An Ideal Choice!
Defined Asset Funds{sm)
SELECT TEN
PORTFOLIO
Sometimes, simple strategies
can be the most effective.
[LOGO] Merrill Lynch
Our Select Ten Portfolio--it's simple.
Maybe you've heard of "The Dow Ten" or even "The Dogs of the Dow." However
you refer to it, this contrarian strategy of investing each year in the ten
highest dividend-yielding stocks of the Dow Jones Industrial Average(*) (DJIA)
looks for equity value by investing in established companies whose prices may
be depressed. After all, to a contrarian investor, bad news can be good news,
and unfavorable developments may create special opportunities.
The Select Ten Portfolio
The Select Ten Portfolio employs a simple strategy of investing in the ten
highest dividend-yielding stocks in the DJIA, and holding them for about one
year. When a Portfolio ends, you may choose to reinvest your proceeds into
the next Portfolio of the then-current Strategy, 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.
Past Performance of Prior Select Ten Portfolios
The chart below shows average annual total returns for each of the four
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:
(*)Dow Jones & Company, Inc., owner of the name "Dow Jones Industrial
Average," is unaffiliated with and did not participate in the creation of the
Portfolio or the selection of its stocks, and has neither reviewed nor
approved any information in the prospectus relating to the Portfolio. "S&P
500" is a trademark of Standard & Poor's Corporation.
Series From Inception through 9/30/97
Inception Return
5/17/91 B Series 17.63%
1/3/92 A Series 17.86%
9/1/92 C Series 20.75%
7/22/96 3 Series 32.60%
Most Recently Completed Portfolio
Period Return
5/20/96-6/27/97 27.54%
1/18/96-2/28/97 31.27%
9/12/95-10/31/96 30.30%
7/22/96-8/29/97 33.68%
Past performance is no guarantee of future results. Average annual total
returns represent price changes plus dividends reinvested, divided by the
initial public offering price, and reflect maximum sales charges and expenses.
Returns for Series Since Inception and Most Recently Completed Portfolio will
differ because Series Since Inception figures reflect a reduced sales charge
for consecutive rollovers. Also, the returns will differ because the
performance period of the Most Recently Completed Portfolio is different.
Hypothetical Results
We analyzed the Strategy of investing in the ten highest dividend-yielding
stocks to see how it compared to the DJIA and the S&P 500 Index*. Past
performance of the Strategy is no guarantee of future results of any
Portfolio. The Strategy would have underperformed the DJIA in 11 and the S&P
500 Index in 10 of the last 25 years if sales charges and expenses were
deducted and would have produced a loss in 5 of those years. But, as you can
see from the chart below, the results are compelling.
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. 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. Generally, dividends and any gains will be subject to tax each
year. Capital gains, if any, on assets held over a year will be taxed up to
the maximum federal tax rate of 28%.
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 invested in 1972 through 9/30/97
[A mountain chart, captioned "Growth of $10,000 invested in 1972 through
9/30/97" compares the cumulative annual performance from 1972 through 9/30/97
of the Strategy (blue), the Dow Jones Industrial Average (DJIA) (pink) and the
S&P 500 Index (green). A blue box in the upper left quadrant indicates the
components of the Strategy performance section of the chart. The horizontal
or (Y) axis compares the cumulative annual performance by YEAR, from 1972
through 9/30/97. The vertical or (X) axis reflects DOLLAR AMOUNT value for
each index from 1972 ending 9/30/97. The initial value of each investment is
$10,000. Throughout the period from 1972 through September 30, 1997,
increases in each investment build towards the right vertical or (X) axis. At
the end of this period, the right vertical or (X) axis, reflects the ending
value of the STRATEGY ($505,427), the ending value of the DJIA ($251,377) and
the ending value of the S&P 500 Index ($237,872).]
There can be no assurance that any Portfolio will outperform either index.
Results shown represent price changes plus dividends reinvested at each year
end, and do not reflect commissions or taxes. Only Strategy performance
reflects the deduction of Portfolio sales charges (2.75% for the first year,
1.75% for each subsequent year) and estimated expenses (about 0.21% a year).
Portfolio performance will also differ from the Strategy 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 and Portfolio performance, please speak to your
financial professional.
Act Now!
You can get started with the Select Ten Strategy right now with as little as
$250. Simply return the attached coupon to receive a free copy of our
brochure. Ask your financial professional for a free prospectus containing
more complete information on the Select Ten Portfolio, including all sales
charges and expenses. Be sure to read the prospectus carefully before you
invest.
Yes!
I would like more information on the Select Ten DJIA Portfolio from Defined
Asset Funds.
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[Copyright]1997 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member
SIPC.
