Defined Asset Funds[SM]
Select Ten Portfolio
1997
Series 2
A Simple Investment Strategy For Total Return
Merrill Lynch
The Dow Jones Industrial Average
The Dow Jones Industrial Average* (DJIA) consists of 30 common stocks chosen
by the editors of The Wall Street Journal as representative of the New York
Stock Exchange and of American industry. The companies are highly capitalized
and their stocks are widely held by individual and institutional investors.
Allied Signal
Aluminum Co. of America
American Express
AT&T
Boeing
Caterpillar
Chevron
Coca-Cola
Walt Disney
Du Pont
Eastman Kodak
Exxon
General Electric
General Motors
Goodyear
Hewlett-Packard
IBM
International Paper
Johnson & Johnson
McDonald's
Merck
3M
J.P. Morgan & Co.
Philip Morris
Procter & Gamble
Sears Roebuck & Co.
Travelers Group
Union Carbide
United Technologies
Wal-Mart
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*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 this brochure or the prospectus relating to the
Portfolio. The "S&P 500" is a trademark of Standard & Poor's Corporation.
SELECTING INVESTMENTS FOR YOUR PORTFOLIO CAN BE COMPLICATED. SOMETIMES,
SIMPLE CAN BE BETTER.
The Select Ten Strategy
The Select Ten Portfolio seeks total return by holding the ten highest
dividend-yielding stocks of the Dow Jones Industrial Average (the "Strategy
Stocks") for about one year.
It's Simple
The Portfolio offers a simple way to seek potential values in the equity
market by investing in established companies whose prices may be depressed.
The Portfolio consists of approximately equal values of the ten stocks in the
DJIA having the highest dividend yield at the time of the offering, and will
hold them for about one year. After one year, the Portfolio will liquidate.
You may choose to reinvest your proceeds into the next Portfolio of the
then-current Strategy Stocks, if available, at a reduced sales charge, 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.
It's Convenient
You have a convenient way to invest in a fixed Portfolio of widely held stocks
with just one purchase. You'll also enjoy the advantages of:
bullet Low minimum investment. You can get started with about $250.
bullet Quarterly dividends. You will receive four consolidated checks per
year, not 40 for the 10 stocks.
bullet Reinvestment. You may choose to reinvest your dividends at a reduced
sales charge to compound your income.
bullet No sell decisions. You are buying and holding for about a year, a
Portfolio of established companies with relatively high dividend yields.
Select Ten Portfolio 1997 Series 2**
Ticker Current
Name of Issuer Symbol Dividend Yield+
1. AT&T Corporation T 4.24%
2. Philip Morris Companies, Inc. MO 4.06
3. J.P. Morgan & Company, Inc. JPM 3.67
4. General Motors Corporation GM 3.64
5. Chevron Corporation CHV 3.29
6. Exxon Corporation XON 3.00
7. Minnesota Mining & Manufacturing Company MMM 2.48
8. International Paper Company IP 2.41
9. Eastman Kodak Company EK 2.21
10. Du Pont (E.I.) De Nemours & Company DD 2.21
** Initial date of deposit -- April 28, 1997.
+ Current Dividend Yield for each security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend
received on that security and dividing the result by that security's
market value as of the close of trading on April 25, 1997. There can
be no assurance that future dividends, if any, will be maintained at
the indicated rates.
The Strategy does not reflect the research opinions or any buy or sell
recommendation of any of the Sponsors.
Past Performance of Prior Select Ten Portfolios
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 3/31/97 Most Recently Completed Portfolio
Inception Return Period Return
A Series 1/3/92 15.12% 1/18/96-2/28/97 31.27%
B Series 5/17/91 16.24% 5/10/95-6/28/96 25.75%
C Series 9/1/92 18.87% 9/12/95-10/31/96 30.30%
Past performance is no guarantee of future results. Average annual total
return represents price changes plus dividends reinvested, divided by the
initial public offering price, and reflects 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 and because the performance
period of the Most Recently Completed Portfolio is different.
Time In The Market
Average Annual Total Returns for periods Ending 12/31/96++: (dividends
reinvested at year-end).
3 year 5 year 10 year 15 year 20 year 25 year
Strategy Stocks 21.96% 20.05% 17.62% 20.48% 17.41% 18.08%
DJIA 22.57% 18.20% 16.49% 18.27% 14.27% 12.76%
S&P 500* 19.44% 15.07% 15.20% 16.57% 14.33% 12.35%
[A mountain chart, captioned "Hypothetical Growth of $10,000 invested in 1972
through 3/31/97", compares the cumulative annual performance from 1972 through
1996 between the Strategy Stocks (blue), the Dow Jones Industrial Average
(pink), and the S&P 500 (green). A box in the upper left quadrant indicates
the components of the chart. The y axis reflects years in 1 year increments.
The initial value of each is $10,000; the ending values are as follows:
$659,215 (Strategy Stocks); $206,721 (DJIA); $188,717 (S&P 500).]
<TABLE>
Annual Total Returns
Periods ending December 31
1972 1973 1974 1975 1976 1977 1978 1979 1980 1981
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Strategy Stocks 23.26% -1.02% -0.31% 57.02% 34.81% -0.83% 0.16% 12.35% 26.37% 7.47%
Dow Jones Industrial
Average 18.21% -13.12% -23.14% 44.40% 22.72% -12.71% 2.69% 10.52% 21.41% -3.40%
S&P 500 18.98% -14.66% -26.47% 36.92% 23.53% -7.19% 6.39% 18.02% 31.50% -4.83%
1982 1983 1984 1985 1986 1987 1988 1989 1990 1991
Strategy Stocks 25.46% 38.46% 7.34% 28.63% 34.57% 6.97% 21.50% 27.30% -7.94% 33.37%
Dow Jones Industrial
Average 25.79% 25.68% 1.06% 32.78% 26.91% 6.02% 15.95% 31.71% -0.57% 23.93
S&P 500 20.26% 22.27% 5.95% 31.43% 18.37% 5.67% 16.58% 31.11% -3.20% 30.51
1992 1993 1994 1995 1996 1/1- Average
3/31/97
Strategy Stocks 8.32% 26.92% 3.89% 36.48% 27.94% 3.32% 18.04%
Dow Jones Industrial
Average 7.34% 16.72% 4.95% 36.48% 28.57% 2.63% 12.74%
S&P 500 7.67% 9.97% 1.30% 37.10% 22.69% 2.70% 12.34%
</TABLE>
Past performance of Strategy Stocks is no guarantee of future results of any
Select Ten Portfolio. 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. There can be no assurance that any Portfolio will
outperform these indices. The results shown represent price changes plus
dividends reinvested at year end, 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 11, and the
S&P 500 index in 10, of the last 25 years. 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 additional information on Strategy Stocks and the
Portfolio, please speak to your financial professional.
++ Average annual total returns represent the annual rate of price
appreciation, plus dividends reinvested at each year end.
Defining Your Risks
At Defined Asset 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.
bullet The Portfolio is designed for investors able and willing to assume the
risks generally associated with equity investments. It may not be appropriate
for investors seeking preservation of capital or high current income.
bullet There can be no assurance that the Portfolio or Strategy will meet its
objective.
bullet The value of your investment will fluctuate with the prices of the
underlying stocks. There is no guarantee that dividend rates will be
maintained or that stock prices will not decrease.
bullet These stocks may have higher yields because they or their industries are
experiencing financial difficulties or are out of favor. There can be no
assurance the market factors that caused these relatively low prices and high
yields will change.
Defining Your Cost
Low Initial Sales Charge/
Reduced Charge for Rollovers
All investors pay a deferred sales charge of $1.75 per 1,000 units, deducted in
each of the last ten months of the Portfolio ($17.50 total). First-time
investors also pay an initial sales charge of approximately 1% when they buy.
As a % of
Public Offering Amount Per
Amount Purchased Price 1,000 Units
- ------------------------------------------------------------------
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
==== ======
Maximum Sales Charge 2.75% $27.50
- ------------------------------------------------------------------
If you sell your units before termination, the deferred sales charges are
deducted, along with the estimated costs of selling Portfolio securities. If
you roll over to a successor Portfolio, if available, the initial charge is
waived. You pay the $17.50 deferred fee.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of
your investment dollars to work for you.
Total Sales Charge Deferred Sales
as a % of the Charge Per
Amount Purchased Public Offering Price 1,000 Units
- ----------------------------------------------------------------------
Less than $50,000 2.75% $17.50
$50,000 to $99,999 2.50% $17.50
$100,000 to $249,999 2.00% $17.50
$250,000 to $999,999 1.75% $17.50
$1,000,000 or more 1.00% $10.00
- ----------------------------------------------------------------------
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 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. Read the prospectus carefully
before you invest.
Additional Select Ten Portfolios containing the then-highest dividend-yielding
stocks may be offered in the future. Information contained herein is subject
to amendment. A registration statement relating to the securities of the next
Portfolio has been filed with the Securities and Exchange Commission. The
securities of that Portfolio 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 these 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 such state.
Other Select Series
Hong Kong Portfolio
(Hang Seng Index)
Japan Portfolio
(Nikkei Index)
United Kingdom Portfolio
(Financial Times Index)
Select Growth Portfolio
Select S&P Intrinsic Value
Portfolio
Select S&P Industrial
Portfolio
Equity Investor Funds
Concept Series
Premier American Portfolio
Health Care Trust II
Natural Gas Trust 2
Real Estate Income Fund 2
TelebulletGlobal Trust 2
Equity Investor Funds
Utility Series
15th Utility Common Stock Series
Equity Investor Funds
Index Series
S&P 500 Index Trust 2
S&P MidCap Index Trust
Other Defined Asset Funds
Municipal Investment Trusts
Corporate Income Funds
Government Securities
Income Funds
International Bond Funds
