Effective January 31, 2018, Foresters Investment Management Company, Inc., (FIMCO), the investment adviser of First Investors Funds, is making several changes to help improve the overall competitiveness of our First Investors Funds. These enhancements include adding high yield allocations to a number of the funds and several changes to two fixed income funds.
High yield allocations
To increase the competitiveness of a number of our fixed income funds, FIMCO has hired two subadvisers to manage high yield sleeves of up to 10% of assets in six First Investors funds.
Muzinich & Co., the subadviser for First Investors Fund For Income and First Investors Floating Rate Fund, has been retained to subadvise a high yield allocation in the First Investors Total Return Fund, the First Investors Balanced Income Fund, the First Investors Investment Grade Fund and the First Investors Limited Duration High Quality Bond Fund. The high yield sleeves will be managed in the same style as the First Investors Fund For Income.
Rajeev Sharma, Director of Fixed Income, in conjunction with FIMCO’s Asset Allocation Committee, will oversee the amount of each fund’s high yield allocation. While the overall credit ratings of the funds are expected to remain investment grade, the addition of a high yield component provides the funds with the potential to achieve a greater total return and higher income, although there is no guarantee this objective will be achieved
FIMCO has also hired Green Square Capital, an experienced specialist in the management of high yield municipal bonds, to subadvise high yield sleeves in the First Investors Tax Exempt Income Fund and the First Investors Tax Exempt Opportunities Fund. Patrick Tucci, co-Portfolio Manager for the Tax Exempt Funds, will oversee the amount of each fund’s high yield allocation. The funds are expected to maintain their overall investment grade credit ratings.
Management fee and name change
We are also making changes to First Investors Limited Duration High Quality Bond Fund and First Investors Tax Exempt Opportunities Fund. First, in order to better reflect its expanded investment universe, the Limited Duration High Quality Bond Fund’s name will be changed to First Investors Limited Duration Bond Fund. Its investment objective, to seek current income consistent with low volatility of principal, will remain the same. Second, we are reducing this Fund’s management fee, with the fee before the first breakpoint being reduced to 0.41% of average daily net assets from 0.66% of average daily net assets, a reduction of 25 basis points (0.25%). Finally, the First Investors Tax Exempt Opportunities Fund will have its management fee lowered by 5 basis points (0.05%).
As always, our goal is to provide you with investment solutions that help your clients achieve their financial objectives.
All investing involves risk, including possible loss of principal. Fixed income investing includes 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 rule, longer-term bonds fluctuate more than shorter-term bonds in reaction to changes in interest rates. Credit risk is the risk that bonds will decline 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. There are also special risks associated with investing in certain types of bonds, including liquidity risk and prepayment and extension risk. High yield debt securities (commonly known as “junk bonds”) have greater credit risk than higher quality debt securities because their issuers may not be as financially strong. High yield securities are inherently speculative due to the risk associated with the issuer’s ability to make principal and interest payments. During times of economic stress, high yield securities issuers may be unable to access credit to refinance their bonds or meet their credit obligations. Past performance is no guarantee of future results.
For more information about First Investors Funds from Foresters Financial Services, Inc., you may obtain a free prospectus by calling 800 524 2803 (Option 2) or visiting our website at firstinvestorsfunds.com. You should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. The prospectus contains this and other information about the funds, and should be read carefully before you invest or send money. An investment in these funds is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Foresters Financial Holding Company, and its subsidiaries, are relying upon the exemption from fiduciary status for arm’s-length transactions with independent and sophisticated financial institutions contained in Section (c)(1) of the Department of Labor’s definition of fiduciary, 81 Fed. Reg. 68, at 20999 (April 8, 2016) (“Fiduciary Rule”) in connection with clients subject to the Employee Retirement Income Security Act of 1974, as amended or Section 4975 of the Internal Revenue Code of 1986, as amended. Accordingly, these materials will not cause us to become a fiduciary within the meaning of the Fiduciary Rule.
Foresters Financial™ and Foresters™ are the trade names and trademarks of The Independent Order of Foresters, a fraternal benefit society, 789 Don Mills Road, Toronto, Canada M3C 1T9 and its subsidiaries, including Foresters Financial Services, Inc. Foresters Financial Services, Inc.is a registered broker-dealer and subsidiary of Foresters Financial Holding Company, Inc. Securities, life insurance and annuity products are offered through Foresters Financial Services, Inc. Insurance products are issued by Foresters Life Insurance and Annuity Company, New York, or The Independent Order of Foresters.
Foresters Financial Services, Inc. is a member of the Securities Investor Protection Corporation.
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