IRA
Ideal!
Defined
Asset Funds [SM]
Select Ten Portfolio
Performance Summary
3rd Quarter o 1998
[ML logo] Merrill Lynch
THE SELECT TEN PORTFOLIO o PERFORMANCE
SUMMARY 3RD QUARTER o 1998
Select Ten Highlights
<TABLE>
<CAPTION>
Quarterly Dividends Reinvestment Affordable No Sell Decisions Tax-Efficient
<S> <C> <C> <C> <C>
You will receive You may choose to The minimum You are buying On rollovers to
four consolidated reinvest your investment is and holding for future
checks per year, not dividends at a about $250. about a year, a Portfolios, if
40 for the ten reduced sales charge Portfolio of available, you
stocks. to compound your established will defer
income. companies with recognition of
relatively high gains and losses
dividend yields. on stocks that
are transferred
to the new
Portfolio.
</TABLE>
Past Performance of Prior Select Ten Portfolios
Past Performance is no guarantee of future results.
Series From Inception Through 9/30/98
(including annual rollovers)
Inception Return
5/17/91 Series B 15.12%
1/3/92 Series A 14.54
9/1/92 Series C 17.62
7/22/96 Series 3 17.13
11/1/96 Series 5 13.66
1/2/97 Series J 8.63
2/25/97 Series I 5.24
4/28/97 Series 2 10.25
9/3/97 Series 4 2.19
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
9/17/96-10/24/97 Series C 28.52
7/28/87-8/28/98 Series 3 1.59
11/1/96-12/12/97 Series 5 25.85
1/2/97-1/30/98 Series J 12.87
2/25/97-3/27/98 Series I 19.38
4/28/97-6/5/98 Series 2 24.49
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 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)
Growth of $10,000 Invested 1/1/73 Through 9/30/98
[A mountain chart compares the hypothetical past performance of the Strategy
[*] (ochre) from 1/1/73 through 9/30/98, the Dow Jones Industrial Average (1)
(DJIA) (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 1/1/73 through
9/30/98. The vertical (Y) axis reflects the dollar amount value for each
index from 1/1/73 through 9/30/98. The initial value of each investment is
$10,000. Throughout the aforementioned period, 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 ($434,295), the ending value of the DJIA
($218,020), the ending value of the S&P 500 Index ($213,831).]
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 (with Portfolio sales charges and expenses
deducted) 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%
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, Portfolios are not fully
invested at all times and stocks may not be weighted equally.
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
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
9/30/98 0.60 0.57 6.06
Average 15.77% 12.63% 12.71%
[*] Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
following year) and estimated expenses.
(1) 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 this brochure or the prospectus relating to the
Portfolio. "S&P 500" is a trademark of The McGraw-Hill Companies, Inc.
[Logo]
SELECT TEN PORTFOLIO
DJIA
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 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]
Defined Asset Funds
Buy With Knowledge o Hold With Confidence
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. Despite recent
volatility, U.S. equity markets are still near historically high
levels. No assurance can be given that these levels will continue.
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.
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 Owning units of the Portfolio may result in annual federal, state
and local taxes, only some of which can be deferred by rolling
over into the next Portfolio. Consult your tax adviser concerning
your personal situation.
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.
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 the offer or sale is not permitted.
70109SJ-10/98
[Copyright logo] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
