DEFINED ASSET FUNDS(SM)
Select Ten Portfolio
- ---------------------------------------
I N T E R N A T I O N A L
S E R I E S A W I N T E R
- ---------------------------------------
[A statuesque picture of Kuan-yin,
Chinese Goddess of Mercy.]
1996
Hong Kong
Portfolio
Merrill Lynch
The Hang Seng Index
The Hang Seng Index, published in 1969, is a recognized indicator of Hong
Kong's stock market performance. The Index is an arithmetic index, weighted
by market capitalization representing about 70% of the total stocks on the
Hong Kong Stock Exchange. The Hang Seng Index includes companies intended to
represent four major market sectors: 1) commerce and industry; 2) finance; 3)
properties; and 4) utilities. The companies include:
Amoy Properties
Bank of East Asia
Cathay Pacific
Cheung Kong
China Light & Power Co.
Citic Pacific
Great Eagle Holdings
Guangdong Investment
Hang Lung Development
Hang Seng Bank
Henderson Land Development
Hong Kong Aircraft Engineering
Hong Kong Electric
Hong Kong and China Gas
Hong Kong and Shanghai Hotels
Hong Kong Telecommunications
Hopewell Holdings
HSBC Holdings
Hutchison Whampoa
Hysan Development Company
Johnson Electric Holdings
Miramar Hotel & Investment
New World Development
Oriental Press Group
Shangri-La Asia
Shun Tak Holdings
Sino Land Co.
South China Morning Post
Sun Hung Kai Properties
Swire Pacific (A)
Television Broadcasts
Wharf Holdings
Wheelock & Co.
Today's global marketplace offers many opportunities. Defined Asset Funds(SM)
Select Ten Portfolio--International Series uses a simple investment strategy
to help you take advantage of opportunities in selected countries.
Global Opportunities
Many international equity markets, such as Hong Kong's, offer attractive
growth potential, which can help investors diversify their portfolios
globally.
Hong Kong's economic growth is reflected in the performance of its stock
market indicator, the Hang Seng Index.
A Simple Strategy For Higher Total Return
The Hong Kong Portfolio seeks total return by investing approximately equal
values of the ten stocks in the Hang Seng Price Index(*) having the highest
dividend yield at the time of the offering (Strategy Stocks). These companies
are among the most highly capitalized in Hong Kong.
After one year, the Portfolio will liquidate. You may choose to reinvest your
proceeds into the next portfolio of the then-current Strategy Stocks, at a
significantly reduced sales charge, or you can take the cash.
Offers U.S. Investment Some Big Advantages
o Semi-annual dividends. This means investors receive two consolidated
checks per year, not 20 for the 10 stocks, and payments are in U.S. dollars.
o Low costs. The minimum purchase is about $250. There is a total
sales charge of 2 3/4%.
o Reinvestment. You may choose to reinvest your dividends at a reduced
sales charge to compound your income.
o Year-end rollover. The Hong Kong Portfolio matures in one year, at
which time you'll have an opportunity to reinvest your Select Ten Portfolio
into the next Portfolio. Although each Select Ten Portfolio is a one-year
fund, we recommend you stay with the Strategy for a minimum of three to five
years.
___________
(*)The publisher of the Hang Seng Index has not participated in any way
in the creation of the Portfolio or in the selection of its stocks nor
approved any information included in this brochure.
Defining Your Risks
At Defined Assets Funds, our goal is to give investors the information they
need to make informed decisions. The following are important facts to keep in
mind when considering this investment for your portfolio. Please read them
carefully. Your financial professional will be happy to answer any questions
you may have.
o The Portfolio should not be considered a complete investment program,
and may be considered speculative. It is appropriate for investors able and
willing to assume the risks generally associated with equity investments
traded in a foreign currency.
o The Portfolio may not be appropriate for investors seeking either
preservation of capital or high current income, nor would it be suitable for
investors unable or unwilling to assume the increased risks of higher price
volatility and currency fluctuations associated with investments in
international equities.
o There can be no assurance that the Portfolio or Strategy will meet
its objective.
o Total returns on Hong Kong stocks fluctuate widely, and the value of
your investment will change with the prices of the underlying stocks and
currency exchange rates. In addition, there is no guarantee that dividend
rates will be maintained or that stock prices or currency exchange rates will
not decline.
o Future political changes in Hong Kong could impact market values of
Hong Kong stocks in general.
o The Strategy Stocks may have higher yields because they or their
industry are experiencing financial difficulty or are out of favor.
Time-Tested Track Record
Since stocks in the Portfolio were chosen solely by applying the
Strategy, we analyzed the Strategy since 1978 to see how it had performed.
Although past performance is no guarantee of future results, as you can see
from the graph below, the results are compelling.
Suppose you had invested $10,000 in the Strategy in 1978?
[A mountain chart, captioned "Suppose you had invested $10,000 in the Strategy
in 1978", compares the cumulative annual performance from 1978 through
12/31/95 of the Stocks (ochre) with the Hang Seng Index (blue). A box in the
upper left quadrant indicates the components of the chart. The x axis
reflects dollar amounts in $50,000 increments; the y axis reflects years. The
initial value of each is $10,000; next to the right margin the ending values
are stated as follows: $382,175 Ending 12/31/95 (Strategy); $300,603 Ending
12/31/95 (Index).]
It is important to note that actual performance of the Portfolio will differ
from the Strategy Stocks because the Portfolio has sales charges and pays
brokerage commissions and expenses. Strategy Stock figures are generally
annual figures based on December 31 sales prices, while the Portfolios are
established and liquidated at different times during the year. Portfolios
normally purchase and sell stocks at prices and currency exchange rates
different from the closing price and currency exchange rate used in
determining the Portfolio's unit price. The Portfolio is not fully invested
at all times and not all stocks may be weighted equally.
The performance of the Strategy is a hypothetical example of how the Hong Kong
Portfolio could have performed if its Strategy had been employed since 1978.
The chart assumes that all dividends during a year are reinvested at the end
of that year. It does not reflect sales charges, commissions, expenses or
taxes.
Select Ten Portfolio--International Series A--1996 Hong Kong Portfolio(**)
Name of Issuer Current Dividend Yield(***)
1. Oriental Press Group 6.18%
2. South China Morning Post (Holdings), Ltd. 6.06
3. Shun Tak Holdings, Ltd. 5.70
4. Henderson Land Development Co., Ltd. 5.36
5. Amoy Properties, Ltd. 5.00
6. Hang Lung Development Co. 4.67
7. Hysan Development Co., Ltd. 4.47
8. Hong Kong Telecommunications 4.33
9. Hopewell Holdings, Ltd. 4.02
10. Hong Kong Electric Holdings, Ltd. 3.97
________________
(**)Initial date of deposit--January 19, 1996.
(***)Current dividend yield for each security was calculated by
adding the most recent interim and final dividends declared on the security
and dividing the result by its market value as of the close of trading on
January 19, 1996.
The Portfolio may not necessarily reflect the research opinions or any buy or
sell recommendation of any of the Sponsors.
Prior Select Ten Portfolio Performance(****)
The following shows total returns (price changes plus dividends received,
divided by the maximum initial offering price, each converted into U.S.
dollars) for each completed prior series, and reflects all sales charges and
expenses.
Fund Term Total Return
1993 Spring B 6/21/93 - 7/22/94 20.07%
1993 Autumn C 9/28/93 - 10/28/94 7.93%
1994 Winter A 1/5/94 - 2/3/95 -45.09%
1994 Spring B 5/6/94 - 6/16/95 -9.49%
1994 Autumn C 9/6/94 - 10/13/95 -27.02%
On the same basis, including presently outstanding series, an investor who
reinvested all income and principal distributions in the next available
series would have received the following results:
Average Annual
Series Term Total Return Total Return
Spring B 6/21/93 - 12/31/95 10.99% 4.22%
Autumn C 9/28/93 - 12/31/95 -13.02% -6.00%
Winter A 1/5/94 - 12/31/95 -30.03% -16.50%
______________
(****)This represents past performance, and is no guarantee of future
results.
Historical Performance of Strategy Stocks
If the Strategy had been followed in each of the last 18 years, investors
would have generally achieved a higher total return than by investing in the
entire Hang Seng Index.
The table below illustrates how the Strategy would have performed on a
theoretical basis from January 1, 1978 through December 31, 1995.* The
returns shown represent past performance of the Hang Seng and Strategy
Stocks, and are no guarantee of future results. The figures do not reflect
the Portfolio's sales charges, commissions, expenses, or reinvestment of
dividends.
Strategy Illustration*
January 1, 1978 - December 31, 1995
Year Hang Seng Index Strategy Stocks
Total Return Total Return
1978 23.51% 28.04%
1979 78.33 82.28
1980 65.83 41.40
1981 -11.07 -3.86
1982 -47.79 -38.97
1983 -0.89 -7.48
1984 42.54 65.32
1985 51.10 47.52
1986 51.16 60.49
1987 -6.73 3.03
1988 20.60 34.04
1989 10.19 9.41
1990 11.99 6.11
1991 48.25 48.51
1992 33.63 38.94
1993 121.11 106.99
1994 -28.83 -31.45
1995 26.95 16.11
Average** 20.81% 22.43%
* As indicated, the Strategy Stocks underperformed the Index in 8 years and
there can be no assurance that the Portfolio will outperform the Index. After
Portfolio sales charges and expenses, a portfolio would have outperformed the
index in 9 of the 18 years.
** Average annual total returns represent the annual rate of price
appreciation, plus dividends reinvested at the end of each year.
Defining Your Cost
Low Initial Sales Charge/Reduced Charge for Rollovers
First-time investors pay a 1% maximum sales charge when they buy. In
addition, a deferred sales charge of $1.75 per 1,000 units will be deducted
from the Portfolio's net asset value each month over the last ten months of
the Portfolio's life ($17.50 total). This deferred method of payment keeps
more of your money invested over a longer period of time.
Amount per As a % of Public
Amount Purchased 1,000 Units Offering Price
Maximum Initial Sales Charge $10.00 1.00%
Deferred Sales Charge $17.50 1.75%
====== =====
Your Sales Charge $27.50 2.75%
After a year, should you roll the proceeds of your investment into a new
portfolio, if available, you will not be subject to an additional 1% initial
charge, just the $17.50 deferred fee. If you sell your investment before
maturity, the deferred sales charge and, in the secondary market, a charge to
reflect the estimated costs of liquidating securities to meet cash
redemptions, will be deducted.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of
your investment dollars to work for you.
Deferred Sales Total Sales Charge
Charge per As A Percentage Of The
Amount Purchased 1,000 units Public Offering Price
Less Than $50,000 $17.50 2.75%
$50,000 to $99,000 $17.50 2.50%
$100,000 to $249,999 $17.50 2.00%
$250,000 or more $17.50 1.75%
Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and the charge for organizational expenses. In
addition, the annual statement and the relevant tax reporting forms you
receive at year-end will reflect the actual amount paid to you (net of the
deferred sales charge and the charge for organizational expenses).
Accordingly, you should not increase your tax basis in your units by the
deferred sales charge and the charge for organizational expenses.
Don't Delay.
Call your financial professional for a free prospectus containing more
complete information, including all charges and expenses, and the special
considerations associated with the risks of international investing
including currency risk. Read it carefully before you invest.
Additional Hong Kong Portfolios containing the then-highest dividend-yielding
stocks may be created in the future. Information contained herein is subject
to completion or amendment. A registration statement relating to the
securities of the next Portfolio in this Select Ten Portfolio--International
Series has been filed with the Securities and Exchange Commission. The
securities of the Portfolio may not be sold nor may offers to buy be accepted
prior to the time that registration becomes effective. This brochure may not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any state in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
Other Select Series
Select Ten Portfolio (DJIA)
United Kingdom Portfolio (Financial Times Index)
Japan Portfolio (Nikkei Index)
Select Growth Portfolio
Other Defined Asset Funds
Municipal Investment Trust Funds
Corporate Income Funds
International Bond Funds
Government Securities Income Funds
Other Equity Income Funds
15th Utility Common Stock Series
Premier American Portfolio
Health Care Trust II
Natural Gas Trust 2
Real Estate Income Fund
S&P 500 Index Trust
S&P MidCap Trust
Tele o Global Trust
[Cover Photo - Statute of Kuan-yin,
Chinese Goddess of Mercy
Her statute, pictured on the front
cover, stands in front of the Repulse
Bay Temple in Hong Kong.]
