DEFINED ASSET FUNDS
Select Ten Portfolio
International
1997
Japan
Portfolio
Series C
[A picture of a famous Torii located off the shores of Miyajima Island, Japan
in the background]
Merrill Lynch
Select Ten Portfolio
JAPAN
International Series
The Nikkei 225 Index
The Nikkei 225 Index consists of 225 Japanese companies listed in the first
section of the Tokyo Stock Exchange. First published in 1950, the Nikkei is
well known both in Japan and worldwide.
The Nikkei 225 Index is published by the Nihon Keizai Shimbun (Japan Economic
Journal).
The Nikkei 225 Index is a price-weighted index. This means that the movement
of each stock, in yen or dollars, is equally weighted regardless of its market
capitalization.
Defined Asset Funds(SM) Select Ten Portfolio--International Series uses a
simple investment strategy to help you take advantage of opportunities in
selected countries.
International equity markets, such as the Tokyo Stock Exchange, can offer
attractive growth potential and help investors diversify their portfolios.
Japan's economic growth is reflected in the performance of its leading stock
market indicator, the Nikkei 225 Index.(*)
A SIMPLE STRATEGY
This Portfolio seeks total return by investing in approximately equal values
of the ten stocks in the Nikkei 225 Index having the highest dividend yield
shortly before the offering date and will hold them for about a year (the
"Strategy"). These companies are among the most highly capitalized in Japan.
Each year, we intend to reapply the screening process to select a new
Portfolio. You may choose to reinvest in the next Portfolio, if available, at
a reduced sales charge, or you can take the cash. Although each Select Ten
Portfolio is a one-year fund, we recommend you stay with the Strategy for at
least three to five years.
Offers U.S. Investors Some Big Advantages
o Semi-annual dividends. Investors receive two consolidated checks per year,
not 20 for the 10 stocks, and payments are in U.S. dollars.
o Low cost. The minimum investment is about $250.
o Reinvestment. You may choose to reinvest your dividends at a reduced sales
charge to compound your income.
o No sell decisions. You are buying and holding for about a year, a Portfolio
of established companies with relatively high dividend yields.
Defining Your Risks
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 Investors considering the Select Ten Japan Portfolio Series C should be aware
that this particular Portfolio is heavily concentrated in common stocks of
engineering and construction companies. These industries are currently
experiencing extreme difficulties in Japan.
o The Portfolio should not be considered a complete investment program and may
be considered speculative.
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.
(*)The publisher of the Nikkei 225 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.
o There can be no assurance that the Portfolio will meet its objective.
o Total returns on Japanese 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 can be no assurance that dividend rates
will be maintained or that stock prices or currency exchange rates will not
decline. 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 rate of 28%.
o The Portfolio's exposure to the Japanese yen is not hedged.
o The stocks may have higher yields because they or their industries are
experiencing financial difficulty or are out of favor. There can be no
assurance the market factors that caused these relatively low prices and high
yields will change.
Select Ten International Japan Portfolio - 1997 Series C(**)
<TABLE>
<S> <C>
Name of Issuer Current Dividend Yield<F2>
1. Fujita Corporation 3.68%
2. Hazama Corporation 2.82
3. Tonen Corporation 2.41
4. Tekken Corporation 2.22
5. Nippon Shinpan Co., Ltd. 2.21
6. Japan Energy Corporation 2.11
7. Kumagai Gumi Co. 2.05
8. Chubu Electric Power Company, Inc. 1.93
9. Kansai Electric Power Company, Inc. 1.83
10. Yokohama Rubber Co., Ltd. 1.80
<FN>
<F1>
(**)Initial date of deposit - September 19, 1997.
<F2>
Current Dividend Yield for each stock was calculated by adding the most recent
interim and final dividends declared on the stock and dividing the result by
its market value as of the close of trading on September 19, 1997. There can
be no assurance that future dividends, if any, will be maintained at the
indicated rates.
</FN>
</TABLE>
PAST PERFORMANCE OF PRIOR SELECT TEN INTERNATIONAL JAPAN PORTFOLIOS
The chart below shows the average annual total returns for the following
Series, which assume an annual "rollover" into the next Portfolio. We've also
included returns for the most recently completed Portfolio of each Series.
<TABLE>
<CAPTION>
Series From Inception Most Recently
Through 6/30/97 Completed Portfolios
- ----------------------------------- ----------------------------------
Inception Return Period Return
---------- -------- --------- --------
<S> <C> <C> <C> <C> <C>
A Series 1/22/96 -20.87% A Series 1/22/96- -29.53%
2/28/97
B Series 5/20/96 -22.86% B Series 5/20/96- -21.46%
6/27/97
3 Series 7/22/96- -28.83%
8/29/97
</TABLE>
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 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.
[A mountain chart, captioned "Hypothetical Performance of the Strategy (not any
Portfolio) Growth of $10,000 invested in 1977 through 6/30/97," compares the
cumulative annual performance from 1977 through 6/30/97 of the Strategy
(ochre) with the Nikkei 225 Index (crimson). An ochre 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 1977 through 6/30/97. The vertical or (X) axis reflects DOLLAR
AMOUNTS in $100,000 increments from $0 up to $600,000. The initial value of
each investment is $10,000. Throughout the 20 year period, increases in each
investment build towards the right vertical or (X) axis. At the end of the 20
year period, the right vertical or (X) axis, reflects both the ending value of
the STRATEGY($252,036) and the ending value of the Nikkei 225 Index
($133,580)].
Since stocks in the Portfolio were chosen solely by applying the Strategy, we
analyzed the Strategy to see how it could have performed. Past performance
of the Strategy is no guarantee of future results of any Portfolio. After
deducting Portfolio sales charges and expenses, the Strategy would have
underperformed the Nikkei 225 in 8 of the last 20 years.
Results assume dividends were reinvested at year end and do not reflect any
commissions or taxes. Only Strategy results reflect deduction of Portfolio
sales charges and estimated expenses.
Annual Total Returns
Figures below do not reflect any sales charges, expenses, commissions or taxes
and are for periods ending December 31.
<TABLE>
<CAPTION>
Nikkei Nikkei
225 225
Year Strategy Index Year Strategy Index
<S> <C> <C> <C> <C> <C>
1977 54.28% 21.55% 1988 63.04 36.57
1978 72.10 55.32 1989 22.96 12.80
1979 -0.89 -10.00 1990 -40.99 -34.79
1980 38.93 29.47 1991 6.90 5.56
1981 18.44 2.20 1992 -16.17 -25.76
1982 -2.54 -0.77 1993 21.52 15.94
1983 31.04 27.08 1994 27.99 28.30
1984 3.11 8.92 1995 -4.98 -2.30
1985 53.01 44.19 1996 -16.78 -12.43
1986 77.83 83.78 6/30/97 -2.63 8.11
1987 93.67 50.71 Average<F1> 19.44% 13.48%
<FN>
<F1>
Average annual total returns represent the annual rate of price appreciation,
plus dividends reinvested at the end of each year.
</FN>
</TABLE>
The data shown represents hypothetical past performance of the Strategy (not
any Portfolio) and is no guarantee of future results. There can be no
assurance that any Portfolio will outperform the Index. Figures represent
price changes plus dividends received. Changes in the exchange rates of the
Japanese yen relative to the U.S. dollar affected these figures significantly.
These changes ranged from
- -23% in 1979 to +23% in 1987 and averaged +4.82% annually over the last 20
years. There can be no assurance that such appreciation will continue during
the life of the Portfolio or successive rollover Series.
Portfolio performance will differ from the Strategy because the Portfolio has
sales charges and pays brokerage commissions and expenses, because Portfolios
are established and liquidated at different times during the year, they
normally purchase and sell stocks at prices and currency exchange rates
different from the closing prices and currency exchange rates used in
determining Portfolio unit price, the Portfolios are not fully invested at all
times and stocks may not be weighted equally. The Strategy does not reflect
the research opinions or any buy or sell recommendation of any of the Sponsors.
DEFINING YOUR COST
Low Initial Sales Charge/
Reduced Charge for Rollovers
First-time investors pay an initial sales charge of approximately 1% when they
buy. 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).
<TABLE>
<CAPTION>
As a % of Public Offering Amount per
Price 1,000 Units
<S> <C> <C>
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
--------------------------- -------------
Maximum Sales Charge 2.75% $27.50
Estimated Annual
Operating Expenses (as a
% of net assets) 0.55% $5.52
</TABLE>
If you sell your units before termination, the remaining 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 only pay the $17.50 deferred fee and operating
expenses.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
<TABLE>
<S> <C>
Total Sales Charge
as a % of the
Amount Purchased Public Offering Price
Less than $50,000 2.75%
$50,000 to $99,999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
$1,000,000 or more 1.00%
</TABLE>
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 of 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 the prospectus carefully before you invest.
Additional Japan 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 statement 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 an 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)
Hong Kong Portfolio (Hang Seng Index)
United Kingdom Portfolio (Financial Times Index)
Select Growth Portfolio
Select S&P Industrial Portfolio
Select S&P Intrinsic Value Portfolio
Equity Investor Funds Concept Series
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund 2
Tele-Global Trust 2
Equity Investor Funds Index Series
S&P 500 Index Trust 2
S&P MidCap Index Trust
Other Defined Asset Funds
Corporate Income Funds
Government Securities Income Funds
International Bond Funds
Municipal Investment Trusts
Cover Photo:
Located off the shores of Miyajima Island, Japan, this famous Torii signifies a
gateway between the secular and spiritual worlds.
