 
  Health Care—14.3%    
107,500 * Barr Pharmaceuticals, Inc.   5,193,325
70,000 Beckman Coulter, Inc.   4,518,500
125,000 * Community Health Systems, Inc.   4,196,250
165,000 DENTSPLY International, Inc.   6,369,000
380,000 * Exelixis, Inc.   2,641,000
97,500 * Express Scripts, Inc.   6,271,200
150,000 * Gilead Sciences, Inc.   7,729,500
75,000 * Laboratory Corporation of America Holdings   5,526,000
100,000 McKesson Corporation   5,237,000
150,000 * Psychiatric Solutions, Inc.   5,088,000
120,000 * St. Jude Medical, Inc.   5,182,800
137,000   * Thermo Fisher Scientific, Inc.         7,787,080
 
               65,739,655
 
 
 
 
76      

Shares     Security         Value
 
  Industrials—18.1%    
205,000 * AAR Corporation $ 5,590,350
110,000 Armstrong World Industries, Inc.   3,922,600
125,000 Avery Dennison Corporation   6,156,250
142,500 Baldor Electric Company   3,990,000
172,500 Chicago Bridge & Iron Company NV – NY Shares   6,768,900
107,500 Dover Corporation   4,491,350
115,000 Harsco Corporation   6,368,700
200,000 IDEX Corporation   6,138,000
160,000 J.B. Hunt Transport Services, Inc.   5,028,800
40,000 L-3 Communications Holdings, Inc.   4,373,600
78,000 Manpower, Inc.   4,388,280
262,962 * Mobile Mini, Inc.   4,996,278
65,500 Northrop Grumman Corporation   5,096,555
37,000 Precision Castparts Corporation   3,776,960
50,000 Regal-Beloit Corporation   1,831,500
95,000 Rolls-Royce Group PLC (ADR)   3,804,608
108,000     Roper Industries, Inc.         6,419,520
 
                83,142,251
 
  Information Technology—9.6%    
225,000 * Cadence Design Systems, Inc.   2,403,000
65,000 * DST Systems, Inc.   4,273,100
150,000 * Electronics for Imaging, Inc.   2,238,000
145,000 Harris Corporation   7,036,850
150,000 * Ingram Micro, Inc. – Class "A"   2,374,500
160,000 Intersil Corporation – Class "A"   4,107,200
175,000 * Intuit, Inc.   4,726,750
235,000 * Macrovision Corporation   3,172,500
175,000 * Open Text Corporation   5,479,250
255,000 * Sybase, Inc.   6,706,500
60,000   * Varian Semiconductor Equipment Associates, Inc.            1,689,000
 
                 44,206,650
 
  Materials—7.5%    
140,000 Agrium, Inc.   8,695,400
62,500 Allegheny Technologies, Inc.   4,460,000
44,000 Freeport-McMoRan Copper & Gold, Inc.   4,233,680
107,100     Lubrizol Corporation        5,945,121
 
 
 
 
      77

Portfolio of Investments (continued)      
OPPORTUNITY FUND      
March 31, 2008           
 
 
 
Shares or        
Principal        
         Amount     Security          Value
 
  Materials (continued)      
67,000 Praxair, Inc.   $ 5,643,410
50,000 Sappi, Ltd. (ADR)     574,500
80,000     Sigma-Aldrich Corporation           4,772,000
 
                34,324,111
 
  Telecommunication Services—2.3%      
235,000 Citizens Communications Company     2,465,150
215,000 NTELOS Holdings Corporation     5,203,000
180,000   * Time Warner Telecom, Inc. – Class "A"           2,788,200
 
                  10,456,350
 
  Utilities—5.8%      
111,000 AGL Resources, Inc.     3,809,520
110,000 California Water Service Group     4,196,500
100,000 Equitable Resources, Inc.     5,890,000
135,000 Portland General Electric Company     3,044,250
125,000 SCANA Corporation     4,572,500
120,000     Wisconsin Energy Corporation         5,278,800
 
                 26,791,570
 
Total Value of Common Stocks (cost $379,303,972)        450,362,317
 
  SHORT-TERM CORPORATE NOTES—1.3%    
           $3,400  M General Electric Capital Corp., 2.3%, 4/10/08   3,398,044
2,800  M   PepsiCo, Inc., 2.15%, 4/23/08 (a)         2,796,320
 
Total Value of Short-Term Corporate Notes (cost $6,194,364)      6,194,364
 
Total Value of Investments (cost $385,498,336) 99.2 %   456,556,681
Other Assets, Less Liabilities .8     3,620,118
 
Net Assets        100.0 % $ 460,176,799
 
   * Non-income producing      
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:      
       ADR        American Depositary Receipts      
       REIT        Real Estate Investment Trust      
 
 
 
 
78   See notes to financial statements    

Fund Expenses      
SPECIAL SITUATIONS 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $897.10 $7.11
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,017.50 $7.57
 Expense Example – Class B Shares      
 Actual $1,000.00 $894.17 $10.42
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,014.00 $11.08
 
* Expenses are equal to the annualized expense ratio of 1.50% for Class A shares and 2.20% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period). Expenses paid during the period are net of expenses waived.
 
 
 
Portfolio Composition      
TOP TEN SECTORS      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
                                                                                                                                                                                                                                           79

Portfolio of Investments    
SPECIAL SITUATIONS FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  COMMON STOCKS—92.8%    
  Consumer Discretionary—8.3%    
124,900 * AnnTaylor Stores Corporation $ 3,020,082
193,000 Interactive Data Corporation   5,494,710
218,200 Penske Automotive Group, Inc.   4,246,172
179,100 PetSmart, Inc.   3,660,804
115,900 Phillips-Van Heusen Corporation   4,394,928
209,600     Tempur-Pedic International, Inc.        2,305,600
 
               23,122,296
 
  Consumer Staples—7.8%    
108,250 Church & Dwight Company, Inc.   5,871,480
231,100 Flower Foods, Inc.   5,719,725
130,400 Hormel Foods Corporation   5,432,464
91,100     J. M. Smucker Company        4,610,571
 
                21,634,240
 
   Energy—6.4%    
200,600 * Denbury Resources, Inc.   5,727,130
111,600 * Plains Exploration & Production Company   5,930,424
94,700   * Whiting Petroleum Corporation        6,122,355
 
                17,779,909
 
  Financials—16.2%    
15,914 * Alleghany Corporation   5,434,645
161,900 American Financial Group, Inc.   4,138,164
789,600 Anworth Mortgage Asset Corporation   4,840,248
170,900 Arthur J. Gallagher & Company   4,036,658
134,700 FirstMerit Corporation   2,782,902
141,500 Harleysville Group, Inc.   5,106,735
582,500  MFA Mortgage Investments, Inc.   3,669,750
108,100  Midland Company   7,018,933
370,700 Phoenix Companies, Inc.   4,526,247
115,900     Wilmington Trust Corporation        3,604,490
 
               45,158,772
 
 
 
 
80      

Shares      Security        Value
 
  Health Care—12.7%    
83,800 Hillenbrand Industries, Inc. $ 4,005,640
68,000 * Invitrogen Corporation   5,811,960
158,500 * K-V Pharmaceutical Company – Class "A"   3,956,160
143,800 * Lincare Holdings, Inc.   4,042,218
132,700 * Magellan Health Services, Inc.   5,266,863
100,052 PerkinElmer, Inc.   2,426,261
180,600 STERIS Corporation   4,845,498
113,500      West Pharmaceutical Services, Inc.        5,020,105
 
                  35,374,705
 
  Industrials—18.5%    
92,500 Alexander & Baldwin, Inc.   3,984,900
43,200 * Alliant Techsystems, Inc.   4,472,496
134,300 Carlisle Companies, Inc.   4,490,992
107,100 CLARCOR, Inc.   3,807,405
132,200 Curtiss-Wright Corporation   5,483,656
187,000 Deluxe Corporation   3,592,270
158,800 * Kansas City Southern, Inc.   6,369,468
170,500 Pentair, Inc.   5,438,950
144,800 Robbins & Myers, Inc.   4,727,720
256,700 * TrueBlue, Inc.   3,450,048
214,800      Woodward Governor Company         5,739,456
 
               51,557,361
 
  Information Technology—11.5%    
128,850 * Avnet, Inc.   4,217,260
314,500 AVX Corporation   4,028,745
96,800 * Cabot Microelectronics Corporation   3,112,120
215,200 * Checkpoint Systems, Inc.   5,778,120
290,400 * Convergys Corporation   4,373,424
232,300 * Epicor Software Corporation   2,601,760
156,400 * Sybase, Inc.   4,113,320
135,300   * Varian Semiconductor Equipment Associates, Inc.       3,808,695
 
                32,033,444
 
 
 
 
      81

Portfolio of Investments (continued)      
SPECIAL SITUATIONS FUND      
March 31, 2008          
 
 
 
     Shares or        
     Principal        
         Amount     Security         Value
  Materials—2.6%      
         109,000 AptarGroup, Inc.     4,243,370
           68,200   * RTI International Metals, Inc.         3,083,322
                    7,326,692
 
  Telecommunication Services—3.3%      
         382,700 * Premiere Global Services, Inc.     5,487,918
         102,675       Telephone & Data Systems, Inc. – Special Shares         3,829,777
                  9,317,695
 
  Utilities—5.5%      
         264,700 CMS Energy Corporation     3,584,038
         432,000 * Dynegy, Inc. – Class "A"     3,408,480
         177,200 Energy East Corporation     4,274,064
         184,800     Portland General Electric Company          4,167,240
                 15,433,822
Total Value of Common Stocks (cost $239,253,635)          258,738,936
 
  SHORT-TERM CORPORATE NOTES—7.2%    
           $9,000  M General Electric Capital Corp., 2.25%, 4/23/08   8,987,621
               4,700  M Madison Gas & Electric Co., 2.35%, 4/11/08     4,696,932
               6,500  M   PepsiCo, Inc., 2.54%, 4/10/08 (a)       6,495,867
Total Value of Short-Term Corporate Notes (cost $20,180,420)     20,180,420
 
Total Value of Investments (cost $259,434,055) 100.0 %   278,919,356
Excess of Liabilities Over Other Assets —       (156,336)
 
Net Assets       100.0 % $ 278,763,020
 
   * Non-income producing      
(a) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
 
 
 
 
82                                        See notes to financial statements    

Fund Expenses      
INTERNATIONAL 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 4 for
a detailed explanation of the information presented in these examples.
   
 
  Beginning Ending  
  Account Account Expenses Paid
  Value Value During Period
  (10/1/07) (3/31/08) (10/1/07-3/31/08)*
 Expense Example – Class A Shares      
 Actual $1,000.00 $922.67 $9.61
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,015.00 $10.08
 Expense Example – Class B Shares      
 Actual $1,000.00 $918.90 $12.95
 Hypothetical      
       (5% annual return before expenses) $1,000.00 $1,011.50 $13.58
 
* Expenses are equal to the annualized expense ratio of 2.00% for Class A shares and 2.70% for
   Class B shares, multiplied by the average account value over the period, multiplied by 183/366
   (to reflect the one-half year period).      
 
 
Portfolio Composition      
BY SECTOR      


Portfolio holdings and allocations are subject to change. Percentages are as of March 31, 2008, and
are based on the total market value of investments.
 
                                                                                                                                                                                                                                             83

 
Portfolio of Investments    
INTERNATIONAL FUND    
March 31, 2008         
 
 
 
 
Shares     Security        Value
 
  COMMON STOCKS—83.8%    
  United Kingdom—17.0%    
194,009 British American Tobacco PLC $ 7,291,629
76,300 Diageo PLC   1,540,740
66,779 Imperial Tobacco Group PLC   3,076,554
50,481 Reckitt Benckiser Group PLC   2,800,264
106,720 SABMiller PLC   2,341,672
513,545     Tesco PLC        3,868,378
 
               20,919,237
 
  Switzerland—10.4%    
18,357 Kuehne & Nagel International AG – Registered   1,843,959
266 Lindt & Spruengli AG   887,518
10,775 Nestle SA – Registered   5,406,293
25,100 Novartis AG – Registered   1,291,734
18,138     Roche Holding AG – Genusscheine         3,427,524
 
                12,857,028
 
  Japan—5.8%    
325 Japan Tobacco, Inc.   1,629,326
72,950 Millea Holdings, Inc.   2,697,102
58,200     Secom Company, Ltd.         2,830,040
 
                7,156,468
  
  Germany—5.6%    
32,000 Deutsche Boerse AG   5,205,977
14,000     RWE AG        1,735,664
 
               6,941,641
 
  Brazil—4.5%    
58,000 Banco Itau Holding Financeira SA (ADR)   1,320,080
36,498 Petroleo Brasileiro SA – Petrobras (ADR)   3,726,811
18,400      Souza Cruz SA         476,706
 
                     5,523,597
 
  Netherlands—4.1%    
25,725 * Core Laboratories NV   3,068,992
59,800     Unilever NV – CVA            2,015,475
 
                5,084,467
 
 
84      

Shares     Security        Value
 
  Canada—4.1%    
54,550 Canadian Natural Resources, Ltd. $ 3,734,845
13,800     Suncor Energy, Inc.        1,334,204
 
               5,069,049
 
  Netherlands Antilles—3.5%    
1,600 Schlumberger, Ltd.   141,241
47,450      Schlumberger, Ltd. (ADR)         4,128,150
 
               4,269,391
 
  Belgium—3.3%    
46,535      InBev NV        4,110,128
 
  India—3.0%    
37,692     HDFC Bank, Ltd. (ADR)        3,702,862
 
  Mexico—2.8%    
53,125     America Movil SAB de CV (ADR) – Series "L"        3,383,531
 
  China—2.7%    
31,987 China Mobile, Ltd.   475,930
8,300 China Mobile, Ltd. (ADR)   622,583
1,490,500     CNOOC, Ltd.        2,202,374
 
               3,300,887
 
  Hong Kong—2.6%    
87,000 Cheung Kong Holdings, Ltd.   1,235,216
62,469     Jardine Matheson Holdings, Ltd.       1,972,771
 
               3,207,987
 
  France—2.6%    
11,110 Air Liquide SA   1,700,063
11,400     L’Oreal SA         1,453,067
 
               3,153,130
 
  Finland—2.5%    
98,900     Nokia Oyj        3,140,528
 
    Spain—2.4%    
97,070     Enagas        2,911,685
 
 
 
      85

 
Portfolio of Investments (continued)    
INTERNATIONAL FUND    
March 31, 2008         
 
 
 
 
Shares or      
Warrants     Security         Value
 
  Norway—2.2%    
210,385     Orkla ASA     $ 2,670,307
 
  Australia—1.7%    
16,800 BHP Billiton, Ltd.   549,178
51,322     WorleyParsons, Ltd.        1,568,046
 
               2,117,224
 
  Denmark—1.1%    
19,200     Novo Nordisk A/S – Series "B"        1,317,737
  
  Singapore—1.0%    
179,000     Keppel Corporation, Ltd.         1,285,854
 
  Italy—.9%    
228,400   * Maire Tecnimont SpA        1,158,123
 
Total Value of Common Stocks (cost $96,868,795)        103,280,861
 
  WARRANTS—10.4%    
  India    
21,800 * Asea Brown Boveri India, Ltd. (expiring 10/15/12) (a)   637,912
14,800 Bharat Heavy Electricals, Ltd. (expiring 7/20/10) (a)   760,424
3,700 * Bharat Heavy Electricals, Ltd. (expiring 5/12/08) (a)   189,662
138,015 * Bharti Tele-Ventures, Ltd. (expiring 5/31/10) (a)   2,842,281
28,421 HDFC Bank, Ltd. (expiring 6/28/10) (a)   943,066
37,330 Housing Development Finance Corp., Ltd. (expiring 5/25/09) (a)   2,217,999
10,700   * Housing Development Finance Corp., Ltd. (expiring 11/14/11) (a)   634,681
21,146   * India Infoline, Ltd. (expiring 7/13/12) (a)   405,919
57,470   * Infrastructure Development Finance Co., Ltd. (expiring 7/28/10) (a)   216,317
354,700   * Infrastructure Development Finance Co., Ltd. (expiring 1/24/13) (a)   1,338,992
245,479   * ITC, Ltd. (expiring 5/5/10) (a)   1,262,008
36,000   * United Spirits, Ltd. (expiring 6/20/11) (a)        1,352,520
 
Total Value of Warrants (cost $12,160,050)        12,801,781
 
 
 
 
86      

     Principal        
         Amount     Security         Value
  SHORT-TERM CORPORATE NOTES—4.9%    
  United States      
           $6,000  M   PepsiCo, Inc., 2.15%, 4/23/08 (cost $5,992,114) (b)   $ 5,992,114
Total Value of Investments (cost $115,020,959) 99.1 %   122,074,756
Other Assets, Less Liabilities .9     1,169,847
Net Assets       100.0 % $ 123,244,603
   * Non-income producing      
(a) Participatory notes issued by brokers registered in the local market. Securities are valued at fair
       value (see Note 1A).      
(b) Security exempt from registration under Section 4(2) of the Securities Act of 1933 (see Note 4).
       Summary of Abbreviations:      
       ADR American Depositary Receipts      
 
 
 
 
                                   See notes to financial statements   87

 
   
 Statements of Assets and Liabilities        
 FIRST INVESTORS INCOME FUNDS        
 March 31, 2008                   
    
  CASH   INVESTMENT  
     MANAGEMENT    GOVERNMENT   GRADE           INCOME
Assets        
Investments in securities:        
     At identified cost $252,782,884 $234,226,879 $303,183,305 $639,357,252 **
     At value (Note 1A) $252,782,884 $237,022,682 $302,110,617 $568,879,981 **
Cash 124,388 1,014,282 1,392,802 799,749
Receivables:        
     Investment Securities sold — 4,854,468 14,798,117 1,958,867
     Interest and dividends 630,005 1,051,529 3,672,467 12,279,472
     Shares sold — 651,781 1,081,846 570,331
Other assets 47,410 49,550 30,146 293,789
Total Assets 253,584,687 244,644,292 323,085,995 584,782,189
 
Liabilities        
Payables:        
     Investment securities purchased — 15,290,922 5,265,035   —
     Collateral for securities loaned (Note 1H) — — — 52,640,202
     Shares redeemed 318,868 312,822 461,711 718,792
     Dividends payable 49,659 90,099 153,411 716,197
Accrued advisory fees 31,718 93,250 126,447 328,086
Accrued shareholder servicing costs 82,220 41,114 55,747 113,794
Accrued expenses 49,795 34,127 14,150 38,861
Total Liabilities 532,260 15,862,334 6,076,501 54,555,932
Net Assets $253,052,427 $228,781,958 $317,009,494 $530,226,257
 
Net Assets Consist of:        
Capital paid in $253,052,427 $236,065,236 $328,381,113 $765,858,436
Undistributed net investment income (deficit) — 1,115 (3,811,997) 2,242,982
Accumulated net realized loss on investments — (10,080,196) (6,486,934) (167,397,890)
Net unrealized appreciation (depreciation) in value of investments — 2,795,803 (1,072,688) (70,477,271)
Total $253,052,427 $228,781,958 $317,009,494 $530,226,257
 
Net Assets:        
     Class A $249,593,548 $216,858,498 $295,360,201 $510,713,764
     Class B $ 3,458,879 $ 11,923,460 $ 21,649,293 $ 19,512,493
Shares outstanding (Note 7):        
     Class A 249,593,548 19,817,680 31,191,131 187,538,036
     Class B 3,458,879 1,089,769 2,288,854 7,173,813
 
Net asset value and redemption price per share — Class A  $1.00  #  $10.94  $ 9.47  $2.72
Maximum offering price per share — Class A        
     (Net asset value/.9425)*  N/A  $11.61  $10.05  $2.89
Net asset value and offering price per share — Class B (Note 7)  $1.00  $10.94  $ 9.46    $2.72
 
 # Also maximum offering price per share.      
 * On purchases of $100,000 or more, the sales charge is reduced.      
** Investments at cost and value include $52,640,202 of collateral for securities loaned (Note 1H).    
 
 
 
 88 See notes to financial statements 89

 
Statements of Assets and Liabilities        
FIRST INVESTORS EQUITY FUNDS        
March 31, 2008                    
     
    TOTAL     GROWTH &  
       RETURN    VALUE     BLUE CHIP    INCOME    GLOBAL
 Assets          
 Investments in securities:          
     At identified cost   $323,560,219 $330,028,754 $355,610,241 $626,107,458 $281,271,421
 
     At value (Note 1A)   $355,737,679 $376,290,537 $478,218,203 $742,932,953 $308,246,008
 Cash   44,191 437,629 358,622 715,108 2,061,578
 Receivables:          
     Investment securities sold   7,129,082 331,706 196,241 1,529,346 4,197,231
     Dividends and interest   1,953,356 887,814 760,672 1,063,094 598,655
     Shares sold   568,707 722,844 585,602 1,400,814 652,654
 Other assets   40,870 45,935 59,868 90,767 56,235
 Total Assets   365,473,885 378,716,465 480,179,208 747,732,082 315,812,361
 
 Liabilities          
 Payables:          
     Investment securities purchased 5,036,533 — — 1,153,901 6,594,215
     Shares redeemed   858,783 755,741 1,120,122 1,469,607 351,722
     Dividends payable   27,263 18,707 7,030 7,289 —
     Forward currency contracts (Note 6) — — — — 1,530
 Accrued advisory fees   226,355 237,200 299,174 453,653 246,600
 Accrued shareholder servicing costs 70,517 80,541 128,861 170,216 70,748
 Accrued expenses   34,247 31,815 34,976 65,898 59,302
 Total Liabilities   6,253,698 1,124,004 1,590,163 3,320,564 7,324,117
 Net Assets   $359,220,187 $377,592,461 $478,589,045 $744,411,518 $308,488,244
 
 Net Assets Consist of:          
 Capital paid in   $326,354,820 $355,742,166 $453,679,090 $624,865,495 $280,361,179
 Undistributed net investment income (loss) 83,756 886,426 923,661 1,185,382 (1,489,431)
 Accumulated net realized gain (loss) on investments 604,151 (25,297,914) (98,621,668) 1,535,146 2,630,073
 Net unrealized appreciation in value of investments 32,177,460 46,261,783 122,607,962 116,825,495 26,986,423
 Total   $359,220,187 $377,592,461 $478,589,045 $744,411,518 $308,488,244
 
 Net Assets:          
     Class A   $330,114,104 $356,307,234 $444,533,152 $692,351,631 $296,840,273
     Class B   $ 29,106,083 $ 21,285,227 $ 34,055,893 $ 52,059,887 $ 11,647,971
 Shares outstanding (Note 7):        
     Class A   22,998,612 50,165,991 19,904,972 48,264,444 42,586,090
     Class B   2,059,502 3,045,150 1,637,455 3,832,226 1,883,435
 Net asset value and redemption price        
     per share – Class A    $14.35  $7.10  $22.33  $14.34  $6.97
 
 Maximum offering price per share – Class A        
     (Net asset value/.9425)*    $15.23  $7.53  $23.69  $15.21   $7.40
 
 Net asset value and offering price per share –        
     Class B (Note 7)    $14.13  $6.99  $20.80  $13.58  $6.18
 
*On purchases of $100,000 or more, the sales charge is reduced.        
 90 See notes to financial statements  91

 Statements of Assets and Liabilities
 FIRST INVESTORS EQUITY FUNDS          
 March 31, 2008          
                                  
  SELECT   SPECIAL    
      GROWTH     OPPORTUNITY            SITUATIONS            INTERNATIONAL  
 Assets          
 Investments in securities:          
     At identified cost $241,973,432 $385,498,336 $259,434,055 $115,020,959  
     At value (Note 1A) $243,899,861 $456,556,681 $278,919,356 $122,074,756  
 Cash 597,602 716,785 1,300,652 1,960,210  
 Receivables:          
     Investment securities sold 1,821,013 3,851,066 — 187,778  
     Dividends and interest 99,759 554,223 119,450 429,988  
     Shares sold 768,134 709,253 308,863 767,508  
     Forward currency contracts (Note 6) — — — 372  
 Other assets 29,246 56,167 33,897 10,433  
 Total Assets 247,215,615 462,444,175 280,682,218 125,431,045  
 
 Liabilities          
 Payables:          
     Investment securities purchased 2,528,459 821,322 1,090,889 673,765  
     Shares redeemed 412,264 1,001,388 524,568 256,442  
     Foreign exchange contracts (Note 6) — — — 1,070,093  
 Accrued advisory fees 153,618 285,609 189,050 100,544  
 Accrued shareholder servicing costs 62,101 104,730 70,062 48,083  
 Accrued expenses 36,116 54,327 44,629 37,515  
 Total Liabilities 3,192,558 2,267,376 1,919,198 2,186,442  
 Net Assets $244,023,057 $460,176,799 $278,763,020 $123,244,603  
   
 Net Assets Consist of:          
 Capital paid in $259,324,156 $382,299,834 $261,534,281 $123,442,581  
 Undistributed net investment income (loss) (678,380) 118,138 (299,846) (2,209,199)  
 Accumulated net realized gain (loss) on investments          
     and foreign currency transactions (16,549,148) 6,700,482 (1,956,716) (3,977,824)  
 Net unrealized appreciation in value of investments          
     and foreign currency transactions 1,926,429 71,058,345 19,485,301 5,989,045  
 Total $244,023,057 $460,176,799 $278,763,020 $123,244,603  
 
 Net Assets:          
     Class A $222,874,979 $419,990,884 $264,208,205 $118,502,009  
     Class B $ 21,148,078 $ 40,185,915 $ 14,554,815 $ 4,742,594  
 Shares outstanding (Note 7):          
     Class A 29,725,022 16,499,408 12,765,656 9,974,964  
     Class B 3,007,967 1,771,958 792,885 404,158  
 Net asset value and redemption price          
     per share – Class A    $7.50    $25.45    $20.70    $11.88  
 
 Maximum offering price per share – Class A          
     (Net asset value/.9425)*    $7.96    $27.00    $21.96    $12.60  
 
 Net asset value and offering price per share –          
     Class B (Note 7)      $7.03    $22.68    $18.36    $11.73  
 
*On purchases of $100,000 or more, the sales charge is reduced.          
 
 
 
 92 See notes to financial statements 93

Statements of Operations              
FIRST INVESTORS INCOME FUNDS              
Six Months Ended March 31, 2008                   
          
    CASH     INVESTMENT    
     MANAGEMENT    GOVERNMENT   GRADE    INCOME  
Investment Income              
Income:              
   Interest     $5,205,098     $6,079,394 $8,270,546 $ 23,886,063  
   Dividends   —   — 440,756 155,385  
Total income   5,205,098   6,079,394 8,711,302 24,041,448  
Expenses (Notes 1 and 3):              
   Advisory fees   601,111   718,886 1,009,353 2,035,160  
   Distribution plan expenses – Class A   —   309,470 426,219 803,080  
   Distribution plan expenses – Class B   10,866   57,653 108,591 109,537  
   Shareholder servicing costs   371,639   204,510 298,790 574,345  
   Professional fees   22,488   24,002 21,513 63,672  
   Registration fees   38,146   20,200 32,683 27,538  
   Custodian fees   29,935   16,332 10,028 14,890  
   Reports to shareholders   22,307   9,898 16,245 33,218  
   Trustees’ fees   5,374   4,929 6,917 13,430  
   Other expenses   33,148   28,675 35,524 55,742  
Total expenses   1,135,014   1,394,555 1,965,863 3,730,612  
Less: Expenses waived   (161,373)   (149,281) (201,890) —  
         Expenses paid indirectly   (1,275)   (6,838) (6,212) (12,459)  
Net expenses   972,366   1,238,436 1,757,761 3,718,153  
Net investment income   4,232,732   4,840,958 6,953,541 20,323,295  
Realized and Unrealized Gain (Loss) on Investments (Note 2):              
Net realized gain (loss) on investments   —   348,983 2,471,823 (7,902,051)  
Net unrealized appreciation (depreciation) of investments   —   5,660,442 (527,709) (44,208,226)  
 
Net gain (loss) on investments    —   6,009,425 1,944,114 (52,110,277)  
Net Increase (Decrease) in Net Assets Resulting from Operations     $4,232,732     $10,850,383 $8,897,655 $ (31,786,982)  
 
 
 
 
94 See notes to financial statements 95

Statements of Operations          
FIRST INVESTORS EQUITY FUNDS          
Six Months Ended March 31, 2008                   
          
  TOTAL     GROWTH &  
    RETURN    VALUE     BLUE CHIP    INCOME    GLOBAL
 Investment Income          
     Dividends $2,781,899 (a) $5,595,717 (b) $5,702,504 (c) $10,198,624 (d) $2,156,241 (e)
     Interest 4,421,700 443,469 170,567 31,381 173,127
 Total income 7,203,599 6,039,186 5,873,071 10,230,005 2,329,368
 
 Expenses (Notes 1 and 3):          
     Advisory fees 1,410,702 1,526,091 1,944,831 2,924,321 1,607,673
     Distribution plan expenses – Class A 521,226 580,665 733,386 1,133,497 473,832
     Distribution plan expenses – Class B 158,706 120,839 199,396 296,884 64,970
     Shareholder servicing costs 429,258 483,095 790,263 1,086,253 468,669
     Professional fees 23,776 29,812 41,297 48,069 33,765
     Custodian fees 18,694 14,061 15,487 25,359 120,526
     Registration fees 26,273 31,479 28,723 32,637 18,882
     Reports to shareholders 18,662 22,278 27,994 50,944 20,062
     Trustees’ fees 8,669 9,630 12,429 18,772 7,572
     Other expenses 41,113 43,306 17,389 74,248 50,887
 Total expenses 2,657,079 2,861,256 3,811,195 5,690,984 2,866,838
 Less: Expenses waived — — — — (45,483)
           Expenses paid indirectly (11,942) (10,041) (8,175) (8,301) (766)
 Net expenses 2,645,137 2,851,215 3,803,020 5,682,683 2,820,589
 Net investment income (loss) 4,558,462 3,187,971 2,070,051 4,547,322 (491,221)
 
 Realized and Unrealized Gain (Loss) on Investments          
     (Note 2):          
 Net realized gain (loss) on:          
     Investments 2,224,119 2,574,452 (2,598,690) 5,525,189 7,109,460
     Foreign currency transactions — — — — (54,937)
 Net realized gain (loss) on investments          
     and foreign currency transactions 2,224,119 2,574,452 (2,598,690) 5,525,189 7,054,523
 Net unrealized appreciation (depreciation) of:          
     Investments (31,999,088) (58,214,006) (69,622,621) (126,506,020) (39,081,023)
     Foreign currency transactions — — — — 2,312
 Net unrealized depreciation of investments          
     and foreign currency transactions (31,999,088) (58,214,006) (69,622,621) (126,506,020) (39,078,711)
 Net loss on investments and foreign currency transactions (29,774,969) (55,639,554) (72,221,311) (120,980,831) (32,024,188)
 Net Decrease in Net Assets Resulting from Operations  $(25,216,507) $(52,451,583) $(70,151,260) $(116,433,509) $ (32,515,409)
 
(a) Net of $1,184 foreign taxes withheld          
(b) Net of $30,323 foreign taxes withheld          
(c) Net of $19,684 foreign taxes withheld          
(d) Net of $4,482 foreign taxes withheld          
(e) Net of $95,756 foreign taxes withheld          
 
 
 
 
96 See notes to financial statements  97

 Statements of Operations          
 FIRST INVESTORS EQUITY FUNDS          
        
  SELECT   SPECIAL    
  GROWTH   OPPORTUNITY   SITUATIONS   INTERNATIONAL  
 Investment Income          
     Dividends $ 1,077,450 $ 3,626,455 (f) $ 1,763,605 $ 844,513 (g)  
     Interest 202,950 116,397 258,869 155,072  
 Total income 1,280,400 3,742,852 2,022,474 999,585  
 
 Expenses (Notes 1 and 3):          
     Advisory fees 980,884 1,841,691 1,391,459 574,141  
     Distribution plan expenses – Class A 356,441 680,901 430,527 168,762  
     Distribution plan expenses – Class B 119,707 227,553 83,213 23,319  
     Shareholder servicing costs 428,917 715,944 481,109 283,648  
     Professional fees 25,116 27,324 30,257 14,861  
     Custodian fees 23,098 18,942 10,058 51,878  
     Registration fees 29,756 21,702 21,225 9,685  
     Reports to shareholders 8,087 31,693 20,294 12,897  
     Trustees’ fees 5,972 11,577 7,053 2,557  
     Other expenses 1,152 53,327 29,715 22,068  
 Total expenses 1,979,130 3,630,654 2,504,910 1,163,816  
 Less: Expenses (waived) repaid to advisor (Note 3) — — (176,817) 19,276  
           Expenses paid indirectly (20,350) (5,940) (5,773) (294)  
 Net expenses 1,958,780 3,624,714 2,322,320 1,182,798  
 Net investment income (loss) (678,380) 118,138 (299,846) (183,213)  
 
 Realized and Unrealized Gain (Loss) on Investments          
     and Foreign Currency Transactions (Note 2):          
 Net realized gain (loss) on:          
     Investments (16,545,599) 6,792,085 (1,749,219) (1,765,576)  
     Foreign currency transactions — — — (120,860)  
 Net realized gain (loss) on investments          
     and foreign currency transactions (16,545,599) 6,792,085 (1,749,219) (1,886,436)  
 Net unrealized depreciation of:          
     Investments (23,450,058) (63,672,886) (30,071,423) (7,357,793)  
     Foreign currency transactions — — — (576,453)  
 Net unrealized depreciation of investments          
     and foreign currency transactions (23,450,058) (63,672,886) (30,071,423) (7,934,246)  
 Net loss on investments and foreign currency transactions (39,995,657) (56,880,801) (31,820,642) (9,820,682)  
 Net Decrease in Net Assets Resulting from Operations  $ (40,674,037) $ (56,762,663) $ (32,120,488) $ (10,003,895)  
 
(f) Net of $5,735 foreign taxes withheld          
(g) Net of $98,079 foreign taxes withheld          
 
 
 
 
 98 See notes to financial statements 99

                               
 Statements of Changes in Net Assets                
 FIRST INVESTORS INCOME FUNDS                
 
  CASH MANAGEMENT GOVERNMENT INVESTMENT GRADE INCOME
  10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to
  3/31/08     9/30/07      3/31/08       9/30/07       3/31/08       9/30/07      3/31/08      9/30/07
Increase (Decrease) in Net Assets From Operations                
     Net investment income $ 4,232,732 $ 9,601,006 $ 4,840,958 $ 8,749,400 $ 6,953,541 $ 12,265,938 $ 20,323,295 $ 41,632,907
     Net realized gain (loss) on investments — — 348,983 (362,482) 2,471,823 461,845 (7,902,051) (5,253,591)
     Net unrealized appreciation (depreciation) of investments — — 5,660,442 (191,790) (527,709) (2,402,019) (44,208,226) 1,569,619
       Net increase (decrease) in net assets resulting                
         from operations 4,232,732 9,601,006 10,850,383 8,195,128 8,897,655 10,325,764 (31,786,982) 37,948,935
Dividends to Shareholders                
    Net investment income – Class A (4,193,006) (9,508,072) (4,628,089) (8,953,505) (6,976,832) (12,261,832) (19,716,202) (39,264,321)
    Net investment income – Class B (39,726) (92,934) (218,535) (489,437) (458,734) (944,574) (723,969) (1,743,259)
Total dividends (4,232,732) (9,601,006) (4,846,624) (9,442,942) (7,435,566) (13,206,406) (20,440,171) (41,007,580)
Share Transactions *                
    Class A:                
        Proceeds from shares sold 136,257,168 234,508,668 24,241,261 38,427,226 40,936,003 69,936,306 23,286,958 60,588,115
        Reinvestment of dividends 4,118,066 9,341,321 4,099,447 7,807,197 6,114,519 10,583,520 15,532,045 30,474,627
        Cost of shares redeemed (108,296,057) (226,716,504) (15,696,738) (32,955,729) (23,558,025) (38,531,439) (40,970,698) (79,486,802)
  32,079,177 17,133,485 12,643,970 13,278,694 23,492,497 41,988,387 (2,151,695) 11,575,940
    Class B:                
        Proceeds from shares sold 3,329,745 2,857,393 1,278,137 1,656,236 1,700,795 2,657,890 682,137 2,526,656
        Reinvestment of dividends 36,777 84,139 201,849 449,226 417,352 853,540 564,204 1,307,604
        Cost of shares redeemed (2,238,167) (3,120,867) (1,522,014) (3,659,377) (2,449,773) (5,240,826) (4,294,834) (9,854,689)
  1,128,355 (179,335) (42,028) (1,553,915) (331,626) (1,729,396) (3,048,493) (6,020,429)
     Net increase (decrease) from share transactions 33,207,532 16,954,150 12,601,942 11,724,779 23,160,871 40,258,991 (5,200,188) 5,555,511
     Net increase (decrease) in net assets 33,207,532 16,954,150 18,605,701 10,476,965 24,622,960 37,378,349 (57,427,341) 2,496,866
Net Assets                
    Beginning of period 219,844,895 202,890,745 210,176,257 199,699,292 292,386,534 255,008,185 587,653,598 585,156,732
    End of period † $ 253,052,427 $ 219,844,895 $ 228,781,958 $ 210,176,257 $ 317,009,494 $ 292,386,534 $ 530,226,257 $ 587,653,598
†Includes undistributed net investment income (deficit) of $ — $ — $ 1,115 $ 6,781 $ (3,811,997) $ (3,329,972) $ 2,242,982 $ 2,359,858
 
*Shares Issued and Redeemed                
    Class A:                
        Sold 136,257,168 234,508,668 2,232,406 3,603,914 4,295,932 7,387,319 8,143,021 19,785,469
        Issued for dividends reinvested 4,118,066 9,341,321 376,770 731,771 640,284 1,117,383 5,477,625 9,965,886
        Redeemed. (108,296,057) (226,716,504) (1,449,599) (3,086,866) (2,472,250) (4,068,637) (14,397,884) (25,966,873)
        Net increase (decrease) in Class A shares outstanding 32,079,177 17,133,485 1,159,577 1,248,819 2,463,966 4,436,065 (777,238) 3,784,482
 
    Class B:                
        Sold 3,329,745 2,857,393 117,228 155,318 178,424 280,947 240,095 829,168
        Issued for dividends reinvested 36,777 84,139 18,553 42,104 43,759 90,199 199,228 427,922
        Redeemed (2,238,167) (3,120,867) (140,862) (342,831) (256,894) (552,729) (1,507,446) (3,219,167)
        Net increase (decrease) in Class B shares outstanding 1,128,355 (179,335) (5,081) (145,409) (34,711) (181,583) (1,068,123) (1,962,077)
 
 
 
 
 100 See notes to financial statements 101

                                        
   Statements of Changes in Net Assets              
   FIRST INVESTORS EQUITY FUNDS              
 
 
 
  TOTAL RETURN VALUE BLUE CHIP GROWTH & INCOME
  10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to
  3/31/08   9/30/07   3/31/08   9/30/07   3/31/08   9/30/07   3/31/08   9/30/07
Increase (Decrease) in Net Assets From Operations                
       Net investment income $ 4,558,462 $ 7,375,510 $ 3,187,971 $ 5,429,775 $ 2,070,051 $ 3,045,447 $ 4,547,322 $ 4,007,275
       Net realized gain (loss) on investments 2,224,119 9,847,727 2,574,452 7,421,981 (2,598,690) 12,432,271 5,525,189 20,850,814
       Net unrealized appreciation (depreciation) of investments (31,999,088) 23,270,714 (58,214,006) 29,157,401 (69,622,621) 56,419,022 (126,506,020) 99,717,015

             Net increase (decrease) in net assets resulting

              
             from operations (25,216,507) 40,493,951 (52,451,583) 42,009,157 (70,151,260) 71,896,740 (116,433,509) 124,575,104
 
Distributions to Shareholders                
       Net investment income – Class A (5,372,454) (6,496,959) (3,319,851) (4,884,892) (2,208,923) (2,538,723) (4,169,997) (3,321,330)
       Net investment income – Class B (381,191) (437,230) (123,907) (158,524) (53,615) — (165,732) (20,137)
       Net realized gains – Class A (6,213,089) (2,189,339) — — — — (10,054,169) (10,825,654)
       Net realized gains – Class B (574,376) (248,051) — — — — (838,220) (1,163,363)
             Total distributions (12,541,110) (9,371,579) (3,443,758) (5,043,416) (2,262,538) (2,538,723) (15,228,118) (15,330,484)
 
Share Transactions *                
    Class A:                
         Proceeds from shares sold 27,979,445 58,416,394 32,371,413 100,634,552 26,746,471 58,252,544 57,457,867 144,742,009
         Value of shares issued for acquisition** — — — — — 42,266,488 — —
         Reinvestment of distributions. 11,455,563 8,570,045 3,272,560 4,810,843 2,188,547 2,514,542 14,120,459 14,046,975
         Cost of shares redeemed (29,991,216) (51,721,710) (40,908,296) (62,678,699) (43,610,530) (77,931,789) (65,425,234) (121,637,432)
  9,443,792 15,264,729 (5,264,323) 42,766,696 (14,675,512) 25,101,785 6,153,092 37,151,552
    Class B:                
        Proceeds from shares sold 1,124,556 3,131,690 1,146,379 3,741,260 1,204,521 3,077,799 2,480,950 6,702,137
        Value of shares issued for acquisition** — — — — — 5,256,892 — —
        Reinvestment of distributions. 950,014 682,111 122,857 157,220 53,508 — 1,001,473 1,180,077
        Cost of shares redeemed (4,009,905) (8,579,532) (3,730,935) (7,606,342) (7,344,213) (13,096,048) (8,427,500) (22,768,583)
  (1,935,335) (4,765,731) (2,461,699) (3,707,862) (6,086,184) (4,761,357) (4,945,077) (14,886,369)
        Net increase (decrease) from share transactions 7,508,457 10,498,998 (7,726,022) 39,058,834 (20,761,696) 20,340,428 1,208,015 22,265,183
        Net increase (decrease) in net assets (30,249,160) 41,621,370 (63,621,363) 76,024,575 (93,175,494) 89,698,445 (130,453,612) 131,509,803
 
Net Assets                
    Beginning of period 389,469,347 347,847,977 441,213,824 365,189,249 571,764,539 482,066,094 874,865,130 743,355,327
    End of period † $ 359,220,187 $ 389,469,347 $ 377,592,461 $ 441,213,824 $ 478,589,045 $ 571,764,539 $ 744,411,518 $ 874,865,130
†Includes undistributed net investment income of $ 83,756 $ 1,278,939 $ 886,426 $ 1,142,213 $ 923,661 $ 1,116,148 $ 1,185,382 $ 973,789
 
*Shares Issued and Redeemed                
    Class A:                
        Sold 1,852,631 3,759,553 4,271,416 12,509,647 1,121,859 2,409,744 3,701,951 8,893,877
        Issued for acquisition** — — — — — 1,728,265 — —
        Issued for distributions reinvested 754,294 552,458 438,403 593,740 92,384 102,169 878,982 891,851
        Redeemed. (2,002,364) (3,332,365) (5,432,883) (7,781,774) (1,832,127) (3,212,113) (4,250,681) (7,473,683)
        Net increase (decrease) in Class A shares outstanding 604,561 979,646 (723,064) 5,321,613 (617,884) 1,028,065 330,252 2,312,045
 
    Class B:                
        Sold 76,052 204,942 153,456 473,203 54,127 136,806 169,422 435,580
      Issued for acquisition** — — — — — 230,867 — —
        Issued for distributions reinvested 63,368 44,782 16,643 19,735 2,359 — 65,169 79,575
        Redeemed. (268,154) (560,413) (500,739) (962,290) (328,652) (581,227) (571,413) (1,482,827)
        Net decrease in Class B shares outstanding (128,734) (310,689) (330,640) (469,352) (272,166) (213,554) (336,822) (967,672)
 
**See Note 8                
 
   102 See notes to financial statements 103

 
                                  
 Statements of Changes in Net Assets                
 FIRST INVESTORS EQUITY FUNDS                
 
 
  GLOBAL SELECT GROWTH OPPORTUNITY SPECIAL SITUATIONS
  10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to 10/1/07 to 10/1/06 to
3/31/08   9/30/07   3/31/08   9/30/07   3/31/08   9/30/07   3/31/08   9/30/07
Increase (Decrease) in Net Assets From Operations                
    Net investment income (loss) $ (491,221) $ (304,687) $ (678,380) $ (1,259,160) $ 118,138 $ 2,398,990 $ (299,846) $ (936,145)
    Net realized gain (loss) on investments                
        and foreign currenty transactions 7,054,523 46,310,683 (16,545,599) 40,730,258 6,792,085 50,721,848 (1,749,219) 30,291,871
    Net unrealized appreciation (depreciation)                
        of investments and foreign currency transactions (39,078,711) 25,030,886 (23,450,058) 3,580,367 (63,672,886) 25,202,521 (30,071,423) 14,116,468
     Net increase (decrease) in net assets resulting                
      from operations (32,515,409) 71,036,882 (40,674,037) 43,051,465 (56,762,663) 78,323,359 (32,120,488) 43,472,194
 
Distributions to Shareholders                
    Net investment income – Class A (1,935,582) (1,703,811) — — (2,157,616) — — —
    Net investment income – Class B (88,410) (95,763) — — (241,374) — — —
    Net realized gains – Class A (39,760,740) (25,963,154) (34,525,068) (16,002,768) (40,556,491) (20,488,349) (14,772,999) (21,193,345)
    Net realized gains – Class B (1,816,126) (1,455,638) (3,724,631) (1,981,350) (4,537,080) (2,618,556) (966,711) (1,645,023)
        Total distributions (43,600,858) (29,218,366) (38,249,699) (17,984,118) (47,492,561) (23,106,905) (15,739,710) (22,838,368)
 
Share Transactions *                
    Class A:                
        Proceeds from shares sold 27,135,991 32,159,549 33,865,760 45,079,857 31,012,799 64,062,828 21,179,382 48,294,542
        Reinvestment of distributions 41,083,109 27,199,554 34,371,915 15,949,659 42,542,593 20,403,976 14,700,522 21,100,036
        Cost of shares redeemed (21,200,467) (37,229,022) (16,491,752) (36,742,589) (40,208,914) (88,627,638) (21,087,796) (43,381,291)
  47,018,633 22,130,081 51,745,923 24,286,927 33,346,478 (4,160,834) 14,792,108 26,013,287
    Class B:                
        Proceeds from shares sold 1,168,995 1,559,530 1,512,345 2,358,789 1,391,764 3,841,591 725,127 1,733,569
        Reinvestment of distributions 1,896,632 1,549,112 3,702,717 1,970,727 4,761,120 2,609,026 963,947 1,642,521
        Cost of shares redeemed (2,250,712) (4,240,943) (2,014,755) (4,462,038) (6,253,590) (12,113,021) (2,173,270) (4,822,147)
  814,915 (1,132,301) 3,200,307 (132,522) (100,706) (5,662,404) (484,196) (1,446,057)
 
        Net increase (decrease) from share transactions 47,833,548 20,997,780 54,946,230 24,154,405 33,245,772 (9,823,238) 14,307,912 24,567,230
        Net increase (decrease) in net assets (28,282,719) 62,816,296 (23,977,506) 49,221,752 (71,009,452) 45,393,216 (33,552,286) 45,201,056
 
Net Assets                
    Beginning of period 336,770,963 273,954,667 268,000,563 218,778,811 531,186,251 485,793,035 312,315,306 267,114,250
 
    End of period † $ 308,488,244 $ 336,770,963 $ 244,023,057 $ 268,000,563 $ 460,176,799 $ 531,186,251 $ 278,763,020 $ 312,315,306
†Includes undistributed net investment income (deficit) of $ (1,489,431) $ 1,025,782 $ (678,380) $ — $ 118,138 $ 2,398,990 $ (299,846) $ —
 
*Shares Issued and Redeemed                
    Class A:                
        Sold 3,519,216 4,050,899 3,970,941 4,765,079 1,119,357 2,107,842 937,882 2,019,030
        Issued for distributions reinvested 5,206,984 3,693,256 3,919,261 1,822,725 1,490,630 721,695 625,820 923,327
        Redeemed. (2,730,073) (4,696,640) (1,913,986) (3,931,282) (1,461,403) (2,932,699) (935,245) (1,809,098)
        Net increase (decrease) in Class A shares outstanding 5,996,127 3,047,515 5,976,216 2,656,522 1,148,584 (103,162) 628,457 1,133,259
 
    Class B:                
        Sold 170,319 216,529 185,995 262,040 55,746 140,039 35,455 80,360
        Issued for distributions reinvested 270,176 230,957 449,359 235,478 186,857 101,414 46,166 79,633
        Redeemed. (317,267) (592,221) (251,963) (501,113) (249,660) (441,498) (107,669) (225,014)
        Net increase (decrease) in Class B shares outstanding 123,228 (144,735) 383,391 (3,595) (7,057) (200,045) (26,048) (65,021)
 
 
 
 
 104 See notes to financial statements 105

      
 Statements of Changes in Net Assets      
 FIRST INVESTORS EQUITY FUNDS        
   
  INTERNATIONAL    
  10/1/07 to 10/1/06 to    
    3/31/08      9/30/07    
Increase (Decrease) in Net Assets From Operations        
    Net investment loss $ (183,213) $ (41,380)    
    Net realized loss on investments        
        and foreign currenty transactions. (1,886,436) (997,950)    
    Net unrealized appreciation (depreciation)        
        of investments and foreign currency transactions (7,934,246) 13,111,602    
      Net increase (decrease) in net assets resulting        
      from operations (10,003,895) 12,072,272    
Dividends to Shareholders        
    Net investment income – Class A (2,659,071) (191,658)    
    Net investment income – Class B (111,221) (10,723)    
        Total dividends (2,770,292) (202,381)    
 
Share Transactions *        
    Class A:        
        Proceeds from shares sold 38,364,626 70,673,752    
        Reinvestment of dividends 2,652,722 191,287    
        Cost of shares redeemed (6,639,751) (5,066,692)    
  34,377,597 65,798,347    
    Class B:        
        Proceeds from shares sold 1,314,283 2,992,429    
        Reinvestment of dividends 111,198 10,605    
        Cost of shares redeemed (356,524) (365,541)     This page left intentionally blank.
  1,068,957 2,637,493    
        Net increase from share transactions 35,446,554 68,435,840    
 
        Net increase in net assets 22,672,367 80,305,731    
 
Net Assets        
    Beginning of period 100,572,236 20,266,505    
    End of period † $ 123,244,603 $ 100,572,236    
†Includes undistributed net investment income (deficit) of $ (2,209,199) $ 744,306    
 
*Shares Issued and Redeemed        
    Class A:        
        Sold 2,996,421 5,913,413    
        Reinvestment of dividends 196,790 16,831    
        Redeemed (529,249) (414,729)    
        Net increase in Class A shares outstanding 2,663,962 5,515,515    
 
    Class B:        
        Sold 103,498 253,454    
        Reinvestment of dividends 8,336 936    
        Redeemed (28,189) (30,527)    
        Net increase in Class B shares outstanding. 83,645 223,863    
 
 
 
 
106                                                See notes to financial statements 107

Notes to Financial Statements
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
March 31, 2008
 
1. Significant Accounting Policies— First Investors Income Funds (“Income
Funds”) and First Investors Equity Funds (“Equity Funds”) each a Delaware statutory
trust (each a “Trust”, collectively, “the Trusts”), are registered under the Investment
Company Act of 1940 (“the 1940 Act”) as diversified, open-end management
investment companies and operate as series funds. The Income Funds issue shares of
beneficial interest in the Cash Management Fund, Government Fund, Investment
Grade Fund and Fund For Income. The Equity Funds issue shares of beneficial
interest in the Total Return Fund, Value Fund, Blue Chip Fund, Growth & Income
Fund, Global Fund, Select Growth Fund (formerly All-Cap Growth Fund), Opportu-
nity Fund (formerly Mid-Cap Opportunity Fund), Special Situations Fund, and
International Fund (each a “Fund”, collectively, “the Funds”). The Trusts account
separately for the assets, liabilities and operations of each Fund. The objective of
each Fund as of March 31, 2008 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.
 
Fund For Income primarily seeks high current income and, secondarily, seeks
capital appreciation.
 
Total Return Fund seeks high, long-term total investment return consistent with
moderate investment risk.
 
Value Fund seeks total return.
 
Blue Chip Fund seeks high total investment return.
 
Growth & Income Fund seeks long-term growth of capital and current income.
 
Global Fund primarily seeks long-term capital growth and, secondarily, a reasonable
level of current income.
 
Select Growth Fund seeks long-term growth of capital.
 
Opportunity Fund seeks long-term capital growth.
 
Special Situations Fund seeks long-term growth of capital.
 
International Fund primarily seeks long-term capital growth.
 
 
108

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, 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 on quotes furnished by a market maker for such securities. Securi-
ties may also be priced by a pricing service approved by the Trusts’ 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. Short-term debt securities that mature in
60 days or less are valued at amortized cost.
 
The Funds monitor for significant events occurring after the close of foreign markets
but prior to the close of trading on the New York Stock Exchange that could have
a material impact on the value of any foreign securities that are held by the Funds.
Examples of such events include natural disasters, political events and issuer-specific
developments. If the Valuation Committee decides that such events warrant using
fair value estimates for foreign securities, it will take such events into consideration
in determining the fair values of such securities. 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.
The Funds also use a pricing service to fair value foreign securities in the event that
fluctuation in U.S. securities markets exceed a predetermined level. For valuation
purposes, where applicable, quotations of foreign securities in foreign currency are
translated to U.S. dollar equivalents using the foreign exchange quotation in effect.
At March 31, 2008, Fund For Income held ten securities that were fair valued by its
Valuation Committee with an aggregate value of $5,265,929, representing 1.0% of
the Fund’s net assets and International Fund held twelve securities that were fair val-
ued by its Valuation Committee with an aggregate value of $12,801,781 representing
10.4% of the Fund’s net assets.
 
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 be-
tween 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.
 
                                                                                                                                                                                                                                         109

Notes to Financial Statements (continued)
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
March 31, 2008
  
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 com-
panies 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, such taxes.
  
At September 30, 2007, capital loss carryovers were as follows:

          Year Capital Loss Carryovers Expire              
Fund Total   2008   2009      2010   2011      2012      2013        2014       2015
Government $ 9,588,398  $ 1,017,364 $  2,144,197    $ —    $ 54,921 $  2,120,906 $  1,600,894 $  740,643   $ 1,909,473
Investment Grade 7,875,581 — 1,715,940   27,419   407,283 1,356,376 14 74,116   4,294,433
Fund For Income 154,363,100 1,832,458 13,810,649   18,563,112   52,099,335 25,740,298 10,200,012 7,456,986   24,660,250
Value 27,853,262 — —   —   27,853,262 — — —   —
Blue Chip* 87,143,349 2,138,552 2,138,552 12,233,984   70,632,261 — — —   —
International 82,339 — —   —   — — — —   82,339

*For Blue Chip Fund, $7,860,758 of the $87,143,349 capital loss carryforward was acquired in the reorganization with
  Focused Equity Fund and will expire by 2011.
 
Effective June 29, 2007, the Funds adopted the Financial Accounting Standards
Board (“FASB”) Interpretation No. 48 “Accounting for Uncertainty in Income Taxes”
(“FIN 48”). FIN 48 provides guidance for how uncertain tax positions should be
recognized, measured, presented and disclosed in the financial statements. FIN 48
requires the evaluation of tax positions taken or expected to be taken in the course
of preparing the Funds’ tax returns to determine whether tax positions are “more-
likely-than-not” of being sustained by the applicable tax authority. Tax positions not
deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit
or expense in the current year. Management has reviewed the tax positions for each
of the open tax years 2004 to 2007 and has determined the adoption of FIN 48 had no
impact on the financial statements of the Funds.
 
C. Distributions to Shareholders—Dividends from net investment income of the Govern-
ment Fund, Investment Grade Fund and Fund For Income are generally declared daily
and paid monthly. 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, if any, of Total Return Fund, Value Fund, Blue Chip Fund and Growth
& Income Fund are declared and paid quarterly. Dividends from net investment income,
if any, of Global Fund, Select Growth Fund, Opportunity Fund, Special Situations Fund,
and International Fund are declared and paid annually. Distributions from net realized
 
 
110

capital gains of each of the other Funds, if any, are normally 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
capital loss carryforwards, deferral of wash sales losses, post-October capital losses, net
operating losses and foreign currency transactions.
 
D. Expense Allocation—Expenses directly charged or attributable to a Fund are paid
from the assets of that Fund. General expenses of the Trusts are allocated among and
charged to the assets of each 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.
 
E. Repurchase Agreements—Securities pledged as collateral for repurchase agree-
ments entered into by the Global Fund are held by the Global Fund’s custodian until
maturity of the repurchase agreement. The agreements provide that the Global Fund
will receive, as collateral, securities with a market value which will at all times be at
least equal to 100% of the amount invested by the Global Fund.
 
F. 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.
 
G. Foreign Currency Translations—The accounting records of Global Fund and
International Fund are maintained in U.S. dollars. Portfolio securities and other assets
and liabilities denominated in foreign currencies are translated to U.S. dollars at the
date of valuation. Purchases and sales of investment securities, dividend income and
certain expenses are translated to U.S. dollars at the rates of exchange prevailing on
the respective dates of such transactions.
 
Global Fund and International Fund do not isolate that portion of gains and losses on
investments which is due to changes in foreign exchange rates from that which is due
to changes in market prices of the investments. These changes are included with the
net realized and unrealized gains and losses from investments.
 
Net realized and unrealized gains and losses on foreign currency transactions include
gains and losses from the sales of foreign currency and gains and losses on accrued
foreign dividends and related withholding taxes.
 
 
                                                                                                                                                                                                                                         111

Notes to Financial Statements (continued)
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
March 31, 2008
 
H. Security Lending—Fund For Income may loan securities to other investors
through the Securities Lending Management Agreement (“the Agreement”) with
Credit Suisse. Under the terms of the Agreement, the Fund is required to maintain
collateral with a market value not less than 101% of the market value of loaned
securities. Collateral is adjusted daily in connection with changes in market value of
securities on loan. Collateral may consist of cash or securities issued or guaranteed
by the U.S. government or its agencies. Cash collateral may be invested in permis-
sible instruments authorized by the Agreement. Interest earned on the collateral and
premiums paid by the broker are recorded as income by the Fund net of fees and
rebates charged by Credit Suisse for its services in connection with this securities
lending program. The Fund is subject to all of the investment risks associated with
the securities that are being loaned and the investments made with the cash collateral.
The Fund is also subject to the risks associated with a delay in recovering the loaned
securities or an inability to recover the loaned securities in the event the collateral
is not sufficient. The market value of securities on loan at March 31, 2008, was
$51,352,851 (including $1,445,393 of accrued interest), for which the Fund received
cash collateral of $52,640,202.
 
I. Other—Security transactions are accounted for on the date the securities are pur-
chased 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. For the six months ended March 31, 2008, the Bank of New York
Mellon, custodian of each Fund (other than Global Fund and International Fund),
has provided credits in the amount of $23,302 for the Income Funds and $63,129 for
the Equity Funds against custodian charges based on the uninvested cash balances of
these Funds. The Funds also reduced expenses through brokerage service arrange-
ments. For the six months ended March 31, 2008, expenses were reduced by $3,482
for the Income Funds and by $8,453 for the Equity Funds under these arrangements.
 
2. Security Transactions—For the six months ended March 31, 2008, purchases
and sales of securities and long-term U.S. Government obligations (excluding U.S.
Treasury bills, repurchase agreements, short-term securities and foreign currencies)
were as follows:
 
 
 
 
112

          Long-Term U.S.
      Securities   Government Obligations
    Cost of   Proceeds Cost of Proceeds
Fund           Purchases     of Sales   Purchases   of Sales
Government $ — $ — $ 59,912,533 $ 51,191,644
Investment Grade   135,384,829   112,885,916 37,352,071 67,533,472
Fund For Income   55,538,280   44,231,809 — —
Total Return   104,445,060   69,867,068 7,322,550 38,922,969
Value   36,383,510   48,423,898 — —
Blue Chip   14,440,630   35,902,236 — —
Growth & Income   91,832,519   102,699,781 — —
Global.   200,333,450   191,594,870 — —
Select Growth.   124,339,895   113,049,599 — —
Opportunity   94,848,968   105,714,720 — —
Special Situations   69,961,384   78,286,030 — —
International   90,113,566   59,986,969 — —

At March 31, 2008, aggregate cost and net unrealized appreciation (depreciation) of
securities for federal income tax purposes were as follows:

            Net
    Gross   Gross   Unrealized
  Aggregate Unrealized   Unrealized   Appreciation
Fund         Cost   Appreciation      Depreciation     (Depreciation)
Government $ 234,226,879 $  3,063,487 $ 267,684 $        2,795,803
Investment Grade 306,365,860 3,766,114   8,021,357   (4,255,243)
Fund For Income 588,598,244 3,018,031   75,376,496   (72,358,465)
Total Return 325,785,048 50,462,074   20,509,442   29,952,632
Value 330,047,858 76,106,052   29,863,373   46,242,679
Blue Chip 363,723,594 138,215,674   23,721,065   114,494,609
Growth & Income 630,096,392 184,060,878   71,224,317   112,836,561
Global* 283,095,604 37,476,910   12,326,506   25,150,404
Select Growth. 241,976,274 13,899,114   11,975,527   1,923,587
Opportunity 385,589,113 108,037,496   37,069,928   70,967,568
Special Situations 259,640,773 39,313,557   20,034,974   19,278,583
International* 116,737,364 9,599,437   4,262,045   5,337,392

*Aggregate cost includes PFIC income of $1,106,120 for Global Fund and $1,587,080 for  
  International Fund.  
 
 
 
 
  113

Notes to Financial Statements (continued)
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
March 31, 2008
  
3. Advisory Fee and Other Transactions With Affiliates—Certain officers and
trustees of the Trusts are officers and directors of the Trusts’ 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. Trustees of the Trusts who are not “interested persons”
of the Funds as defined in the 1940 Act are remunerated by the Funds. For the six
months ended March 31, 2008, total trustees’ fees accrued by the Income Funds and
Equity Funds amounted to $30,650 and $84,231, respectively.
  
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. During the
period October 1, 2007 to March 31, 2008, FIMCO has voluntarily waived $161,373
in advisory fees to limit the Fund’s overall expense ratio to .80% on Class A shares
and 1.55% on Class B shares.
  
Government Fund—.66% on the first $500 million of the Fund’s average daily net
assets, declining by .02% on each $500 million thereafter, down to .60% on average
daily net assets over $1.5 billion. During the period October 1, 2007 to March 31,
2008, FIMCO has voluntarily waived $149,281 in advisory fees to limit the Fund’s
overall expense ratio to 1.10% on Class A shares and 1.80% on Class B shares.
  
Investment Grade Fund— .66% on the first $500 million of the Fund’s average daily
net assets, declining by .02% on each $500 million thereafter, down to .60% on average
daily net assets over $1.5 billion. During the period October 1, 2007 to March 31, 2008,
FIMCO has voluntarily waived $201,890 in advisory fees to limit the Fund’s overall
expense ratio to 1.10% on Class A shares and 1.80% on Class B shares.
  
Fund For Income— .75% on the first $250 million of the Fund’s average daily net
assets, .72% on the next $250 million, .69% on the next $250 million, .66% on the
next $500 million, declining by .02% on each $500 million thereafter, down to .60%
on average daily net assets over $2.25 billion.
  
Total Return, Value, Blue Chip, Growth & Income, Select Growth, and
Opportunity Funds— .75% on the first $300 million of each Fund’s average daily
net assets, .72% on the next $200 million, .69% on the next $250 million, .66% on
the next $500 million, declining by .02% on each $500 million thereafter, down to
.60% on average daily net assets over $2.25 billion.
 
 
 
114

Special Situations Fund— 1% on the first $200 million of the Fund’s average daily
net assets, .75% on the next $300 million, .72% on the next $250 million, .69% on
the next $250 million, .66% on the next $500 million, and .64% on average daily
net assets over $1.5 billion. During the period October 1, 2007 to March 31, 2008,
FIMCO has voluntarily waived 20% of the 1% annual fee to limit the advisory fee to
.80% of the Fund’s average daily net assets.
 
Global and International Funds— .98% on the first $300 million of each Fund’s
average daily net assets, .95% on the next $300 million, .92% on the next $400 mil-
lion, .90% on the next $500 million and .88% on average daily net assets over $1.5
billion. During the period October 1, 2007 to March 31, 2008, FIMCO has volun-
tarily waived 3.1% of the .98% annual fee on Global Fund to limit the advisory fee to
.95% of the Fund’s average daily net assets.
 
For the six months ended March 31, 2008, total advisory fees accrued to FIMCO by
the Income Funds and Equity Funds were $4,364,510 and $14,201,793, respectively,
of which $512,544 and $222,300, respectively, was voluntarily waived by FIMCO as
noted above.
 
FIMCO, pursuant to an expense limitation agreement, assumed for the International
Fund organizational expenses and expenses incurred during the fiscal year ended
September 30, 2006, to limit the International Fund’s total expenses to 2.50% of the
average daily net assets on the Class A shares and 3.20% of the average daily net
assets on the Class B shares. FIMCO and the International Fund have agreed that any
expenses of the International Fund assumed by FIMCO pursuant to this agreement
shall be repaid to FIMCO by the International Fund in the first, second, or third fiscal
years following the year ended September 30, 2006, if the total expenses of the In-
ternational Fund for such year or years do not exceed 2.50% of the average daily net
assets on Class A shares and 3.20% on the average daily net assets of Class B shares
or any lower expense limitations to which FIMCO may otherwise agree. The total or-
ganizational expenses and expenses incurred in excess of the above stated limitations
was $101,265. During the year ended September 30, 2007, the International Fund has
repaid FIMCO $81,989 pursuant to the terms of the agreement. During the period
October 1, 2007 to March 31, 2008, the International Fund has repaid to FIMCO the
remaining amount of $19,276.
 
For the six months ended March 31, 2008, FIC, as underwriter, received from the
Income Funds and Equity Funds $2,490,952 and $12,153,302, respectively, in com-
missions in connection with the sale of shares of the Funds, after allowing $7,795
and $3,674, respectively, to other dealers. For the six months ended March 31, 2008,
shareholder servicing costs for the Income Funds and Equity Funds included $1,108,882
 
                                                                                                                                                                                                                                         115

Notes to Financial Statements (continued)
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
March 31, 2008
 
and $3,809,781, respectively, in transfer agent fees accrued to ADM and $185,432 and
$980,779, respectively, in retirement accounts custodian fees accrued to FIFSB.
 
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 and 1% of the average daily
net assets of the Class B shares on an annualized basis each fiscal year, payable
monthly. The Cash Management Fund is authorized to pay FIC a fee of 1% of the
average daily net assets of the Class B shares. 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 six months ended March 31, 2008, total distribu-
tion plan fees accrued to FIC by the Income Funds and Equity Funds amounted to
$1,825,416 and $6,373,824, respectively.
 
Wellington Management Company, LLP (“Wellington”) serves as investment subadvis-
er to Global Fund, Smith Asset Management Group, L.P. serves as investment subad-
viser to Select Growth Fund, Paradigm Capital Management, Inc. serves as investment
subadviser to Special Situations Fund and Vontobel Asset Management, Inc. serves as
investment subadviser to International Fund. The subadvisers are paid by FIMCO and
not by the Funds.
 
4. Restricted Securities— Certain restricted securities are exempt from the registra-
tion requirements under Rule 144A of the Securities Act of 1933 and may only be
sold to qualified institutional investors. At March 31, 2008, Cash Management Fund
held two 144A securities with an aggregate value of $11,866,829 representing 4.7%
of the Fund’s net assets, Investment Grade Fund held eleven 144A securities with an
aggregate value of $15,643,770 representing 4.9% of the Fund’s net assets, Fund For
Income held twenty-seven 144A securities with an aggregate value of $66,417,392
representing 12.5% of the Fund’s net assets, Total Return Fund held four 144A
securities with an aggregate value of $2,819,600 representing .8% of the Fund’s net
assets and Global Fund held one 144A security with a value of $357,500, represent-
ing .1% 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 March 31, 2008, Cash Management Fund held
seventeen Section 4(2) securities with an aggregate value of $88,398,048 represent-
ing 34.9% of the Fund’s net assets, Fund For Income held one Section 4(2) security
with a value of $9,986,857 representing 1.9% of the Fund’s net assets, Value Fund
held one Section 4(2) security with a value of $17,477,000 representing 4.6% of the
Fund’s net assets, Blue Chip Fund held two Section 4(2) securities with an aggregate
value of $5,993,132 representing 1.3% of the Fund’s net assets, Growth & Income
 
 
116

Fund held one Section 4(2) security with a value of $1,299,173 representing .2% of
the Fund’s net assets, Select Growth Fund held one Section 4(2) security with a value
of $7,290,406 representing 3.0% of the Fund’s net assets, Opportunity Fund held
one Section 4(2) security with a value of $2,796,320 representing .6% of the Fund’s
net assets, Special Situations Fund held one Section 4(2) security with a value of
$6,495,867 representing 2.3% of the Fund’s net assets and International Fund held
one Section 4(2) security with a value of $5,992,114 representing 4.9% of the Fund’s
net assets. These securities are valued as set forth in Note 1A.
 
5. High Yield Credit Risk—The investments of Fund For Income in high yield se-
curities 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. Forward Currency Contracts and Foreign Exchange Contracts—Forward
currency contracts and foreign exchange contracts are obligations to purchase or sell
a specific currency for an agreed-upon price at a future date. When a Fund purchases
or sells foreign securities it customarily enters into a forward currency contract to
minimize foreign exchange risk between the trade date and the settlement date of such
transactions. The Fund could be exposed to risk if counter parties to the contracts
are unable to meet the terms of their contracts or if the value of the foreign currency
changes unfavorably. Forward currency contracts and foreign exchange contracts are
“marked-to-market” daily at the applicable translation rate and the resulting unrealized
gains or losses are reflected in the Fund’s assets.
 
The Global Fund had the following forward currency contracts outstanding at
March 31, 2008:

     
Contracts to Buy     Unrealized
Foreign Currency In Exchange for Settlement Date Gain (Loss)
1,369,907 Euro US $2,171,262 3/31/08 US $562
481,622 Euro 759,299 4/1/08 (3,860)
4,138,138 Japanese Yen 41,679 4/1/08 104
380,754 Swiss Franc 382,668 4/1/08 (2,302)
669,941 Euro 1,056,684 4/2/08 (4,877)
168,457 Swiss Franc 168,917 4/2/08 (1,406)
    $4,580,509   $(11,779)
 
 
 
        117

Notes to Financial Statements (continued)  
FIRST INVESTORS INCOME FUNDS    
FIRST INVESTORS EQUITY FUNDS      
March 31, 2008      
 
Contracts to Sell     Unrealized
Foreign Currency In Exchange for Settlement Date Gain (Loss)
               82,207  Euro US $ 130,295 3/31/08 US $(34)
           535,658 Brazilian Real 308,505 4/1/08 (2,153)
           967,097 Euro   1,524,600 4/1/08 7,823
           226,507 Swiss Franc 227,645 4/1/08 1,369
           235,054   Euro 370,746 4/2/08 1,711
   41,536,805 Japanese Yen 415,776 4/2/08 1,533
    $2,977,567   $10,249
 
Net Unrealized Loss on Forward Currency Contracts   $(1,530)
 
The International Fund had the following forward currency contracts outstanding at
March 31, 2008:      
 
Contracts to Buy     Unrealized
Foreign Currency In Exchange for Settlement Date Gain
4,715,220 Hong Kong Dollar US $606,011 4/1/08 US $163
 
Contracts to Sell     Unrealized
Foreign Currency In Exchange for Settlement Date Gain
           928,589 Mexican Peso US $ 86,847 3/31/08 US $209
Net Unrealized Gain on Forward Currency Contracts   $372
 
 
 
 
118        

The International Fund had the following foreign exchange contracts outstanding at
March 31, 2008:      
 
Contracts to Buy     Unrealized
Foreign Currency In Exchange for Settlement Date Gain
351,000,000 Japanese Yen US $2,977,781 5/12/08 US $ 548,617
8,310,000 Swiss Franc 7,020,123 5/13/08 1,381,879
3,330,000 Australian Dollar 2,942,721 6/13/08 97,070
6,187,000 British Pound 12,107,217 6/13/08 189,560
9,170,000 Euro 13,474,581 6/13/08 1,055,834
11,490,000 Swiss Franc 10,606,186 6/13/08 1,011,022
6,233,000 British Pound 12,352,871 8/11/08 35,331
8,650,000 Euro 12,670,953 8/11/08 1,035,492
7,100,000 Euro 11,124,280 9/22/08 126,096
6,120,000 Swiss Franc 6,170,288 9/22/08 17,468
    $91,447,001   $5,498,369
 
Contracts to Sell     Unrealized
Foreign Currency In Exchange for Settlement Date Gain (Loss)
351,000,000 Japanese Yen US $ 3,053,627 5/12/08 US $ (472,770)
8,310,000 Swiss Franc 6,999,078 5/13/08 (1,402,923)
3,330,000 Australian Dollar 2,877,520 6/13/08 (162,272)
6,187,000 British Pound 12,506,419 6/13/08 209,643
9,170,000 Euro 13,433,981 6/13/08 (1,096,434)
11,490,000 Swiss Franc 10,163,644 6/13/08 (1,453,564)
6,233,000 British Pound 11,976,336 8/11/08 (411,867)
8,650,000 Euro 12,490,687 8/11/08 (1,215,758)
6,770,000 British Pound 13,253,020 9/22/08 (202,480)
7,100,000 Euro 10,979,440 9/22/08 (270,936)
6,120,000 Swiss Franc 6,098,655 9/22/08 (89,101)
    $103,832,407   $(6,568,462)
Net Unrealized Loss on Foreign Exchange Contracts   $(1,070,093)
 
 
 
 
        119

Notes to Financial Statements (continued)
FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
March 31, 2008
 
7. Capital—The Trusts are authorized to issue an unlimited number of shares of benefi-
cial interest without par value. The Trusts consist of the Funds listed on the cover page,
each of which is a separate and distinct series of the Trusts. Each Fund has designated
two classes of shares, Class A shares and Class B shares (each, a “Class”). Each share of
each Class has an equal beneficial interest in the assets, has identical voting, dividend,
liquidation and other rights and is subject to the same term and conditions except that
expenses allocated to a Class may be borne solely by that Class as determined by the
Trustees and a Class may have exclusive voting rights with respect to matters affecting
only that Class. Cash Management Fund’s Class A and Class B shares are sold without
an initial sales charge; however, its 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 Trusts. The Class A and Class
B shares sold by the other Funds have 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 distri-
bution 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.
 
8. Reorganizations—On August 10, 2007, First Investors Blue Chip Fund (“Blue
Chip Fund”) acquired all of the net assets of the First Investors Focused Equity
Fund (“Focused Equity Fund”) in connection with a tax-free reorganization that
was approved by the Equity Funds’ Board of Trustees. The Blue Chip Fund issued
1,728,265 Class A shares and 230,867 Class B shares to the Focused Equity Fund in
connection with the reorganization. In return, it received net assets of $47,523,380
from the Focused Equity Fund (which included $1,253,787 of Unrealized apprecia-
tion and $11,500,588 of accumulated net realized losses). The Blue Chip Fund’s
shares were issued at their current net asset values as of the date of the reorganiza-
tion. The aggregate net assets of the Blue Chip Fund and Focused Equity Fund
immediately before the acquisition were $549,166,656 consisting of Blue Chip Fund
$501,643,276 ($462,090,636 Class A and $39,552,640 Class B) and Focused Equity
Fund $47,523,380 ($42,266,488 Class A and $5,256,892 Class B), respectively.
 
 
 
 
120

9. New Accounting Pronouncements—In September 2006, the FASB issued State-
ment on Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measure-
ments.” This standard establishes a single authoritative definition of fair value, sets out
a framework for measuring fair value and requires additional disclosures about fair val-
ue measurements. SFAS No. 157 applies to fair value measurements already required
or permitted by existing standards. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years. The changes to current generally accepted accounting principles for
the application of this Statement relate to the definition of fair value, the methods used
to measure fair value, and the expanded disclosures about fair value measurements. As
of March 31, 2008, FIMCO does not believe the adoption of SFAS No. 157 will impact
the financial statement amounts of the Funds, however, additional disclosures may be
required about the inputs used to develop the measurements and the effect of certain of
the measurements on changes in net assets for the period.
 
 
 
 
                                                                                                                                                                                                                                         121

 
                 
Financial Highlights                                                        
FIRST INVESTORS INCOME FUNDS                                                        
 
 
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, except as otherwise indicated.                                                        
 
            P E R   S H A R E   D A T A                       R A T I O S  /  S U P P L E M E N T A L   D A T A            
                    Less Distributions                               Ratio to Average Net        
        Investment Operations       from                   Ratio to Average Net   Assets Before Expenses        
    Net Asset       Net Realized                   Net Asset           Assets**   Waived or Assumed        
    Value,   Net   and Unrealized   Total from   Net   Net       Value,       Net Assets      Net Expenses   Net Expenses   Net       Net   Portfolio    
    Beginning   Investment   Gain (Loss) on   Investment   Investment   Realized   Total   End of   Total   End of Period          After Fee   Before Fee   Investment       Investment   Turnover    
    of Period   Income   Investments   Operations   Income   Gain   Distributions   Period   Return *  (in millions)              Credits   Credits (a)    Income   Expenses     Income (Loss)   Rate    
 
CASH MANAGEMENT FUND                                                            
 
Class A                                                                    
2003   $ 1.00    $.006   —    $.006    $.006    —   $.006    $ 1.00    .62 % $179                 .78 % .78 %          .62 %        .97 %           .43 % —    
2004   1.00   .005   —   .005   .005   —   .005   1.00   .50   171                .70   .70   .50      1.05   .15   —    
2005   1.00   .019   —   .019   .019   —   .019   1.00   1.94   162                .70   .71          1.90      1.04          1.56   —    
2006   1.00   .038   —   .038   .038   —   .038   1.00   3.89   200                .78   .79          3.85      1.01          3.62   —    
2007   1.00   .045   —   .045   .045   —   .045   1.00   4.59   218                .80   .81          4.51   .93          4.38   —    
2008(b)   1.00   .018   —   .018   .018   —   .018   1.00   1.79   250                .80 †  .80 †         3.53 †       .94 †         3.39†   —    
 
Class B                                                                    
2003   1.00   .001   —   .001   .001   —   .001   1.00   .05   6              1.34   1.34   .06      1.53          (.13)   —    
2004   1.00   —   —   —   —   —   —   1.00   —   5              1.20   1.20   —      1.55          (.35)   —    
2005   1.00   .012   —   .012   .012   —   .012   1.00   1.18   3              1.45   1.46          1.15      1.79   .81   —    
2006   1.00   .031   —   .031   .031   —   .031   1.00   3.11   3              1.53   1.54          3.10      1.76          2.87   —    
2007   1.00   .037   —   .037   .037   —   .037   1.00   3.81   2              1.55   1.56          3.76      1.68          3.63   —    
2008(b)   1.00   .014   —   .014   .014   —   .014   1.00   1.42   3              1.55 †  1.55 †         2.78 †     1.69 †         2.64 †  —    
 
GOVERNMENT FUND                                                            
 
Class A                                                                    
2003   $11.50   $ .54   $(.19)   $ .35   $ .54   —   $ .54   $11.31   3.08 % $184              1.10 % 1.10 %        4.69 %    1.58 %         4.21 %  65 %  
2004   11.31   .51   (.18)   .33   .51   —   .51   11.13   3.01   179              1.10   1.10          4.59      1.56          4.13   60    
2005   11.13   .50   (.25)   .25   .50   —   .50   10.88   2.25   182              1.10   1.11          4.49      1.57          4.02   48    
2006   10.88   .45   (.13)   .32   .49   —   .49   10.71   3.02   186              1.10   1.11          4.14      1.35          3.89   43    
2007   10.71   .49   (.06)   .43   .50   —   .50   10.64   4.07   199              1.10   1.11          4.62      1.24          4.48   23    
2008(b)   10.64   .24   .30   .54   .24   —   .24   10.94   5.14   217              1.10 †  1.11 †         4.47 †     1.24 †         4.34 †  24    
 
Class B                                                                    
2003   11.49   .45   (.19)   .26   .45   —   .45   11.30   2.33   21              1.85   1.85          3.94      2.33          3.46   65    
2004   11.30   .43   (.18)   .25   .43   —   .43   11.12   2.25   17              1.85   1.85          3.84      2.31          3.38   60    
2005   11.12   .41   (.25)   .16   .41   —   .41   10.87   1.48   15              1.85   1.86          3.74      2.32          3.27   48    
2006   10.87   .36   (.12)   .24   .40   —   .40   10.71   2.32   13              1.85   1.86          3.39      2.10          3.14   43    
2007   10.71   .41   (.06)   .35   .42   —   .42   10.64   3.33   12              1.82   1.83          3.90      1.96          3.76   23    
2008(b)   10.64   .20   .31   .51   .21   —   .21   10.94   4.77   12              1.80 †  1.81 †         3.77 †     1.94 †         3.64 †  24    
 
 
 
 
122                                                                   123

               
Financial Highlights (continued)                                                        
FIRST INVESTORS INCOME FUNDS                                                        
 
 
 
 
                P E R   S H A R E   D A T A                       R A T I O S  /  S U P P L E M E N T A L   D A T A            
                        Less Distributions                               Ratio to Average Net        
            Investment Operations   from                   Ratio to Average Net   Assets Before Expenses        
        Net Asset       Net Realized                   Net Asset           Assets**   Waived or Assumed        
        Value,   Net   and Unrealized   Total from   Net   Net       Value,       Net Assets      Net Expenses   Net Expenses   Net       Net   Portfolio    
        Beginning   Investment   Gain (Loss) on   Investment   Investment   Realized   Total   End of   Total   End of Period          After Fee    Before Fee   Investment       Investment   Turnover    
        of Period   Income   Investments   Operations   Income   Gain   Distributions   Period   Return * (in millions)              Credits   Credits (a)    Income   Expenses   Income   Rate    
 
INVESTMENT GRADE FUND                                                            
 
Class A                                                                    
2003   $ 9.96   $.51   $ .35   $ .86   $.54   —   $.54   $10.28   8.94 % $144              1.10 %      1.10 %        4.85 % 1.35 % 4.60 % 6 %  
2004   10.28   .47   (.11)   .36   .53   —   .53   10.11   3.57   170              1.10        1.10          4.49   1.32   4.27   9    
2005   10.11   .45   (.28)   .17   .52   —   .52   9.76   1.70   203              1.10        1.11          4.21   1.31   4.00   11    
2006   9.76   .44   (.19)   .25   .49   —   .49   9.52   2.69   231              1.10        1.11          4.35   1.27   4.18   74    
2007   9.52   .45   (.09)   .36   .46   —   .46   9.42   3.91   271              1.10        1.11          4.58   1.22   4.46   50    
2008(b)   9.42   .23   .05   .28   .23   —   .23   9.47   3.02   295              1.10 †       1.10 †         4.60 †  1.24 †         4.46 †  59    
 
Class B                                                                    
2003   9.96   .43   .36   .79   .47   —   .47   10.28   8.17   31              1.85        1.85          4.10   2.10   3.85   6    
2004   10.28   .38   (.11)   .27   .45   —   .45   10.10   2.74   30              1.85        1.85          3.74   2.07   3.52   9    
2005   10.10   .34   (.24)   .10   .45   —   .45   9.75   .97   28              1.85        1.86          3.46   2.06   3.25   11    
2006   9.75   .30   (.12)   .18   .42   —   .42   9.51   1.92   24              1.85        1.86          3.60   2.02   3.43   74    
2007   9.51   .35   (.05)   .30   .40   —   .40   9.41   3.17   22              1.82        1.83          3.86   1.94   3.74   50    
2008(b)   9.41   .18   .07   .25   .20   —   .20   9.46   2.67   22              1.80 †       1.80 †         3.90 †  1.94 †         3.76 †  59    
 
INCOME FUND                                                                
 
Class A                                                                    
2003   $ 2.64   $.24   $ .41   $ .65   $.24   —   $.24   $ 3.05   25.78 % $509              1.34 %      1.34 %        8.38 %   N/A   N/A   31 %  
2004   3.05   .23   .13   .36   .23   —   .23   3.18   12.06   561              1.29        1.29          7.35   N/A   N/A   37    
2005   3.18   .23   (.11)   .12   .23   —   .23   3.07   3.79   571              1.30        1.30          7.33   N/A   N/A   39    
2006   3.07   .22   (.06)   .16   .22   —   .22   3.01   5.40   555              1.30        1.31          7.28   N/A   N/A   28    
2007   3.01   .21   (.02)   .19   .21   —   .21   2.99   6.38   563              1.28        1.29          7.00   N/A   N/A   34    
2008(b)   2.99   .10   (.26)   (.16)   .11   —   .11   2.72   (5.61)   511              1.31 †       1.31 †         7.32 †  N/A   N/A   8    
 
Class B                                                                    
2003   2.63   .23   .41   .64   .22   —   .22   3.05   25.24   37              2.04        2.04          7.68   N/A   N/A   31    
2004   3.05   .21   .12   .33   .20   —   .20   3.18   11.22   40              1.99        1.99          6.65   N/A   N/A   37    
2005   3.18   .21   (.13)   .08   .20   —   .20   3.06   2.68   37              2.00        2.00          6.63   N/A   N/A   39    
2006   3.06   .20   (.06)   .14   .20   —   .20   3.00   4.64   31              2.00        2.01          6.58   N/A   N/A   28    
2007   3.00   .19   (.01)   .18   .19   —   .19   2.99   5.99   25              1.98        1.99          6.30   N/A   N/A   34    
2008(b)   2.99   .09   (.27)   (.18)   .09   —   .09   2.72   (5.96)   20              2.01 †       2.01 †         6.62 †  N/A   N/A   8    
 
 
 *   Calculated without sales charges.
**   Net of expenses waived or assumed (Note 3).
 †  Annualized.
(a)   The ratios do not include a reduction of expenses from cash balances maintained with the custodian
    or from brokerage service arrangements (Note 1I).
(b)  For the period October 1, 2007 to March 31, 2008.
 
 
 
 
124       See notes to financial statements                                               125

          
Financial Highlights                                                        
FIRST INVESTORS EQUITY FUNDS                                                        
 
 
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, except as otherwise indicated.                                                        
 
            P E R   S H A R E   D A T A                       R A T I O S  /  S U P P L E M E N T A L   D A T A            
                   Less Distributions                               Ratio to Average Net        
        Investment Operations  from                   Ratio to Average Net   Assets Before Expenses        
    Net Asset       Net Realized                   Net Asset           Assets**   Waived or Assumed        
    Value,   Net   and Unrealized Total from     Net   Net       Value,       Net Assets      Net Expenses   Net Expenses   Net       Net   Portfolio    
    Beginning   Investment   Gain (Loss) on Investment    Investment   Realized   Total   End of   Total   End of Period          After Fee    Before Fee   Investment       Investment   Turnover    
    of Period   Income   Investments   Operations    Income   Gain   Distributions   Period   Return * (in millions)              Credits   Credits (a) Income   Expenses   Income   Rate    
 
TOTAL RETURN FUND                                                            
 
Class A                                                                    
2003   $10.59   $.20   $ 1.44   $1.64   $.21   $ —   $.21   $12.02   15.58 % $177              1.52 %        1.52 %        1.72 % 1.77 % 1.47 % 80 %  
2004   12.02   .20   .96   1.16   .20   —   .20   12.98   9.65   231              1.44          1.44   1.60   1.65   1.39   41    
2005   12.98   .23   .97   1.20   .25   —   .25   13.93   9.25   281              1.39          1.40   1.69   1.57   1.52   52    
2006   13.93   .23   .64   .87   .23   —   .23   14.57   6.24   312              1.37          1.38   1.63   1.44   1.57   57    
2007   14.57   .29   1.40   1.69   .30   .10   .40   15.86   11.68   355              1.32          1.33   2.05   N/A   N/A   40    
2008(b)   15.86   .19   (1.18)   (.99)   .24   .28   .52   14.35   (6.45)   330              1.34 †         1.34 †  2.46 †  N/A   N/A   31    
 
Class B                                                                    
2003   10.46   .09   1.44   1.53   .13   —   .13   11.86   14.71   28              2.22          2.22   1.02   2.47   .77   80    
2004   11.86   .12   .94   1.06   .12   —   .12   12.80   8.92   36              2.14          2.14   .90   2.35   .69   41    
2005   12.80   .13   .95   1.08   .15   —   .15   13.73   8.49   38              2.09          2.10   .99   2.27   .82   52    
2006   13.73   .13   .63   .76   .13   —   .13   14.36   5.53   36              2.07          2.08   .93   2.14   .87   57    
2007   14.36   .14   1.42   1.56   .19   .10   .29   15.63   10.93   34              2.02          2.03   1.35   N/A   N/A   40    
2008(b)   15.63   .13   (1.17)   (1.04)   .18   .28   .46   14.13   (6.81)   29              2.04 †         2.04 †  1.76 †  N/A   N/A   31    
 
VALUE FUND                                                                
 
Class A                                                                    
2003   $ 4.26   $.08   $ .73   .81   $.08   —   $.08   $ 4.99   19.04 % $126              1.67 %        1.67 %        1.69 % N/A   N/A   92 %  
2004   4.99   .07   .96   1.03   .07   —   .07   5.95   20.57   185              1.48          1.48   1.21   N/A   N/A   11    
2005   5.95   .08   .65   .73   .07   —   .07   6.61   12.31   267              1.42          1.43   1.31   N/A   N/A   17    
2006   6.61   .09   .78   .87   .08   —   .08   7.40   13.22   337              1.39          1.40   1.29   N/A   N/A   15    
2007   7.40   .10   .74   .84   .10   —   .10   8.14   11.36   414              1.32          1.33   1.34   N/A   N/A   8    
2008(b)   8.14   .06   (1.03)   (.97)   .07   —   .07   7.10   (12.00)   356              1.35 †         1.35 †  1.58 †  N/A   N/A   9    
 
Class B                                                                    
2003   4.20   .05   .71   .76   .04   —   .04   4.92   18.26   19              2.37          2.37   .99   N/A   N/A   92    
2004   4.92   .03   .95   .98   .03   —   .03   5.87   19.91   23              2.18          2.18   .51   N/A   N/A   11    
2005   5.87   .04   .63   .67   .03   —   .03   6.51   11.43   27              2.12          2.13   .61   N/A   N/A   17    
2006   6.51   .04   .76   .80   .03   —   .03   7.28   12.34   28              2.09          2.10   .59   N/A   N/A   15    
2007   7.28   .05   .72   .77   .04   —   .04   8.01   10.64   27              2.02          2.03   .64   N/A   N/A   8    
2008(b)   8.01   .03   (1.01)   (.98)   .04   —   .04   6.99   (12.27)   21              2.05 †         2.05 †  .88 †  N/A   N/A   9    
 
 
 
 
126                                                                   127

 
       
Financial Highlights (continued)                                                        
FIRST INVESTORS EQUITY FUNDS                                                        
 
 
 
 
                 P E R    S H A R E    D A T A                       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        
                         Less Distributions                   Ratio to Average Net   Assets Before Expenses        
           Investment Operations   from                   Assets**   Waived or Assumed        
    Net Asset   Net Net Realized                     Net Asset                                    
    Value,   Investment and Unrealized    Total from   Net   Net       Value,       Net Assets      Net Expenses   Net Expenses   Net       Net   Portfolio    
    Beginning   Income  Gain (Loss) on  Investment   Investment   Realized   Total   End of   Total   End of Period          After Fee    Before Fee   Investment       Investment   Turnover    
    of Period   (Loss)     Investments    Operations   Income   Gain   Distributions   Period   Return * (in millions)              Credits        Credits (a) Income (Loss)   Expenses    Income (Loss)    Rate    
BLUE CHIP FUND                                                                
 
Class A                                                                    
2003   $14.56   $ —   $ 2.58   $ 2.58   $ —   —   $ —   $17.14   17.72 % $383              1.56 %        1.56 %        .00 % 1.68 %        (.12) %   111 %  
2004   17.14   .01   1.54   1.55   —   —   —   18.69   9.04   414              1.47          1.47          .03   1.58   (.08)   94    
2005   18.69   .10   1.91   2.01   .10   —   .10   20.60   10.76   421              1.45          1.45          .54   1.56   .43   55    
2006   20.60   .10   1.82   1.92   .07   —   .07   22.45   9.31   438              1.46          1.46          .47   1.50   .43   6    
2007   22.45   .15   3.17   3.32   .13   —   .13   25.64   14.81   526              1.39          1.39          .65   N/A   N/A   3    
2008(b)   25.64   .10   (3.30)   (3.20)   .11   —   .11   22.33   (12.50)   445              1.39†          1.39†          .83†   N/A   N/A   3    
 
Class B                                                                    
2003   13.91   (.11)   2.46   2.35   —   —   —   16.26   16.90   62              2.26          2.26        (.70)   2.38   (.82)   111    
2004   16.26   (.13)   1.48   1.35   —   —   —   17.61   8.30   61              2.17          2.17        (.67)   2.28   (.78)   94    
2005   17.61   .09   1.67   1.76   .07   —   .07   19.30   9.98   52              2.15          2.15        (.16)   2.26   (.27)   55    
2006   19.30   (.08)   1.72   1.64   —   —   —   20.94   8.50   44              2.16          2.16        (.23)   2.20   (.27)   6    
2007   20.94   (.06)   3.00   2.94   —   —   —   23.88   14.04   46              2.09          2.09        (.05)   N/A   N/A   3    
2008(b)   23.88   .01   (3.06)   (3.05)   .03   —   .03   20.80   (12.78)   34              2.09†          2.09†   .13†   N/A   N/A   3    
 
GROWTH & INCOME FUND                                                            
 
Class A                                                                    
2003   $ 8.83   $ .04     $ 1.85   1.89   $.04   $ —   $.04   $10.68   21.49 % $400              1.52 %        1.52 %        .44 % N/A   N/A   70 %  
2004   10.68   .06   1.43   1.49   .03   —   .03   12.14   13.95   499              1.42          1.42          .53   N/A   N/A   32    
2005   12.14   .09   1.54   1.63   .10   —   .10   13.67   13.43   597              1.38          1.38          .72   N/A   N/A   42    
2006   13.67   .05   1.05   1.10   .05   —   .05   14.72   8.06   671              1.37          1.37          .35   N/A   N/A   34    
2007   14.72   .08   2.37   2.45   .07   .24   .31   16.86   16.78   808              1.32          1.32          .54   N/A   N/A   23    
2008(b)   16.86   .09   (2.31)   (2.22)   .09   .21   .30   14.34   (13.37)   692              1.35†          1.35†   1.16†   N/A   N/A   11    
 
Class B                                                                    
2003   8.51   (.03)   1.78   1.75   —   —   —   10.26   20.56   76              2.22          2.22        (.26)   N/A   N/A   70    
2004   10.26   (.03)   1.39   1.36   —   —   —   11.62   13.26   83              2.12          2.12        (.17)   N/A   N/A   32    
2005   11.62   (.04)   1.51   1.47   .03   —   .03   13.06   12.65   82              2.08          2.08          .02   N/A   N/A   42    
2006   13.06   (.12)   1.07   .95   —   —   —   14.01   7.28   72              2.07          2.07        (.35)   N/A   N/A   34    
2007   14.01   (.13)   2.35   2.22   —   .24   .24   15.99   15.98   67              2.02          2.02        (.16)   N/A   N/A   23    
2008(b)   15.99   .03   (2.19)   (2.16)   .04   .21   .25   13.58   (13.68)   52              2.05†          2.05†   .46†   N/A   N/A   11    
 
 
 
 
128                                                                   129

 
          
Financial Highlights (continued)                                                        
FIRST INVESTORS EQUITY FUNDS                                                        
 
 
 
 
            P E R   S H A R E   D A T A                       R A T I O S  /  S U P P L E M E N T A L   D A T A            
                    Less Distributions                               Ratio to Average Net        
        Investment Operations   from                   Ratio to Average Net   Assets Before Expenses        
    Net Asset   Net   Net Realized                 Net Asset           Assets**   Waived or Assumed        
    Value,   Investment   and Unrealized   Total from   Net   Net       Value,       Net Assets      Net Expenses   Net Expenses   Net       Net   Portfolio    
    Beginning   Income   Gain (Loss) on   Investment   Investment Realized   Total End of    Total   End of Period          After Fee    Before Fee   Investment       Investment   Turnover    
    of Period   (Loss)   Investments   Operations   Income   Gain    Distributions     Period     Return *  (in millions)                Credits     Credits  (a) Income (Loss)     Expenses    Income (Loss)     Rate    
 
GLOBAL FUND                                                                
 
Class A                                                                    
2003   $ 4.24   $(.01)   $ .93   $ .92   $ —   $ —   $ —   $ 5.16   21.70 % $192              1.98 %        1.98 % (.19) %    N/A   N/A   112 %   
2004   5.16   (.01)   .78   .77   —   —   —   5.93   14.92   209              1.86          1.86   (.13)      N/A   N/A   105    
2005   5.93   —   1.13   1.13   —   —   —   7.06   19.06   239              1.78          1.78   .05      N/A   N/A   104    
2006   7.06   .01   .71   .72   .02   —   .02   7.76   10.15   260              1.77          1.77   .14      N/A   N/A   105    
2007   7.76   —   1.87   1.87   .05   .76   .81   8.82   26.43   323              1.70          1.70   (.07)      1.70 %      (.07) % 134    
2008(b)   8.82   (.01)   (.71)   (.72)   .05   1.08   1.13   6.97   (9.62)   297              1.69 †         1.69 †  (.28) †     1.72 †       (.31) †  60    
 
Class B                                                                    
2003   4.00   (.04)   .88   .84   —   —   —   4.84   21.00   15              2.68          2.68   (.89)      N/A   N/A   112    
2004   4.84   (.05)   .73   .68   —   —   —   5.52   14.05   15              2.56          2.56   (.83)      N/A   N/A   105    
2005   5.52   (.04)   1.04   1.00   —   —   —   6.52   18.12   14              2.48          2.48   (.65)      N/A   N/A   104    
2006   6.52   (.05)   .67   .62   —   —   —   7.14   9.51   14              2.47          2.47   (.56)      N/A   N/A   105    
2007   7.14   (.16)   1.81   1.65   .05   .76   .81   7.98   25.57   14              2.40          2.40   (.77)      2.40   (.77)   134    
2008(b)   7.98   (.02)   (.65)   (.67)   .05   1.08   1.13   6.18   (10.05)   12              2.39 †         2.39 †  (.98) †     2.42 †     (1.01) †  60    
 
SELECT GROWTH FUND††                                                            
 
Class A                                                                    
2003   $ 5.33   $(.06)   $ 1.48   $ 1.42   —   $ —   $ —   $ 6.75   26.64 % $ 77              1.94 %        1.94 %   (1.15) %    1.96 %    (1.17) % 126 %  
2004   6.75   (.07)   1.12   1.05   —   —   —   7.80   15.56   130              1.68          1.68   (1.12)      N/A   N/A   75    
2005   7.80   (.05)   1.07   1.02   —   —   —   8.82   13.08   169              1.58          1.58   (.66)      N/A   N/A   91    
2006   8.82   (.06)   .50   .44   —   —   —   9.26   4.99   195              1.53          1.53   (.65)      N/A   N/A   107    
2007   9.26   (.04)   1.75   1.71   —   .76   .76   10.21   19.81   243              1.47          1.47   (.46)      N/A   N/A   169    
2008(b)   10.21   (.02)   (1.27)   (1.29)   —   1.42   1.42   7.50   (14.61)   223              1.44 †         1.45 †  (.47) †     N/A   N/A   45    
 
Class B                                                                    
2003   5.26   (.09)   1.44   1.35   —   —   —   6.61   25.67   14              2.64          2.64   (1.85)      2.66   (1.87)   126    
2004   6.61   (.12)   1.10   .98   —   —   —   7.59   14.83   20              2.38          2.38   (1.82)      N/A   N/A   75    
2005   7.59   (.11)   1.04   .93   —   —   —   8.52   12.25   23              2.28          2.28   (1.36)      N/A   N/A   91    
2006   8.52   (.12)   .49   .37   —   —   —   8.89   4.34   23              2.23          2.23   (1.35)      N/A   N/A   107    
2007   8.89   (.11)   1.68   1.57   —   .76   .76   9.70   19.00   25              2.17          2.17   (1.16)      N/A   N/A   169    
2008(b)   9.70   (.05)   (1.20)   (1.25)   —   1.42   1.42   7.03   (15.00)   21              2.14 †         2.15 †  (1.17) †     N/A   N/A   45    
 
 
 
 
130                                                                   131

               
Financial Highlights (continued)                                                        
FIRST INVESTORS EQUITY FUNDS                                                        
 
 
 
 
            P E R   S H A R E   D A T A                       R A T I O S  /  S U P P L E M E N T A L   D A T A            
                    Less Distributions                               Ratio to Average Net        
        Investment Operations   from                   Ratio to Average Net   Assets Before Expenses        
    Net Asset   Net   Net Realized                   Net Asset           Assets**   Waived or Assumed        
    Value,   Investment   and Unrealized   Total from   Net   Net       Value,       Net Assets      Net Expenses   Net Expenses   Net       Net   Portfolio    
    Beginning   Income   Gain (Loss) on   Investment   Investment Realized   Total   End of   Total   End of Period          After Fee    Before Fee   Investment       Investment   Turnover    
    of Period   (Loss)   Investments   Operations   Income   Gain    Distributions    Period   Return * (in millions)              Credits   Credits (a) Income (Loss)     Expenses   (Loss)   Rate    
 
OPPORTUNITY FUND†††                                                            
 
Class A                                                                    
2003   $15.78   $(.12)   $ 3.52   $ 3.40   $ —    $ —   $ —   $19.18   21.55 % $192              1.73 %        1.73 % (.80) %    1.97 %    (1.04) % 37 %  
2004   19.18   (.09)   3.62   3.53   —   —   —   22.71   18.41   277              1.56          1.56   (.46)      1.73   (.63)   40    
2005   22.71   (.09)   5.62   5.53   —   —   —   28.24   24.35   410              1.48          1.48   (.39)      1.61   (.52)   43    
2006   28.24   (.09)   .77   .68   —   .78   .78   28.14   2.58   435              1.44          1.44   (.33)      1.47   (.36)   55    
2007   28.14   .16   4.35   4.51   —   1.33   1.33   31.32   16.57   481              1.38          1.38   .52      N/A   N/A   50    
2008(b)   31.32   .02   (3.09)   (3.07)   .14   2.66   2.80   25.45   (10.78)   420              1.39 †         1.39 †  .11 †     N/A   N/A   19    
 
Class B                                                                    
2003   14.87   (.23)   3.31   3.08   —   —   —   17.95   20.71   35              2.43          2.43   (1.50)      2.67   (1.74)   37    
2004   17.95   (.23)   3.38   3.15   —   —   —   21.10   17.55   46              2.26          2.26   (1.16)      2.43   (1.33)   40    
2005   21.10   (.26)   5.22   4.96   —   —   —   26.06   23.51   57              2.18          2.18   (1.09)      2.31   (1.22)   43    
2006   26.06   (.29)   .73   .44   —   .78   .78   25.72   1.85   51              2.14          2.14   (1.03)      2.17   (1.06)   55    
2007   25.72   (.05)   3.97   3.92   —   1.33   1.33   28.31   15.80   50              2.08          2.08   (.18)      N/A   N/A   50    
2008(b)   28.31   (.07)   (2.76)   (2.83)   .14   2.66   2.80   22.68   (11.09)   40              2.09 †         2.09 †     (.59) †     N/A   N/A   19    
 
SPECIAL SITUATIONS FUND                                                            
 
Class A                                                                    
2003   $12.66   $(.17)   $ 3.14   $ 2.97   —    $ —   $ —   $15.63   23.46 % $169              1.80 %        1.80 %  (1.26) %    2.05 %    (1.51) % 111 %  
2004   15.63   (.18)   1.39   1.21   —   —   —   16.84   7.74   190              1.63          1.63   (1.08)      1.86   (1.31)   119    
2005   16.84   (.12)   3.72   3.60   —   —   —   20.44   21.38   224              1.59          1.60   (.64)      1.82   (.86)   112    
2006   20.44   .11   2.07   2.18   —   —   —   22.62   10.67   249              1.53          1.53   (.49)      1.73   (.69)   48    
2007   22.62   (.06)   3.59   3.53   —   1.88   1.88   24.27   16.30   295              1.46          1.46   (.27)      1.61   (.42)   64    
2008(b)   24.27   (.02)   (2.33)   (2.35)   —   1.22   1.22   20.70   (10.29)   264              1.49 †         1.50 †     (.16) †     1.61 †       (.28) †  24    
 
Class B                                                                    
2003   11.84   (.25)   2.93   2.68   —   —   —   14.52   22.63   20              2.50          2.50   (1.96)      2.75   (2.21)   111    
2004   14.52   (.30)   1.32   1.02   —   —   —   15.54   7.03   21              2.33          2.33   (1.78)      2.56   (2.01)   119    
2005   15.54   (.26)   3.44   3.18   —   —   —   18.72   20.46   21              2.29          2.30   (1.34)      2.52   (1.56)   112    
2006   18.72   (.26)   2.11   1.85   —   —   —   20.57   9.88   18              2.23          2.23   (1.19)      2.43   (1.39)   48    
2007   20.57   (.22)   3.26   3.04   —   1.88   1.88   21.73   15.48   18              2.16          2.16   (.97)      2.31   (1.12)   64    
2008(b)   21.73   (.09)   (2.06)   (2.15)   —   1.22   1.22   18.36   (10.58)   15              2.19 †         2.20 †     (.86) †    2.31 †       (.98) †  24    
 
 
 
 
132                                                                   133

 
                                   
Financial Highlights (continued)                                                        
FIRST INVESTORS EQUITY FUNDS                                                        
 
 
 
 
        P E R   S H A R E   D A T A                       R A T I O S  /  S U P P L E M E N T A L   D A T A            
                Less Distributions                               Ratio to Average Net        
    Investment Operations       from                   Ratio to Average Net   Assets Before Expenses        
Net Asset   Net   Net Realized                   Net Asset           Assets**   Waived or Assumed        
Value,   Investment   and Unrealized   Total from   Net   Net       Value,       Net Assets      Net Expenses  Net Expenses   Net       Net   Portfolio    
Beginning   Income   Gain (Loss) on   Investment   Investment   Realized   Total   End of   Total   End of Period          After Fee   Before Fee   Investment       Investment   Turnover    
of Period   (Loss)   Investments   Operations   Income   Gain   Distributions   Period   Return *  (in millions)              Credits    Credits  (a) Income (Loss)   Expenses   Income (Loss)   Rate    
 
INTERNATIONAL FUND                                                            
 
Class A                                                                  
2006(c) $10.00   $ —   $ .71   $ .71   $ —   —   $ —   $10.71   7.10 % $ 19              2.35 %†    2.35 %†        .15 %†    5.65 %†    (3.15) %† 9 %  
2007 10.71   .08   2.46   2.54   .07   —   .07   13.18   23.84   96              2.50      2.50        (.05)      2.35   .10   67    
2008(b) 13.18   .01   (.99)   (.98)   .32   —   .32   11.88   (7.73)   119              2.00 †     2.00 †       (.29) †     1.96 †  (.25) †  55    
 
Class B                                                                  
2006(c) 10.00   (.01)   .71   .70   —   —   —   10.70   7.00   1              3.05 †      3.05 †        (.55) †      6.35 †   (3.85) †   9    
2007 10.70   —   2.44   2.44   .07   —   .07   13.07   22.93   4              3.20      3.20        (.75)      3.05   (.60)   67    
2008(b) 13.07   (.02)   (1.00)   (1.02)   .32   —   .32   11.73   (8.11)   5              2.70 †      2.70 †        (.99) †      2.66 †   (.95) †   55    
 
 
   *   Calculated without sales charges
**   Net of expenses waived or assumed by the investment adviser (Note 3)
   †   Annualized
††   Prior to May 7, 2007, known as All-Cap Growth Fund.
†††   Prior to January 31, 2008, known as Mid-Cap Opportunity Fund.
(a)   The ratios do not include a reduction of expenses from cash balances maintained with the custodian
    or from brokerage service arrangements (Note 1I).
(b)   For the period October 1, 2007 to March 31, 2008
(c)   For the period June 27, 2006 (commencement of operations) to September 30, 2006
 
 
 
 
134         See notes to financial statements                                               135

Report of Independent Registered Public
Accounting Firm
 
 
To the Shareholders and Board of Trustees of
First Investors Income Funds and First Investors Equity Funds
 
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments of the Cash Management Fund, Government Fund,
Investment Grade Fund and Fund For Income, (each a series of First Investors
Income Funds), and the Total Return Fund, Value Fund, Blue Chip Fund, Growth
& Income Fund, Global Fund, Select Growth Fund, Opportunity Fund, Special
Situations Fund, and International Fund (each a series of First Investors Equity
Funds), as of March 31, 2008, the related statements of operations, the statements 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 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 audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Funds are
not required to have, nor were we engaged to perform an audit of the Funds’ internal
control over fi nancial reporting. Our audits included consideration of internal control
over fi nancial reporting as a basis for designing audit procedures that are appropri-
ate 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 confi rmation of securities owned as of March 31, 2008, 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.
 
 
 
 
136

In our opinion, the fi nancial statements and financial highlights referred to above
present fairly, in all material respects, the financial position of the Cash Management
Fund, Government Fund, Investment Grade Fund, Fund For Income, Total Return
Fund, Value Fund, Blue Chip Fund, Growth & Income Fund, Global Fund, Select
Growth Fund, Opportunity Fund, Special Situations Fund and International Fund, as
of March 31, 2008, and the results of their operations, changes in their net assets, and
their financial highlights for the periods presented, in conformity with accounting
principles generally accepted in the United States of America.
 
                                                                                       Tait, Weller & Baker LLP
 
Philadelphia, Pennsylvania
May 30, 2008
 
 
 
 
                                                                                                                                                                                                                                         137

FIRST INVESTORS INCOME FUNDS
FIRST INVESTORS EQUITY FUNDS
 
  
Trustees
———————————————————
Charles R. Barton, III
 
Stefan L. Geiringer
 
Robert M. Grohol
 
Kathryn S. Head
 
Arthur M. Scutro, Jr.
 
James M. Srygley
 
Robert F. Wentworth
  
Officers
———————————————————
Kathryn S. Head
President
 
Larry R. Lavoie
Chief Compliance Officer
 
Joseph I. Benedek
Treasurer
 
Mark S. Spencer
Assistant Treasurer
 
Ruta M. Carroll
Secretary
 
Carol Lerner Brown
Assistant Secretary
 
 
 
 
138

Shareholder Information  
———————————————————  
Investment Adviser Custodian
First Investors Management The Bank of New York Mellon
Company, Inc. One Wall Street
110 Wall Street New York, NY 10286
New York, NY 10005   
   Custodian
Subadviser (Global and International Funds)
(Global Fund) Brown Brothers Harriman & Co.
Wellington Management Company, LLP 40 Water Street
75 State Street Boston, MA 02109
Boston, MA 02109   
   Transfer Agent
Subadviser Administrative Data Management Corp.
(Select Growth Fund) Raritan Plaza I – 8th Floor
Smith Asset Management Group, L. P. Edison, NJ 08837-3620
100 Crescent Court   
Dallas, TX 75201 Independent Registered Public
   Accounting Firm
Subadviser Tait, Weller & Baker LLP
(Special Situations Fund) 1818 Market Street
Paradigm Capital Management, Inc. Philadelphia, PA 19103
Nine Elk Street   
Albany, NY 12207 Legal Counsel
   Kirkpatrick & Lockhart
Subadviser Preston Gates Ellis, LLP
(International Fund) 1601 K Street, N. W.
Vontobel Asset Management, Inc. Washington, DC 20006
1540 Broadway  
New York, NY 10036  
  
Underwriter  
First Investors Corporation  
110 Wall Street  
New York, NY 10005  
 
 
 
 
                                                                                                         139

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 1-800-423-4026,
or can be viewed online or downloaded from the Edgar database on the Securities and
Exchange Commission’s (SEC) 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 at
our address listed above or by calling 1-800-423-4026 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 1-800-SEC-0330. The schedule of portfolio
holdings is also available, without charge, upon request, by calling 1-800-423-4026 or
writing to us at our address listed above.
 
 
 
 
140

NOTES  
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
 
 
 
 
  141


Item 2. Code of Ethics
 
                       Not applicable
   
Item 3. Audit Committee Financial Expert
 
                        Not applicable
   
Item 4. Principal Accountant Fees and Services
 
                        Not applicable 
   
Item 5. Audit Committee of Listed Registrants
 
                        Not applicable
   
Item 6. Schedule of Investments
 
                        Schedule of investments is included as part of the report to stockholders 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 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 control 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)(1) Code of Ethics - Not applicable
 
 
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act
  of 2002 - Filed herewith
 
(b) 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 Equity Funds
(Registrant)
 
By /S/ KATHRYN S. HEAD
                       Kathryn S. Head
                       President and Principal Executive Officer
 
Date: June 3, 2008
 
 
                   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 Equity Funds
(Registrant)
 
By /S/ JOSEPH I. BENEDEK
                       Joseph I. Benedek
                       Treasurer and Principal Financial Officer
 
Date: June 3, 2008