Defined Asset Funds
Select Ten Portfolio
Sometimes, simple strategies can be the most effective ...
Like the strategy applied in our Select Ten Portfolio ...
A Simple Strategy For Total Return
The Select Ten Portfolio seeks total return over a one-year period by holding
the ten current highest dividend-yielding stocks of the Dow Jones Industrial
Average(1) (DJIA). These companies are highly capitalized and widely held.
Many are household names. Purchasing a Portfolio of these stocks, instead of
just one or two, is a way to diversify your stock holdings. Investing in a
number of quality stocks when their prices are depressed is a strategy
designed to increase the potential for total return.
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(1) Dow Jones & Company, Inc., owner of the name "Dow Jones Industrial
Average," is unaffiliated with and did not participate in the creation of the
Portfolio or the selection of its stocks, and has neither reviewed nor
approved any information in the prospectus relating to the Portfolio. "S&P
500" is a trademark of Standard & Poor's Corporation.
How The Portfolio Works
The Portfolio consists of approximately equal values of the ten stocks in the
DJIA having the highest yield shortly before the initial offering date (the
"Strategy Stocks") and holds them for about a year. The Portfolio will remained
relatively fixed during this time. After one year, the Portfolio will
liquidate. You may choose to roll your proceeds into the next portfolio of the
then-current Strategy Stocks, if available, or you can take the cash.
Prior Select Ten Performance
The chart below shows average annual total return for each of the three
series, which assumes an annual "rollover" into the next Portfolio. We've also
included returns for the most recently completed Portfolio of each series.
Series from Inception through 9/30/96
Inception Return
A Series 1/3/92 14.30%
B Series 5/17/91 14.48%
C Series 9/1/92 16.90%
Most Recent Completed Portfolio
Period Return
A Series 1/9/95 - 2/23/96 34.72%
B Series 5/10/95 - 6/30/96 25.32%
C Series 9/7/94 - 9/30/95 22.41%
Past performance in no guarantee of future results. Average annual total
return represents price changes plus dividends reinvested at year-end, divided
by Initial Public Offering Price, and reflects maximum sales charges and
expenses.
Defining Your Risks
Select Ten Portfolios are designed for investors able and willing to assume
the risks generally associated with equity investments, and may not be
appropriate for those seeking preservation of capital or high current income.
The value of the investment will fluctuate with the prices of the underlying
stocks. There can be no assurance that dividend rates will be maintained or
that the stock prices will not decrease.
A Time Tested Track Record
We analyzed the Strategy of investing in the ten highest dividend-yielding
stocks over various periods to see how it compared to the DJIA and the S&P
500(2). The following charts illustrate past performance of the Strategy
Stocks, but not any Select Ten Portfolios. While there is no guarantee of
future results of any Portfolio, as you can see the results are compelling.
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(2) The "S&P 500" is a trademark of Standard & Poor's Corporation.
Time in the Market
Average Annual Total Return through 12/31/96/95; Strategy Stocks, DJIA and S&P
500 (dividends reinvested at year-end).
3year 5year 10year 15year 20year 25year
Strategy 21.63% 21.06% 18.21% 19.08% 17.72% 17.04%
Stocks
DJIA 18.69% 17.33% 16.34% 16.04% 14.00% 12.05%
S&P 500 15.16% 16.50% 14.79% 14.63% 14.37% 12.03%
[mountain graph entitled "Potential Growth of $10,000 invested in 1971 through
9/30/96" compares the cumulative annual performance from 1971 through 9/30/96
of the Strategy Stocks (blue), the DJIA (red) and the S&P 500 (green). A box
in the upper left quadrant indicated the components of the chart. The x axis
reflects dollar amounts and the y axis reflects years. The initial value of
each is $10,000; next to the right margin the ending values are stated as
follows: $596,047 for the Strategy Stocks; $200,916 for the DJIA; and $194,095
for the S&P 500.]
The charts above compare hypothetical performance of the Select Ten Strategy
Stocks with actual performance of the Dow Jones Industrial Average and the S&P
500 Composite Stock Price Index. The results shown assume that all dividends
during each year are reinvested at the end of that year, and do not reflect
sales charges, commissions, expenses or taxes. If Portfolio sales charges and
expenses were deducted, the Strategy Stocks would have outperformed the DJIA
and the S&P 500 in 14 of the last 5 years, and there can be no assurance that
any Portfolio will outperform the DJIA. Actual Portfolio performance will also
differ from Strategy Stocks because Portfolios are established and liquidated
at different times during the year, they normally purchase and sell stock at
prices different from the closing prices used in determining Portfolio unit
price, Portfolios are not fully invested at all times and stocks may not be
weighed equally. For more complete discussion of Strategy Stocks and Portfolio
performance, please speak to your financial professional.
Timing The Market
Annual Total Return
(Periods ending December 31)
Strategy
Year Stocks DJIA S&P 500
1971 2.47% 9.79% 14.31%
1972 23.26% 18.21% 18.98%
1973 -1.02% -13.12% -14.66%
1974 -0.31% -23.14% -26.47%
1975 57.02% 44.40% 36.92%
1976 34.81% 22.72% 23.53%
1977 -0.83% -12.71% -7.19%
1978 0.16% 2.69% 6.39%
1979 12.35% 10.52% 18.02%
1980 26.37% 21.41% 31.50%
1981 7.47% -3.40% -4.83%
1982 25.46% 25.79% 20.26%
1983 38.46% 25.68% 22.27%
1984 7.34% 1.06% 5.95%
1985 28.63% 32.78% 31.43%
1986 34.57% 26.91% 18.37%
1987 6.97% 6.02% 5.67%
1988 21.50% 15.95% 16.58%
1989 27.30% 31.71% 31.11%
1990 -7.94% -0.57% -3.20%
1991 33.37% 23.93% 30.51%
1992 8.32% 7.34% 7.67%
1993 26.92% 16.72% 9.97%
1994 3.89% 4.95% 1.30%
1995 36.48% 36.48% 37.10%
1996(3) 16.64% 16.81% 13.37%
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(3)as of 9/30/96
Select Ten Highlights
- -Minimum investment of $250 for regular or IRA accounts.
- -Quarterly dividend distributions.
- -Reduced risk by investing in ten different securities.
- -Low initial sales charge; balance deferred.
- -Volume discounts.
- -Reduced sales charge for rollovers.
Time-Tested Investment Principles
1. Time in the market is more important than timing the market.
2. The stocks to buy are the ones everyone else is selling.
3. Dividends can be an important part of total return.
Defining Your Costs
Low Initial Sales Charge/Reduced Charge for Rollovers
As illustrated in the chart below, first-time investors pay a 1% maximum sales
charge when they buy. 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 ten 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.
Amount per As a % of Public
Amount Purchased 1,000 Units Offering Price
Maximum Initial Sales Charge $10.00 1.00%
Deferred Sales Charge $17.50 1.75%
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Your Sales Charge $27.50 2.75%
Should you reinvest the proceeds of your investment into a new portfolio, if
available, you will not be subject to the initial charge, just the $17.50
deferred fee. If you sell your investment before maturity, the remaining
deferred sales charge and, in the secondary market, a charge to reflect
estimated costs of liquidating securities to meet cash redemptions, will be
deducted.
Find Out More About Our Current Series.
Defined Asset Funds plans to offer six Select Ten Portfolios each year, one
approximately every two months.
For details on the latest offering, or for a free brochure on each of the
current Defined Asset Funds, Select Ten (DJIA), Hong Kong, United Kingdom and
Japan Portfolios talk to your financial professional.
A free prospectus containing more complete information, including all charges
and expenses on any of these Portfolios, is also available. Read it carefully
before investing.
Information contained herein is subject to amendment. A registration statement
relating to the next Series of the Select Ten Portfolio has been filed with
the Securities and Exchange Commission. The securities of that series may not
be sold, nor may offers to buy be accepted prior to the time the registration
statement become effective. This brochure shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
those securities in any state in which such an offer, solicitation, or sale
would be unlawful prior to registration or qualification under the securities
laws of any such state.
Printed on Recycled Paper
14662SJ-11/96
