EQUITY INCOME FUND SEL SER 1997 YEAR AHEAD INTL PORT DEF, 497, 1996-12-12

EQUITY INCOME FUND SEL SER 1997 YEAR AHEAD INTL PORT DEF
497, 1996-12-12

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<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------

EQUITY INCOME FUND The objective of this Defined Fund is capital
SELECT SERIES appreciation by investing for a period of about
1997 YEAR AHEAD one year in a portfolio of international common
INTERNATIONAL PORTFOLIO stocks. These stocks were selected from a list of
(A UNIT INVESTMENT international stocks named by the Merrill Lynch
TRUST) Global Research and Economics group as their
- ------------------------------'Focus Stocks' for 1997 and reflect the Merrill
Lynch Global Strategy group's recommendations of
how international equity investments should be
allocated among five world regions. Current
dividend income is not an objective of the Fund.
The Portfolio is not an appropriate investment for
investors seeking preservation of capital or high
current income. The Portfolio may be considered
speculative and therefore may be appropriate only
for those investors able and willing to assume the
increased risks of higher price volatility and
currency fluctuations associated with investments
in international equities. The Portfolio should be
considered as a vehicle for investing a portion of
an investor's assets in foreign securities and not
as a complete equity investment program.
The value of units will fluctuate with the value
of the common stocks in the Portfolio and with the
value of the U.S. dollar relative to the various
foreign currencies represented in the Portfolio,
and there can be no assurance that the Fund will
achieve its objective.
Unless otherwise indicated, all amounts are stated
in U.S. dollars computed on the basis of the
exchange rates for the relevant currencies on the
business day prior to the date of this Prospectus.
Minimum purchase: $250.

-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Inquiries should be directed to the Trustee at
SPONSOR: 1-800-323-1508.
Merrill Lynch, Prospectus dated December 11, 1996.
Pierce, Fenner & Smith INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Incorporated AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>
- --------------------------------------------------------------------------------
Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.
Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International bond and equity portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.
- ----------------------------------------------------------------
Defined Year Ahead International Portfolio
- ----------------------------------------------------------------
The Portfolio contains 71 common stocks from 20 different countries, selected by
the Sponsor for capital appreciation. This Select Series permits investors to
buy and hold the Portfolio for approximately one year. At the end of the year,
the Portfolio will be liquidated and the same selection process repeated to
select a new portfolio. Each Select Portfolio is designed to be part of a longer
term strategy and the Sponsor believes that more consistent results are likely
if the strategy is followed for at least three to five years.
So long as the Sponsor continues to offer new portfolios, investors will have
the option to reinvest into a new portfolio each year at a reduced sales charge.
The Sponsor reserves the right, however, not to offer a new portfolio.
The Sponsor selected the Securities through a three-step screening process.
First, on December 9th analysts in the Merrill Lynch Global Research and
Economics group announced the common stocks to focus on for the coming year from
the United Kingdom, Continental Europe, Japan, Asia Pacific and Latin
America--their 'Focus Stocks.' Second, the companies were screened for liquidity
and country and industry diversification. Finally, in order to determine what
proportion of the Portfolio each of the five regions should represent, a target
weighting was obtained from the Merrill Lynch Global Strategy group, which
recommended what percentage each region should represent in an international
equity portfolio. The final Portfolio reflects those recommended weightings,
except that no stock was included from an 'emerging market' country if the
Global Strategy group underweighted that country in its regional allocation.
(See Fund Description-- Portfolio Selection in Part B.)
- ----------------------------------------------------------------
Defining Your Portfolio
- ----------------------------------------------------------------
The Portfolio is broadly diversified among a wide variety of industries.
Based upon current market values, the following regions and countries are
represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE
/ / United Kingdom 10%
/ / Continental Europe: 31%
Austria (3%)
France (7%)
Germany (6%)
Italy (4%)
Netherlands (1%)
Spain (3%)
Sweden (2%)
Switzerland (5%)
/ / Japan 34%
/ / Asia Pacific: 20%
Australia (2%)
China (4%)
Hong Kong (5%)
Korea (1%)
Malaysia (3%)
Singapore (3%)
Thailand (2%)
/ / Latin America: 5%
Brazil (3%)
Mexico (1%)
Peru (1%)
- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
The Portfolio is 'concentrated' in stocks of Japan. Each issuer is a foreign
issuer. Investing in securities of foreign issuers involves risks that are
different from investing in securities of domestic issuers. (See Risk Factors in
Part B.)
There can be no assurance that the Portfolio will meet its objective over its
one-year life or that portfolios selected through this process during
consecutive one-year periods will meet their objectives. In addition, the
opinions of Merrill Lynch research analysts may change during the year. The
Portfolio is not appropriate for investors who are unable or unwilling to assume
the increased risks involved generally with
A-2
<PAGE>
an international equity investment or who are seeking preservation of capital or
high current income. The Portfolio should be considered a vehicle for investing
a portion of your assets in foreign securities and not as a complete equity
investment program.
Unit price fluctuates with the value of the Portfolio, which could be affected
by changes in the financial condition of the issuers, changes in the economies
of the various countries represented in the Portfolio, currency exchange rate
fluctuations, movements in stock prices generally, the impact of the Sponsor's
purchase and sale of securities for the Portfolio and other factors.
Unlike a mutual fund, the Portfolio is not actively managed and the Sponsor
receives no management fee. Therefore, the adverse financial condition of an
issuer, changes in research analysts' opinions or any market movement in the
price of a security will not require the sale of securities from the Portfolio
or mean that the Sponsor will not continue to purchase the security in order to
create additional Units; however, the Sponsor may instruct the Trustee to sell
securities under certain limited circumstances. (See Portfolio Supervision in
Part B.)
- ----------------------------------------------------------------
Defining Your Investment
- ----------------------------------------------------------------
PUBLIC OFFERING PRICE PER 1,000 UNITS $1,000.00
The Public Offering Price as of December 10, 1996, the business day prior to the
initial date of deposit, is based on the aggregate U.S. dollar value of the
underlying securities ($1,229,954.54) and any cash held to purchase securities,
divided by the number of units outstanding (1,242,378) times 1,000, plus the
initial sales charge. Units offered on the Initial Date of Deposit will also be
priced at $1,000 per 1,000 Units although the aggregate value of the underlying
securities, cash amount and number of Units may vary. The Public Offering Price
on any subsequent date will vary. The underlying securities are valued by the
Trustee on the basis of their closing sale prices at 4:00 p.m. Eastern time on
every business day.
SALES CHARGES
The total sales charge for this investment combines an initial up-front sales
charge and a deferred sales charge that will be deducted from the net asset
value of the Portfolio monthly beginning March 1, 1997 and thereafter on the 1st
of each month through December 1, 1997.
ROLLOVER OPTION
When this Select Year Ahead International Portfolio is about to be liquidated,
you may have the option to roll your proceeds into the next Select Year Ahead
International Portfolio. If you notify your financial professional by December
8, 1997, your units will be redeemed and your proceeds will be reinvested in
units of the next Portfolio, if available. If you decide not to roll over your
proceeds, you will receive a cash distribution after the Fund terminates. Of
course you can sell or redeem your Units at any time prior to termination.
DISTRIBUTIONS
You will receive distributions of dividend income, net of expenses, on the 25th
day of November 1997, if you own Units on the 10th of that month.
In order to meet certain tax requirements, a special distribution of income
including capital gains may be payable to investors of record as of a date in
December. Any capital gain income will generally be distributed after the end of
the Trust's taxable year.
REINVESTMENT OPTION
You can elect to automatically reinvest your distributions into additional units
of the Portfolio subject only to the deferred sales charge remaining at the time
of reinvestment. Reinvesting helps to compound your income for a greater total
return.
TAXES
Distributions which are taxable as ordinary income to Holders will constitute
dividends for Federal income tax purposes but will not be eligible for the
dividends-received deduction for certain corporations. Also, if a new portfolio
is offered in less than one year, any gains recognized on the redemption of
units by investors who roll over on the first offering date of the new portfolio
would be considered short-term gains. Dividends received by the Fund will in
most cases be subject to foreign withholding taxes, which investors may be able
to credit against their federal income tax liability. (See Taxes.) Foreign
investors should be aware that distributions from the Fund will generally be
subject to withholding taxes.
MANDATORY TERMINATION DATE
The Portfolio will terminate by January 23, 1998. The final distribution will be
made within a reasonable time afterward. The Portfolio may be terminated earlier
if its value is less than 40% of the value of the securities when deposited.
SPONSOR'S PROFIT OR LOSS
The Sponsor's profit or loss from the Portfolio will include the receipt of
applicable sales charges, fluctuations in the Public Offering Price or secondary
market price of units, a loss of $4,910.43 on the initial deposit of the
securities and a gain or loss on subsequent deposits of securities (see
Sponsor's and Underwriters' Profits in Part B).
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- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------
SALES CHARGE
First-time investors pay a 1% sales charge when they buy. For example, on a
$1,000 investment, $990 is invested in the Portfolio. 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 10 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. If you roll the proceeds of your investment into a new
portfolio, you will not be subject to the 1% initial charge, just the $17.50
deferred fee. Although this is a unit investment trust rather than a mutual
fund, the following information is presented to permit a comparison of fees and
an understanding of the direct or indirect costs and expenses that you pay.

As a %
of Initial Public Amount per
Offering Price 1,000 Units
----------------- --------------
Maximum Initial Sales Charge 1.00% $ 10.00
Deferred Sales Charge per Year 1.75% 17.50
----------------- --------------
2.75% $ 27.50
----------------- --------------
----------------- --------------
Maximum Sales Charge Imposed per
Year on Reinvested Dividends .175% $ 1.75

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a % Amount per
of Net Assets 1,000 Units
----------------- --------------
Trustee's Fee .085% $ 0.84
Portfolio Supervision,
Bookkeeping and Administrative
Fees .045% $ 0.45
Organizational Expenses .147% $ 1.46
Other Operating Expenses .465% $ 4.60
----------------- --------------
TOTAL .742% $ 7.35

This Portfolio (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states, and the initial audit of the Portfolio--as is common for mutual
funds.
COSTS OVER TIME
You would pay the following cumulative expenses on a $1,000 investment, assuming
5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:

1 Year 3 Years 5 Years 10 Years
$35 $87 $142 $292

Although the Portfolio has a term of only one year and is a unit investment
trust rather than a mutual fund, this information is presented to permit a
comparison of fees, assuming the investment is rolled over each year into a new
portfolio subject only to the deferred sales charge and fund expenses.
The example assumes reinvestment of any dividends and distributions and uses a
5% annual rate of return as mandated by SEC regulations applicable to mutual
funds. For purposes of the example, the deferred sales charge imposed on
reinvestment of dividends is not reflected until the year following payment of
the dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment.
Reductions to the repurchase and cash redemption prices in the secondary market
to recoup the costs of liquidating securities to meet redemption (described
below) have not been reflected. The example should not be considered a
representation of past or future expenses or annual rates of return; the actual
expenses and annual rates of return may be more or less than the example.
REDEEMING OR SELLING YOUR INVESTMENT
You may redeem or sell your units at any time prior to the termination of the
Portfolio. Your price will be based on the then current net asset value. The
redemption and secondary market repurchase price as of December 10, 1996 was
$972.50 per 1,000 units ($27.50 per 1,000 units less than the Public Offering
Price). This price reflects deductions of the deferred sales charge which
declines over the last 10 months of the Portfolio ($17.50 initially). If you
redeem or sell your units before the termination of the Portfolio, you will pay
the remaining balance of the deferred sales charge. After the initial offering
period, the repurchase and cash redemption prices for units will be reduced to
reflect the estimated costs of liquidating securities to meet the redemption,
currently estimated at $3.94 per 1,000 units. If you reinvest in the new
portfolio, you will pay your share of any brokerage commissions on the sale of
underlying securities when your units are liquidated during the rollover.
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REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsor, Trustee and Holders of Equity Income Fund Select Series 1997 Year
Ahead International Portfolio, Defined Asset Funds (the 'Fund'):
We have audited the accompanying statement of condition and the defined
portfolio included in the prospectus of the Fund as of December 11, 1996. This
financial statement is the responsibility of the Trustee. Our responsibility is
to express an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Fund as of December 11,
1996 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
December 11, 1996
STATEMENT OF CONDITION AS OF DECEMBER 11, 1996
TRUST PROPERTY

Investments--Contracts to purchase Securities(1).........$ 1,229,954.54
Organizational Costs(2).................................. 73,000.00
--------------------
Total.........................................$ 1,302,954.54
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Accrued Liability(2)................................... 73,000.00
--------------------
Subtotal...............................................$ 73,000.00
--------------------
Interest of Holders of 1,242,378 Units of fractional
undivided interest outstanding(3):
Cost to investors(4)...................................$ 1,242,378.00
Gross underwriting commissions(5)...................... (12,423.46)
--------------------
Subtotal...............................................$ 1,229,954.54
--------------------
Total.........................................$ 1,302,954.54
--------------------
--------------------

- ---------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio determined by the Trustee at 4:00 p.m., Eastern time on December 10,
1996. The contracts to purchase securities are collateralized by an irrevocable
letter of credit which has been issued by DBS Bank, New York Branch, in the
amount of $1,234,864.97 and deposited with the Trustee. The amount of the letter
of credit includes $1,229,954.54 for the purchase of securities.
(2) This represents a portion of the Fund's organizational costs,
which will be deferred and amortized over the life of the Fund. Organizational
costs have been estimated based on projected total assets of $50 million. To the
extent the Fund is larger or smaller, the estimate may vary.
(3) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in this statement of
condition, the number of Units offered on the Initial Date of Deposit will be
adjusted from the initial number of Units to maintain the $1,000 per 1,000 Units
offering price.
(4) Aggregate public offering price computed on the basis of the U.S.
dollar value of the underlying securities at 4:00 p.m., Eastern time on December
10, 1996.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00%
of the Public Offering Price. A deferred sales charge of $1.75 per 1,000 Units
per month is payable on March 1, 1997 and thereafter on the 1st day of each
month through December 1, 1997. Distributions will be made on behalf of the
investors to an account maintained by the Trustee from which the deferred sales
charge obligation of the investors to the Sponsors will be satisfied. If units
are redeemed prior to December 1, 1997, the remaining portion of the
distribution applicable to such units will be transferred to such account on the
redemption date.
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Defined Portfolio
- --------------------------------------------------------------------------------
Equity Income Fund Select Series
1997 Year Ahead International Portfolio December 11, 1996
Defined Asset Funds

PRICE
PER SHARE
TO FUND
NUMBER OF SHARES PERCENTAGE IN U.S.
LOCALTION OF ISSUER NAME OF ISSUER OF COMMON STOCK OF FUND (1) DOLLARS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UNITED KINGDOM:
1. Barclays PLC 700 0.9737% $ 17.11
2. Berkeley Group PLC 1,100 0.9342 10.45
3. British Aerospace PLC 600 0.9108 18.67
4. British Airways PLC 1,100 0.8847 9.89
5. British Land Company PLC 1,300 0.8684 8.22
6. FKI PLC 3,100 0.8575 3.40
7. General Electric Company PLC 1,700 0.8469 6.13
8. GKN PLC 600 0.8624 17.68
9. Imperial Tobacco Group PLC 1,700 0.8640 6.25
10. National Power PLC 1,400 0.8431 7.41
11. Pilkington PLC 4,100 0.8148 2.44
12. Whitbread PLC 800 0.8368 12.87
CONTINENTAL EUROPE:
Austria 13. Voest-Alpine Stahl AG 500 1.4658 36.06
14. VA Technologie AG 100 1.2627 155.30
France 15. Credit Commercial de France 400 1.4770 45.42
16. Cetelem 100 1.7944 220.70
17. SGS-Thomson Microelectronics
N.V. 300 1.7371 71.22
18. Canal Plus 100 1.8068 222.22
Germany 19. Bayerische Moteren Werke (BMW) 25 1.4096 693.50
20. Henkel KGaA 400 1.5559 47.84
21. Karstadt AG 50 1.3808 339.67
22. VEBA AG 300 1.4126 57.91
Italy 23. Gucci Group 250 1.4025 69.00
24. Istituto Mobiliare Italiano
S.p.A. 750 1.5244 25.00
25. Stet Societa Finanziaria
Telefonica S.p.A. 450 1.5046 41.13
Netherlands 26. CSM NV 350 1.4706 51.68
Spain 27. Autopistas del Mare Nostrum SA 1,100 1.3696 15.31
28. Banco Bilbao Vizcaya SA 350 1.4490 50.92
Sweden 29. AssiDoman AB 700 1.5385 27.03

</TABLE>

COST
TO FUND
IN U.S. DOLLARS
LOCALTION OF ISSUER (2)
- -------------------------------------------
UNITED KINGDOM:
$ 11,976.68
11,490.31
11,202.12
10,881.73
10,681.08
10,546.48
10,416.01
10,607.58
10,626.58
10,369.77
10,021.30
10,292.15
CONTINENTAL EUROPE:
Austria 18,028.74
15,530.34
France 18,166.24
22,069.88

21,365.32
22,222.22
Germany 17,337.41
19,137.15
16,983.26
17,374.11
Italy 17,250.00

18,750.00

18,506.25
Netherlands 18,087.86
Spain 16,845.33
17,821.59
Sweden 18,923.08

PRICE
PER SHARE
TO FUND
NUMBER OF SHARES PERCENTAGE IN U.S.
LOCATION OF ISSUER NAME OF ISSUER OF COMMON STOCK OF FUND (1) DOLLARS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Switzerland 30. Sandoz AG 10 0.9426% $ 1,159.37
31. Ciba-Geigy AG 10 1.0009 1,231.12
32. SMH AG 125 1.4815 145.77
33. Zurich
Versicherungsgesellschaft 75 1.6810 275.68
JAPAN:
34. Nippon Telegraph & Telephone 4 2.6155 8,042.33
35. Komatsu Ltd. 4,000 2.7302 8.40
36. Fujitsu Ltd. 3,000 2.3660 9.70
37. Toyota Motor Corporation 1,000 2.3445 28.84
38. Obayashi Corp. 4,000 2.2857 7.03
39. Toray Industries Inc. 5,000 2.6241 6.46
40. Kansai Paint 7,000 2.5295 4.44
41. Sharp Corporation 2,000 2.5524 15.70
42. Sankyo 1,000 2.3230 28.57
43. Hirose Electric 600 2.9338 60.14
44. JUSCO Co. 1,000 2.8894 35.54
45. Tokyo Tatemono Co. Ltd. 7,000 2.7854 4.89
46. Sumitomo Corporation 4,000 2.7790 8.54
ASIA PACIFIC:
Australia 47. WMC Limited 500 0.9909 24.38
48. National Australia Bank Ltd. 200 0.9980 61.38
China 49. Yizheng Chemical Fibre Company
Ltd. 50,000 0.9884 0.24
50. Guangdong Investments 14,000 0.9201 0.81
51. Tingyi (Cayman Island) Holding
Co. 42,000 0.9274 0.27
52. Huaneng Power International
Inc. 600 0.9574 19.63
Hong Kong 53. HSBC Holdings PLC 400 0.6793 20.89
54. Citic Pacific Ltd. 2,000 0.8559 5.26
55. Oriental Press Group 18,000 0.7902 0.54
56. Great Eagle Holdings Ltd. 3,000 1.0252 4.20
57. Sun Hung Kai Properties Ltd. 1,000 1.0200 12.54
58. Hong Kong and China Gas Company
Ltd. 6,000 0.9558 1.96

COST
TO FUND
IN U.S. DOLLARS
LOCATION OF ISSUER (2)
- -------------------------------------------
Switzerland $ 11,593.66
12,311.18
18,221.30

20,675.98
JAPAN:
32,169.31
33,580.25
29,100.53
28,835.98
28,112.87
32,275.13
31,111.11
31,393.30
28,571.43
36,084.66
35,537.92
34,259.26
34,179.89
ASIA PACIFIC:
Australia 12,187.50
12,275.00
China
12,156.95
11,316.31

11,406.84

11,775.00
Hong Kong 8,354.67
10,527.40
9,719.10
12,609.61
12,544.94

11,756.03

</TABLE>

(Continued on Next Page)
- ------------------------------------
stock exchanges and may have a long or short position in any of these securities
or in options on any of them, and may be on the opposite side of public orders
executed on the floor of an exchange where the securities are listed. An
officer, director or employee of the Sponsor may be an officer or director of
one or more of the issuers of the securities in the Fund. The Sponsor may trade
for its own account as an odd-lot dealer, market maker, block positioner or
arbitrageur in any of the securities or in options on them. The Sponsor, its
affiliates, directors, elected officers and employee benefits programs may have
either a long or short position in any securities or in options on them.
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Defined Portfolio
- --------------------------------------------------------------------------------
Equity Income Fund Select Series
1997 Year Ahead International Portfolio December 11, 1996
Defined Asset Funds (Continued)

PRICE
PER SHARE
TO FUND
NUMBER OF SHARES PERCENTAGE IN U.S.
LOCATION OF ISSUER NAME OF ISSUER OF COMMON STOCK OF FUND (1) DOLLARS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Korea 59. Korea Mobile Telecommunications 1,000 0.9452% $ 11.63
Malaysia 60. Road Builder (M) Holdings Bhd 2,000 0.8508 5.23
61. Berjaya Sport Toto Bhd 3,000 1.3052 5.35
62. Tenaga Nasional Bhd 3,000 1.1312 4.64
Singapore 63. City Developments Limited 1,000 0.7436 9.15
64. Oversea-Chinese Banking
Corporation Ltd. 1,000 0.9934 12.22
65. Straits Steamship Land Ltd. 4,000 1.0457 3.22
Thailand 66. Thai Farmers Bank Public
Company Ltd. 1,600 0.9872 7.59
67. Land and House Public Company
Ltd. 1,600 0.9668 7.43
LATIN AMERICA:
Brazil 68. Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar 900 1.2805 17.50
69. Telecomunicacoes Brasileiras
S/A-Telebras 200 1.2419 76.38
Mexico 70. ALFA S.A. de C.V. 3,300 1.2417 4.63
Peru 71. Telefonica del Peru S.A. 750 1.2348 20.25
--------------------
100.00%
--------------------
--------------------

</TABLE>

COST
TO FUND
IN U.S. DOLLARS
LOCATION OF ISSUER (2)
- -------------------------------------------
Korea $ 11,625.00
Malaysia 10,464.56
16,053.59
13,913.11
Singapore 9,146.12

12,218.65
12,861.74
Thailand
12,141.60

11,891.26
LATIN AMERICA:
Brazil

15,750.00

15,275.00
Mexico 15,272.73
Peru 15,187.50
------------------
$ 1,229,954.54
------------------
------------------

- ------------------------------------
(1) Based on Cost to Fund in U.S. dollars.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on December 10, 1996, the business day before the initial
date of deposit. The value of the securities on any subsequent date will
vary.
------------------------------------
The securities were acquired on December 10, 1996 and are represented entirely
by contracts to purchase the securities. The Sponsor may have acted as
underwriter, manager or comanager of a public offering of the securities in this
Fund during the last three years. Affiliates of the Sponsor may serve as
specialists in the securities in this Fund on one or more stock exchanges and
may have a long or short position in any of these securities or in options on
any of them, and may be on the opposite side of public orders executed on the
floor of an exchange where the securities are listed. An officer, director or
employee of the Sponsor may be an officer or director of one or more of the
issuers of the securities in the Fund. The Sponsor may trade for its own account
as an odd-lot dealer, market maker, block positioner or arbitrageur in any of
the securities or in options on them. The Sponsor, its affiliates, directors,
elected officers and employee benefits programs may have either a long or short
position in any securities or in options on them.
A-8
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INCOME FUND SELECT SERIES, 1997 YEAR AHEAD INTERNATIONAL PORTFOLIO
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
INDEX

PAGE
---------
FUND DESCRIPTION.......................... 1
RISK FACTORS.............................. 2
HOW TO BUY UNITS.......................... 6
HOW TO REDEEM OR SELL UNITS............... 7
INCOME, DISTRIBUTIONS AND REINVESTMENT.... 9
FUND EXPENSES............................. 9
TAXES..................................... 10
RECORDS AND REPORTS....................... 12
TRUST INDENTURE........................... 13
MISCELLANEOUS............................. 13
EXCHANGE OPTION........................... 15
SUPPLEMENTAL INFORMATION.................. 15

FUND DESCRIPTION
THE SELECT YEAR AHEAD INTERNATIONAL PORTFOLIO
This Select Series is designed to permit an investor to buy and hold a
portfolio of international equity securities for a period of approximately one
year based upon the Select Year Ahead selection process. At the end of the year
the process is repeated and the investor may reinvest in a new portfolio, if
available.
The Fund seeks capital appreciation by acquiring and holding for about one
year certain international common stocks selected through a three-step selection
process.
PORTFOLIO SELECTION
The Sponsor selected the Securities through a three-step screening process.
First, analysts in the Merrill Lynch Global Research and Economics group
selected the common stocks to focus on for the coming year from one of the
following five geographical regions: the United Kingdom, Continental Europe,
Japan, Asia Pacific and Latin America--their 'Focus Stocks.' Second, the
companies were screened for liquidity and country and industry diversification.
Finally, the target weightings for each of the five regions were obtained from
the Merrill Lynch Global Strategy group, which recommended what percentage each
region of the world should represent in an international equity portfolio. The
common stocks comprising the final Portfolio reflect those recommended
weightings, except that no stock was included from an 'emerging market' country
if the Global Strategy group recommended that the country be underweighted in
its regional allocation. The Merrill Lynch Global Research and Economics group
concentrates on specific companies by industry, while the Merrill Lynch Global
Strategy group focuses on asset, industry, sector and regional allocations.
Investors should be aware that the Fund may not be able to buy each
Security at the same time because of the availability of the Security, any
restrictions applicable to the Fund relating to the purchase of the Security by
reason of the federal securities laws or otherwise. Any monies allocated to the
purchase of a Security will generally be held for the purchase of the Security.
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The deposit of the Securities in the Portfolio on the initial date of
deposit established a proportionate relationship among the number of shares of
each Security. Following the initial date of deposit the Sponsor may deposit
additional Securities in order to create new Units, maintaining to the extent
practicable that original proportionate relationship. The ability to acquire
each Security at the same time will generally depend upon the Security's
availability and any restrictions on the purchase of that Security under the
federal securities laws or otherwise.
Additional Units may also be created by the deposit of cash (including a
letter of credit) with instructions to purchase additional Securities. This
practice could cause both existing and new investors to experience a dilution of
their investments and a reduction in their anticipated income because of price
fluctuations in the Securities between the time of the cash deposit and the
actual purchase of the additional Securities and because the associated
brokerage fees will be an expense of the Portfolio. To minimize the risk of
price fluctuations when purchasing Securities, the Portfolio will try to
purchase Securities as close to the evaluation time or at prices as close to the
evaluated prices as possible. The Portfolio may also enter into program trades
with unaffiliated broker/dealers, which may have the effect of increasing
brokerage commissions, while reducing market risk.
PORTFOLIO SUPERVISION
The Portfolio follows an investment strategy that buys stocks and generally
holds them for one year, in contrast to the frequent portfolio changes of a
managed fund based on economic, financial and market analyses. In the event a
public tender offer is made for a Security or a merger or acquisition is
announced affecting a Security, the Sponsor may instruct the Trustee to tender
or sell the Security in the open market when in its opinion it is in the best
interests of investors to do so. While the Portfolio is not actively managed,
the Portfolio is regularly reviewed and evaluated and Securities may be sold in
the case of adverse developments concerning a Security, including the adverse
financial condition of the issuer, the institution of legal proceedings against
the issuer, a decline in the price or the occurrence of other market or credit
factors that might make retention of the Security detrimental to the interest of
investors or if the disposition of these Securities is necessary in order to
enable the Fund to make distributions of the Fund's capital gain net income or
desirable in order to maintain the qualification of the Fund as a regulated
investment company under the Internal Revenue Code. Securities can also be sold
to meet redemption of Units. The Sponsor is also authorized to direct the
reinvestment of the proceeds of the sale of Securities, as well as moneys held
to cover the purchase of Securities pursuant to contracts which have failed, in
additional Securities, including U.S. Treasury Securities. The Portfolio may
continue to hold a Security and purchase additional shares even though the
research analyst's opinion or the assessment of a Security or region may have
changed or subsequent to the initial date of deposit a Security may no longer
satisfy the Portfolio's selection criteria.
RISK FACTORS
An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
stock market worsens. The rights of holders of common stocks to receive payments
from the issuer are generally inferior to the rights of creditors of, or holders
of debt obligations or preferred stocks issued by, the issuer. Because common
stocks do not represent an obligation of the issuer they do not offer any
assurance of income or provide the degree of protection of capital provided by
debt securities. Common stocks in general are susceptible to general stock
market movements and to volatile increases and decreases in value as market
confidence in and perceptions of issuers change. Equity markets can be affected
by unpredictable factors including expectations regarding government, economic,
monetary and fiscal policies, inflation and interest rates, economic expansion
or contraction, and global or regional political, economic or banking crises.
The Sponsor cannot predict the direction or scope of any of these factors. There
can be no assurance that the Portfolio will be effective in achieving its
objective over the one-year life of the Fund or that future portfolios selected
through this process during consecutive one-year periods will meet their
objectives. The Portfolio is not designed to be a complete equity investment
program.
FOREIGN EXCHANGE RATES
Because securities of non-U.S. issuers generally pay dividends and trade in
their principal markets in foreign currencies, there is the risk that the U.S.
dollar value of these securities will vary with fluctuations in foreign exchange
rates. Most foreign currencies have fluctuated widely in value against the U.S.
dollar because of changing investor perceptions, currency speculation by
institutional investors, supply and demand of the respective currency, the
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<PAGE>
soundness of the world economy and the relative strength of the respective
economy, the impact of actual and proposed government policies, interest rate
differentials between currencies and the balance of imports and exports of goods
and services and transfers of income and capital from one country to another.
For example, during the first 11 months of 1996, the Japanese yen dropped
10.75% against the U.S. dollar (from a high of 103.45 on January 1, 1996 to a
low of 114.57 on December 2, 1996). The yen's volatility is further illustrated
by its foreign exchange values during 1995, when the value of the yen dropped
29.67% in U.S. dollar terms (from a high of 80.63 on April 18, 1995 to a low of
104.55 on September 19, 1995). Similarly, the value of the British pound
sterling has fluctuated widely against the U.S. dollar in the last six months
(from a low of 1.534 on June 13, 1996 to a high of 1.6848 on December 2, 1996).
The volatility of the British pound was also shown in October, 1992, when the
pound dropped in value 10.40% against the U.S. dollar (from a high of 1.7335 on
October 1 to a low of 1.5585 on October 30, 1992). An extreme example of foreign
currency fluctuations is that of the Mexican peso, which dropped 117% against
the U.S. dollar in the four months from December 1, 1994 to March 29, 1995 (from
a high of 3.4307 to a low of 7.450).
The Fund's foreign exchange transactions may be conducted either on a spot
(i.e., cash) or forward foreign exchange basis. Foreign currency exchange
transactions are generally conducted on a principal basis and foreign exchange
dealers realize a profit based upon the difference between the price at which
they are willing to buy a particular currency (bid price) and the price at which
they are willing to sell the currency (offer price). The cost to the Portfolio
of engaging in these foreign currency transactions also varies with such factors
as the currency involved, the length of the contract period and the market
conditions then prevailing. Portfolio evaluations include the cost of buying or
selling a forward foreign exchange contract in the relevant currency to
correspond to the settlement period for purchases and redemptions of Units.
FOREIGN ISSUERS
Investing in securities of foreign issuers involves risks that are
different from investing in securities of domestic issuers. These risks may
include future political and economic developments, the possibility of exchange
controls or other governmental restrictions on the payment of dividends, less
publicly available information and the absence of uniform accounting, auditing
and financial reporting standards, practices and requirements. The information
set forth below has been extracted from various governmental and private
publications, but no representation can be made as to its accuracy; furthermore,
no representation is made that any correlation exists between the state of the
economies of the United Kingdom, Japan, the countries of Latin America,
Continental Europe and Asia Pacific and the value of any Securities held by the
Portfolio.
United Kingdom Risk Factors
The United Kingdom stocks in the Portfolio are common stocks of British
companies many of which are subject to extensive government regulation which may
have a materially adverse effect on the performance of their securities.
The economy of the United Kingdom is focused upon the private services
sector, which includes the wholesale and retail sector, banking, finance,
insurance, and tourism. Services as a whole account for a majority of the United
Kingdom's gross national product and make a significant contribution to the
country's balance of payments. In addition, the United Kingdom, as a member of
the European Union (the 'EU'), formerly known as the European Community, is
subject to the effects of the recent rapid political and social change
throughout Europe although the extent and nature of future economic development
in the United Kingdom and Europe and the impact of such development upon the
value of the securities in the United Kingdom Portfolio is impossible to
predict.
European Risk Factors
The economies of individual European countries may differ favorably or
unfavorably from the U.S. economy in gross national product, growth of gross
national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position.
For a number of years, certain European countries have been seeking
economic and political unification which would reduce barriers between
countries, increase competition among companies, reduce government subsidies in
certain industries and reduce or eliminate currency fluctuations among these
European countries. The Maastricht Treaty on economic and monetary union (EMU)
attempts to provide a stable monetary framework. But until the EMU takes effect,
which is intended to occur between 1997 and 1999, the countries in the European
community will
3
<PAGE>
face the need to reinforce monetary cooperation in order to reduce the risk of a
recurrence of tensions between domestic and external policy objectives. No
assurances can be given that the EMU will take effect or that the changes
planned for Europe can be successfully implemented or that these changes will
result in higher market prices for the Securities in the Portfolio.
The risks associated with investing in European Securities may be
heightened in the case of investments in smaller or emerging European Securities
markets because of risks due to the inexperience of financial intermediaries,
the lack of modern technology, the lack of a sufficient capital base to expand
business operations and the possibility of permanent or temporary termination of
trading and greater spreads between bid and asked prices for securities in those
markets.
Japan Risk Factors
The Japanese stocks in the Portfolio are common stocks of Japanese
companies whose principal trading market is on the Tokyo Stock Exchange. Reports
of official improprieties, resignations and political reallignments have
recently been followed by significant economic reforms. There is currently
uncertainty as to the future of Japan's political outlook (including the
influence and effectiveness of Japan's bureaucracy) and the impact of these
political factors on the Japanese economy and the stock market.
The Japanese economy experienced its worst recession since World War II in
the 1990s and the economy has been largely stagnant since October 1993. Japan
has also recently experienced a period of prolonged price deflation and weak
real estate prices. While the economy has recently shown signs of recovery, it
is unclear whether the recovery is sustainable and to what extent the recovery
will continue without continued fiscal stimulus by the Japanese government.
Strains on the financial system in the form of non-performing loans of financial
institutions and real estate companies have also been one of the major causes of
Japan's economic weakness. Resolution of the bad debt problem may require
disproportionate contributions by major banks. Structural problems of
overregulation, excessive government intervention and under-consumption, coupled
with the current government's relative inexperience in applying fiscal
direction, could undercut Japan's economic recovery. Japanese exports could be
adversely affected by pressure from trading partners--particularly the U.S.--to
improve trade imbalances. Until early 1995 general appreciation of the Japanese
yen relative to the U.S. dollar had been a significant factor in the overall
appreciation. As evidenced by the depreciation of the yen in April, 1995, there
can be no assurance that the value of the yen will appreciate, or might not
further depreciate, which could adversely affect the performance of the Japan
Portfolio.
Asia Pacific Risk Factors
Social, political and economic instability may be significantly greater in
many of the Asian-Pacific countries than that typically associated with the
United States and other industrialized countries. Varying degrees of social,
political and economic instability could significantly disrupt the principal
financial markets in which the Fund invests, and in turn could adversely affect
the value of the Fund's assets.
Few of the Asian-Pacific countries have western-style or fully democratic
governments. Some governments in the region are authoritarian and subject to
control by the military. Over the past twenty-five years, governments in the
region have been installed or removed as a result of military coups, while
others have periodically demonstrated against repressive police state
characteristics. Disparities of wealth, among other factors, have also led to
social unrest in some of the Asian-Pacific countries, accompanied, in certain
cases, by violence and labor unrest. Ethnic, religious and racial disaffection,
as evidenced in India, Pakistan and Sri Lanka, have created social, economic and
political problems.
Several of the Asian-Pacific countries have, or in the past have had,
hostile relationships with neighboring nations or have experienced internal
insurgency. Among the Asian-Pacific countries, any internal conflicts or
conflicts with neighbors, including war, could adversely affect not only the
securities markets of the countries directly involved but also the securities
markets of countries not involved.
In Hong Kong, British proposals to extend limited democracy have adversely
affected British relations with China, which is scheduled to assume sovereignty
over Hong Kong in 1997. Although China has committed by treaty to preserve the
economic and social freedoms enjoyed in Hong Kong for 50 years after regaining
control of Hong Kong, the continuation of the current economic system in Hong
Kong after the reversion will depend on the actions of the government of China.
With the impending return of Hong Kong to China, sensitivity in Hong Kong to
political developments and statements by public figures in China has increased.
Business confidence in Hong Kong, therefore, can
4
<PAGE>
be significantly affected by such developments and statements, which in turn can
affect markets and business performance.
The economies of most of the Asian-Pacific countries are heavily dependent
upon international trade and are accordingly affected by protective trade
barriers and the economic conditions of their trading partners, principally, the
United States, Japan, China and the European Union. The enactment by the United
States or other principal trading partners of protectionist trade legislation,
reduction of foreign investment in the local economies and general declines in
the international securities markets could have a significant adverse effect
upon the securities markets of the Asian-Pacific Countries.
Governments in certain of the Asian-Pacific countries participate to a
significant degree, through ownership interests or regulation, in their
respective economies. Action by these governments could have a significant
adverse effect on market prices of securities and payment of dividends.
Latin American Risk Factors
The economies of individual Latin American countries may differ favorably
or unfavorably from the U.S. economy in such respects as the rate of growth of
gross domestic product, the rate of inflation, currency depreciation, capital
reinvestment, resource self-sufficiency and balance of payments position.
Governments of many Latin American countries have exercised and continue to
exercise substantial influence over many aspects of the private sector. In some
cases, the government owns or controls many companies, including some of the
largest in the country. Accordingly, government actions in the future could have
a significant effect on economic conditions in a Latin American country, which
could affect private sector companies and the Fund, and on market conditions,
prices and yields of Securities in the Fund's portfolio. Expropriation,
confiscatory taxation, nationalization, political, economic or social
instability or other developments could adversely affect the assets of the Fund
held in particular Latin American countries.
LIQUIDITY
Since sales of the Securities by the Fund will generally be effected only
in foreign securities markets, investors should realize that many of the
Securities may be traded in foreign countries where the securities markets are
not as developed or efficient as those of the United States. Foreign securities
markets, although growing in volume, generally have substantially less volume
than United States markets, and securities of many foreign companies are less
liquid and their prices more volatile than securities of comparable U.S.
companies. Fixed brokerage commissions and other transaction costs on foreign
securities exchanges are generally higher than in the United States and there is
generally less government supervision and regulation of exchanges, brokers and
issuers in foreign countries than there is in the United States. To the extent
the liquidity of these foreign facilities markets becomes impaired, the ability
of the Fund to respond to a substantial volume of requests for redemption of
Units received at or about the same time could be adversely affected. This might
occur, for example, as a result of economic or political turmoil in a country in
whose currency the Fund had a substantial portion of its assets invested, or
should relations between the United States and such foreign country deteriorate
markedly.
Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Fund may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsor. The
price at which the Securities may be sold to meet redemptions and the value of
the Fund will be adversely affected if trading markets for the Securities are
limited or absent.
EXCHANGE CONTROLS
At the present time the Sponsor does not believe that any of the Securities
is subject to exchange control restrictions that would materially interfere with
payment to the Fund of amounts due on the Securities. There can be no assurance
that exchange control regulations might not be adopted in the future that might
adversely affect payments to the Fund. In addition, the adoption of exchange
control regulations and other legal restrictions could have an adverse impact on
the marketability of the Securities and on the ability of the Fund to satisfy
redemptions.
5
<PAGE>
LITIGATION AND LEGISLATION
The Sponsor does not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Fund, although pending litigation may have a material adverse effect on
the value of Securities in the Fund. In addition, at any time after the initial
date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation may have a negative
impact on certain companies represented in the Portfolio. There can be no
assurance that future litigation, legislation, regulation or deregulation will
not have a material adverse effect on the Portfolio or will not impair the
ability of the issuers of the Securities to achieve their business goals.
LIFE OF THE FUND; FUND TERMINATION
The size and composition of the Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units or
participating in a rollover. The Portfolio will be terminated no later than the
mandatory termination date specified in Part A of the Prospectus. It will
terminate earlier upon the disposition of the last Security or upon the consent
of investors holding 51% of the Units. The Portfolio may also be terminated
earlier by the Sponsors once its total assets have fallen below the minimum
value specified in Part A of the Prospectus. A decision by the Sponsors to
terminate the Portfolio early, which will likely be made following the rollover,
will be based on factors such as the size of the Portfolio relative to its
original size, the ratio of Portfolio expenses to income, and the cost of
maintaining a current prospectus.
Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in the Portfolio
although any Security unable to be sold at a reasonable price may continue to be
held by the Trustee in a liquidating trust pending its final disposition. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.
HOW TO BUY UNITS
Units are available from the Sponsor, Underwriter and other broker-dealers
at the Public Offering Price. The Public Offering Price varies each Business Day
with changes in the value of the Portfolio and other assets and liabilities of
the Fund.
PUBLIC OFFERING PRICE
Units are charged a combination of Initial and Deferred Sales Charges
equal, in the aggregate, to a maximum charge of 2.75% of the public offering
price or, for quantity purchases of units of all Select Portfolios by an
investor and the investor's spouse and minor children, or by a single trust
estate or fiduciary account, made on a single day, the following percentages of
the public offering price:

APPLICABLE SALES CHARGE
(GROSS UNDERWRITING PROFIT)
------------------------------------
AS % OF PUBLIC AS % OF NET
AMOUNT PURCHASED OFFERING PRICE AMOUNT INVESTED
- ------------------------------ ----------------- -----------------
Less than $50,000............. 2.75% 2.778%
$50,000 to $99,999............ 2.50 2.519
$100,000 to $249,999.......... 2.00 2.005
$250,000 to $999,999.......... 1.75 1.750
$1,000,000 or more............ 1.00 1.000

The Deferred Sales Charge is a monthly charge of $1.75 per 1,000 units and
is accrued in ten monthly installments commencing on the date indicated in part
A of this Prospectus. Units redeemed or repurchased prior to the accrual of the
final Deferred Sales Charge installment will have the amount of any remaining
installments deducted from the redemption or repurchase proceeds or deducted in
calculating an in-kind distribution, although this deduction will be waived in
the event of the death or disability (as defined in the Internal Revenue Code of
1986) of an investor. The Initial Sales Charge is equal to the aggregate sales
charge, determined as described above, less the aggregate amount of any
remaining installments of the Deferred Sales Charge.
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It is anticipated that Securities will not be sold to pay the Deferred
Sales Charge until after the date of the last installment. Investors will be at
risk for market price fluctuations in the Securities from the several
installment accrual dates to the dates of actual sale of Securities to satisfy
this liability.
Employees of the Sponsor and Sponsor affiliates and non-employee directors
of Merrill Lynch & Co. Inc. may purchase Units subject only to the Deferred
Sales Charge.
EVALUATIONS
Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas and, with respect to
individual stocks in the Portfolio, various additional holidays in the relevant
country. Evaluations are generally based on the U.S. dollar equivalent of the
last reported closing sales prices or, if closing sales prices are not
available, at the mean between the closing bid and offer prices. If the
Securities are not listed or if listed but the principal market is elsewhere,
the evaluation is generally determined based on sales prices of the Securities
on the over-the-counter market or, if sales prices in that market are not
available, on the basis of the mean between current bid and offer prices for the
Securities or for comparable securities or by appraisal or by any combination of
these methods. Neither the Sponsor nor the Trustee guarantees the
enforceability, marketability or price of any Securities.
NO CERTIFICATES
All investors are required to hold their Units in uncertificated form and
in 'street name' by their broker, dealer or financial institution at the
Depository Trust Company ('DTC').
HOW TO REDEEM OR SELL UNITS
You can redeem your Units at any time for net asset value. In addition, the
Sponsor has maintained an uninterrupted secondary market for Units for over 20
years and will ordinarily buy back Units at net asset value. The following
describes these two methods to redeem or sell Units in greater detail.
REDEEMING UNITS WITH THE TRUSTEE
You can always redeem your Units for net asset value. This can be done by
contacting your broker, dealer or financial institution that holds your Units in
street name. In certain instances, additional documents may be required such as
a trust instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian.
Within seven days after the Trustee's receipt of your request containing
the necessary documents, a check will be mailed to you in an amount equal to the
net asset value of your Units. Because of the sales charge, market movements or
changes in the Portfolio, net asset value at the time you redeem your Units may
be greater or less than the original cost of your Units. Net asset value is
calculated each Business Day by adding the value of the Securities, declared but
unpaid dividends on the Securities, cash and the value of any other Fund assets;
deducting unpaid taxes or other governmental charges, accrued but unpaid Fund
expenses and any remaining deferred sales charges, unreimbursed Trustee
advances, cash held to redeem Units or for distribution to investors and the
value of any other Fund liabilities; and dividing the result by the number of
outstanding Units. After the initial offering period, net asset value will be
reduced to reflect the cost to the Fund of liquidating Securities to pay the
redemption price.
As long as the Sponsor is maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsor for net asset value. If the Sponsor is not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.
If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Sponsor based on
market and credit factors determined to be in the best interest of the Fund.
These sales are often made at times when the Securities would not otherwise be
sold and may result in lower prices than might be realized otherwise and may
also reduce the size and diversity of the Fund. If Securities are being sold
during a time when additional Units are being created by the purchase of
additional Securities (as described under
7
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Portfolio Selection), Securities will be sold in a manner designed to maintain,
to the extent practicable, the proportionate relationship among the number of
shares of each Security in the Portfolio.
Any investor owning Units representing Securities with a value of at least
$1,500,000 who redeems those Units prior to the rollover notification date
indicated in Part A of the Prospectus may, in lieu of cash redemption, request
distribution in kind of an amount and value of Securities per Unit equal to the
otherwise applicable Redemption Price per Unit. Generally, whole shares of each
Security together with cash from the Capital Account equal to any fractional
shares to which the investor would be entitled (less any Deferred Sales Charge
payable) will be paid over to a distribution agent and either held for the
account of the investor or disposed of in accordance with instructions of the
investor. Any brokerage commissions on sales of Securities in connection with
in-kind redemptions will be borne by the redeeming investors. The in-kind
redemption option is subject to all applicable legal restrictions and may be
terminated by the Sponsor at any time upon prior notice to investors.
Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Bonds not
reasonably practicable or (iii) for any other period permitted by SEC order.
SPONSOR'S SECONDARY MARKET FOR UNITS
The Sponsor, while not obligated to do so, will buy back Units at net asset
value without any other fee or charge as long as they are maintaining a
secondary market for Units. Because of the sales charge, market movements or
changes in the portfolio, net asset value at the time you sell your Units may be
greater or less than the original cost of your Units. You should consult your
financial professional for current market prices to determine if other
broker-dealers or banks are offering higher prices for Units.
The Sponsor may discontinue the secondary market for Units without prior
notice. Regardless of whether the Sponsor maintains a secondary market, you have
the right to redeem your Units for net asset value, as described above.
ROLLOVER
In lieu of redeeming their Units or receiving liquidation proceeds upon the
termination of the Fund, investors may elect, by written notice to the Trustee
prior to the rollover notification date indicated in Part A, to apply their
proportional interest in the Securities and other assets of the Fund toward the
purchase of units of a new Select Year Ahead International Portfolio (if
available). It is expected that the terms of any new portfolio, including this
rollover feature, will be substantially the same as those of the Fund.
A rollover of an investor's units is accomplished by the in-kind redemption
of his Units of the Fund followed by the sale of the underlying Securities by a
distribution agent on behalf of participating investors and the reinvestment of
the sale proceeds (net of brokerage fees, governmental charges, stamp taxes and
other sale expenses) in units of the new portfolio at their net asset value.
The Sponsor intends to sell the distributed Securities, on behalf of the
distribution agent, as quickly as practicable and then to create units of the
new portfolio as quickly as possible, subject in both cases to the Sponsor's
sensitivity that the concentrated sale and purchase of large volumes of
securities may affect market prices in a manner adverse to the interest of
investors. Accordingly, the Sponsor may, in its sole discretion, undertake a
more gradual sale of the distributed Securities and a more gradual creation of
units of the new portfolio to help mitigate any negative market price
consequences caused by this large volume of securities trades. In order to
minimize potential losses caused by market movement during the rollover period,
the Sponsor may enter into program trades, which might increase brokerage
commissions payable by investors. There can be no assurance, however, that any
trading procedures will be successful or might not result in less advantageous
prices. Pending the investment of rollover proceeds in the securities to
comprise the new portfolio, those moneys may be uninvested for up to several
days. For any Securities in the Portfolio that will also be in the portfolio of
the new Series, a direct sale of those securities between the two funds is now
permitted pursuant to an SEC exemptive order. These sales will be effected at
the securities' closing sales prices on the exchanges where they are principally
traded, free of any brokerage costs.
Investors participating in the rollover may realize taxable capital gain on
the rollover but may not be entitled to a deduction for capital loss recognized
on the rollover and, because of the rollover procedures, will not receive a cash
8
<PAGE>
distribution with which to pay those taxes. Investors should consult their own
tax advisors in this regard. Investors who do not participate in the rollover
will continue to hold their Units until the termination of the Fund; however,
depending upon the extent of participation in the rollover, the aggregate size
of the Fund may be sharply reduced resulting in a significant increase in per
Unit expenses.
The Sponsor may, in its sole discretion and without penalty or liability to
investors, decide not to sponsor a new portfolio or to modify the terms of the
rollover. Prior notice of any decision would be provided to investors.
The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an 'exchange offer', for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsor has received exemptive orders under
Section 11(c) which it believes permit it to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsor's position, and
additional regulatory approvals may be required.
INCOME, DISTRIBUTIONS AND REINVESTMENT
INCOME AND DISTRIBUTIONS
Although current dividend income is not an objective of the Fund and it is
anticipated that expenses will exceed available income, the annual income per
Unit will depend primarily upon the amount of dividends declared and paid by the
issuers of the Securities and changes in the expenses of the Fund and, to a
lesser degree, upon the level of purchases of additional Securities and sales of
Securities. There is no assurance that dividends on the Securities will continue
at their current levels or be declared at all.
Each Unit receives an equal share of distributions of dividend income.
Dividends received are credited to an Income Account and other receipts to a
Capital Account. A Reserve Account may be created by withdrawing from the Income
and Capital Accounts amounts considered appropriate by the Trustee to reserve
for any material amount that may be payable out of the Fund. Funds held by the
Trustee in the various accounts do not bear interest. In addition, distributions
of amounts necessary to pay the Deferred Sales Charge will be made from the
Capital Account to an account maintained by the Trustee for purposes of
satisfying investors' sales charge obligations. Although the Sponsors may
collect the Deferred Sales Charge monthly, to keep Units more fully invested the
Sponsors currently do not anticipate sales of Securities to pay the deferred
sales charge until after the rollover notification date. Proceeds of the
disposition of any Securities not used to pay Deferred Sales Charge or to redeem
Units will be held in the Capital Account and distributed following liquidation
of the Fund.
REINVESTMENT
Any income and principal distributions on Units may be reinvested by
participating in the Fund's reinvestment plan. Under the plan, the Units
acquired for investors will be either Units already held in inventory by the
Sponsor or new Units created by the Sponsor's deposit of additional Securities,
contracts to purchase additional Securities or cash (or a bank letter of credit
in lieu of cash) with instructions to purchase additional Securities. Deposits
or purchases of additional Securities will generally be made so as to maintain
the then existing proportionate relationship among the number of shares of each
Security in the Fund. Units acquired by reinvestment will not be subject to the
initial sales charge but will be subject to any remaining installments of
Deferred Sales Charge. The Sponsor reserves the right to amend, modify or
terminate the reinvestment plan at any time without prior notice. Investors
holding Units in 'street name' should contact their broker, dealer or financial
institution if they wish to participate in the reinvestment plan.
FUND EXPENSES
Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. To
the extent that expenses exceed the amount available in the Income Account, the
Trustee is authorized to sell Securities and pay the excess expenses from the
Capital Account. The estimated expenses do not include the brokerage commissions
or stamp taxes payable by the Fund in purchasing and selling Securities. The
Trustee's Fee shown in Part A of this Prospectus assumes that the Portfolio will
reach a size estimated by the Sponsor and is based on a sliding scale that
reduces the Trustee's fee as the size of the Portfolio increases. The Trustee's
annual fee is payable in monthly installments. The Trustee also benefits when it
holds cash for the Fund in non-interest bearing accounts. Possible additional
charges include Trustee fees and expenses for extraordinary services, costs of
indemnifying the Trustee and the Sponsor, costs of action taken to protect the
Fund and other legal fees and
9
<PAGE>
expenses, Fund termination expenses and any governmental charges. The Trustee
has a lien on Fund assets to secure reimbursement of these amounts and may sell
Securities for this purpose if cash is not available. The Sponsor receives an
annual fee of a maximum of $0.35 per 1,000 Units to reimburse it for the cost of
providing Portfolio supervisory services to the Fund. While the fee may exceed
its costs of providing these services to the Fund, the total supervision fees
from all Series of Equity Income Fund will not exceed its costs for these
services to all of those Series during any calendar year. The Sponsor may also
be reimbursed for its costs of providing bookkeeping and administrative services
to the Fund, currently estimated at $0.10 per 1,000 Units. The Trustee's and
Sponsor's fees may be adjusted for inflation without investors' approval.
All or a portion of expenses incurred in establishing the Fund, including
the cost of the initial preparation of documents relating to the Fund, Federal
and State registration fees, the initial fees and expenses of the Trustee, legal
expenses and any other out-of-pocket expenses will be paid by the Fund and
amortized over the life of the Fund. Advertising and selling expenses will be
paid by the Sponsor at no charge to the Fund. Defined Asset Funds can be a cost-
effective way to purchase and hold investments. Annual operating expenses are
generally lower than for managed funds. Because Defined Asset Funds have no
management fees, limited transaction costs and no ongoing marketing expenses,
operating expenses are generally less than 0.25% a year. When compounded
annually, small differences in expense ratios can make a big difference in your
investment results.
TAXES
TAXATION OF THE FUND
The Fund intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Section 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involve no supervision of
investment policy or management by any government agency. If the Fund qualifies
as a 'regulated investment company' and distributes to investors 90% or more of
its taxable income without regard to its net capital gain (i.e., the excess of
its net long-term capital gain over its net short-term capital loss), it will
not be subject to Federal income tax on any portion of its taxable income
(including any net capital gain) distributed to investors in a timely manner. In
addition, the Fund will not be subject to the 4% excise tax on certain
undistributed income of 'regulated investment companies' to the extent it
distributes to investors in a timely manner at least 98% of its taxable income
(including any net capital gain). It is anticipated that the Fund will not be
subject to Federal income tax or the excise tax because the Indenture requires
the distribution of the Fund's taxable income (including any net capital gain)
in a timely manner. Although all or a portion of the Fund's taxable income
(including any net capital gain) for a taxable year may be distributed shortly
after the end of the calendar year, such a distribution will be treated for
Federal income tax purposes as having been received by investors during the
calendar year.
DISTRIBUTIONS
Distribution to investors of the Fund's dividend income and net short-term
capital gain in any year will be taxable as ordinary income to investors to the
extent of the Fund's taxable income (without regard to its net capital gain) for
that year. Any excess will be treated as a return of capital and will reduce the
investor's basis in his Units and, to the extent that such distributions exceed
his basis, will be treated as a gain from the sale of his Units as discussed
below. It is anticipated that substantially all of the distributions of the
Fund's dividend income and net short-term capital gain will be taxable as
ordinary income to investors. Distributions that are taxable as ordinary income
to investors will constitute dividends for Federal income tax purposes but will
not be eligible for the dividends-received deduction for corporations.
Distribution of the Fund's net capital gain (designated as capital gain
dividends by the Fund) will be taxable to investors as long-term capital gain,
regardless of the length of time the Units have been held by an investor.
However, if the Portfolio were to terminate in less than one year, the Fund
would not distribute any capital gain dividends. An investor will recognize a
taxable gain or loss if the investor sells or redeems his Units. Any gain or
loss arising from (or treated as arising from) the sale or redemption of Units
will be a capital gain or loss, except in the case of a dealer in securities.
The excess of net long-term capital gains over net short-term capital losses may
be taxed at a lower rate than ordinary income for certain noncorporate
taxpayers. A capital gain or loss recognized by an investor on the sale of a
Unit will be long-term if the investor's holding period for the Unit is more
than one year and short-term if the investor's holding period for the Unit is
one year or less. However, any capital loss on the sale or redemption of a Unit
that
10
<PAGE>
an investor has held for six months or less will be a long-term capital loss to
the extent of any capital gain dividends previously distributed to the investor
by the Fund. The deduction of capital losses is subject to limitations.
Dividends received by the Fund will in most cases be subject to foreign
withholding taxes. The Fund will be eligible to make an election that will
enable investors to credit foreign withholding taxes against their Federal
income tax liability on distributions by the Fund. The Fund currently intends to
make this election, but there can be no assurance that the Fund will, in fact,
make the election. If the Fund makes such an election, the amount of the foreign
taxes withheld will be includible in the gross income of investors, and
investors who hold Units on the relevant record date for dividends on the
underlying Securities held by the Fund should be entitled, subject to applicable
limitations, to a credit for foreign taxes paid with respect to such dividends.
However, any taxes withheld in excess of the rate provided for in a treaty
between the U.S. and the relevant foreign country will not be creditable by the
investor. There can be no assurance that the Fund will recover such excess
withholding tax.
A distribution of Securities to an investor upon redemption of his Units
will be a taxable event to that investor, and that investor will recognize
taxable gain or loss upon such distribution (equal to the difference between the
investor's tax basis in his Units and the fair market value of Securities
received in redemption), which will be capital gain or loss except in the case
of a dealer in securities. Investors are urged to consult their own tax advisors
as to the tax consequences to them of exchanging units in particular cases.
The investor's basis in his Units will be equal to the cost of his Units,
including the initial sales charge. A portion of the sales charge is deferred
until the termination of the Fund or the redemption of the Units. The proceeds
received by an investor upon such event will reflect deduction of the deferred
amount (the 'Deferred Sales Charge'). The annual statement and the relevant tax
reporting forms received by investors will reflect the actual amounts paid to
them, net of the Deferred Sales Charge. Accordingly, investors should not
increase their basis in their Units by the Deferred Sales Charge amount.
Investors will be taxed in the manner described above regardless of whether
distributions from the Fund are actually received by the investor or are
reinvested pursuant to the reinvestment plan. The Federal tax status of each
year's distributions will be reported to investors and to the Internal Revenue
Service. The Fund intends to report to each investor no later than January 31,
the amount of distributions to that investor.
The foregoing discussion relates only to the Federal income tax status of
the Fund and to the tax treatment of distributions by the Fund to U.S.
investors. Distributions may also be subject to state and local taxation and
investors should consult their own tax advisers in this regard.
FOREIGN INVESTORS
A 'Foreign Investor' is a person or entity that, for U.S. Federal income
tax purposes, is a non-resident alien individual, a foreign corporation, a
foreign partnership, or a non-resident fiduciary of a foreign estate or trust.
If a distribution of the Fund's taxable income (without regard to its net
capital gain) to a Foreign Investor is not effectively connected with a U.S.
trade or business carried on by the investor, such distribution will be subject
to withholding tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.
A Foreign Investor generally will not be subject to Federal income tax with
respect to gains arising from the sale or redemption of Units or distributions
of the Fund's net capital gain unless the income is effectively connected with a
trade or business of such Investor in the United States. In the case of a
Foreign Investor who is a non-resident alien individual, however, gain arising
from the sale or redemption of Units or distributions of the Fund's net capital
gain ordinarily will be subject to Federal income tax at a rate of 30% if such
individual is physically present in the U.S. for 183 days or more during the
taxable year and either the gain is attributable to an office or other fixed
place of business maintained by the Investor in the United States or the
Investor has a 'tax home' in the United States. In addition, a Unit held by an
individual who is not a citizen or resident of the United States at the time of
his death will generally be subject to U. S. Federal estate tax unless an
applicable treaty provides otherwise.
The tax consequences to a Foreign Investor entitled to claim the benefits
of an applicable tax treaty may be different from those described herein.
Foreign Investors should consult their own tax advisers to determine whether
investment in the Fund is appropriate.
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<PAGE>
RETIREMENT PLAN
This Series of Equity Income Fund may be well suited for purchase by
Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing plans are
exempt from Federal taxation. All distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for special 5 or
10 year averaging or tax-deferred rollover treatment. Holders of Units in IRAs,
Keogh plans and other tax-deferred retirement plans should consult their plan
custodian as to the appropriate disposition of distributions. Investors
considering participation in any of these plans should review specific tax laws
related thereto and should consult their attorneys or tax advisors with respect
to the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsor of this Fund, and other
financial institutions. Fees and charges with respect to such plans may vary.
Retirement Plans for the Self-Employed--Keogh Plans. Units of the Fund may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ('Keogh plans'). The assets of a Keogh
plan must be held in a qualified trust or other arrangement which meets the
requirements of the Code. Keogh plan participants may also establish separate
IRAs (see below) to which they may contribute up to an additional $2,000 per
year ($2,250, and for tax years beginning after December 31, 1996, $4,000, in a
spousal account).
Individual Retirement Account--IRA, Any individual can make use of a
qualified IRA arrangement for the purchase of Units of the Fund. Any individual
(including one covered by an employer retirement plan) can make a contribution
in an IRA equal to the lesser of $2,000 ($2,250, and for tax years beginning
after December 31, 1996, $4,000, in a spousal account) or 100% of earned income;
such investment must be made in cash. However, the deductible amount an
individual may contribute will be reduced if the individual's adjusted gross
income exceeds $25,000 (in the case of a single individual), $40,000 (in the
case of married individuals filing a joint return) or $200 (in the case of a
married individual filing a separate return). Certain transactions which are
prohibited under Section 408 of the Code will cause all or a portion of the
amount in an IRA to be deemed to the distributed and subject to tax at that
time. Unless nondeductible contributions were made in 1987 or a later year, all
distributions from an IRA will be treated as ordinary income but generally are
eligible for tax-deferred rollover treatment. Taxable distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability or where the amount distributed is part of a series of substantially
equal periodic (at least annual) payments that are to be made over the life
expectancies of the participant and his or her beneficiary, are generally
subject to a surtax in an amount equal to 10% of the distribution.
Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.
RECORDS AND REPORTS
The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.
With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of
the Fund, the Trustee sends each investor of record a statement summarizing
transactions in the Fund's accounts including amounts distributed from them,
identifying Securities sold and purchased and listing Securities held and the
number of Units outstanding at termination and stating the Redemption Price per
1,000 Units at termination, and the fees and expenses paid by the Fund, among
other matters. Fund accounts may be audited by independent accountants selected
by the Sponsors and any report of the accountants will be available from the
Trustee on request.
TRUST INDENTURE
The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors and the Trustee. This Prospectus summarizes various
provisions of the Indenture, but each statement is qualified in its entirety by
reference to the Indenture.
The Indenture may be amended by the Sponsor and the Trustee without consent
by investors to cure ambiguities or to correct or supplement any defective or
inconsistent provision, to make any amendment required by the SEC or
12
<PAGE>
other governmental agency or to make any other change not materially adverse to
the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.
The Trustee may resign upon notice to the Sponsor. It may be removed by
investors holding 51% of the Units at any time or by the Sponsor without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the Sponsor
determines in good faith that its replacement is in the best interest of the
investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsor will use its best efforts
to appoint a successor promptly; however, if upon resignation no successor has
accepted appointment within 30 days after notification, the resigning Trustee
may apply to a court of competent jurisdiction to appoint a successor.
If the Sponsor fails to perform its duties or becomes incapable of acting
or bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indenture and liquidate the Fund or continue to act as Trustee without a
Sponsor.
The Sponsor and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of the
Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limiting the liability of the Trustee.
MISCELLANEOUS
LEGAL OPINION
The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.
AUDITORS
The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.
TRUSTEE
The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and New York
State banking authorities.
SPONSOR
The Sponsor is a wholly-owned subsidiary of Merrill Lynch Co. Inc. The
Sponsor, or one of its predecessor corporations, has acted as Sponsor of a
number of series of unit investment trusts and as principal underwriter and
managing underwriter of other investment companies. The Sponsor, in addition to
participating as a member of various selling groups or as agent of other
investment companies, executes orders on behalf of investment companies for the
purchase and sale of securities of these companies and sells securities to these
companies in its capacities as broker or dealer in securities.
CODE OF ETHICS
The Sponsor has adopted a code of ethics requiring preclearance and
reporting of personal securities transactions by its personnel who have access
to information on Defined Asset Funds portfolio transactions. The code is
intended to prevent any act, practice or course of conduct which would operate
as a fraud or deceit on any Fund and to provide guidance to these persons
regarding standards of conduct consistent with the Sponsor's responsibilities to
the Funds.
PUBLIC DISTRIBUTION
During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public
13
<PAGE>
Offering Price determined in the manner provided above or to selected dealers
who are members of the National Association of Securities Dealers, Inc. at a
concession not in excess of the maximum sales charge. The Sponsor intends to
qualify Units for sale in all states in which qualification is deemed necessary
through the Underwriting Account and by dealers who are members of the National
Association of Securities Dealers, Inc.. The Sponsor does not intend to qualify
Units for sale in any foreign countries and this Prospectus does not constitute
an offer to sell Units in any country where Units cannot lawfully be sold.
UNDERWRITER'S AND SPONSOR'S PROFITS
Upon sale of the Units, the Sponsor will be entitled to receive sales
charges. The Sponsor also realizes a profit or loss on deposit of the Securities
equal to the difference between the cost of the Securities to the Fund (based on
the aggregate value of the Securities on their date of deposit) and the purchase
price of the Securities to the Sponsor plus commissions payable by the Sponsor.
In addition, the Sponsor or Underwriter may realize profits or sustain losses on
Securities it deposits in the Fund which were acquired from underwriting
syndicates of which it was a member. During the initial offering period, the
Sponsor also may realize profits or sustain losses as a result of fluctuations
after the initial date of deposit in the Public Offering Price of the Units. In
maintaining a secondary market for Units, the Sponsor will also realize profits
or sustain losses in the amount of any difference between the prices at which it
buys Units and the prices at which it resells these Units (which include the
sales charge) or the prices at which it redeems the Units. Cash, if any, made
available by buyers of Units to the Sponsor prior to a settlement date for the
purchase of Units may be used in the Sponsor's business to the extent permitted
by Rule 15c3-3 under the Securities Exchange Act of 1934 and may be of benefit
to the Sponsor.
PERFORMANCE INFORMATION
Advertisements and other material distributed to prospective investors may
include average annual total returns (with dividends reinvested) of equity
markets in major industrialized countries over the last 10 years, as compiled by
Morgan Stanley Capital International Index. Advertisements and other material
distributed to prospective investors may include the average annual compounded
rate of return on selected types of assets for periods of at least 10 years, as
compiled by Ibbotson Associates, compared to the rate of inflation over the same
period. These materials may also compare the shrinking relative proportion of
world stock market capitalization represented by U.S. markets for different
years.
DEFINED ASSET FUNDS
For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement, or attractive, regular current income consistent with the
preservation of principal. Unit investment trusts are particularly suited for
the many investors who prefer to seek long-term profits by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Funds offer.
Your investment objectives may call for a combination of Defined Asset Funds.
One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.
Investors may pursue investment growth to meet long-term goals such as
children's education or retirement. But they are faced with decisions of
selecting stock groups, choosing individual stocks, determining when to buy and
sell
14
<PAGE>
and how to reinvest sales proceeds. Growth stocks--those whose price is expected
to appreciate above average usually because of superior growth in earnings per
share--can be difficult to select successfully because their prices tend to be
more volatile than more established stocks and, by the time they are discovered
by ordinary investors, their prices may have already increased beyond attractive
levels or may be susceptible to dramatic declines if actual performance is less
than anticipated.
EXCHANGE OPTION
You may exchange Fund Units for units of other Select Series Portfolios,
subject only to the remaining deferred sales charge on the units received.
Holders of units of any Select Portfolio or any other Defined Asset Fund with a
regular maximum sales charge of at least 3.50%, or of any unaffiliated unit
trust with a regular maximum sales charge of at least 3.0%, may exchange those
units for Units of this Fund at their relative net asset values, subject only to
the remaining Deferred Sales Charge on Fund Units.
To make an exchange, you should contact your financial professional to find
out what suitable exchange funds are available and to obtain a prospectus. You
may acquire units of only those exchange funds in which the Sponsor is
maintaining a secondary market and which are lawfully for sale in the state
where you reside. Except for the reduced sales charge, an exchange is a taxable
event normally requiring recognition of any gain or loss on the units exchanged.
However, the Internal Revenue Service may seek to disallow a loss if the
portfolio of the units acquired is not materially different from the portfolio
of the units exchanged; you should consult your own tax advisor. If the proceeds
of units exchanged are insufficient to acquire a whole number of exchange fund
units, you may pay the difference in cash (not exceeding the price of a single
unit acquired).
As the Sponsor is not obligated to maintain a secondary market in any
series, there can be no assurance that units of a desired series will be
available for exchange. The Exchange Option may be amended or terminated at any
time without notice.
SUPPLEMENTAL INFORMATION
Upon writing or calling the Trustee shown on the back cover of this
Prospectus, investors will receive without charge supplemental information about
the Fund, which has been filed with the SEC. The supplemental information
includes more detailed risk factor disclosure about the types of securities that
may be part of the Portfolio and general information about the structure and
operation of the Fund.
15
<PAGE>
Defined
Asset FundsSM

SPONSOR: EQUITY INCOME FUND
Merrill Lynch, SELECT SERIES
Pierce, Fenner & Smith Incorporated1997 YEAR AHEAD
Defined Asset Funds INTERNATIONAL PORTFOLIO
P.O. Box 9051
Princeton, NJ 08543-9051
(609) 282-8500
TRUSTEE: This Prospectus does not contain all of the
The Chase Manhattan Bank information with respect to the investment
Customer Service Retail Department company set forth in its registration
Bowling Green Station statement and exhibits relating thereto which
P.O. Box 5187 have been filed with the Securities and
New York, NY 10274-5187 Exchange Commission, Washington, D.C. under
1-800-323-1508 the Securities Act of 1933 and the Investment
Company Act of 1940, and to which reference
is hereby made. Copies of filed material can
be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.
The Commission also maintains a Web site that
contains information statements and other
information regarding registrants such as
Defined Asset Funds that file electronically
with the Commission at http://www.sec.gov.
------------------------------
No person is authorized to give any
information or to make any representations
with respect to this investment company not
contained in its registration statement and
exhibits relating thereto; and any
information or representation not contained
therein must not be relied upon as having
been authorized.
------------------------------
When Units of this Fund are no longer
available or for investors who may reinvest
into subsequent Select Year Ahead Portfolios,
this Prospectus may be used as a preliminary
prospectus for a future series, and investors
should note the following:
Information contained herein is subject to
amendment. A registration statement relating
to securities of a future series has been
filed with the Securities and Exchange
Commission. These securities may not be sold
nor may offers to buy be accepted prior to
the time the registration statement becomes
effective.
This Prospectus 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 offer,
solicitation or sale would be unlawful prior
to qualification under the securities laws of
any such State.

11503--12/96