Defined Asset Funds[SM]
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Select Ten Portfolio
International
1996 United Kingdom Portfolio
Series 5
Merrill Lynch
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Financial Times Index
The Financial Times Industrial Ordinary Share (FT) Index consists of 30 common
stocks chosen by the editors of The Financial Times (London) to be
representative of British industry and commerce. The companies are major
players in their industries and their stocks are widely held by individual and
institutional investors. The FT Index is an unweighted average of the share
prices of these companies:
ASDA Group
Allied Domecq
BICC
BOC Group
BTR
Blue Circle Industries
Boots Companies
British Airways
British Gas
British Telecommunications
British Petroleum Company
Cadbury Schweppes
Courtaulds
General Electric Company
Glaxo Wellcome
Grand Metropolitan
GKN
Guinness
Hanson
Imperial Chemical Industries
Lucas Industries
Marks & Spencer
National Westminster Bank
Peninsular & Oriental Steam Navigation Company
Reuters Holdings
Royal & Sun Alliance Insurance
SmithKline Beecham
Tate & Lyle
Thorn EMI
Vodafone Group
SELECT TEN PORTFOLIO
UNITED KINGDOM
INTERNATIONAL SERIES
Today's global marketplace offers many opportunities. Defined Assets
Funds[SM] Select Ten Portfolio-International Series uses a simple investment
strategy to help you take advantage of opportunities in selected countries.
Global Opportunities
Many international equity markets, such as the London Stock Exchange, offer
attractive growth potential, which can help investors diversify their
portfolios globally.
A Simple Strategy
The United Kingdom Portfolio seeks total return by investing in approximately
equal values of the ten stocks in the Financial Times Industrial Ordinary
Shares (FT) Index,(*) having the highest dividend yield at the time of the
offering (Strategy Stocks). These companies are among the most highly
capitalized in the United Kingdom.
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(*)The publisher of the Financial Times Index has not participated in
any way in the creation of the Portfolio or in the selection of its stocks
nor approved any information included in this brochure. objective.
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 significantly reduced sales charge, or you can take the cash.
Offers U.S. Investments Some Big Advantages
o Semi-annual dividends. This means investors receive two consolidated
checks per year, not 20 for the 10 stocks, and payments are in U.S. dollars.
o Low costs. The minimum purchase is about $250. There is a total sales
charge of 2-3/4%.
o Reinvestment. You may choose to reinvest your dividends at a reduced sales
charge to compound your income.
o Year-end rollover. The United Kingdom Portfolio matures in about one year,
at which time you'll have the opportunity to reinvest your Select Ten
Portfolio into the next Portfolio, if available. Although each Select Ten
Portfolio is a one-year fund, we recommend you stay with the Strategy for a
minimum of three-to five-years.
Defining Your Risks
At Defined Asset Funds, our goal is to give investors the information they
need to make informed decisions. The following are important facts to keep in
mind when considering this investment for your portfolio. Please read them
carefully. Your financial professional will be happy to answer any questions
you may have.
o The Portfolio should not be considered a complete investment program, and
may be considered speculative.
o The Portfolio may not be appropriate for investors seeking either
preservation of capital or high current income, nor would it be suitable for
investors unable or unwilling to assume the increased risks of higher price
volatility and currency fluctuations associated with investments in
international equities.
o There can be no assurance that the Portfolio or Strategy will meet its
o Total returns on United Kingdom stocks fluctuate widely, and the value of
your investment will change with the prices of the underlying stocks and
currency exchange rates. In addition, there is no guarantee that dividend
rates will be maintained or that stock prices or currency exchange rates will
not decline.
o The Strategy Stocks may have higher yields because they or their industries
are experiencing financial difficulty or are out of favor.
Time-Tested Track Record
Since stocks in the Portfolio were chosen solely by applying the Strategy, we
analyzed the Strategy to see how it had performed. The chart below
illustrates past performance of the FT Index and Strategy stocks. Although
this is no guarantee of future results of any Portfolio, as you can see the
results are compelling.
[A mountain chart, captioned "Suppose you had invested $10,000 in the Strategy
in 1976"', compares the cumulative annual performance from 1976 through
9/30/96 of the Strategy Stocks (burnt orange) with the FT Index (purple). A
box in the upper 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 $50,000; next to the right margin the
ending values are stated as follows: $599,903 Ending 9/30/96 (Strategy);
$163,169 Ending 9/30/96 (Index).]
The performance of the Strategy is a hypothetical example of how the United
Kingdom Portfolio could have performed if the 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. Changes in the exchange rate of the pound sterling
relative to the US dollar affected these figures significantly in certain
years. These changes ranged from -25% in 1981 and 1984 to +21% in 1987, and
averaged -2.7% over the last 20 years.
It is important to note that actual performance of the Portfolio will differ
from the Strategy Stocks because the Portfolio has sales charges and pays
brokerage commissions and expenses. Strategy Stock figures are generally
annual figures based on December 31 sales prices, while the Portfolios are
established and liquidated at different times during the year. Portfolios
normally purchase and sell stocks at prices and currency exchange rates
different from the closing price and currency exchange rate used in
determining the Portfolio's unit price. In addition, the Portfolio is not
fully invested at all times and not all stocks may be weighted equally.
Select Ten Portfolio--International Series 5--1996 United Kingdom Portfolio*
Name of Issuer Current Dividend Yield+
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1. Hanson PLC 9.03%
2. British Gas PLC 7.57
3. BTR PLC 5.50
4. British Telecommunications PLC 5.26
5. Peninsular & Oriental Steam Navigation Company 5.05
6. Allied Domecq PLC 4.47
7. Royal & Sun Alliance Insurance Group PLC 4.23
8. BICC PLC 4.21
9. Imperial Chemical Industries PLC 3.93
10. National Westminster Bank PLC 3.78
* Initial date of deposit--October 31, 1996
+ Current dividend yield for each security was generally calculated by adding
the most recent interim and final dividends declared on the security and
dividing the result by its market value as of the close of trading on October
31, 1996.
The Portfolio may not necessarily reflect the research opinions or any buy or
sell recommendation of any of the Sponsors.
Prior Select Ten Portfolio Performance
The chart below shows average annual total returns for each of the three
Series, which assume 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 Most Recent Completed Portfolio
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Inception Return Period Return
A Series 1/5/94 2.25% 1/6/95-2/23/96 5.75%
B Series 6/21/93 4.65% 5/10/95-6/28/96 -10.03%
C Series 9/28/93 2.58% 9/6/94-10/13/95 -2.21%
Past performance is no guarantee of future results. Average annual total
return represents price changes plus dividends reinvested, divided by the
initial public offering price, and reflects maximum sales charges and expenses.
Historical Performance
If the Strategy had been followed for the last 20 years, an investor generally
would have achieved a higher total return than by investing in the entire FT
Index.
The table below illustrates how the Strategy would have performed on a
theoretical basis from January 1, 1976 through September 30, 1996.* The
returns shown represent past performance of the United Kingdom and Strategy
Stocks, and are no guarantee of future results. The figures do not reflect
the Portfolio's sales charges, commissions, expenses, or reinvestment of
dividends.
Strategy Illustration*
January 1, 1976-September 30, 1996
FT Index Strategy Stocks
Year Total Return Total Return
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1976 -15.58% -15.89%
1977 61.92 87.27
1978 9.92 17.73
1979 3.59 4.76
1980 31.77 30.15
1981 -5.30 -6.26
1982 0.42 44.03
1983 21.94 42.06
1984 2.15 5.50
1985 54.74 78.64
1986 24.36 32.88
1987 38.99 48.10
1988 6.74 11.38
1989 22.80 28.71
1990 10.29 9.26
1991 14.65 16.57
1992 -2.33 4.27
1993 18.40 37.69
1994 1.89 5.46
1995 17.63 10.83
1/1/96-9/30/96 9.31 8.86
Average** 14.40% 21.81%
* After Portfolio sales charges and expenses, a Portfolio would have
outperformed the index in 13 of the 20 years.
** Average annual total returns represent the annual rate of price
appreciation, plus dividends reinvested at the end of each year.
Defining Your Cost
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 Purchased Amount per 1,000 As a % of Public
Units Offering Price
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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%
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After a year, should you reinvest the proceeds of your investment into a new
portfolio, if available, you will not be subject to an additional 1% initial
charge, just the $17.50 deferred fee. If you sell your investment before
maturity, the deferred sales charge and, in the secondary market, a charge to
reflect the estimated costs of liquidating securities to meet cash
redemptions, will be deducted.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
Total Sales Charge
Deferred Sales as a % of the
Charge per 1,000 Public Offering
Amount Purchased Units Offering Price
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Less than $50,000 $17.50 2.75%
$50,000 to $99,999 $17.50 2.50%
$100,000 to $249,999 $17.50 2.00%
$250,000 or more $17.50 1.75%
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Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and the charge for organizational expenses. In
addition, the annual statement and the relevant tax reporting forms you
receive at year-end will reflect the actual amount paid to you (net of the
deferred sales charge and the charge for organizational expenses).
Accordingly, you should not increase your tax basis in your units by the
deferred sales charge and the charge for organizational expenses. US
investors will include in income their share of dividends grossed up for
certain taxes paid by UK issuers; however, they may not be able to obtain
refunds for such taxes.
Don't Delay.
Call your financial professional for a free prospectus containing more complete
information, including all charges and expenses, and the special considerations
associated with the risks of international investing including currency risk.
Read it carefully before you invest.
Additional United Kingdom Portfolios containing the then-highest
dividend-yielding stocks may be created in the future. Information contained
herein is subject to completion or amendment. A registration statement
relating to the securities of the next Portfolio in this Select Ten
Portfolio--International Series has been filed with the Securities and
Exchange Commission. The securities of that Portfolio may not be sold nor may
offers to buy be accepted prior to the time that registration becomes
effective. This brochure may not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any state in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
Other Select Series
Select Ten Portfolio (DJIA)
Hong Kong Portfolio (Hang Seng Index)
Japan Portfolio (Nikkei Index)
Select Growth Portfolio
Equity Income Funds
Concept Series
Premier American Portfolio
Health Care Trust II
Natural Gas Trust 2
Real Estate Income Fund 2
TeleoGlobal Trust 2
Equity Income Funds
Utility Series
15th Utility Common Stock Series
Equity Income Funds
Index Series
S&P 500 Index Trust
S&P MidCap Index Trust
Other Defined Asset Funds
Municipal Income Funds
Corporate Income Funds
Government Securities Income Funds
International Bond Funds
