An Ideal IRA Choice!
Defined Asset Funds[SM]
The Select S&P Industrial Portfolio
1997 Series G
Take indexing to a new level. . .
[LOGO] Merrill Lynch
Indexing -- it's a strategy that many investors choose to mirror the returns
of major indices. Why not go a step beyond Indexing?
Defined Asset Funds[SM] can help.
For Dividends. . .
For Potential Capital Appreciation. . .
For Total Return. . .
A Step Beyond Indexing
Instead of simply replicating an index, the Select S&P Industrial Portfolio
takes indexing to a new level by attempting to single out stocks within the
index for a combination of value, capital appreciation and current dividend
income. The Portfolio seeks total return through a contrarian strategy of
selecting 15 stocks from the S&P Industrial Index* with high dividend
yields. It is important to note that when a stock has a relatively high
dividend yield, it can be an indication that the company or the industry may
be currently out of favor.
The Selection Process
The Select S&P Industrial Portfolio looks for potential values in the equity
market by investing in companies in the S&P Industrial Index that may be
currently out of favor. It does this through a disciplined four-part screening
process:
1. Defining the Universe: We begin with the S&P Industrial Index, a sub-set
of the S&P 500 Index*, which includes only industrial stocks. Defined
Asset Funds then removes any stocks that are a part of the Dow Jones
Industrial Average* (DJIA).
*"Standard & Poor's," "S&P" and "S&P 500" are trademarks of The McGraw-Hill
Companies, Inc. 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.
2. Quality Screen: Only stocks that are ranked A+ or A by Standard &
Poor's are included. Standard & Poor's determines these stock rankings
using a computerized system which focuses primarily on the growth and
stability of per-share earnings and dividends. 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 (these rankings are not intended to predict stock price
movements).
3. Market Capitalization: The stocks are then ranked by their market
capitalization from highest to lowest, and the lowest 25% are
eliminated. This allows the Portfolio to avoid smaller, less liquid
issues.
4. Highest Dividend Yield: Finally, the remaining stocks are ranked
according to dividend yield which identifies companies whose prices may
have declined. The l 5 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 which follows
a disciplined investment strategy for about a year. 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 take the cash. The research is done for
you. There are no buy or sell decisions to make.
Although the Select Portfolios are one year investments, we recommend staying
with the Strategy for at least three to five years.
<TABLE>
<CAPTION>
Average Annual Total Returns**
Periods ending December 31, 1996.
S&P
Year Strategy DJIA S&P 500 Index Industrial Index
<S> <C> <C> <C> <C>
3 19.00% 22.57% 19.44% 19.56%
5 13.94 18.20 15.07 14.48
10 17.02 16.49 15.20 15.30
15 19.29 18.27 16.57 16.46
20 16.82 14.27 14.33 14.21
25 15.51 12.76 12.35 12.25
</TABLE>
Annual Total Returns**
<TABLE>
<CAPTION>
S&P S&P
S&P 500 Industrial S&P 500 Industrial
Strategy DJIA Index Index 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>
**Hypothetical past performance of the Strategy (not any Portfolio) is
no guarantee of future results. Figures represent price changes
plus dividends distributed (reinvested at year ends in average figures)
and do not reflect the deduction of any commissions or taxes. Only
Strategy figures, not index returns, reflect the deduction of Portfolio
sales charges (2.75% the first year, 1.75% for each subsequent
year) and estimated expenses (about 0.22% a year).
<TABLE>
Select S&P Industrial Portfolio -- 1997 Series G
<CAPTION>
Current
Companies Ticker Symbol Dividend Yield***
--------- ------------- --------------
<S> <C> <C> <C>
1. UST, INC. UST 5.40%
2. ALLTEL CORPORATION AT 3.06%
3. INTERNATIONAL FLAVORS & FRAGRANCES, INC. IFF 2.94%
4. GENUINE PARTS COMPANY GPC 2.92%
5. SBC COMMUNICATIONS, INC. SBC 2.79%
6. WINN-DIXIE STORES, INC. WIN 2.72%
7. ROYAL DUTCH PETROLEUM COMPANY(****) RD 2.67%
8. HEINZ (H.J.) COMPANY HNZ 2.55%
9. ANHEUSER-BUSCH COMPANIES, INC. BUD 2.46%
10. AMERICAN HOME PRODUCTS CORPORATION AHP 2.41%
11. MAY DEPARTMENT STORES COMPANY MAY 2.26%
12. KELLOGG COMPANY K 2.09%
13. THE LIMITED, INC LTD 2.06%
14. PITNEY BOWES, INC. PBI 2.04%
15. KIMBERLY-CLARK CORPORATION KMB 1.96%
</TABLE>
*** Current Dividend Yield for each stock was calculated by annualizing the
last monthly, quarterly or semi-annual ordinary dividend received on the
stock and dividing the results by its market value on the close of trading
on October 17, 1997.
**** This issuer is located in The Netherlands; the current semi-annual
dividend per share will be subject to withholding taxes of The
Netherlands.
Avoid the teachings of speculators
whose judgments are not confirmed by experience.
LEONARDO DA VINCI
How the Strategy Could Have Performed
We analyzed the hypothetical returns of $10,000 invested over 25 years
according to the S&P Industrial Strategy (not any Portfolio) as compared to
the S&P Industrial Index, the S&P 500 Index and the DJIA. Past performance is
no guarantee of future results for any Portfolio. The Strategy would have
underperformed the S&P Industrial Index in 9, the S&P 500 Index in 10, and the
DJIA in 11 of the last 25 years. As you can see by the chart below, the
Strategy would have offered impressive results over time.
[A mountain chart, captioned "Hypothetical 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).]
There can be no assurance that any Portfolio will outperform these indices.
Returns shown represent price changes plus dividends reinvested at year ends
and do not reflect commissions or taxes. Only Strategy figures reflect the
deduction of Portfolio sales charges and expenses. Portfolio performance will
differ from the Strategy 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.
About Standard & Poor's
STANDARD & POOR'S is a leading financial information and investment research
company. Since 1860, it has provided investors with financial research,
benchmarks and market data. Its most notable benchmark, the S&P 500 Composite
Stock Price Index, features utility, financial, transportation and industrial
stocks. The S&P Industrial Index, a sub-set of the S&P 500 Index, includes
only highly capitalized industrial stocks.
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 is designed for investors willing and able to assume the
risks generally associated with equity investments, and may not be
appropriate for those seeking capital preservation or high current income.
o There can be no assurance that the Portfolio or the Strategy will meet
their objectives.
o The value of your investment will fluctuate with the prices 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 tax rate of
28%.
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 basis in your units by the deferred sales charge
and the charge for organizational expenses.
Defining Your Cost
Low Initial Sales Charge/Reduced Charge for Rollovers
First-time investors pay a sales charge of about 1% when they buy. 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>
As a % of Initial
Public Offering Amount per
Sales Charges Price 1,000 Units
- ---------------------------------------------------------------------------
<S> <C> <C>
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
===========================
Maximum Sales Charge 2.75% $27.50
Estimated Annual Operating Expenses
(as a % of net assets) .289% $2.86
- ---------------------------------------------------------------------------
</TABLE>
If you sell before termination, the remaining deferred sales charges are
deducted, along with the estimated costs of selling Portfolio securities. 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.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of
your investment dollars to work for you.
<TABLE>
<CAPTION>
Total Sales Charge
as a % of the Public
Amount Purchased Offering Price
- --------------------------------------------------------------
<S> <C>
Less than $50,000 2.75%
$50,000 to $99,9999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
$1,000,000 or more 1.00%
- ---------------------------------------------------------------
</TABLE>
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 all charges and expenses. Please read the
prospectus carefully before investing.
Other Select Series
Select Ten Portfolio (DJIA)
Hong Kong Portfolio (Hang Seng Index)
Japan Portfolio (Nikkei Index)
United Kingdom Portfolio (Financial Times Index)
Select Growth Portfolio
Select S&P Intrinsic Value Portfolio
Equity Investor Funds Concept Series
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund 2
Tele-Global Trust 2
Equity Investor Funds Index Series
S&P 500 Index Trust 2
S&P MidCap Index Trust
Other Defined Asset Funds
Corporate Income Funds
Government Securities Income Funds
International Bond Funds
Municipal Income Funds
Information contained herein is subject to amendment. A registration
statement relating to the next Series of the S&P Industrial Portfolio has been
filed with the Securities and Exchange Commission. The securities of the new
offering 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.
11579BR - 10/97
[Copyright]1997 Merrill Lynch, Pierce, Fenner & Smith Incorporated, Member
SIPC.
