DEFINED ASSET FUNDS
SELECT TEN PORTFOLIO
Sometimes, simple,
strategies can be
the most effective...
Merrill Lynch
Like the Strategy applied in our Select Ten Portfolio...
A Simple Strategy for Total Return
The Select Ten Portfolio seeks total return over a one-year period by holding
the ten current highest dividend-yielding stocks of the Dow Jones Industrial
Average (DJIA)*. These companies are highly capitalized and widely held.
Many are household names. Purchasing a Portfolio of these stocks, instead of
just one or two, is a way to diversify your stock holdings. Investing in a
number of quality stocks when their prices are depressed is a strategy
designed to increase the potential for total return.
How The Portfolio Works
The Portfolio consists of approximately equal values of the ten stocks in the
DJIA having the highest dividend yield shortly before the initial offering
date (the "Strategy Stocks") and holds them for about a year. The Portfolio
will remain relatively fixed during this time. After one year, the Portfolio
will liquidate. You may choose to roll your proceeds into the next Portfolio
of the then-current Strategy Stocks, if available, or you can take the cash.
Although this is a one year investment, we recommend you stay with the
Strategy for a minimum of three to five years.
Prior Select Ten Portfolio Performance
The chart below shows average annual total returns for each of the three
established Series, which assume an annual "rollover" into the next Portfolio.
We've also included returns for the most recently completed Portfolio of each
Series:
Series From Inception through 12/31/96
<TABLE>
<CAPTION>
Inception Return
<S> <C> <C>
A Series 1/3/92 15.62%
B Series 5/17/91 16.01%
C Series 9/1/92 18.92%
Most Recently Completed Portfolio
Period Return
A Series 1/9/95-2/23/96 34.84%
B Series 5/10/95-6/28/96 25.39%
C Series 9/12/95-10/31/96 29.01%
</TABLE>
Past performance is no guarantee of future results. Average annual total
return represents price changes plus dividends reinvested, dividends by the
initial public offering price, and reflects maximum sales charges and expenses.
A Time Tested Track Record
We analyzed the Strategy of investing in the ten highest dividend-yielding
stocks over various periods to see how it compared to the DJIA and the S&P
500*. The charts below illustrate past performance of the Strategy Stocks,
but not any Select Ten Portfolio. While there is no guarantee of future
results of any Portfolio, as you can see the results are compelling.
* The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Inc., which is unaffiliated with and has not participated in any way
in the creation of the Select Ten Portfolio or the selection of its stock.
The "S&P 500" is a trademark of Standard & Poor's Corporation.
Defining Your Risks
Select Ten Portfolios are designed for investors able and willing to assume the
risks generally associated with equity investments, and may not be appropriate
for those seeking preservation of capital or high current income. The value
of the investment will fluctuate with the prices of the underlying stocks.
There can be no assurance that dividend rates will be maintained or that the
stock prices will not decrease.
<TABLE>
Timing in the Market
Average Annual Total Returns for periods ending 12/31/96: Strategy Stocks, DJIA and S&P 500 (dividends
reinvested at year-end)
3 years 5 years 10 years 15 years 20 years 25 years 26 years
<S> <C> <C> <C> <C> <C> <C> <C>
Strategy Stocks 21.96% 20.05% 17.62% 20.48% 17.41% 18.08% 17.44%
DJIA* 22.57% 18.20% 16.49% 18.27% 14.27% 12.76% 12.65%
S&P 500* 19.44% 15.07% 15.20% 16.57% 14.33% 12.35% 12.42%
</TABLE>
[A mountain chart, captioned "Hypothetical Growth of $10,000 invested in 1971
through 12/31/96" compares the cumulative annual performance from 1971 through
1996 of the Strategy Stocks (blue) with the DJIA (mauve) and the S&P 500
(green). Three boxes in the upper left quadrant indicates the components of
the chart. The x axis reflects dollar amounts $210,051, $221,143 and $653,792
and the y axis reflects years. The initial value is $210,051 next to the
right margin and the ending value is $653,792.]
The charts above compare hypothetical performance of the Select Ten
Strategy Stocks (not any actual Portfolio) with the actual performance of
the Dow Jones Industrial Average and the S&P 500 Composite Stock Price
Index. The results shown assume that all dividends during each year are
reinvested at the end of that year, and do not reflect sales charges,
commissions, expenses or taxes. If Portfolio sales charges and expenses
were deducted, the Strategy Stocks would have underperformed the DJIA
in 12 out of the last 26 years and the S&P 500 Index in 11 out of the last 26
years, and there can be no assurance that any Portfolio will outperform the
DJIA. Actual Portfolio performance will also differ from Strategy Stocks
because Portfolios are established and liquidated at different times during
the year, they normally purchase and sell stocks at prices different from the
closing prices used in determining Portfolio unit price, Portfolios are not
fully invested at all times and stocks may not be weighted equally. For a
more complete discussion of Strategy Stock and Portfolio performance,
please speak to your financial professional.
Annual Total Returns
<TABLE>
<CAPTION>
(Periods ending December 31)
Strategy
Year Stocks DJIA S&P 500
<S> <C> <C> <C>
1971 2.47% 9.79% 14.31%
1972 23.26% 18.21% 18.98%
1973 -1.02% -13.12% -14.66%
1974 -0.31% -23.14% -26.47%
1975 57.02% 44.40% 36.92%
1976 34.81% 22.72% 23.53%
1977 -0.83% -12.71% -7.19%
1978 0.16% 2.69% 6.39%
1979 12.35% 10.52% 18.02%
1980 26.37% 21.41% 31.50%
1981 7.47% -3.40% -4.83%
1982 25.46% 25.79% 20.26%
1983 38.46% 25.68% 22.27%
1984 7.34% 1.06% 5.95%
1985 28.63% 32.78% 31.43%
1986 34.57% 26.91% 18.37%
1987 6.97% 6.02% 5.67%
1988 21.50% 15.95% 16.58%
1989 27.30% 31.71% 31.11%
1990 -7.94% -0.57% -3.20%
1991 33.37$ 23.93% 30.51%
1992 8.32% 7.34% 7.67%
1993 26.92% 16.72% 9.97%
1994 3.89% 4.95% 1.30%
1995 36.48% 36.48% 37.10%
1996 27.94% 28.57% 22.69%
</TABLE>
Select Ten Highlights
o Minimum investment of $250 for regular or IRA accounts.
o Quarterly dividend distributions.
o Reduced risk by investing in ten different securities.
o Low initial sales charge; balance deferred.
o Volume discounts.
o Reduced sales charge for rollover.
Time-Tested Investment Principles
1. Time in the market is more important than timing the market.
2. The stocks to buy are the ones everyone else is selling.
3. Dividends can be an important part of total return.
Defining Your Cost
Low Initial Sales Charge/Reduced Charge for Rolllovers
As illustrated in the chart below, 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.
<TABLE>
<CAPTION>
As a % of
Amount per Public Offering
Amount Purchased 1,000 Units Price
- -----------------------------------------------------------------------
<S> <C> <C>
Maximum Initial Sales Charge $10.00 1.00%
Deferred Sales Charge $17.50 1.75%
=================================
Your Sales Charge $27.50 2.75%
- -----------------------------------------------------------------------
</TABLE>
Should you reinvest the proceeds of your investment into a new portfolio, if
available, you will not be subject to the 1% initial charge, just the $17.50
deferred fee. If you sell your investment before maturity, the remaining
deferred sales charge and, in the secondary market, a charge to reflect
estimated costs of liquidating securities to meet cash redemptions, will be
deducted.
Find Out More About Our Current Series.
Defined Asset Funds plans to offer six Select Ten Portfolios each year, one
approximately every two months.
For details on the latest offering, or for a free brochure on each of the
current Defined Asset Funds--Select Ten (DJIA), Hong Kong, United Kingdom and
Japan Portfolios talk to your financial professional.
A free prospectus containing more complete information, including all charges
and expenses on any of these Portfolios, is also available. Read it carefully
before investing.
Information contained herein is subject to amendment. A registration statement
relating to the next Series of the Select Ten Portfolio has been filed with the
Securities and Exchange Commission. The securities of that Series may not be
sold, nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This brochure shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
those securities in any state in which such an offer, solicitation, or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state.
