IRA Ideal!
Defined
Asset Funds(sm)
Select Ten Portfolio
Performance Summary
4th Quarter o 1998
[encircled flag logo]
[bull logo] Merrill Lynch
The Select Ten Portfolio o Performance Summary 4th Quarter o 1998
Select Ten Highlights----------------------------------------------------------
o Quarterly Dividends. You will receive four consolidated checks per year,
not 40 for the ten stocks.
o Reinvestment. You may choose to reinvest your dividends at a reduced sales
charge to compound your income.
o Purchase Option. Investments start at about $250 with discounts available
for volume purchases of $50,000 or more.
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. You will defer recognition of gains and losses on stocks
that are transferred to the new Portfolio, on rollovers to future
Portfolios, if available.
Past Performance of Prior Select Ten Portfolios
Past performance is no guarantee of future results.
<PAGE>
Series From Inception Through 12/31/98
(including annual rollovers)
- -------------------------------------------------------------------------------
Inception Return
--------- ------
5/17/91 Series B 15.84%
1/3/92 Series A 15.00%
9/1/92 Series C 18.63%
7/22/96 Series 3 19.45%
11/1/96 Series 5 13.48%
1/2/97 Series J 11.84%
2/25/97 Series 1 8.92%
4/28/97 Series 2 14.33%
9/3/97 Series 4 9.37%
Most Recently Completed Portfolio
- -------------------------------------------------------------------------------
Period Return
------ ------
5/27/97--6/30/98 Series B 11.29%
1/27/97--2/27/98 Series A 18.90%
9/22/97--10/23/98 Series C 6.79%
7/28/97--8/28/98 Series 3 1.59%
11/10/97--12/18/98 Series 5 6.66%
1/2/97--1/30/98 Series J 12.87%
2/25/97--3/27/98 Series 1 19.38%
4/28/97--6/5/98 Series 2 24.49%
9/3/97--10/2/98 Series 4 2.02%
The chart above shows average annual total returns which 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
2
<PAGE>
from Most Recently Completed Portfolio because the former figures reflect a
reduced sales charge on annual rollovers and different performance periods.
Hypothetical Past Performance of the Strategy (not any Portfolio)
[Insert Mountain Graph]
For the 25 years ended 12/31/98, these figures would have been: Strategy
$483,520, DJIA $288,778 and S&P 500 Index, $309,140.
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
(with Portfolio sales charges and expenses deducted) would have underperformed
the DJIA in 13 and the S&P 500 Index in 12 of the last 26 years. There can be
no assurance that any Portfolio will outperform either index.
Average Annual Total Returns
For periods ending 12/31/98
3 year 5 year 10 year 15 year 20 year 25 year
------ ------ ------- ------- ------- -------
Strategy* 17.73% 17.51% 16.12% 16.74% 17.49% 16.78%
DJIA 23.38% 21.85% 18.53% 17.63% 17.08% 14.40%
S&P 500 Index 27.62% 23.58% 18.94% 17.67% 17.45% 14.71%
Annual Total Returns
Year Strategy* DJIA S&P 500 Index
- ---- -------- ---- -------------
1973 -4.08% -13.12% -14.66%
1974 -2.40 -23.14 -26.47
1975 55.65 44.40 36.92
1976 33.25 22.72 23.53
1977 -2.90 -12.71 -7.19
1978 -1.91 2.69 6.39
3
<PAGE>
1979 10.48 10.52 18.02
1980 24.69 21.41 31.50
1981 5.51 -3.40 -4.83
1982 23.78 25.79 20.26
1983 36.93 25.68 22.27
1984 5.41 1.06 5.95
1985 27.00 32.78 31.43
1986 32.96 26.91 18.37
1987 5.06 6.02 5.67
1988 22.44 15.95 16.58
1989 25.65 31.71 31.11
1990 -10.14 -0.57 -3.20
1991 31.81 23.93 30.51
1992 6.44 7.34 7.67
1993 25.30 16.72 9.97
1994 1.95 4.95 1.30
1995 34.97 36.48 37.10
1996 26.34 28.57 22.69
1997 19.92 24.78 33.10
1998 8.55 18.00 28.34
Average 15.95% 13.19% 13.41%
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 year ends, divided by the initial public
offering price and do not reflect 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,
4
<PAGE>
Portfolios 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
following 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 Index" 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 stocks, if available, or you can redeem
your investment at the 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 Hewlett-Packard
Aluminum Co. of IBM
America
International Paper
American Express Johnson & Johnson
AT&T J.P. Morgan & Co.
5
<PAGE>
Boeing McDonald's
Caterpillar Merck
Chevron Minnesota Mining &
Manufacturing (3M)
Citigroup
Coca-Cola Philip Morris
Du Pont Procter & Gamble
Eastman Kodak Sears Roebuck & Co.
Exxon Union Carbide
General Electric United Technologies
General Motors Wal-Mart Stores
Goodyear 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
Please keep in mind the following factors when considering this investment. 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.
o There can be no assurance that the Portfolio will meet its objective, that
dividend rates will be maintained or that stock prices will not decrease.
o The value of your investment will fluctuate with the prices of the
underlying stocks. Stock prices can be volatile.
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.
6
<PAGE>
o Owning units of the Portfolio may result in annual federal, state and
local taxes, much of which can be deferred by rolling over into the next
Portfolio. Please consult your tax advisor.
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 Portfolio, call your financial professional today.
A free prospectus containing more complete information, including all charges,
expenses and risks, is available. Please read it carefully before you invest or
send money
The information in this brochure is not complete and may be changed. We may not
sell the securities of the next Portfolio until the registration statement
filed with the Securities and Exchange Commission is effective. This brochure
is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where their offer or sale is not permitted.
[recycling logo] Printed on Recycled Paper
70109SJ-1/99
(C) 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member SIPC.
7
