IRA Ideal!
Defined
Asset Funds[SM]
Select Ten Portfolio
Performance Summary
2nd Quarter o 1998
[encircled flag logo]
A Defined
Strategy for
Total Return
[ML logo] Merrill Lynch
The Select Ten Portfolio o 2nd Quarter Performance Summary o 1998
Select Ten Highlights ----------------------------------------------------
o Reinvestment. You may choose to reinvest your dividends at a
reduced sales charge to compound your income.
o Quarterly dividends. You will receive four consolidated checks
per year, not 40 for the ten stocks.
o Affordable. The minimum investment is $250.
o No sell decisions. You are buying and holding for about a year, a
Portfolio of established companies with relatively high dividend
yields.
o Tax-efficient. On rollovers to future Portfolios, if available,
you will defer recognition of gains and losses on stocks that are
contributed to the new Portfolio.
Past Performance of Prior Select Ten Portfolios
The chart below shows average annual total returns for the following Series,
which assume annual "rollovers" into the next Portfolio. We've also included
returns for the most recently completed Portfolio of each Series.
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Series From Inception Through 6/30/98
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Inception Return
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5/17/91 Series B 16.24%
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1/3/92 Series A 16.33%
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9/1/92 Series C 20.21%
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7/22/96 Series 3 24.27%
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11/1/96 Series 5 19.25%
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1/2/97 Series J 14.26%
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2/25/97 Series 1 10.26%
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4/28/97 Series 2 16.77%
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Most Recently Completed Portfolio
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Period Return
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5/27/97--6/30/98 Series B 11.29%
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1/27/97--2/27/98 Series A 18.90%
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9/17/96--10/24/97 Series C 28.52%
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7/22/96--8/29/97 Series 3 33.68%
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11/1/96--12/12/97 Series 5 25.85%
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1/2/97--1/30/98 Series J 12.87%
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2/25/97--3/27/98 Series 1 19.38%
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4/28/97--6/5/98 Series 2 24.49%
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Past performance is no guarantee of future results. Average annual total
returns represent price changes plus dividends reinvested, divided by the
initial public offering price and reflect maximum sales charges and expenses.
Returns for Series From Inception differ from Most Recently Completed
Portfolio because the former figures reflect a reduced sales charge on
rollovers and different performance periods.
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 invested 1/1/73 through 6/30/98.
[A mountain chart compares the cumulative annual performance from 1/1/73
through 6/30/98 of the Strategy(*) (ochre), the DJIA(1) (pink) and the
S&P 500 Index(1) (purple). An ochre box in the upper left quadrant indicates
the components of the Strategy performance section of the chart ("net of
sales charges and expenses"). The horizontal (X) axis compares the
cumulative annual performance by year, from 1973 through 6/30/98. The
vertical (Y) axis reflects the dollar amount value for each index from 1978
through 6/30/98. The initial value of each investment is $10,000.
Throughout the period from 1978 through 6/30/98, increases in each
investment build towards the Y axis. At the end of this period, the Y axis
reflects the ending value of the Strategy ($458,377), the ending value of
the DJIA ($242,620) and the ending value of the S&P 500 Index ($241,866)].
Since stocks in the Portfolio were chosen solely by applying the Strategy, we
analyzed the Strategy to see how it could have performed. Past performance of
the Strategy is no guarantee of future results of any Portfolio. The Strategy
would have underperformed the DJIA in 12 and the S&P 500 Index in 11 of the
last 25 years. There can be no assurance that any Portfolio will outperform
either index.]
Average Annual Total Returns
For periods ending 12/31/97
- -----------------------------------------------------------------------------
3 year 5 year 10 year 15 year 20 year 25 year
- -----------------------------------------------------------------------------
Strategy* 26.61% 20.98% 17.52% 18.57% 16.89% 16.25%
- -----------------------------------------------------------------------------
DJIA 29.85% 21.81% 18.41% 18.21% 16.33% 13.01%
- -----------------------------------------------------------------------------
S&P 500 Index 30.82% 20.06% 17.89% 17.37% 16.41% 12.85%
- -----------------------------------------------------------------------------
Annual Total Returns
Strategy returns are net of sales charges and expenses.
- -------------------------------------------------------------------
Year Strategy* DJIA S&P 500 Index
- -------------------------------------------------------------------
1973 -4.08% -13.12% -14.66%
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1974 -2.40 -23.14 -26.47
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1975 55.65 44.40 36.92
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1976 33.25 22.72 23.53
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1977 -2.90 -12.71 -7.19
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1978 -1.91 2.69 6.39
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1979 10.48 10.52 18.02
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1980 24.69 21.41 31.50
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1981 5.51 -3.40 -4.83
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1982 23.78 25.79 20.26
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1983 36.93 25.68 22.27
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1984 5.41 1.06 5.95
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1985 27.00 32.78 31.43
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1986 32.96 26.91 18.37
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1987 5.06 6.02 5.67
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1988 22.44 15.95 16.58
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1989 25.65 31.71 31.11
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1990 -10.14 -0.57 -3.20
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1991 31.81 23.93 30.51
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1992 6.44 7.34 7.67
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1993 25.30 16.72 9.97
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1994 1.95 4.95 1.30
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1995 34.97 36.48 37.10
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1996 26.34 28.57 22.69
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1997 19.92 24.78 33.10
- -------------------------------------------------------------------
6/30/98 6.18 14.11 17.66
- -------------------------------------------------------------------
Average 16.18% 13.32% 13.31%
The results shown are hypothetical past performance of the Strategy (not any
Portfolio) and are no guarantee of future results. Returns represent price
changes plus dividends reinvested at each year end, divided by the initial
public offering price and do not reflect the deduction of any commissions or
taxes. Portfolio performance will differ from the Strategy because of
commissions, Portfolios are established and liquidated at different times
during the year, they normally purchase and sell stocks at prices different
from those used in determining Portfolio unit price, they are not fully
invested at all times and stocks may not be weighted equally.
- ------------
* Net of Portfolio sales charges (2.75% for the first year, 1.75%
for each subsequent year) and estimated expenses.
Dow Jones & Company, Inc., owner of the name "Down 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 this brochure or
the prospectus relating to the Portfolio. "S&P 500" is a
trademark of The McGraw-Hill Companies, Inc.
[encircled flag logo with "Select Ten Portfolio DJIA" written around circle]
The Select Ten Strategy
The Select Ten Portfolio employs a strategy of investing in the ten highest
dividend-yielding stocks in the DJIA and holding them for about one year. When
a Portfolio ends, you may choose to reinvest your proceeds into the next
Portfolio of the then-current Strategy, if available, or you can redeem your
investment at then-current net asset value. Although this is a one-year
investment, we recommend you stay with the Strategy for at least three to five
years for potentially more consistent results.
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. These companies are highly capitalized and
their stocks are widely held by both individual and institutional investors.
The current companies are:
Allied Signal IBM
Aluminum Co. of America International Paper
American Express Johnson & Johnson
AT&T J.P. Morgan & Co.
Boeing McDonald's
Caterpillar Merck
Chevron Minnesota Mining &
Manufacturing (3M)
Coca-Cola Philip Morris
Du Pont Procter & Gamble
Eastman Kodak Sears Roebuck & Co.
Exxon Travelers Group
General Electric Union Carbide
General Motors United Technologies
Goodyear Wal-Mart Stores
Hewlett-Packard Walt Disney
[logo: oval containing "Defined Asset Funds" inside and "Buy With Knowledge o
Hold With Confidence" wrapping around bottom edge of logo]
Defining Your Risks
The following are important facts to keep in mind when considering this
investment. Please read them carefully. Your financial professional will be
happy to answer any questions you may have.
o The Portfolio is designed for investors who can assume the risks
associated with equity investments. It may not be appropriate for
investors seeking capital preservation. U.S. equity markets have
been at historically high levels and no assurance can be given
that these levels will continue.
o There can be no assurance that the Portfolio will meet its
objective.
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.
o These stocks may have higher yields because they or their
industries are experiencing financial difficulties or are out of
favor. There can be no assurance that the market factors which
caused these relatively low prices and high yields will change.
o Generally, dividends and any gains (except to a limited extent on
rollovers) will be subject to tax each year.
Find Out More About Our Current Series
Defined Asset Funds plans to offer nine Select Ten Portfolios each year. For
details on the latest offering, or for a free brochure on the Defined Asset
Funds Select Ten (DJIA) Portfolio, call your financial professional.
A free prospectus containing more complete information, including all charges
and expenses, is available. Please read the prospectus carefully before you
invest.
Additional Select Ten Portfolios containing the then-highest dividend-yielding
stocks may be offered in the future. Information contained herein is subject
to amendment. A registration statement relating to the securities of the next
Portfolio 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 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 these 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 such state.
[recycling logo] Printed on Recycled Paper
70109SJ-7/98
[Copyright] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member
SIPC.
