NEW YORK, May 19, 2014 /CNW/ - First Investors has launched a new mutual
fund—the First Investors Limited Duration High Quality Bond Fund. It is a short duration bond fund that seeks current income consistent with low
volatility of principal, which may be beneficial in the current
environment of rising interest rates.
"This Fund is an exciting new addition and enhances our overall product
lineup," said Derek Burke, President of First Investors Management Company, Inc. (FIMCO).* "Our focus always is performance for our clients, to manage risk and to
deliver returns for them over a complete market cycle. In a rising
interest rate environment, this Fund provides our clients with a short duration investment option that we
believe can help add current income to a portfolio."
"Bond funds with shorter durations are less impacted by rising interest
rates," said Clark D. Wagner, Portfolio Manager and Director of Fixed
Income, FIMCO. "This Fund is designed to generate current income while
helping to manage risk. It will invest primarily in investment grade
bonds and debt securities and maintain an average duration of between
two and six years. The Fund is intended for investors who seek current
income and are willing to accept a slightly lower yield to mitigate the
impact of rising interest rates."
"At the same time, credit risk will be moderate because the bonds will
be high quality," said Portfolio Manager Rodwell Chadehumbe. "The Fund
will principally invest in different types of investment grade
securities, including corporate bonds, securities issued or guaranteed
by the U.S. Government or U.S. Government-sponsored enterprises, and
mortgage-backed and other asset-backed securities."
The Fund's key advantages and benefits include:
Interest Rate Management
Deep, Experienced Portfolio Management Team
"This Fund should appeal to investors seeking less risk, since the
assets will be high quality and shorter term so that as interest rates
change, so will the Fund's value," explained Portfolio Manager Rajeev
Sharma. "So it's geared toward investors who have a somewhat longer
investing time horizon and are able to deal with modest market
fluctuations. We believe our investment discipline, however, should
prevent such fluctuations from creating major impacts on the Fund's
* FIMCO is the investment adviser to the First Investors family of funds
and an affiliate of First Investors Corporation.
For more information about the First Investors Limited Duration High
Quality Bond Fund, or any other First Investors mutual fund, you may
obtain a free prospectus and summary prospectus by contacting your
Representative, writing to the address below, calling (800) 423-4026 or
visiting our website at www.firstinvestors.com. You should consider the investment objectives, risks, charges and
expenses carefully before investing. The prospectus and summary
prospectus contain this and other information and should be read
carefully before you invest or send money. An investment in a mutual
fund is not a bank deposit and is not insured or guaranteed by the
Federal Deposit Insurance Corporation ("FDIC") or any other government
The principal risks of investing in the Limited Duration High Quality
Bond Fund are:
Interest Rate Risk. In general, when interest rates rise, the market value of a debt
security declines, and when interest rates decline, the market value of
a debt security increases. The Fund may be subject to a greater risk
of rising interest rates during periods of historically low interest
rates. Securities with longer maturities are generally more sensitive
to interest rate changes.
Credit Risk. This is the risk that an issuer of bonds and other debt securities
will be unable to pay interest or principal when due. The prices of
bonds and other debt securities are affected by the credit quality of
the issuer and, in the case of mortgage-backed and asset-backed
securities, the credit quality of the underlying loans. Credit risk
also applies to securities issued by the U.S. Government and by U.S.
Government-sponsored enterprises that are not backed by the full faith
and credit of the U.S. Government. The securities issued by U.S.
Government-sponsored enterprises are supported only by the credit of
the issuing agency, instrumentality or corporation.
Prepayment and Extension Risk. The Fund is subject to prepayment and extension risk since it invests
in mortgage-backed and other asset-backed securities. When interest
rates decline, borrowers tend to refinance their loans. When this
occurs, the loans that back these securities suffer a higher rate of
prepayment. This could cause a decrease in the Fund's income and share
price. Extension risk is the flip side of prepayment risk. When
interest rates rise, the Fund's average maturity may lengthen due to a
drop in prepayments. This will generally increase both the Fund's
sensitivity to interest rates and its potential for price declines.
Derivatives Risk. Investments in U.S. Treasury futures and options on U.S. Treasury
futures to hedge against changes in interest rates involve risks, such
as 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.
Market Risk. The prices of, and the income generated by, the debt securities held by
the Fund 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. These events may lead to periods of volatility,
which may be exacerbated by changes in bond market size and structure.
In addition, adverse market events may lead to increased redemptions,
which could cause the Fund to experience a loss when selling securities
to meet redemption requests by shareholders. The risk of loss
increases if the redemption requests are unusually large or frequent.
Security Selection Risk. Securities selected by the portfolio manager may perform differently
than the overall market or may not meet the portfolio manager's
An investment in the Fund is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation ("FDIC") or any
other government agency.
Foresters™ is the trade name and a trademark of The Independent Order of
Foresters ("Foresters"), a fraternal benefit society, 789 Don Mills
Road, Toronto, Canada M3C 1T9. Its subsidiary, First Investors
Consolidated Corporation ("First Investors"), is licensed to use this
mark. First Investors Corporation is a subsidiary of First Investors
Consolidated Corporation. All securities products are offered through
First Investors Corporation.
First Investors Corporation
40 Wall Street
New York, NY 10005
SOURCE: First Investors Corporation
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