IRA Ideal!
Defined Asset Fund (SM)
Select Ten Portfolio
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 selecting 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.
Hypothetical Results
We analyzed the Strategy to see how it could have performed. While 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,
and would have produced a loss in five of those years, the results are still
compelling.
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* 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.
Past Performance of Prior Select Ten Portfolios
Past performance is no guarantee of future results.
<TABLE>
<S> <C> <C> <C> <C> <C>
Series From Inception Through 9/30/98 Most Recently Completed Portfolio
(including annual rollovers)
Inception Series Return Period Series Return
5/17/91 B 15.12% 5/27/97-6/30/98 B 11.29%
1/3/92 A 14.54 1/27/97-2/27/98 A 18.90
9/1/92 C 17.62 9/17/96-10/24/97 C 28.52
7/22/96 3 17.13 7/28/97-8/28/98 3 1.59
11/1/96 5 13.66 11/1/96-12/12/97 5 25.85
1/2/97 J 8.63 1/2/97-1/30/98 J 12.87
2/25/97 1 5.24 2/25/97-3/27/98 1 19.38
4/28/97 2 10.25 4/28/97-6/5/98 2 24.49
9/3/97 4 2.19
</TABLE>
The chart above shows average annual total returns which represent price
changes plus dividends reinvested, divided by the initial public offering
price, and reflects 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.
Defining Your Risks
The following are important facts to keep in mind when considering this
investment.
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 this 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 advisor concerning your personal situation.
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 S&P 500 Index (purple), the Dow Jones
Industrial Average (DJIA) (pink). 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 S&P 500 Index ($218,020), and the
ending value of the DJIA ($213,831).]
Past performance of the Strategy is no guarantee of future results of any
Portfolio. 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 following year) and estimated
expenses. 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.
Act Now!
You can get started with the Select Ten Portfolio 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 charges, expenses and
risks. Please read it carefully before you invest.
Yes! I would like more information on the Select Ten Portfolio from Defined
Asset Funds.
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.
15360NI-10/98
(copyright logo) 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
