IRA Ideal!
Defined
Asset Funds(SM)
Select Ten Portfolio
[encircled flag logo]
A Defined
Strategy for
Total Return
[ML Logo] Merrill Lynch
SELECTING INVESTMENTS FOR YOUR PORTFOLIO CAN BE COMPLICATED--UNLESS YOU HAVE A
STRATEGY.
Maybe you've heard of "The Dow Ten" or even "The Dogs of the Dow." However you
refer to it, this contrarian strategy of investing each year in the ten
highest dividend-yielding stocks of the Dow Jones Industrial Average(*) (DJIA)
looks for value by investing in established stocks whose prices may be
depressed. After all, to a contrarian investor, bad news can be good news,
and unfavorable developments may create special opportunities.
The Select Ten Strategy
The Portfolio seeks total return by holding the ten highest dividend-yielding
stocks of the DJIA for about one year (the "Strategy"). When a Portfolio ends,
you may choose to reinvest your proceeds into the next Portfolio, if
available, or you can redeem your investment. 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.
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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Series From Inception Most Recently
Through 6/30/98 Completed Portfolio
- ------------------------------------ -------------------------------------
Inception Series Return Period Series Return
- ------------------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C>
5/17/91 B 16.24% 5/27/97-6/30/98 B 11.29%
- ------------------------------------ -------------------------------------
1/3/92 A 16.33% 1/27/97-2/27/98 A 18.90%
- ------------------------------------ -------------------------------------
9/1/92 C 20.21% 9/17/96-10/24/97 C 28.52%
- ------------------------------------ -------------------------------------
7/22/96 3 24.27% 7/22/96-8/29/97 3 33.68%
- ------------------------------------ -------------------------------------
11/1/96 5 19.25% 11/1/96-12/12/97 5 25.85%
- ------------------------------------ -------------------------------------
1/2/97 J 14.26% 1/2/97-1/30/98 J 12.87%
- ------------------------------------ -------------------------------------
2/25/97 1 10.26% 2/25/97-3/27/98 1 19.38%
- ------------------------------------ -------------------------------------
4/28/97 2 16.77% 4/28/97-6/5/98 2 24.49%
- ------------------------------------ -------------------------------------
</TABLE>
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 Results
We analyzed the Strategy to see how it could have performed. While the
Strategy would have underperformed the DJIA in 12 and the S&P 500(*) in 11 of
the last 25 years, and would have produced a loss in five of those years, the
results are still compelling.
Defining Your Risks
The following are important facts to keep in mind when considering this
investment.
o The Portfolio is 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
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.
- ------------
(*) 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 The McGraw-Hill Companies, Inc.
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 (pink) and the S&P 500
Index (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 1973 through
6/30/98. The initial value of each investment is $10,000. Throughout the
period from 1973 through 6/30/98, increases in each investment builds
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).]
Past performance of the Strategy is no guarantee of future results of any
Portfolio. There can be no assurance that any Portfolio will outperform
either index. Results shown represent price changes plus dividends reinvested
at each year end, and do not reflect the deduction of any commissions or
taxes. Only Strategy performance reflects the deduction of Portfolio sales
charges (2.75% for the first year, 1.75% for each subsequent year) and
estimated expenses (about 0.21% a year). 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 closing prices used in determining
Portfolio unit price, Portfolios are not fully invested at all times and
stocks may not be weighted equally.
Act Now!
You can get started with the Select Ten Strategy with just $250. Simply return
the attached coupon to receive a free copy of our brochure. Ask your financial
professional for a free prospectus containing more complete information on the
Select Ten Portfolio, including all sales charges and expenses. Be sure to
read the prospectus carefully before you invest.
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.
1536ONI-7/98
[recycling logo] Printed on Recycled Paper
[Copyright] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member
SIPC.
