COHEN & STEERS
REALTY MAJORS
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The Realty Majors(SM) Portfolio June 30, 1999
The Realty Majors Portfolio
The Equity Investor Fund Cohen & Steers Realty Majors(SM) Portfolio is a
Defined Asset Fund(SM) with investments in many of the leading Real Estate
Investment Trusts ("REITs") in the U.S. The Portfolio is broadly diversified by
both geographic region and property type and is designed to provide a total
investment return from both current income and capital appreciation potential.
Investment Overview
This Fund posted strong second quarter performance. REIT share prices appear to
have bottomed, and their recovery was fueled by compelling valuations, solid
real estate fundamentals, and renewed strength in the U.S. economy which has
precipitated rising inflationary expectations. Although past performance is no
guarantee of future results, the Fund's focus on the nation's leading real
estate companies enabled it to outpace the broader stock market for the
quarter, and to continue to outperform general real estate benchmarks since
inception. Cohen & Steers believes that the investment environment for REITs
remains very positive. The U.S. economy remains robust, occupancy rates for
most property types are at all time highs and property values are once again
rising. In addition, the market valuation of REIT shares continues to be very
attractive on both an absolute and relative basis. Cohen & Steers believes that
the large, well-capitalized companies that comprise the Realty Majors
Portfolio remain the most attractively positioned real estate companies in
America, and should continue to produce above-average earnings and dividend
growth.
Realty Majors in the News Second Quarter 1999
o Arden Realty continued to enhance its market dominance in Southern
California with the purchase of a $53 million office tower in West Los
Angeles.
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o Equity Residential agreed to acquire Lexford Residential Trust, a NYSE-
listed apartment REIT, for $733 million in stock and the assumption of
debt.
o First Industrial Realty Trust announced an 800,000 square foot lease with
Amazon.com for warehouse and distribution space in Atlanta. The
transaction is one of the largest in the history of Atlanta.
o Health Care Property Investors announced the sale of approximately $115
million of assisted living facilities to Emeritus, the operator and lessee
of the facilities. Sale proceeds will be reinvested tax-free into higher
yielding health care properties.
o Highwoods Properties completed the sale of $323 million of office
properties to fund its pipeline of new office property developments.
o Kimco Realty closed a joint venture agreement with the New York State
Common Retirement Fund. The joint venture was formed to launch the Kimko
Income REIT, a REIT formed to invest in assets with long-term, high
quality leases.
o The Rouse Company raised $152 million through the sale of its 50% interest
in the Vally Fair Mall in San Jose, California. Proceeds will be used to
reduce debt.
o Mack-Cali Realty announced $150 million of additional development at its
Harborside Financial Center office complex on the Jersey City, NJ
waterfront. The development consists of a Hyatt Regency Hotel and a
three-story office building for Waterhouse Securities.
o Post Properties signed agreements with Tut Systems, InterQuest, AT&T and
Cisco Systems to provide high speed Internet access to Post's apartment
residents.
o TriNet Corporate Realty Trust agreed to merge with Starwood Financial
Trust, an ASE-listed REIT (symbol: APT) that makes mortgage loan and
mezzanine investments. Under terms of the agreement, each TriNet common
share will be exchanged for 1.15 shares of Starwood Financial Trust. The
Fund's position in TriNet was sold during the quarter because Starwood's
mortgage strategy does not meet the Fund's objective of investing in
equity REITs.
o Vornado Realty Trust raised $115 million through the issuance of 8.5%
preferred stock. A portion of proceeds were used to increase its
investment in a joint venture with Apollo Real Estate which focuses on the
acquisition of real estate partnership interests.
o First quarter 1999 Funds From Operations (cash flow) growth averaged 13.0%
for the companies in the Realty Majors Portfolio.
Geographic Diversification as of 6/30/99
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[Graphic representation of the U.S., divided into sections and labeled with
section names and percentages.]
Section Name States Percentage
- ------------ ------ ----------
North West Central North Dakota, South Dakota, 4%
Nebraska, Kansas, Oklahoma,
Minnesota, Iowa, Missouri, Arkansas,
Louisiana
Pacific Washington, Oregon, California 21%
Mountain Idaho, Nevada, Utah, Arizona, 9%
Montana, Wyoming, Colorado, New
Mexico
South West Central Texas 11%
North East Central Wisconsin, Michigan, Illinois, 13%
Indiana, Ohio
New England Maine, New Hampshire, Vermont, 3%
Massachusetts, Connecticut, Rhode
Island
Mid-Atlantic New York, Pennsylvania, New Jersey 16%
South Atlantic Delaware, Maryland, West Virginia, 21%
Virginia, North Carolina, South
Carolina, Georgia, Florida
South East Central Kentucky, Tennessee, Mississippi, 2%
Alabama
Portfolio Highlights as of 6/30/99
Symbol RMP001
Number of Holdings 28
Total Net Assets $615 million
NAV per Unit $0.89872
Termination Date April, 2001
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Investment Consultant Cohen & Steers Capital Management
Investment Performance
Past performance is no guarantee of future results.
Total Return from Inception 4/23/98 to 3/31/99
2nd YEAR SINCE
QUARTER TO DATE INCEPTION(1)
Realty Majors Portfolio 10.1% 5.5% -3.3%
Dow Jones REIT Index2 10.1% 5.8% -7.2%
S&P REIT Index 9.5% 4.5% -10.7%
DJIA3 12.5% 20.5% 18.7%
S&P 500 Index 7.1% 12.4% 20.5%
Dividend Review
Twenty-three of the Realty Majors increased their dividends by an average 11.8%
since the inception of the fund (see reverse for details).
Dividends are paid monthly or can be reinvested in additional units of the
Fund.
The annual dividend and current yield for each of the Realty Majors is listed
on the back of this form.
- --------
(1) Average Annual Total Return from Inception 4/23/98 to 6/30/99. Change in
Total Returns (stock prices plus dividends reinvested divided by initial
price). The Portfolio reflects deduction of ongoing expenses of .348
annually.
(2) The Dow Jones Equity REIT Total Return Index reflects both price changes
and dividend payouts of 118 equity REIT stocks. The S&P REIT Index is a
capitalization-weighted index of 100 REIT stocks. The Dow Jones Industrial
Average is a price-weighted index of 30 large-cap common stocks chosen as
representative of American Industry. The S&P 500 Stock Price Composite
Index is a capitalization weighted index of 500 large-cap common stocks.
(3) The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Inc. "S&P" and "S&P 500 Index" are trademarks of the McGraw-Hill
Companies.
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Sector Diversification as of 6/30/99
[Pie chart divided into sections labeled with section names and percentages]
Section Name Percentage
- ------------ ----------
Shopping Centers 6%
Regional Malls 14%
Self Storage 5%
Office/Industrial 8%
Industrial 11%
Apartment 23%
Diversified 5%
Health Care 5%
Office 23%
[copyright symbol] 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
This material is authorized for client distribution only when accompanied or
preceded by a current prospectus.
Dividend Changes since inception -- 4/23/98 through 6/30/99
Twenty-three companies have announced annualized dividend increases averaging
11.8% (since inception).
% Change
Company New Dividend since 4/23/98
Crescent Real Estate Equities Co. $2.20 44.7%
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Kimco Realty Corp. 2.40 25.0(4)
AvalonBay Communities, Inc. 2.04 21.4
Reckson Associates Realty Corp. 1.49 18.8
Equity Office Properties Trust 1.48 15.6
ProLogis Trust 1.31 14.8
Duke-Weeks Realty Corp. 1.36 13.3
First Industrial Realty Trust, Inc. 2.40 13.2
Mack-Cali Realty Corp. 2.20 10.0
Vornado Realty Trust 1.76 10.0
Archstone Communities Trust 1.48 8.8
Health Care Properties Investors 2.76 7.8
% Change vs.
Company New Dividend Prior Year
Post Properties Inc. $2.80 7.7%
Nationwide Health Properties, Inc. 1.80 7.1
The Rouse Company 1.20 7.1
Spieker Properties Inc. 2.44 7.0
Developers Diversified Realty Corp. 1.40 6.9
Manufactured Home Communities, Inc. 1.55 6.9
Equity Residential Properties Trust 2.84 6.0
Arden Realty Inc. 1.78 6.0
Highwoods Properties 2.16 5.9
The Macerich Company 1.94 5.4
Taubman Centers 0.96 2.1
- --------
(4) Excludes $0.05 Special Dividend
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The Realty Majors Portfolio as of 6/30/99
Price Annual
Company Symbol Per Share Dividend
- ------- ------ --------- --------
Archstone Communities Trust ASN $21.938 $1.48
Arden Realty Inc. ARI 24.625 1.78
AvalonBay Communities Inc. AVB 37.000 2.04
CarrAmerica Realty Corp. CRE 25.000 1.85
Crescent Real Estate Equities Co. CEI 23.750 2.20
Developers Diversified Realty Corp. DDR 16.875 1.40
Duke-Weeks Realty Corp. DRE 22.563 1.36
Equity Office Properties Trust EOP 25.625 1.48
Equity Residential Properties Trust EQR 45.063 2.84
First Industrial Realty Trust, Inc. FR 27.438 2.40
Health Care Property Investors, Inc. HCP 28.875 2.76
Highwoods Properties, Inc. HIW 27.438 2.16
Kimco Realty Corp. KIM 39.750 2.40
The Macerich Company MAC 26.250 1.94
Mack-Cali Realty Corp. CLI 30.938 2.20
Manufactured Home Communities, Inc. MHC 26.000 1.55
Nationwide Health Properties, Inc. NHP 19.063 1.80
Post Properties Inc. PPS 41.000 2.80
ProLogis Trust PLD 20.250 1.31
Public Storage Inc. PSA 28.000 0.88
Reckson Associates Realty Corp. RA 23.563 1.49
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Reckson Services Industries, Inc.(5) RSII 15.125 0.00
The Rouse Company RSE 23.375 1.20
Simon Property Group Inc. SPG 25.375 2.02
Spieker Properties Inc. SPK 38.875 2.44
Taubman Centers Inc. TCO 13.188 0.96
Vornado Operating Co.(6) VOO 8.00 0.00
Vornado Realty Trust VNO 35.313 1.76
Current Market Cap. Property
Company Dividend ($ in Millions) Sector
Yield(7)
Archstone Communities Trust 6.7% $3,049 Apartment
Arden Realty Inc. 7.2 1,537 Office
AvalonBay Communities Inc. 5.5 2,385 Apartment
CarrAmerica Realty Corp. 7.4 1,669 Office
Crescent Real Estate Equities 9.3 3,012 Office
Co.
Developers Diversified Realty 8.3 1,034 Retail
Corp.
Duke-Weeks Realty Corp. 6.0 1,956 Office/
Industrial
Equity Office Properties Trust 5.8 6,608 Office
- --------
(5) Reckson Services Industries, Inc., spun off from Reckson Associates Realty
in June, 1998.
(6) Vornado Operating Co. was spun off from Vornado Realty Trust in October,
1998.
(7) Calculated by annualizing the latest quarterly or semi-annual ordinary
dividend declared and dividing the result by its market value as of the
close of trading on June 30, 1999.
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Equity Residential Properties 6.3 5,388 Apartment
Trust
First Industrial Realty Trust, 8.7 1,044 Industrial
Inc.
Health Care Property Investors, 9.6 896 Health Care
Inc.
Highwoods Properties, Inc. 7.9 1,692 Office
Kimco Realty Corp 6.0 2,396 Retail
The Macerich Company 7.4 892 Retail
Mack-Cali Realty Corp. 7.1 1,807 Office
Manufactured Home 6.0 678 Manufactured
Communities, Inc. Homes
Nationwide Health Properties, 9.4 881 Health Care
Inc.
Post Properties Inc. 6.8 1,574 Apartment
ProLogis Trust 6.5 3,265 Industrial
Public Storage Inc. 3.1 3,599 Self Storage
Reckson Associates Realty 6.3 944 Office/
Corp. Industrial
Reckson Services Industries, 0.0 373 Diversified
Inc.
The Rouse Company 4.7 1,834 Retail
Simon Property Group Inc. 8.0 4,314 Retail
Spieker Properties Inc. 6.3 2,461 Office/
Industrial
Taubman Centers Inc. 7.3 701 Retail
Vornado Operating Co. 0.0 33 Diversified
Vornado Realty Trust 5.0 3,009 Diversified
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The Fund is subject to special risk considerations similar to those associated
with the direct ownership of real estate due to its policy of concentration in
the securities of real estate companies. Real estate valuations may be subject
to factors such as changing general and local economic, financial, competitive
and environmental conditions. The Fund is also classified as non-diversified
and therefore is not limited in the proportion of its assets that may be
invested in a single issuer.
70137IN-7/99
[ML logo] Merrill Lynch
COHEN & STEERS
Realty Majors
[logo] Defined Asset Funds(SM)
Buy With Knowledge o Hold With Confidence
10
