Defined Asset Funds
Select Ten Portfolio 1996 Series 3
Time in the market can be more important than timing in the market when it
comes to investment performance. Inevitably the market will fluctuate and no
one can accurately predict every bust or boom. Following a consistent,
disciplined approach to investing can be more rewarding over the long-term.
A Defined Strategy
The Select Ten Portfolio seeks total return by holding the ten highest
dividend-yielding stocks of the Dow Jones Industrial Average (DJIA)(1) - the
"Strategy Stocks" - for about one year. After one year, the Portfolio will
liquidate. You may choose to reinvest your proceeds into the next portfolio of
the then-current Strategy Stocks, if available, at a reduced sales charge, or
you can take the cash.
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(1) The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Inc., which is unaffiliated with and has not participated in any way
in the creation of the Portfolio or in the selection of its stocks and has
neither reviewed or approved any information in this brochure or the
prospectus relating to the Portfolio.
The Select Ten Portfolio selection process is a straightforward, objective and
mathematical application of the Strategy that eliminates subjective
influences. What's more, when investors follow the Strategy they're investing
in some of the largest companies in America.
Defining Your Risks
The following are important facts to keep in mind when considering this
investment for your portfolio. Please read them carefully. Your financial
professional will be happy to answer any questions you may have.
- -The Portfolio is designed for investors able and willing to assume the risks
generally associated with equity investments. It may not be appropriate for
investors seeking preservation of capital or high current income.
- -There can be no assurance that the Portfolio or Strategy will meet its
objective.
- -The value of your investment will fluctuate with the prices of the underlying
stocks. There is no guarantee that dividend rates will be maintained or that
stock prices will not decrease.
- -These stocks may have higher yields because the companies or their industries
are experiencing financial difficulties or are out of favor. There can be no
assurance the market factors that caused these relatively low prices and high
yields will change.
Don't Delay
You can get started with the Select Ten Portfolio with as little as $250. Call
your financial professional for a free prospectus containing more complete
information, including all charges and expenses. Read it carefully before you
invest.
The Dow Jones Industrial Average
The Dow Jones Industrial Average consists of 30 common stocks chosen by the
editors of the Wall Street Journal as representative of the New York Stock
Exchange and of American industry. The companies are highly capitalized in
their industries and their stocks are widely held by individual and
institutional investors.
Allied Signal
Aluminum Co. of America
American Express
AT&T
Bethlehem Steel
Boeing
Caterpillar
Chevron
Coca-Cola
Walt Disney
Du Pont
Eastman Kodak
Exxon
General Electric
General Motors
Goodyear
IBM
International Paper
McDonald's
Merck
3M
J.P. Morgan
Philip Morris
Procter & Gamble
Sear Roebuck & Co.
Texaco
Union Carbide
United Technologies
Westinghouse Electric
Woolworth
About the Chart
It is important to note that the actual performance of a Portfolio will differ
from that of the Strategy Stocks because the portfolio has sales charges and
pays brokerage commissions and expenses. Strategy Stock figures are generally
annual figures based on the closing sale prices on December 31, while the
Portfolios are established and liquidated at different times during the year.
Also, performance varies because Portfolios normally purchase and sell stocks
at prices different from the closing prices used in determining the
Portfolio's unit price, and the Portfolio is not fully invested at all times
and not all the stocks may be weighed equally. After Portfolio sales charges
and expenses, the Strategy Stocks would have underperformed the DJIA in 6
years, and there can be no assurance that the Portfolio will outperform the
DJIA.
Time-Tested Track Record
We analyzed the Strategy of investing in the ten highest dividend-yielding
stocks in the DJIA, or "Strategy Stocks," over a 20-year period to see how it
had performed. The chart below illustrates past performance of the DJIA and the
Strategy Stocks (but not any Portfolio). While there is no guarantee of future
results of any Portfolio, as you can see the results are compelling.
[A mountain graph entitled "Suppose you had invested $10,000 in the Strategy
in 1976?" compares the cumulative annual performance from 1976 through June
30, 1996 of the Strategy Stocks (brown) and the DJIA (gray). A box in the left
quadrant indicates the components of the chart. The x axis reflects dollar
amounts in $50,000 increments; the y axis reflects years. The initial value of
each is $10,000. The values ending June 30, 1996 were $290,405 (Strategy) and
$153,554 (DJIA).]
The performance of the Strategy is a hypothetical example of how the Select
Ten Portfolio could have performed if its Strategy had been employed since
1976. The chart assumes that all dividends during a year are reinvested at the
end of that year. It does not reflect sales charges, commissions, expenses or
taxes.
Select Ten Portfolio 1996 Series 3(2)
Current
Ticker Dividend
Name of Issuer Symbol Yield(3)
1. Philip Morris Companies, Inc. MO 3.98%
2. J.P. Morgan & Company, Inc. JPM 3.82%
3. Texaco, Inc. TX 3.70%
4. Exxon Corporation XON 3.70%
5. Chevron Corporation CNV 3.44%
6. General Motors Corporation GM 3.32%
7. Du Pont (E.I.) De Nemours& Company DD 3.00%
8. Minnesota Mining and
Manufacturing Company MMM 3.00%
9. International Paper Company IP 2.57%
10. American Telephone&Telegraph Company T 2.47%
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(2) Initial date of deposit - July 22, 1996.
(3) Current Dividend Yield for each security was calculated by
annualizing the last quarterly or semi-annual ordinary dividend distributed
on that security and dividing the result by that security's market value as
of the close of trading on July 19, 1996. There can be no assurance that
future dividends, if any, will be maintained at the indicated rates.
The Strategy may not necessarily reflect the research opinions or any buy or
sell recommendation of any of the Sponsors.
Prior Select Ten Portfolio Rollover Performance
The following table shows total return (price changes plus dividends
reinvested, divided by the maximum initial public offering price) and reflects
all sales charges and expenses, but not taxes. These figures represent past
performance and are no guarantee of future results. These figures show the
results that could have been obtained by investing on the initial offer date
of the first Portfolio of each of the established Series and reinvested each
year into the next Portfolio of that Series (including the presently
outstanding Portfolios).
Total Average Annual
Series Term Return Return
Series A 1/3/92-6/30/96 77.96% 13.71%
Series B 5/17/91-6/30/96 99.49% 14.44%
Series C 9/1/92-6/30/96 94.20% 18.95%
Performance of the last completed Portfolio of each established Series.
Total Average Annual
Portfolio Term Return Return
1995 Series A 1/9/95-2/23/96 39.75% 34.72%
1995 Series B 5/10/95-6/28/96 29.23% 25.32%
1995 Series C 9/7/94-9/29/95 23.90% 22.41%
14950IN-7/96
