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Michigan Tax Exempt Fund

Investment Adviser: Foresters Investment Management Company, Inc.

Portfolio Managers: Clark D. Wagner and Patrick Tucci, CFA


 
 

Investment Objective and Strategy

The Fund seeks a high level of interest income that is exempt from both federal and state income tax for individual residents of the state of Michigan. The Fund also seeks income that is not a tax preference item for purposes of the federal alternative minimum tax (“AMT”). Under normal circumstances, at least 80% of the Fund’s net assets (plus any borrowing for investment purposes) will be invested in municipal securities that pay interest that is exempt from federal income tax, including the AMT, and any applicable state income tax for individual residents of the state of Michigan. However, the Fund typically attempts to invest all its assets in such securities. The Fund invests in municipal bonds and other municipal securities, including variable rate and floating rate notes that pay interest that is exempt from federal income tax, the AMT, and any applicable state income tax for Michigan residents. The Fund generally concentrates its investments in municipal bonds issued by Michigan. However, the Fund may also invest significantly in municipal securities that are issued by U.S. commonwealths, possessions, or territories, such as Puerto Rico if the interest on them is exempt from state income tax for state residents.

Sector Allocation (%)

As of 06-30-2017

This information is for illustrative purposes only and includes only invested cash; therefore, the sum of all sectors as a percentage of net assets may not equal 100%.

Returns as of 06-30-2017 06-30-2017
Gross/Net Exp as of 12-31-2016 Gross/Net Exp as of 12-31-2016
Average Annual Total Returns
Class 1 Yr. % 3 Yr. % 5 Yr. % 10 Yr. % Since inception* Inception date Gross/Net Exp %
Average Annual Total Returns
Aat NAV-0.783.042.554.05N/A01-01-19871.14/1.14
w/ sales charge-4.741.641.713.63N/A01-01-19871.14/1.14
Bat NAV-1.472.321.813.46N/A01-12-19951.85/1.85
w/ sales charge-5.291.371.463.46N/A01-12-19951.85/1.85
Advisorat NAV-0.533.45N/AN/A2.3305-01-20130.86/0.86
Institutionalat NAV-0.453.23N/AN/A2.2405-01-20130.84/0.84
Average Annual Total Returns
ClassA
at NAV
1 Yr. %-0.78
3 Yr. %3.04
5 Yr. %2.55
10 Yr. %4.05
Since inception*N/A
Inception date01-01-1987
Gross/Net Exp %1.14/1.14
Average Annual Total Returns
ClassA
w/ sales charge
1 Yr. %-4.74
3 Yr. %1.64
5 Yr. %1.71
10 Yr. %3.63
Since inception*N/A
Inception date01-01-1987
Gross/Net Exp %1.14/1.14
Average Annual Total Returns
ClassB
at NAV
1 Yr. %-1.47
3 Yr. %2.32
5 Yr. %1.81
10 Yr. %3.46
Since inception*N/A
Inception date01-12-1995
Gross/Net Exp %1.85/1.85
Average Annual Total Returns
ClassB
w/ sales charge
1 Yr. %-5.29
3 Yr. %1.37
5 Yr. %1.46
10 Yr. %3.46
Since inception*N/A
Inception date01-12-1995
Gross/Net Exp %1.85/1.85
Average Annual Total Returns
ClassAdvisor
at NAV
1 Yr. %-0.53
3 Yr. %3.45
5 Yr. %N/A
10 Yr. %N/A
Since inception*2.33
Inception date05-01-2013
Gross/Net Exp %0.86/0.86
Average Annual Total Returns
ClassInstitutional
at NAV
1 Yr. %-0.45
3 Yr. %3.23
5 Yr. %N/A
10 Yr. %N/A
Since inception*2.24
Inception date05-01-2013
Gross/Net Exp %0.84/0.84
Average Annual Total Returns
Class 1 Yr. % 3 Yr. % 5 Yr. % 10 Yr. % Since inception* Inception date Gross/Net Exp %
Average Annual Total Returns
Aat NAV-0.783.042.554.05N/A01-01-19871.14/1.14
w/ sales charge-4.741.641.713.63N/A01-01-19871.14/1.14
Bat NAV-1.472.321.813.46N/A01-12-19951.85/1.85
w/ sales charge-5.291.371.463.46N/A01-12-19951.85/1.85
Advisorat NAV-0.533.45N/AN/A2.3305-01-20130.86/0.86
Institutionalat NAV-0.453.23N/AN/A2.2405-01-20130.84/0.84
Average Annual Total Returns
ClassA
at NAV
1 Yr. %-0.78
3 Yr. %3.04
5 Yr. %2.55
10 Yr. %4.05
Since inception*N/A
Inception date01-01-1987
Gross/Net Exp %1.14/1.14
Average Annual Total Returns
ClassA
w/ sales charge
1 Yr. %-4.74
3 Yr. %1.64
5 Yr. %1.71
10 Yr. %3.63
Since inception*N/A
Inception date01-01-1987
Gross/Net Exp %1.14/1.14
Average Annual Total Returns
ClassB
at NAV
1 Yr. %-1.47
3 Yr. %2.32
5 Yr. %1.81
10 Yr. %3.46
Since inception*N/A
Inception date01-12-1995
Gross/Net Exp %1.85/1.85
Average Annual Total Returns
ClassB
w/ sales charge
1 Yr. %-5.29
3 Yr. %1.37
5 Yr. %1.46
10 Yr. %3.46
Since inception*N/A
Inception date01-12-1995
Gross/Net Exp %1.85/1.85
Average Annual Total Returns
ClassAdvisor
at NAV
1 Yr. %-0.53
3 Yr. %3.45
5 Yr. %N/A
10 Yr. %N/A
Since inception*2.33
Inception date05-01-2013
Gross/Net Exp %0.86/0.86
Average Annual Total Returns
ClassInstitutional
at NAV
1 Yr. %-0.45
3 Yr. %3.23
5 Yr. %N/A
10 Yr. %N/A
Since inception*2.24
Inception date05-01-2013
Gross/Net Exp %0.84/0.84

*For funds with less than 1, 3, 5 or 10 year performance data.

 

 

The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. Performance of share classes will differ because each class is sold pursuant to different sales arrangements and bears different expenses.  The Class A returns shown with sales charges are based on the maximum sales charge of 4%. The Class B returns shown with sales charges are adjusted for the applicable deferred sales charge (maximum of 4% in the first year). The Advisor Class and Institutional Class returns are shown as NAV only returns since these classes are sold without sales charges. Redemptions of Class B shares may be subject to a deferred sales charge. For performance data current to the most recent month-end call 800 524 2803 or visit Pricing & Performance. Returns may reflect waivers or reimbursements of certain expenses. Absent of these waivers or reimbursements, returns may be lower.


Sector Allocation (%)

As of 06-30-2017

This information is for illustrative purposes only and includes only invested cash; therefore, the sum of all sectors as a percentage of net assets may not equal 100%.

Top Holdings (%)

As of 06-30-2017
Top Holdings (%)
Security% of Total Net Assets
Goodrich Mich Area Sch Dist, 5.500%, 05/01/20325.9%
Detroit Mich Sew Disp Rev Bonds, 7.500%, 07/01/20335.9%
Kent Hosp Fin Auth Rev, 5.000%, 11/15/20295.8%
Michigan St Bldg Auth Rev Bonds, 5.250%, 10/15/20255.7%
Michigan Mun Bd Auth Rev, 5.000%, 10/01/20295.7%
Michigan St Hosp Fin Auth Rev, 6.250%, 12/01/20285.6%
Wyandotte Elec Rev, 5.250%, 10/01/20285.6%
Grand Rapids Wtr Supply, 5.000%, 01/01/20295.5%
Michigan State, 5.000%, 11/01/20225.5%
Ferris St Univ Mich Rev, 5.000%, 10/01/20285.5%
Total56.7%

This information is solely for illustrative purposes. The portfolio as of the date of this report may or may not be the same as the portfolio on the date this material is used.

Class A Class B Advisor Class Institutional Class
Shareholder Fees (fees paid directly from your investment)
Maximum sales charge (load) imposed on purchases (as a percentage of offering price) 4.00% 1 None None None
Maximum deferred sales charge (load) (as a percentage of the lower of purchase price or redemption price) 1.00%2 4.00% 3 None None
Class A Class B Advisor Class Institutional Class
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)
Management Fees 0.60% 0.60% 0.60% 0.60%
Distribution and Service (12b-1) Fees 0.30% 1.00% None None
Other Expenses 0.24% 0.25% 0.26% 0.24%
Total Annual Fund Operating Expenses 1.14% 1.85% 0.86% 0.84%

1 Due to rounding of numbers in calculating a sales charge, you may pay more or less than what is shown above.

2 A CDSC of 1.00% will be assessed on certain redemptions of Class A shares that are purchased without a sales charge.

3 4.00% in the first year, declining to 0% after the sixth year. Class B shares convert to Class A shares after eight years.

Clark Wagner

Clark D. Wagner

Clark D. Wagner, President, Foresters Investment Management Company (FIMCO) and Vice President and Chief Investment Officer, Foresters Financial™, serves as Portfolio Manager of the Strategic Income Fund, Total Return Fund, Life Series Total Return Fund, Balanced Income Fund and Life Series Balanced Income Fund. He also serves as Co-Portfolio Manager of the Tax Exempt Income Fund, Tax Exempt Opportunities Fund, and each of the Single State Tax Exempt Funds. Mr. Wagner has served as President of FIMCO since 2016 and served as the Director of Fixed Income from 2001 – 2016. Prior to that Mr. Wagner served as Chief Investment Officer of FIMCO from 1992-2001. Mr. Wagner joined FIMCO in 1991 as a Portfolio Manager.

Patrick Tucci

Patrick Tucci

Patrick Tucci, CFA, has served as Co-Portfolio Manager of the Tax Exempt Funds since joining Foresters Investment Management Company, Inc. ("FIMCO") in May 2016. Prior to joining FIMCO, Mr. Tucci was the President and Founder of Harbor Hills Investment Management Co. (2014-2016) and Managing Director at Piper Jaffray & Co. (2010-2013). 

How to obtain a prospectus

For more complete information on any First Investors fund, you may obtain a free prospectus by downloading it here, contacting your registered representative, or calling 800 423 4026. You should consider the investment objectives, risks, fees or charges, and expenses of the fund carefully before investing. The prospectus and summary prospectus contain this and other information about the fund, and should be read carefully before you invest or send money. An investment in a fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Principal Risks:  You can lose money by investing in the Fund.  The Fund is intended for investors who want a high level of income that is exempt from federal and state income tax, are able to assume a moderate degree of risk, and have a long-term investment horizon.  There is no guarantee that the Fund will meet its investment objective.  Here are the principal risks of investing in the Fund:

Call Risk.  During periods of falling interest rates, an issuer of a callable bond held by the Fund may “call” or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds at lower interest rates, resulting in a decline in the Fund’s income.

Concentration Risk.  The Fund’s return will be affected significantly by events that affect Michigan’s economy as well as legislative, political and judicial changes in the state.  The Fund’s portfolio may be concentrated in a relatively small number of issuers.  

Credit Risk.  This is the risk that an issuer of securities will be unable to pay interest or principal when due.  The prices of debt securities are affected by the credit quality of the issuer and in the case of insured securities, the quality of the insurer.  A municipal issuer’s ability to pay interest and principal on its debt obligations may be adversely affected by a variety of factors, such as economic, political, regulatory, or legal developments; a downgrade in an issuer’s credit rating; or other adverse news about the issuer.

Derivatives Risk.  Investments in inverse floaters, interest rate swaps, futures contracts, and options on futures contracts involve risks, such as possible default by a counterparty to a swap agreement, potential losses if interest rates do not move as expected, and the potential for greater losses than if these techniques had not been used.  Investments in derivatives can increase the volatility of the Fund’s share price and may expose the Fund to significant additional costs.  Derivatives may be difficult to sell, unwind, or value.  

Interest Rate Risk.  The market value of municipal securities is affected by changes in interest rates.  In general, when interest rates rise, the market values of municipal securities decline, and when interest rates decline, the market values of municipal securities increase.  As of the date of this prospectus, interest rates are at or near historic lows, which may increase the Fund’s exposure to the risks associated with rising interest rates.

Securities with longer maturities are more sensitive to changes in interest rates than securities with shorter maturities.  Since the Fund typically purchases securities with longer maturities, the Fund will generally have a high degree of interest rate risk.  The Fund’s yield may also decline if interest rates decline.  

Liquidity Risk.  During times of market stress, it may be difficult to sell municipal securities at a time or price most favorable to the Fund.  
Market Risk.  The prices of municipal securities may decline in response to certain events, such as general economic and market conditions, regional or global economic instability, interest rate fluctuations, and those events directly involving the issuers.  Adverse market events may lead to increased redemptions, which could cause the Fund to experience a loss when selling securities to meet redemption requests

Municipal Securities Risk.  The Fund’s return will be impacted by events that affect the municipal securities markets, including legislative, political, or judicial developments that are perceived to have a negative effect on municipal securities and economic conditions that threaten the ability of municipalities to raise taxes or obtain the other sources of revenue that back their securities.  

Security Selection Risk.  Securities selected by the portfolio manager may perform differently than the overall market or may not meet the portfolio manager’s expectations. 

Tax Risk.  The Fund may invest in municipal securities that pay interest that is subject to federal, state and/or local income tax and/or is a tax preference item for purposes of the AMT or effect transactions that produce taxable capital gains.  Interest income on municipal securities held by the Fund may also become subject to income tax due to an adverse change in the law or other events.  

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