An Ideal IRA Choice!
Defined Asset Funds[SM]
The Select S&P Industrial Portfolio
1997 Series
For Dividends ...
For Capital Appreciation ...
For Total Return ...
[Logo] Merrill Lynch
If your goal is total return, choosing appropriate stocks
can be challenging.
Defined Asset Funds(SM) can help.
The Portfolio
The Defined Asset Funds(SM) Select S&P Industrial Portfolio is a sensible and
straightforward approach for seeking total return. The Portfolio follows a
contrarian strategy by selecting 15 stock from the S&P Industrial Index* that
have high dividend yields. These stocks are selected to provide a combination
of value, capital appreciation potential and current dividend income.
The Selection Process
The Select S&P Industrial Portfolio looks for potential values in the equity
market by investing in leading companies in the S&P Industrial Index that may
be currently out of favor. We do this by employing a disciplined four-part
screening process:
1. Defining the Universe: We begin with the S&P Industrial Index, and remove
any stocks that are in the Dow Jones Industrial Average* (DJIA).
2. Quality Screen: Only stocks that are ranked A+ or A by Standard & Poor's
are included.
3. Market Capitalization: The remaining stocks are ranked by their market
capitalization from highest to lowest, and the lowest 25% are eliminated.
4. Highest Dividend Yield: The remaining stocks are ranked according to
dividend yield. The 15 highest-yielding stocks are selected for the
Portfolio.
The Defined Asset Funds Select Strategy
Like each Portfolio in the Defined Asset Funds Select Series, the Select S&P
Industrial Portfolio employs a "buy and hold" style of investing for
approximately one year following a disciplined investment strategy. Each
year, the screening process is reapplied and a new Portfolio is selected. You
can reinvest in the new Portfolio, if available, or you can redeem your
investment. The research is done for you. There are no buy or sell decisions
to make. It's that straightforward.
Although the Select Portfolios are one year investments, we recommend staying
with the Strategy for at least three to five years.
Hypothetical Results
We analyzed the hypothetical returns of $10,000 invested over the last 25
years in the Strategy (not any Portfolio) compared to the DJIA, the S&P 500
Index* and the S&P Industrial Index. Past performance of the Strategy is
no guarantee of future results of any Portfolio. The Strategy would have
underperformed the DJIA in 11, the S&P 500 Index in 10, and the S&P
Industrial Index in 9 of these years. [A mountain chart, captioned
"Hypothetical Performance of the Strategy (not any Portfolio) Growth of
$10,000 invested in 1972 through 9/30/97" compares the cumulative annual
performance from 1972 through 9/30/97 of the Strategy (ochre), the Dow
Jones Industrial Average (DJIA) (pink), the S&P 500 Index (purple) and the
S&P Industrial Index (green). An ochre box in the upper left quadrant
indicates the components of the Strategy performance section of the chart.
The horizontal or (Y) axis compares the cumulative annual performance by
YEAR , from 1972 through 9/30/97. The vertical or (X) axis reflects DOLLAR
AMOUNT value for each index from 1972 ending 9/30/97. The initial value of
each investment is $10,000. Throughout the period from 1972 through
September 30, 1997, increases in each investment build towards the right
vertical or (X) axis. At the end of this period, the right vertical or (X)
axis, reflects the ending value of the STRATEGY ($442,689), the ending
value of the DJIA ($251,377), the ending value of the S&P 500 Index
($237,872) and the ending value of the S&P Industrial Index ($231,578).]
* "Standard & Poor's," "S&P" and "S&P 500" are trademarks of The McGraw-Hill
Companies, and have been licensed for use by Defined Asset Funds. The
Portfolio is not sponsored, managed, sold or promoted by Standard & Poor's.
The name "Dow Jones Industrial Average" is the property of Dow Jones &
Company, Incorporated.
There can be no assurance that any Portfolio will outperform these indices.
Returns shown represent price changes plus dividends distributed (reinvested
at each year end in chart and averages) and do not reflect commissions or
taxes. Portfolio performance will differ from Strategy because of sales
charges and expenses, because Portfolios are established and liquidated at
different times during the year, they normally purchase and sell stocks 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
weighted equally.
Annual Total Returns
<TABLE>
<CAPTION>
S&P S&P
S&P 500 Industrial S&P 500 Industrial
Year Strategy** DJIA Index Index Year Strategy** DJIA Index Index
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1972 14.82% 18.21% 18.98% 19.83% 1985 29.66 32.78 31.43 30.08
1973 -18.64 -13.12 -14.66 -14.61 1986 28.46 26.91 18.37 18.54
1974 -5.14 -23.14 -26.47 -26.54 1987 2.55 6.02 5.67 9.13
1975 40.21 44.40 36.92 36.78 1988 41.58 15.95 16.58 15.80
1976 30.55 22.72 23.53 22.59 1989 35.01 31.71 31.11 29.30
1977 -6.32 -12.71 -7.19 -8.20 1990 1.02 -0.57 -3.20 -0.84
1978 6.06 2.69 6.39 7.50 1991 26.75 23.93 30.51 30.39
1979 26.20 10.52 18.02 18.40 1992 11.38 7.34 7.67 5.63
1980 18.06 21.41 31.50 32.98 1993 2.31 16.72 9.97 8.90
1981 7.66 -3.40 -4.83 - 6.69 1994 11.30 4.95 1.30 3.75
1982 25.61 25.79 20.26 20.14 1995 36.27 36.48 37.10 34.26
1983 24.47 25.68 22.27 22.79 1996 12.12 28.57 22.69 22.70
1984 12.24 1.06 5.95 4.09 09/30/97 20.46 24.80 29.45 28.86
Average 15.86% 13.34% 13.10% 12.98%
</TABLE>
** Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses (about 0.22% a year).
A History of Tracking Quality: Standard & Poor's
Ranking System
For decades, the Standard & Poor's Earnings and Dividend Rankings have been
helping investors and financial professionals to assess a stock's history of
quality.
The Ranking System primarily reflects Standard & Poor's appraisal of a stock's
past growth and stability of earnings and dividends. These Rankings should
not be confused with Ratings, which are published separately by Standard &
Poor's and pertain to perceived credit worthiness of a company's bonds and
other debt.
Standard & Poor's determines the relative quality of stocks using a
computerized ranking system, based on pre-share earnings and dividends records
for the most recent ten years. Standard & Poor's also looks at a company's
products, industry position, corporate resources and financial policy. It
then assigns a symbol to each stock, which ranges from A+ for the most highly
esteemed stocks to D for those stocks which Standard & Poor's considers to be
the most speculative.
About Standard & Poor's
STANDARD & POOR'S is a leading financial information and investment research
company. Since 1860, they have provided investors with financial research,
benchmarks and market data. Its most notable benchmark, the S&P 500 Stock
Composite Index, features utility, financial, transportation and industrial
stocks. The S&P Industrial Index, a sub-set of the S&P 500, includes only
highly capitalized industrial stocks.
Defining Your Cost
Low Initial Sales Charge/Reduced Charge for Rollovers
First-time investors pay a sales charge of approximately 1% when they buy.
Deferring sales charges keeps more of your money invested. All investors pay
a deferred sales charge of $1.75 per 1,000 units ($17.50 total), deducted in
each of the last ten months of the Portfolio.
<TABLE>
<CAPTION>
Amount Per As a % of
1,000 Units Public Offering Price
----------- ---------------------
<S> <C> <C>
Initial Sales Charge $10.00 1.00%
Deferred Sales Charge $17.50 1.75%
Maximum Sales Charge $27.50 2.75%
Estimated Annual Operating Expenses $ 2.27 0.22%
(based on $1,000 offering price)
</TABLE>
If you sell before termination, the remaining deferred sales charges are
deducted, along with the estimated cost of selling Portfolio stocks. If you
roll over into a successor Portfolio, if available, the initial charge is
waived. You only pay the $17.50 deferred fee and operating expenses for that
Portfolio.
Defining Your Risks
The Select S&P Industrial Portfolio is 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 value of the
underlying stocks. There can be no assurance that dividend rates will be
maintained or that stock prices will not decrease. Generally, dividends and
any gains will be subject to tax each year. Capital gains, if any, on assets
held over a year will be taxed up to the maximum federal rate of 28%.
Select Now!
You can get started with the Select S&P Industrial Portfolio with as little as
$250. Call your financial professional for a free prospectus containing more
complete information, including sales charges and expenses. Please read the
prospectus carefully before investing.
Information contained herein is subject to amendment. A registration
statement relating to the next Series of the Select S&P Industrial Portfolio
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 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.
[Copyright]1997 Merrill Lynch, Pierce, Fenner & Smith Incorporated, Member
SIPC.
11578SJ - 10/97
