EQUITY INV FD SEL 10 PT 98 INTL SER 1 UK HK&J PT DEF AS FDS, 497, 1998-03-03

EQUITY INV FD SEL 10 PT 98 INTL SER 1 UK HK&J PT DEF AS FDS
497, 1998-03-03

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DEFINED ASSET FUNDSSM
- --------------------------------------------------------------------------------

EQUITY INVESTOR FUND The objective of these Defined Portfolios is total
SELECT TEN PORTFOLIO return through a combination of capital
1998 INTERNATIONAL appreciation and current dividend income.
SERIES 1 The common stocks in the United Kingdom Portfolio
UNITED KINGDOM, were selected by following a strategy that invests
HONG KONG AND for a period of about one year in the ten common
JAPAN PORTFOLIOS stocks in the Financial Times Industrial Ordinary
(UNIT INVESTMENT TRUSTS) Share Index (the FT Index) having the highest
- ------------------------------dividend yields two business days prior to the
/ / DESIGNED FOR TOTAL RETURN date of this Prospectus.
/ / DEFINED PORTFOLIOS OF 10 The common stocks in the Hong Kong Portfolio were
HIGHEST DIVIDEND YIELDING selected by following a strategy that invests for
INDEX STOCKS a period of about one year in the ten common
/ / DIVIDEND INCOME stocks in the Hang Seng Index having the highest
dividend yields two business days prior to the
date of this Prospectus.
The common stocks in the Japan Portfolio were
selected by following a strategy that invests for
a period of about one year in the ten common
stocks in the Nikkei 225 Index having the highest
dividend yields four business days prior to the
date of this Prospectus.
The Portfolios, especially the Hong Kong and Japan
Portfolios, may be considered speculative and
therefore they may be appropriate only for those
investors able and willing to assume higher price
risk and volatility and currency fluctuations. The
Portfolios should be considered as vehicles for
investing a portion of your assets in foreign
securities and not as a complete equity investment
program. The value of units will fluctuate with
the value of the common stocks in the applicable
Portfolio and with currency fluctuations and no
assurance can be given that dividends will be paid
or that the units will appreciate in value.
Unless otherwise indicated, all amounts herein are
stated in U.S. dollars computed on the basis of
the exchange rate for British pounds sterling,
Hong Kong dollars or Japanese yen, as applicable,
on February 27, 1998.
An investor may invest in Units of one or more
Portfolios.
Minimum purchase: $250 per Portfolio.

-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
SPONSORS: OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Merrill Lynch, CONTRARY IS A CRIMINAL OFFENSE.
Pierce, Fenner & Smith Inquiries should be directed to the Trustees
Incorporated listed on the back cover of this prospectus.
Smith Barney Inc. Prospectus dated February 27, 1998.
PaineWebber Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>
- --------------------------------------------------------------------------------
Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $115 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.

Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.

Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:
o Municipal bond portfolios
o Corporate bond portfolios
o Government bond portfolios
o Equity portfolios
o International bond and equity portfolios
The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.
- ---------------------------------------------------
Defining the Strategy
- ---------------------------------------------------
The Select Ten Portfolios follow a simple, time-tested Strategy: buy
approximately equal amounts of the ten highest dividend-yielding common stocks
(Strategy Stocks) of the Financial Times Industrial Ordinary Share Index, the
Hang Seng Index or Nikkei 225 Index* and hold them for about one year. At the
end of the year, each Portfolio will be liquidated and the Strategy reapplied to
that Index to select a new portfolio. As of two business days prior to the
initial date of deposit, Select Ten Portfolios hold approximately $1.1 billion
of the International Strategy Stocks. Each Select Ten Portfolio is designed to
be part of a longer term strategy and investors are advised to follow the
Strategy for at least three to five years. So long as the Sponsors continue to
offer new portfolios, investors will have the option to reinvest into a new
portfolio each year at a reduced sales charge. The Sponsors reserve the right
not to offer new portfolios.
- ---------
* The publishers of these Indexes are not affiliated with the Sponsors, have not
participated in any way in the creation of the Portfolios or in the selection of
stocks included in the Portfolios and have not reviewed or approved any
information included in this Prospectus.

The Strategy provides a disciplined approach to investing based on a buy and
hold philosophy, which ignores market timing and investment research and rejects
active management. The Sponsors anticipate that each Portfolio will remain
unchanged over its one-year life despite any adverse developments concerning an
issuer, an industry or the economy or a stock market generally.
- ---------------------------------------------------
Defining Your Risks
- ---------------------------------------------------
The Strategy Stocks, as the 10 highest dividend yielding stocks in the related
Index, generally share attributes that have caused them to have lower prices or
higher yields relative to the other stocks in those Indexes. The Strategy Stocks
may, for example, be experiencing financial difficulty, or be out of favor in
the market because of weak performance, poor earnings forecasts or negative
publicity; or they may be reacting to general market cycles. The Strategy is
therefore contrarian in nature. The Strategy Stocks are chosen solely by
application of the Strategy to determine the highest-yielding Index stocks. For
these purposes the Sponsors may consider issuer announcements of proposed
dividend reductions to eliminate stocks that have higher historic dividends. The
Portfolios do not reflect any investment recommendations of the Sponsors and one
or more of the stocks in a Portfolio may, from time to time, be subject to sell
recommendations from one or more of the Sponsors.

Hong Kong reverted to the sovereignty of The People's Republic of China
('China') on July 1, 1997. The Sponsors are unable to predict the level of
market liquidity or volatility which may prevail subsequent to the handover.
While China has committed to preserve for 50 years the economic and social
freedoms currently enjoyed in Hong Kong, there can be no assurance that China
will abide by its commitment. (See Risk Factors in Part B.)

The Portfolios are not appropriate investments for those who are not comfortable
with the Strategy. They may not be appropriate for investors seeking either
preservation of capital or high current income, nor would they be appropriate
for investors unable or unwilling to assume the increased risks of higher price
volatility and currency fluctuations associated with investments in
international equities trading in non-U.S. currencies. The Portfolios should be
considered as vehicles for investing a portion of an investor's assets in
foreign securities and not as a complete equity investment program.

There can be no assurance that the market factors that caused the relatively low
prices and high yields of the Strategy Stocks will change, that any negative
conditions adversely affecting the stock price will not deteriorate, that the
dividend rates on the Strategy Stocks will be maintained or that share prices
will not decline further during the life of a Portfolio, or that the Strategy
Stocks will continue to be included in the related Index. Investors should note
that the composition of the related Indexes may change with greater frequency
than comparable United States stock
A-2
<PAGE>
indexes and that a Strategy Stock which is deleted from the related Index or
delisted from the related stock exchange may suffer a significant decrease in
liquidity or price deterioration.

Unit price fluctuates with the value of a Portfolio, and the value of a
Portfolio could be affected by changes in the financial condition of the
issuers, changes in the various industries represented in the Portfolios,
movements in stock prices generally and in currency exchange rates, the impact
of purchase and sale of securities for a Portfolio (especially during the
primary offering period of units and during the rollover period) and other
factors. Also, the return on an investment in a Portfolio will be lower than the
hypothetical returns on Strategy Stocks because the Portfolio has sales charges,
brokerage commissions and expenses, purchases Strategy Stocks at different
prices and is not fully invested at all times and because of other factors
described under Performance Information.

Unlike mutual funds, the Portfolios are not actively managed and the Sponsors
receive no management fee. The adverse financial condition of an issuer or any
market movement in the price of a security will not require the sale of
securities from a Portfolio. Although the Sponsors may instruct the Trustee to
sell securities under certain limited circumstances, given the investment
philosophy of the Portfolios, the Sponsors are not likely to do so. The
Portfolios may continue to purchase or hold securities originally selected even
though the market value and yields on the securities may have changed or the
securities may no longer be included in the related Index.

- ---------------------------------------------------
Defining Your Investment
- ---------------------------------------------------

PUBLIC OFFERING PRICE PER 1,000 UNITS $1,000.00

The Public Offering Price as of February 27, 1998 is based on the aggregate
value of the underlying securities and any cash held to purchase securities,
divided by the number of units outstanding times 1,000, plus the initial sales
charge. The Public Offering Price on any subsequent date will vary. The
underlying securities are valued by the Trustee on every business day on the
basis of their closing sale prices (11:30 a.m. New York Time for the London
Stock Exchange, 3:30 a.m. New York time for the Hong Kong Stock Exchange and
1:00 a.m. New York Time for the Tokyo Stock Exchange).

ROLLOVER OPTION

When these Select Ten International Portfolios are about to terminate, you may
have the option to roll your proceeds into the next portfolio of the then
current Strategy Stocks. If you hold your Units with one of the Sponsors and
notify your financial adviser by March 5, 1999, your units will be redeemed and
certain distributed securities plus the proceeds from the sale of the remaining
distributed securities will be reinvested in units of a new United Kingdom, Hong
Kong or Japan Portfolio. If you decide not to roll over your proceeds, you will
receive a cash distribution (or, if you so elect, an in-kind distribution) after
the Fund terminates. Of course you can sell or redeem your Units at any time
prior to termination.

REINVESTMENT OPTION

You can elect to automatically reinvest your distributions into additional units
of a Portfolio subject only to the deferred sales charge remaining at the time
of reinvestment. Reinvesting helps to compound your income for a greater total
return.

TAXES

In the opinion of counsel, for U.S. tax purposes, you will be considered to have
received all the dividends paid on your pro rata portion of each security in a
Portfolio when those dividends are received (or deemed to be received) by the
Portfolio, even though the dividend payments may be subject to withholding taxes
or may be used to pay expenses of the Portfolio and regardless of whether you
reinvest your dividends in the Portfolio. (See U.S. Taxation in Part B.)

A-3
<PAGE>
TAX BASIS REPORTING

The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and the charge for organizational expenses. In
addition, the annual statement and the relevant tax reporting forms you receive
at year-end will be based upon the amount paid to you (net of the deferred sales
charge and the charge for organizational expenses). Accordingly, you should not
increase your basis in your units by the deferred sales charge or the charge for
organizational expenses. (See U.S. Taxation in Part B.)

TERMINATION DATE
The Portfolios will terminate by April 9, 1999. The final distribution will be
made within a reasonable time afterward. A Portfolio may be terminated earlier
if its value is less than 40% of the value of the securities when deposited.

SPONSORS' PROFIT OR LOSS

The Sponsors' profit or loss from the Portfolios will include applicable sales
charges, fluctuations in the Public Offering Price or secondary market price of
units and a gain or loss on the initial and subsequent deposits of securities
(see Defined Portfolios; Sponsors' and Underwriters' Profits in Part B).
- ---------------------------------------------------
Defining Your Costs
- ---------------------------------------------------

SALES CHARGES

First-time investors pay a maximum sales charge of 2.75% of the offering price,
of which $17.50 per 1,000 units is deferred. For example, on a $1,000
investment, 2.75% less $17.50 (or about 1%) is deducted when they buy and the
remaining $990 is invested in the Strategy Stocks. The initial sales charge is
reduced on purchases of $50,000 or more, as described in Part B. In addition, a
deferred sales charge of $1.75 per 1,000 units will be deducted from a
Portfolio's net asset value monthly beginning May 1, 1998 and thereafter on the
first of each month through February 1, 1999 ($17.50 total). This deferred
method of payment keeps more of your money invested over a longer period of
time. If you roll the proceeds of your investment into a new portfolio, you will
not be subject to the 1% initial charge, just the $17.50 deferred fee.

Although this is a unit investment trust rather than a mutual fund, the
following information is presented to permit a comparison of fees and an
understanding of the direct or indirect costs and expenses that you pay.

As a %
of Initial
Public
Offering Amount per
Price 1,000 Units
----------- -----------
Initial Sales Charge 1.000% $ 10.00
Deferred Sales Charge
per Year 1.750% 17.50
----------- -----------
Maximum Sales Charge 2.750% $ 27.50
----------- -----------
----------- -----------
Sales Charge Imposed
Per Year on Reinvested
Dividends
United Kingdom and
Hong Kong Portfolios 1.225% $ 12.25
Japan Portfolio 0.175% $ 1.75

Estimated Operating Expenses and the cumulative costs are provided below for
each Portfolio.

REDEEMING OR SELLING YOUR INVESTMENT

You may sell or redeem your units at any time prior to the termination of a
Portfolio. Your price will be based on the then current net asset value. The
redemption and secondary market repurchase price as of February 27, 1998 was
$972.50 per 1,000 units ($27.50 per 1,000 units less than the Public Offering
Price). This price reflects deductions of the deferred sales charge which
declines over the last ten months of a Portfolio ($17.50 initially). If you sell
your units before the termination of the Portfolio, you will pay the remaining
balance of the deferred sales charge. In addition, after the initial offering
period, the repurchase and cash redemption prices for units will be further
reduced to reflect the estimated costs of liquidating securities to meet the
redemption. If you reinvest in a new Portfolio, you will pay your share of any
brokerage commissions on the sale of underlying securities when your units are
liquidated during the rollover.

A-4
<PAGE>
- ---------------------------------------------------
Defining Your United Kingdom Portfolio
- ---------------------------------------------------

Based upon the principal business of each issuer and current market values, the
following industries are represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE

/ / Chemicals 20%
/ / Conglomerate 20
/ / Building & Construction 10
/ / Sugar 10
/ / Telecommunications 10
/ / Transportation/Marine 10
/ / Utilities/Electric 10
/ / Wines/Spirits 10

The United Kingdom Portfolio is not considered to be concentrated in any
particular industry, and all of the stocks represent United Kingdom issuers.

U.K. TAXES

The Portfolio will report as gross income each investor's pro rata share of
dividends earned by the Portfolio grossed-up to reflect the payment of certain
U.K. taxes by the relevant U.K. company. The U.K Inland Revenue have approved a
special procedure under which the Trustee may claim a refund of a portion of
such U.K. taxes under the U.S.-U.K. Treaty on behalf of investors. (See United
Kingdom Taxation in Part B.)

ESTIMATED ANNUAL OPERATING EXPENSES

AS A % OF AMOUNT PER
NET ASSETS 1,000 UNITS
----------- -----------
Trustee's Fee .090% $ 0.89
Portfolio Supervision,
Bookkeeping and
Administrative Fees .045 0.45
Organizational Expenses .199 1.97
Other Operating
Expenses .100 0.99
----------- -----------
TOTAL .434% $ 4.30

The Portfolio (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds.

These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:

1 Year 3 Years 5 Years 10 Years
$32 $78 $127 $261

Although the Portfolio has a term of only one year and is a unit investment
trust rather than a mutual fund, this information is presented to permit a
comparison of fees, assuming the principal amount and distributions are rolled
over each year into a new Series subject only to the deferred sales charge and
fund expenses.

This example assumes reinvestment of all dividends and distributions and uses a
5% annual rate of return as mandated by SEC regulations applicable to mutual
funds. For purposes of the example, the deferred sales charge imposed on
reinvestment of dividends is not reflected until the year following payment of
the dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment.

The example should not be considered a representation of past or future expenses
or annual rates of return; the actual expenses and annual rates of return may be
more or less than the example. Reductions to the repurchase and cash redemption
prices in the secondary market to recoup the costs of liquidating securities to
meet redemption, currently estimated at $1.99 per 1,000 units, have not been
reflected.

SEMI-ANNUAL DISTRIBUTIONS

You will receive distributions of any dividend income, net of expenses, on the
25th of July, 1998 and January, 1999, if you own units on the 10th of those
months.

A-5
<PAGE>
- --------------------------------------------------------------------------------
Defined United Kingdom Portfolio
- --------------------------------------------------------------------------------

Equity Investor Fund
Select Ten Portfolio 1998 International Series 1 February 27, 1998
United Kingdom Portfolio

PRICE
PER SHARE COST
PERCENTAGE CURRENT TO PORTFOLIO TO PORTFOLIO
OF PORTFOLIO DIVIDEND YIELD IN IN U.S.
NAME OF ISSUER (1) (2) U.S. DOLLARS DOLLARS (3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>

1. BTR PLC 9.94% 6.82% $ 2.653 $ 28,125.71
2. Courtaulds PLC 10.02 4.71 5.784 28,341.27
3. Allied Domecq PLC 9.88 4.17 9.634 27,939.77
4. Peninsular & Oriental Steam
Navigation Company 10.02 3.90 12.876 28,327.28
5. Blue Circle Industries PLC 10.54 3.84 5.846 29,812.76
6. Scottish Power PLC 9.94 3.69 8.524 28,128.18
7. Tate and Lyle PLC 9.79 3.48 8.655 27,697.06
8. General Electric Company PLC 9.93 3.36 6.533 28,090.33
9. British Telecommunications PLC 9.99 3.18 10.095 28,266.40
10. BOC Group PLC 9.95 3.16 15.632 28,138.05
-------------- --------------
100.00% $ 282,866.81
-------------- --------------
-------------- --------------
</TABLE>

- ----------------------------
(1) Based on Cost to Portfolio in U.S. dollars.
(2) Current Dividend Yield for each security was generally calculated by adding
the most recent interim and final dividends declared on the security and
dividing the result by its market value as of the close of trading on
February 27, 1998.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on February 27, 1998, the initial date of deposit, converted
into U.S. dollars on the offer side of the exchange rate at the evaluation
time on that date. The value of the Securities on any subsequent business
day will vary. Loss to the Sponsors on deposit of the Securities was
$1,983.67.

----------------------------

The securities were acquired on February 27, 1998 and are represented entirely
by contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or co-managers of a public offering of the securities in
this Portfolio during the last three years. Affiliates of the Sponsors may serve
as specialists in the securities in this Portfolio on one or more stock
exchanges and may have a long or short position in any of these securities or in
options on any of them, and may be on the opposite side of public orders
executed on the floor of an exchange where the securities are listed. An
officer, director or employee of any of the Sponsors may be an officer or
director of one or more of the issuers of the securities in the Portfolio. A
Sponsor may trade for its own account as an odd-lot dealer, market maker, block
positioner and/or arbitrageur in any of the securities or in options on them.
Any Sponsor, its affiliates, directors, elected officers and employee benefits
programs may have either a long or short position in any securities or in
options on them.

A-6
<PAGE>
- --------------------------------------------------------------------------------
Past Performance of Prior United Kingdom Portfolios
- --------------------------------------------------------------------------------

Select United Kingdom Portfolios, first available in 1993, are now offered in
various cycles -- or Series -- each starting at different times during a year.
The following table shows the actual performance of each Portfolio of five of
these Series. The table also shows the Average Annual Total Return and the
Cumulative Total Return for these five Series. These past performance returns
reflect an investment made in the initial Portfolio of each Series and assume
annual rollovers into successor Portfolios of the same Series. Past performance
of the Portfolios and the Series is no guarantee of future results of the Select
Ten Strategy or of any Portfolio currently offered.

ANNUALIZED
-------------------------------------------- CUMULATIVE
DIVIDEND TOTAL TOTAL
SERIES A TERM YIELD(1) APPRECIATION(2) RETURN(3) RETURN
- -------------------- ------------------ ---------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>

1994 1/5/94-2/3/95 3.28% -7.27% -3.99%
1995 1/9/95-2/23/96 3.94 1.94 5.88
1996 1/22/96-2/28/97 4.26 -1.48 2.78
Average Annual
Total Return(4) 1/5/94-12/31/97 -- -- 4.70
Cumulative
Total Return 1/5/94-12/31/97 -- -- -- 20.10%*
SERIES B
- --------------------
1993** 6/21/93-7/22/94 3.61 10.34 13.95
1994 5/6/94-6/16/95 4.61 3.38 7.99
1995 5/10/95-6/28/96 3.88 -14.05 -10.17
1996 5/20/96-6/27/97 4.74 13.89 18.63
Average Annual
Total Return(4) 6/21/93-12/31/97 -- -- 10.07
Cumulative
Total Return 6/21/93-12/31/97 -- -- -- 54.45%*
SERIES C
- --------------------
1993 9/28/93-10/28/94 3.95 5.74 9.69
1994 9/7/94-10/13/95 4.32 -6.58 -2.26
1995 9/12/95-10/31/96 4.70 -3.42 1.28
1996 9/17/96-10/24/97 6.19 15.96 22.15
Average Annual
Total Return(4) 9/28/93-12/31/97 -- -- 7.81
Cumulative
Total Return 9/28/93-12/31/97 -- -- -- 37.74%*
SERIES 3
- --------------------
1996 7/22/96-8/29/97 6.47 11.54 18.01
Average Annual
Total Return(4) 7/22/96-12/31/97 -- -- 24.13
Cumulative
Total Return 7/22/96-12/31/97 -- -- -- 36.63%*
SERIES 5
- --------------------
1996 11/1/96-12/12/97 6.62 11.88 18.50
Average Annual
Total Return(4) 11/1/96-12/31/97 -- -- 17.01
Cumulative
Total Return 11/1/96-12/31/97 -- -- -- 20.08%*

</TABLE>

(3) Appreciation plus Dividend Yield. Reflects reinvestment of dividends,
deduction of maximum applicable sales charges and ongoing expenses, but no
adjustment for taxes payable.

(4) Average Annual Total Return for a Series includes the brokerage commissions
paid in selling securities received in kind on annual rollovers and the
waiver of any up-front sales charge on those rollovers.

* These figures are not annualized.

** 1993 Series A rolled into 1994 Series B.

A-7
<PAGE>
- --------------------------------------------------------------------------------
Hypothetical Performance Information--FT Strategy
- --------------------------------------------------------------------------------

Select Ten United Kingdom Portfolios are based on a strategy of investing equal
amounts in the 10 highest dividend-yielding stocks ('Strategy Stocks') in the FT
Index each year. Although the Strategy Stocks underperformed the FT Index in six
of the last 20 years (eight years if Portfolio sales charges and expenses were
deducted from Strategy Stock performance), their total return over the entire
period outperformed the FT Index. This is why the Sponsors recommend following
the Strategy for at least three to five years. The results below are
hypothetical for the following reasons: None of these figures reflects
reinvestment of dividends or any sales charges, expenses or brokerage
commissions which investors in the Portfolio bear. Portfolio performance will
also differ from the hypothetical performance of Strategy Stocks because the
Select Ten United Kingdom Portfolios are established at various times during a
year, Portfolios may not be fully invested at all times or equally weighted in
all 10 stocks, and their stocks are normally purchased or sold at prices and
currency exchange rates different from the closing prices and currency exchange
rates used in buying and selling Portfolio units. Past performance is no
guaranty of future results of the Strategy or any Select Ten United Kingdom
Portfolio.
COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN
(FIGURES REFLECT CONVERSION INTO U.S. DOLLARS AT APPLICABLE CURRENCY EXCHANGE
RATES
BUT NOT SALES CHARGES, FUND EXPENSES, COMMISSIONS OR TAXES)

FT STRATEGY STOCKS(1) FT INDEX*
---------------------------------------------------------- ----------------------------------------------------------
ACTUAL DIVIDEND TOTAL ACTUAL DIVIDEND TOTAL
YEAR APPRECIATION(2) YIELD(3) RETURN(4) APPRECIATION(2) YIELD(3) RETURN(4)
- ---- -------------- ---------------------- -------------- -------------- ---------------------- --------------
<S> <C> <C> <C> <C> <C> <C>

1978 7.22% 10.51% 17.73% 3.57% 6.35% 9.92%
1979 -5.75 10.51 4.76 -3.94 7.53 3.59
1980 16.49 13.66 30.15 22.57 9.20 31.77
1981 -14.02 7.76 -6.26 -10.36 5.06 -5.30
1982 34.04 9.99 44.03 -4.41 4.83 0.42
1983 34.17 7.89 42.06 16.60 5.34 21.94
1984 -0.85 6.35 5.50 -2.26 4.41 2.15
1985 69.36 9.28 78.64 48.25 6.49 54.74
1986 26.35 6.53 32.88 19.14 5.22 24.36
1987 40.49 7.61 48.10 32.97 6.02 38.99
1988 5.19 6.19 11.38 1.62 5.12 6.74
1989 22.08 6.63 28.71 17.57 5.23 22.80
1990 1.91 7.35 9.26 4.31 5.98 10.29
1991 8.70 7.87 16.57 9.36 5.29 14.65
1992 -1.41 5.68 4.27 -6.33 4.00 -2.33
1993 31.55 6.14 37.69 14.24 4.16 18.40
1994 0.42 5.04 5.46 -2.43 4.32 1.89
1995 5.20 5.63 10.83 13.07 4.56 17.63
1996 7.98 6.31 14.29 15.33 4.72 20.05
1997 4.84 7.27 12.11 12.38 4.60 16.98
</TABLE>

Changes in the exchange rates of the pound sterling relative to the U.S. dollar
affected these figures significantly in certain years. These changes ranged from
minus 25% in 1981 and 1984 to plus 21% in 1987, and averaged minus 1.6535% over
the last 20 years. See Foreign Currency Exchange Rates table under Risk Factors
in Part B.
- ----------------------------
* Source: Datastream International, Inc. The Sponsors have not independently
verified these data, but they have no reason to believe these data are
incorrect in any material respect.
(1) The FT Strategy Stocks for any given year were selected by ranking the
dividend yields for each of the stocks in the FT Index as of the beginning
of that year, as provided by Datastream International Inc. The yields were
generally computed by adding together the interim and final dividends for
each of the stocks (these companies generally pay one interim and a final
dividend per fiscal year) declared in the preceding year divided by that
stock's market value on the first trading day that year on the London Stock
Exchange.
(2) Appreciation for the Strategy Stocks is calculated by subtracting the market
value of these stocks at the opening value on the first trading day on the
London Stock Exchange in a given year from the market value of those stocks
at the closing value on the last trading day in the year, and dividing the
result by the market value of the stocks at the opening value on the first
trading day in that year. Appreciation for the FT Index is calculated by
subtracting the opening value of the FT Index on the first trading day in
each year from the closing value of the FT Index on the last trading day in
the year, and dividing the result by the opening value of the FT Index on
the first trading day in that year.
(3) Actual Dividend Yield for the FT Strategy Stocks is calculated by adding the
total dividends received on the stocks in the year and dividing the result
by the market value of the stocks on the first trading day in that year.
Actual Dividend Yield for the FT Index is calculated by taking the total
dividends credited to the FT Index and dividing the result by the opening
value of the FT Index on the first trading day of the year.
(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Individual year Total Returns do not take into consideration any
reinvestment of dividend income.

A-8
<PAGE>
- ---------------------------------------------------
Defining Your Hong Kong Portfolio
- ---------------------------------------------------

Based upon the principal business of each issuer and current market values, the
following industries are represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE

/ / Real Estate/Property 70%
/ / Airline 9
/ / Diversified Operations 11
/ / Hotels/Motels 10

The Hong Kong Portfolio is highly concentrated in Real Estate and Property
stocks. All of the stocks represent Hong Kong issuers. Investors should note
that Hong Kong reverted to Chinese sovereignty on July 1, 1997. Events
subsequent to the handover may adversely affect real estate or property values
or the market value of Hong Kong stocks generally. (See Risk Factors in Part B.)

ESTIMATED ANNUAL OPERATING EXPENSES

AS A % OF AMOUNT PER
NET ASSETS 1,000 UNITS
----------- -----------
Trustee's Fee .091% $ 0.90
Portfolio Supervision,
Bookkeeping and
Administrative Fees .045 0.45
Organizational Expenses .276 2.73
Other Operating
Expenses .167 1.65
----------- -----------
TOTAL .579% $ 5.73

These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:

1 Year 3 Years 5 Years 10 Years
$34 $82 $134 $276

SEMI-ANNUAL DISTRIBUTIONS

You will receive distributions of any dividend income, net of expenses, on the
25th of July, 1998 and January, 1999 if you own units on the 10th of those
months.

A-9
<PAGE>
- --------------------------------------------------------------------------------
Defined Hong Kong Portfolio
- --------------------------------------------------------------------------------

Equity Investor Fund
Select Ten Portfolio 1998 International Series 1 February 27, 1998
Hong Kong Portfolio

1. Cathay Pacific Airways Ltd. 9.49% 7.97% $ 0.859 $ 30,053.59
2. Hysan Development Co., Ltd. 10.22 7.86 1.905 32,377.82
3. Henderson Land Development Co.,
Ltd. 9.88 7.62 5.217 31,299.63
4. Amoy Properties Ltd. 10.14 7.18 0.846 32,138.94
5. Sino Land Co. 10.25 7.03 0.478 32,487.57
6. The Wharf (Holdings) Ltd. 10.53 6.93 2.085 33,365.61
7. Hang Lung Development Co., Ltd. 9.71 6.56 1.466 30,776.68
8. Henderson Investment Ltd. 9.80 6.46 0.839 31,054.30
9. The Hong Kong and Shanghai
Hotels, Ltd. 9.76 5.71 0.859 30,912.26
10. Great Eagle Holdings Ltd. 10.22 5.61 1.472 32,384.27
-------------- --------------
100.00% $ 316,850.67
-------------- --------------
-------------- --------------
</TABLE>

- ----------------------------
(1) Based on Cost to Portfolio in U.S. dollars.
(2) Current Dividend Yield for each security was calculated by adding the most
recent interim and final dividends declared on the security and dividing the
result by its market value as of the close of trading on February 27, 1998.
(3) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on February 27, 1998, the initial date of deposit, converted
into U.S. dollars on the offer side of the exchange rate at the evaluation
time on that date. The value of the Securities on any subsequent business
day will vary. Loss to the Sponsors on deposit of the Securities was
$1,585.13.

----------------------------

A-10
<PAGE>
- --------------------------------------------------------------------------------
Past Performance of Prior Hong Kong Portfolios
- --------------------------------------------------------------------------------

Select Ten Hong Kong Portfolios, first available in 1993, are now offered in
various cycles -- or Series -- each starting at different times during a year.
The following table shows the actual performance of each Portfolio of six of
these Series. The table also shows the Average Annual Total Return and the
Cumulative Total Return for these six Series. These past performance returns
reflect an investment made in the initial Portfolio of each Series and assume
annual rollovers into successor Portfolios of the same Series. Past performance
of the Portfolios and the Series is no guarantee of future results of the Select
Ten Strategy or of any Portfolio currently offered.

ANNUALIZED
--------------------------------------------- CUMULATIVE
DIVIDEND TOTAL TOTAL
SERIES A TERM YIELD(1) APPRECIATION(2) RETURN(3) RETURN
- -------------------- ------------------ ---------- -------------- ------------- ----------
<S> <C> <C> <C> <C> <C>

1994 1/5/94-2/3/95 2.75% -45.93% -43.18%
1995 1/9/95-2/23/96 5.18 31.56 36.74
1996 1/22/96-2/28/97 3.60 4.43 8.03
Average Annual
Total Return(4) 1/5/94-12/31/97 -- -- -9.72
Cumulative
Total Return 1/5/94-12/31/97 -- -- -- -33.50%*
SERIES B
- --------------------
1996 4/23/96-6/13/97 4.89 1.19 6.08
Average Annual
Total Return(4) 4/23/96-12/31/97 -- -- -14.11
Cumulative
Total Return 4/23/96-12/31/97 -- -- -- -22.68%*
SERIES C
- --------------------
1993 6/21/93-7/22/94 4.66 12.72 17.38
1994 5/9/94-6/16/95 4.52 -10.86 -6.34
1995** 5/10/95-6/28/96 4.27 13.86 18.13
1996 5/20/96-6/27/97 4.29 5.41 9.70
Average Annual
Total Return(4) 6/21/93-12/31/97 -- -- -0.68
Cumulative
Total Return 6/21/93-12/31/97 -- -- -- -3.05%*
SERIES D
- --------------------
1993 9/28/93-10/28/94 5.03 2.29 7.32
1994 9/7/94-10/13/95 4.46 -29.71 -25.25
1995*** 9/12/95-10/31/96 4.80 15.88 20.68
1996 9/27/96-10/24/97 4.65 -20.52 -15.87
Average Annual
Total Return(4) 9/28/93-12/31/97 -- -- -5.16
Cumulative
Total Return 9/28/93-12/31/97 -- -- -- -20.20%*
SERIES 3
- --------------------
1996 7/22/96-8/29/97 4.41 -2.28 2.13
Average Annual
Total Return(4) 7/22/96-12/31/97 -- -- -16.42
Cumulative
Total Return 7/22/96-12/31/97 -- -- -- -22.82%*
SERIES 5
- --------------------
1996 11/1/96-12/12/97 4.69 -30.28 -25.59
Average Annual
Total Return(4) 11/1/96-12/31/97 -- -- -27.13
Cumulative
Total Return 11/1/96-12/31/97 -- -- -- -30.83%*

</TABLE>

- ----------------------------
(1) Dividends paid on the securities to the Portfolio less ongoing expenses,
divided by maximum initial public offering price.
(2) Represents the difference between initial unit price and redemption or
liquidation price on the ending date (reflecting payment of deferred sales
charges, brokerage commissions paid by the Portfolio and, beginning with
1995 Series B, organization expenses, and assumes reinvestment of dividends
on the distribution dates), divided by the maximum initial public offering
price.
(3) Appreciation plus Dividend Yield. Reflects reinvestment of dividends,
deduction of maximum applicable sales charges and ongoing expenses, but no
adjustment for taxes payable.
(4) Average Annual Total Return for a Series includes the brokerage commissions
paid in selling securities received in kind on annual rollovers and the
waiver of any up-front sales charge on those rollovers.
* These figures are not annualized.
** 1995 Series B rolled into 1996 Series C.
*** 1995 Series C rolled into 1996 Series D.

A-11
<PAGE>
- --------------------------------------------------------------------------------
Hypothetical Stock Performance Information--Hang Seng Strategy
- --------------------------------------------------------------------------------

Select Ten Hong Kong Portfolios are based on a strategy of investing equal
amounts in the 10 highest dividend-yielding stocks ('Strategy Stocks') in the
Hang Seng Index each year. The Strategy Stocks underperformed the Hang Seng
Index in 9 of the last 20 years (10 years if Portfolio sales charges and
expenses were deducted from Strategy Stock performance). This is why the
Sponsors recommend following the Strategy for at least three to five years. Only
the average annualized total return figures at the bottom of each column reflect
reinvestment of dividends (at the end of each year). The results below are
hypothetical for the following reasons: None of these figures reflects any sales
charges, expenses or brokerage commissions which investors in the Portfolio
bear. Portfolio performance will also differ from the hypothetical performance
of Strategy Stocks because the Select Ten Hong Kong Portfolios are established
at various times during a year, Portfolios may not be fully invested at all
times or equally weighted in all 10 stocks, and their stocks are normally
purchased or sold at prices and currency exchange rates different from the
closing prices and currency exchange rates used in buying and selling Portfolio
units. Past performance is no guaranty of future results of the Strategy or any
Select Ten Hong Kong Portfolio. In addition, the Hang Seng Index is weighted by
market capitalization while the Portfolio stocks are more or less equally
weighted. While the Hong Kong dollar exchange rate has been pegged to the U.S.
dollar since 1983, there can no assurance that this arrangement will continue in
the future.

COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN

(FIGURES REFLECT CONVERSION INTO U.S. DOLLARS AT APPLICABLE CURRENCY EXCHANGE
RATES
BUT NOT SALES CHARGES, FUND EXPENSES, COMMISSIONS OR TAXES)

HANG SENG STRATEGY STOCKS(1) HANG SENG INDEX*
---------------------------------------------------------- ----------------------------------------------------------
ACTUAL DIVIDEND TOTAL ACTUAL DIVIDEND TOTAL
YEAR APPRECIATION(2) YIELD(3) RETURN(4) APPRECIATION(2) YIELD(3) RETURN(4)
- ---- -------------- ---------------------- -------------- -------------- ---------------------- --------------
<S> <C> <C> <C> <C> <C> <C>

1978 19.82% 8.22% 28.04% 17.83% 5.68% 23.51%
1979 72.63 9.65 82.28 72.27 6.06 78.33
1980 34.03 7.37 41.40 61.60 4.23 65.83
1981 -10.94 7.08 -3.86 -13.75 2.68 -11.07
1982 -46.13 7.16 -38.97 -51.24 3.45 -47.79
1983 -15.40 7.92 -7.48 -6.92 6.03 -0.89
1984 53.82 11.50 65.32 36.45 6.09 42.54
1985 40.25 7.27 47.52 46.33 4.77 51.10
1986 54.50 5.99 60.49 46.90 4.26 51.16
1987 -2.15 5.18 3.03 -10.06 3.33 -6.73
1988 28.02 6.02 34.04 16.07 4.53 20.60
1989 2.66 6.75 9.41 5.55 4.64 10.19
1990 -1.93 8.04 6.11 6.71 5.28 11.99
1991 40.07 8.44 48.51 42.41 5.84 48.25
1992 32.08 6.86 38.94 28.87 4.76 33.63
1993 100.80 6.19 106.99 116.14 4.97 121.11
1994 -34.93 3.48 -31.45 -31.22 2.39 -28.83
1995 10.25 5.86 16.11 23.03 3.92 26.95
1996 23.19 4.63 27.82 33.52 4.21 37.73
1997 -18.57 4.49 -14.08 -20.41 2.08 -18.33

</TABLE>

(1) The Hang Seng Strategy Stocks for any given year were selected by ranking
the dividend yields for each of the stocks in the Hang Seng Index as of the
beginning of that year, as provided by Datastream International Inc. The
yields were generally computed by adding together the interim and final
dividends for each of the stocks (these companies generally pay one interim
and a final dividend per fiscal year) declared in the preceding year divided
by that stock's market value on the first trading day that year on the Hong
Kong Stock Exchange.

(2) Appreciation for the Hang Seng Strategy Stocks is calculated by subtracting
the market value of these stocks at the opening value on the first trading
day on the London Stock Exchange in a given year from the market value of
those stocks at the closing value on the last trading day in the year, and
dividing the result by the market value of the stocks at the opening value
on the first trading day in that year. Appreciation for the Hang Seng Index
is calculated by subtracting the opening value of the Hang Seng Index on the
first trading day in each year from the closing value of the Hang Seng Index
on the last trading day in the year, and dividing the result by the opening
value of the Hang Seng Index on the first trading day in that year.

(3) Actual Dividend Yield for the Hang Seng Strategy Stocks is calculated by
adding the total dividends received on the stocks in the year and dividing
the result by the market value of the stocks on the first trading day in
that year. Actual Dividend Yield for the Hang Seng Index is calculated by
taking the total dividends credited to the Hang Seng Index and dividing the
result by the opening value of the Hang Seng Index on the first trading day
of the year.

(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Individual year Total Returns do not take into consideration any
reinvestment of dividend income.

A-12
<PAGE>
- ---------------------------------------------------
Defining Your Japan Portfolio
- ---------------------------------------------------

Based upon the principal business of each issuer and current market values, the
following industries are represented in the Portfolio:
APPROXIMATE
PORTFOLIO PERCENTAGE

/ / Construction/Engineering 20%
/ / Oil/Gas 20
/ / Electrical Products 10
/ / Financial Services/Banking 10
/ / Industrial Machinery 10
/ / Retail 10
/ / Textile Products 10
/ / Utilities/Gas and Electric 10
The Japan Portfolio is not considered to be concentrated in any particular
industry. All of the stocks represent Japanese issuers. (See Risk Factors in
Part B.)

JAPANESE TAXES

The Portfolio will report as gross income each investor's pro rata share of
dividends earned by the Portfolio as well as Japanese tax withheld from these
dividends. Since the national tax authority of Japan has not granted approval
for the Trustee to file a specified application under the U.S-Japan Treaty on
behalf of investors, investors may not in practice be able to benefit from a
reduced withholding rate provided by the Treaty. (See Japanese Taxation in Part
B.)

ESTIMATED ANNUAL OPERATING EXPENSES

AS A % OF AMOUNT PER
NET ASSETS 1,000 UNITS
----------- -----------
Trustee's Fee .091% $ 0.90
Portfolio Supervision,
Bookkeeping and
Administrative Fees .046 0.45
Organizational
Expenses .295 2.92
Other Operating Ex-
penses .139 1.38
----------- -----------
TOTAL .571% $ 5.65

These estimates do not include the costs of purchasing and selling the
underlying Strategy Stocks.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
a 5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:

1 Year 3 Years 5 Years 10 Years
$33 $82 $134 $275

ANNUAL DISTRIBUTION

You will receive a distribution of any dividend income, net of expenses, on the
25th of January, 1999, if you own units on the 10th of that month.

A-13
<PAGE>
- --------------------------------------------------------------------------------
Defined Japan Portfolio
- --------------------------------------------------------------------------------

Equity Investor Fund
Select Ten Portfolio 1998 International Series 1 February 27, 1998
Japan Portfolio

1. Tonen Corporation 9.77% 2.82% $ 6.694 $ 33,469.84
2. Nippon Shinpan Co., Ltd. 9.85 2.54 1.985 33,737.60
3. Japan Energy Corporation 10.06 2.29 1.378 34,454.24
4. Fujita Corporation 10.00 2.21 1.142 34,257.35
5. Tokyu Department Store Co., Ltd. 10.61 1.98 1.914 36,360.06
6. Chubu Electric Power Co., Inc. 9.75 1.98 15.908 33,406.84
7. Furukawa Co., Ltd. 9.69 1.94 1.953 33,202.08
8. Toyobo, Ltd. 10.24 1.89 1.670 35,060.64
9. Mitsubishi Electric Corporation 9.71 1.88 3.024 33,265.08
10. Toa Corporation 10.32 1.82 2.079 35,344.15
-------------- --------------
100.00% $ 342,557.88
-------------- --------------
-------------- --------------
</TABLE>

----------------------------

A-14
<PAGE>
- --------------------------------------------------------------------------------
Past Performance of Prior Japan Portfolios
- --------------------------------------------------------------------------------

Select Ten Japan Portfolios, first available in 1996, are now offered in various
cycles -- or Series -- each starting at different times during a year. The
following table shows the actual performance of each Portfolio of five of these
Series. The table also shows the Average Annual Total Return and the Cumulative
Total Return for these five Series. These past performance returns reflect an
investment made in the initial Portfolio of each Series and assume annual
rollovers into successor Portfolios of the same Series. Past performance of the
Portfolios and the Series is no guarantee of future results of the Select Ten
Strategy or of any Portfolio currently offered.

1996 1/22/96-2/28/97 0.89% -30.42% -29.53%
Average Annual
Total Return(4) 1/22/96-12/31/97 -- -- -34.61
Cumulative
Total Return 1/22/96-12/31/97 -- -- -- -56.18%*
SERIES B
- --------------------
1996 5/20/96-6/27/97 0.79 -22.25 -21.46
Average Annual
Total Return(4) 5/20/96-12/31/97 -- -- -44.58
Cumulative
Total Return 5/20/96-12/31/97 -- -- -- -61.48%*
SERIES 3
- --------------------
1996 7/22/96-8/29/97 0.70 -29.53 -28.83
Average Annual
Total Return(4) 7/22/96-12/31/97 -- -- -48.39
Cumulative
Total Return 7/22/96-12/31/97 -- -- -- -61.52%*
SERIES C
- --------------------
1996 9/17/96-10/24/97 1.21 -40.36 -39.15
Average Annual
Total Return(4) 9/17/96-12/31/97 -- -- -52.26
Cumulative
Total Return 9/17/96-12/31/97 -- -- -- -61.40%*
SERIES 5
- --------------------
1996 11/1/96-12/12/97 0.95 -41.93 -40.98
Average Annual
Total Return(4) 11/1/96-12/31/97 -- -- -53.16
Cumulative
Total Return 11/1/96-12/31/97 -- -- -- -58.65%*

</TABLE>

(3) Appreciation plus Dividend Yield. Reflects reinvestment of dividends,
deduction of maximum applicable sales charges and ongoing expenses, but no
adjustment for taxes payable.

* These figures are not annualized.

A-15
<PAGE>
- --------------------------------------------------------------------------------
Hypothetical Performance Information--Nikkei 225 Strategy
- --------------------------------------------------------------------------------

Select Ten Japan Portfolios are based on a strategy of investing equal amounts
in the 10 highest dividend-yielding stocks ('Strategy Stocks') in the Nikkei 225
Index each year. Although the Strategy Stocks underperformed the Nikkei 225
Index in eight of the last 20 years (nine years if Portfolio sales charges and
expenses were deducted from Strategy Stock performance), their total return over
the entire period outperformed the Nikkei 225 Index. This is why the Sponsors
recommend following the Strategy for at least three to five years. The results
below are hypothetical for the following reasons: None of these figures reflects
reinvestment of dividends or any sales charges, expenses or brokerage
commissions which investors in the Portfolio bear. Portfolio performance will
also differ from the hypothetical performance of Strategy Stocks because the
Select Ten Japan Portfolios are established at various times during a year,
Portfolios may not be fully invested at all times or equally weighted in all 10
stocks, and their stocks are normally purchased or sold at prices and currency
exchange rates different from the closing prices and currency exchange rates
used in buying and selling Portfolio units. Past performance is no guaranty of
future results of the Strategy or any Select Ten Japan Portfolio.

COMPARISON OF DIVIDENDS, APPRECIATION AND TOTAL RETURN

(FIGURES REFLECT CONVERSION INTO U.S. DOLLARS AT APPLICABLE EXCHANGE RATES
BUT NOT SALES CHARGES, FUND EXPENSES, COMMISSIONS OR TAXES)

NIKKEI STRATEGY STOCKS(1) NIKKEI 225 INDEX*
---------------------------------------------------------- ----------------------------------------------------------
ACTUAL DIVIDEND TOTAL ACTUAL DIVIDEND TOTAL
YEAR APPRECIATION(2) YIELD(3) RETURN(4) APPRECIATION(2) YIELD(3) RETURN(4)
- ---- -------------- ---------------------- -------------- -------------- ---------------------- --------------
<S> <C> <C> <C> <C> <C> <C>

1978 69.05% 3.05% 72.10% 52.35% 2.97% 55.32%
1979 -3.31 2.42 -0.89 -11.49 1.49 -10.00
1980 34.72 4.21 38.93 27.20 2.27 29.47
1981 14.89 3.55 18.44 0.49 1.71 2.20
1982 -5.61 3.07 -2.54 -2.26 1.49 -0.77
1983 27.00 4.04 31.04 25.01 2.07 27.08
1984 -0.05 3.16 3.11 7.43 1.49 8.92
1985 49.46 3.55 53.01 42.41 1.78 44.19
1986 75.32 2.51 77.83 81.97 1.81 83.78
1987 91.23 2.44 93.67 49.58 1.13 50.71
1988 61.43 1.61 63.04 35.60 0.97 36.57
1989 21.99 0.97 22.96 12.21 0.59 12.80
1990 -41.87 0.88 -40.99 -35.08 0.29 -34.79
1991 5.35 1.55 6.90 4.74 0.82 5.56
1992 -17.66 1.49 -16.17 -26.33 0.57 -25.76
1993 19.55 1.97 21.52 14.87 1.07 15.94
1994 26.11 1.88 27.99 27.16 1.14 28.30
1995 -6.31 1.33 -4.98 -2.99 0.69 -2.30
1996 -18.29 1.51 -16.78 -13.00 0.57 -12.43
1997 -40.71 1.52 -39.19 -30.27 0.56 -29.71

</TABLE>

Changes in the exchange rates of the Japanese yen relative to the U.S. dollar
affected these figures significantly. These changes ranged from minus 23% in
1979 to plus 23% in 1987 and averaged plus 2.0865% annually over the last 20
years. See Foreign Currency Exchange Rates table under Risk Factors in Part B.
There can be no assurance that similar appreciation will continue during the
life of the Portfolio or successive rollover periods.

- ----------------------------
* Source: Datastream International, Inc. The Sponsors have not independently
verified these data, but they have no reason to believe these data are
incorrect in any material respect.
(1) The Nikkei Strategy Stocks for any given year were selected by ranking the
dividend yields for each of the stocks in the Nikkei 225 Index as of the
beginning of that year, as provided by Datastream International Inc. The
yields were generally computed by adding together the interim and final
dividends for each of the stocks (these companies generally pay one interim
and a final dividend per fiscal year) declared in the preceding year divided
by that stock's market value on the first trading day that year on the Tokyo
Stock Exchange.

(2) Appreciation for the Nikkei Strategy Stocks is calculated by subtracting the
market value of these stocks at the opening value on the first trading day
on the Tokyo Stock Exchange in a given year from the market value of those
stocks at the closing value on the last trading day in the year, and
dividing the result by the market value of the stocks at the opening value
on the first trading day in that year. Appreciation for the Nikkei 225 Index
is calculated by subtracting the opening value of the Nikkei 225 Index on
the first trading day in each year from the closing value of the Nikkei 225
Index on the last trading day in the year, and dividing the result by the
opening value of the Nikkei 225 Index on the first trading day in that year.

(3) Actual Dividend Yield for the Nikkei Strategy Stocks is calculated by adding
the total dividends received on the stocks in the year and dividing the
result by the market value of the stocks on the first trading day in that
year. Actual Dividend Yield for the Nikkei 225 Index is calculated by taking
the total dividends credited to the Nikkei 225 Index and dividing the result
by the opening value of the Nikkei 225 Index on the first trading day of the
year.

(4) Total Return represents the sum of Appreciation and Actual Dividend Yield.
Individual year Total Returns do not take into consideration any
reinvestment of dividend income.

A-16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustees and Holders of Defined Asset Funds Equity Investor Fund,
Select Ten Portfolio 1998 International Series 1 (United Kingdom, Hong Hong and
Japan Portfolios) (the 'Fund'):

We have audited the accompanying statements of condition and the related
portfolios included in the prospectus of the Fund as of February 27, 1998. These
financial statements are the responsibility of the Trustees. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Our procedures included
confirmation of the irrevocable letters of credit deposited for the purchase of
securities, as described in the statements of condition, with the Trustees. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustees, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Fund as of February 27,
1998 in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP
New York, N.Y.
February 27, 1998

STATEMENTS OF CONDITION AS OF FEBRUARY 27, 1998
TRUST PROPERTY
<TABLE>
<CAPTION>
UNITED KINGDOM HONG KONG JAPAN
PORTFOLIO PORTFOLIO PORTFOLIO
-------------------- -------------------- --------------------
<S> <C> <C> <C>

Investments--Contracts to purchase Securities(1).........$ 282,866.81 $ 316,850.67 $ 342,557.88
Organizational Costs(2)..................................$ 124,110.00 $ 95,550.00 $ 93,440.00
-------------------- -------------------- --------------------
Total............................................$ 406,976.81 $ 412,400.67 $ 435,997.88
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
LIABILITY AND INTEREST OF HOLDERS
Accrued Liability(2) $ 124,110.00 $ 95,550.00 $ 93,440.00
-------------------- -------------------- --------------------
Subtotal $ 124,110.00 $ 95,550.00 $ 93,440.00
-------------------- -------------------- --------------------
Interest of Holders of fractional undivided interest
outstanding
(United Kingdom Portfolio--285,724 units; Hong Kong
Portfolio-- 320,051 units; Japan Portfolio--346,018
units)(3):
Cost to investors(4)...................................$ 285,724.00 $ 320,051.00 $ 346,018.00
Gross underwriting commissions(5)...................... (2,857.19) (3,200.33) (3,460.12)
-------------------- -------------------- --------------------
Subtotal $ 282,866.81 $ 316,850.67 $ 342,557.88
-------------------- -------------------- --------------------
Total $ 406,976.81 $ 412,400.67 $ 435,997.88
-------------------- -------------------- --------------------
-------------------- -------------------- --------------------
</TABLE>
- ------------
(1) Aggregate cost to each Portfolio of the securities listed under
Defined Portfolio based on the U.S. dollar offer side value of the relevant
exchange rate determined by the Trustees at the evaluation time on February 27,
1998. The contracts to purchase securities are collateralized by irrevocable
letters of credit which have been issued by DBS Bank, New York Branch, in the
amount of $948,369.04 and deposited with the Trustees. The amount of the letters
of credit includes $942,275.36 for the purchase of securities.
(2) This represents a portion of the Fund's organizational costs which
will be deferred and amortized over the life of the Fund. Organizational costs
have been estimated based on projected total assets of $130 million. To the
extent the Fund is larger or smaller, the amount may vary.
(3) Because the value of securities at the evaluation time on the Initial
Date of Deposit may differ from the amounts shown in these statements of
condition, the number of Units offered on the business day following the Initial
Date of Deposit will be adjusted from the initial number of Units to maintain
the $1,000 per 1,000 Units offering price only for that day. The Public Offering
Price on any subsequent business day will vary.
(4) Aggregate public offering price computed on the basis of the U. S.
dollar value of the underlying securities based on the U.S. dollar offer side
value of the relevant exchange rate at the evaluation time on February 27, 1998.
(5) Assumes the initial maximum sales charge per 1,000 units of 1.00% of
the Public Offering Price. A deferred sales charge of $1.75 per 1,000 Units per
month is payable on May 1, 1998 and thereafter on the 1st day of each month
through February 1, 1999. Distributions will be made to accounts maintained by
the Trustees from which the deferred sales charge obligation of the investors to
the Sponsors will be satisfied. If units are redeemed prior to February, 1999,
the remaining portion of the distribution applicable to such units will be
transferred to such account on the redemption date.

A-17
<PAGE>
DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INVESTOR FUND SELECT TEN PORTFOLIOS--INTERNATIONAL SERIES
UNITED KINGDOM, HONG KONG AND JAPAN PORTFOLIOS
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
BY WRITING OR CALLING THE TRUSTEE AT THE ADDRESS AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.

Index

PAGE
----
Fund Description........................... 1
Risk Factors............................... 5
How to Buy Units........................... 9
How to Redeem or Sell Units................ 10
Trust Termination.......................... 11
Rollover................................... 11
Income, Distributions and Reinvestment..... 12
PAGE
----
Portfolio Expenses......................... 13
Taxes...................................... 13
Records and Reports........................ 18
Trust Indenture............................ 18
Miscellaneous.............................. 19
Exchange Option............................ 20
Supplemental Information................... 21

FUND DESCRIPTION

THE STRATEGY

Simple strategies can sometimes be the most effective. The United Kingdom,
Hong Kong and Japan Portfolios seek total return by acquiring the ten highest
yielding stocks in the Financial Times Industrial Ordinary Share Index (FT
Index), Hang Seng Index and Nikkei 225 Index, respectively, as of the dates
indicated in Part A, after giving effect to any forthcoming changes to an index
announced prior to those dates, and holding them for about one year. This
investment strategy is based on three time-tested investment principles: time in
the market is more important than timing the market; the stocks to buy are the
ones everyone else is selling; and dividends can be an important part of total
return. Defined Asset Funds can make some of them available to investors with
the Select Ten International Portfolios. Global markets can move in different
directions. While some markets may be experiencing rapid growth, others may be
in decline. These markets can offer attractive growth opportunities. An
investment in the Fund can be cost-efficient, avoiding the odd-lot costs of
buying small quantities of securities directly. Purchasing a portfolio of these
stocks as opposed to one or two offers greater diversification. For each
Portfolio there is only one investment decision. Investment in a number of
companies with high dividends relative to their stock prices is designed to
increase a Portfolio's potential for higher total returns. Each Portfolio's
return will consist of a combination of capital appreciation and current
dividend income. Each Portfolio will terminate in about one year, when investors
may choose to either receive the distribution in cash or reinvest in the next
Series (if available) at a reduced sales charge. There can be no assurance that
the dividend rates on the selected stocks will be maintained. Reduction or
elimination of a dividend could adversely affect the stock price as well.

The FT Index. The FT Index began as the Financial News Industrial Ordinary
Share Index in London in 1935 and became the Financial Times Industrial Ordinary
Share Index in 1947. This Index is an unweighted average of the share prices of
selected companies, which are highly capitalized, major factors in their
industries; their stocks are widely held by individuals and institutional
investors. The following are the stocks currently represented in the FT Index:

1
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Allied Domecq PLC Imperial Chemical Industries PLC
ASDA Group PLC Lucas Industries PLC
The BOC Group PLC Lloyds TSB PLC
BTR PLC Marks & Spencer PLC
Blue Circle Industries PLC National Westminster Bank PLC
The Boots Company PLC The Peninsular & Oriental Steam
The British Petroleum Company Navigation Company
PLC Reuters Holdings PLC
British Telecommunications PLC Royal & Sun Alliance Insurance
BG PLC Group PLC
British Airways PLC Scottish Power PLC
Cadbury Schweppes PLC SmithKline Beecham PLC
Courtaulds PLC Tate & Lyle PLC
Diageo PLC Thorn EMI PLC
The General Electric Company PLC Vodafone Group PLC
Glaxo Wellcome PLC
GKN PLC
Granada PLC
The Hang Seng Index. The Hang Seng Index, first published in 1969, is a
recognized indicator of stock market performance in Hong Kong. It is computed on
an arithmetic basis, weighted by market capitalization, and represents
approximately 70% of the total market capitalization of stocks listed on the
Hong Kong Exchange. The companies represented are among the most highly
capitalized in Hong Kong. Index stocks include companies intended to represent
four major market sectors; commerce and industry, finance, properties and
utilities. The following are the stocks currently represented in the Hang Seng
Index.
Amoy Properties Ltd. Holdings Ltd.
The Bank of East Asia Ltd. The Hongkong and China
Cathay Pacific Airways Ltd. Gas Company Ltd.
Cheung Kong (Holdings) The Hong Kong and Shanghai
Ltd. Hotels Ltd.
Cheung Kong Infrastructure Hong Kong Telecommunications
Ltd. Ltd.
CLP Holdings Limited Hopewell Holdings Ltd.
China Telecom Ltd. HSBC Holdings PLC
CITIC Pacific Ltd. Hutchison Whampoa Ltd.
China Resources Enterprise Limited Hysan Development Company Ltd.
First Pacific Company Ltd. New World Development Company
Great Eagle Holdings Ltd. Ltd.
Guangdong Investment Ltd. Shanghai Industrial Holdings Ltd.
Hang Lung Development Shangri-La Asia Ltd.
Company Ltd. Sino Land Company Ltd.
Hang Seng Bank Ltd. Sun Hung Kai Properties Ltd.
Henderson Investment Ltd. Swire Pacific Ltd. (A)
Hendersen Land Development Television Broadcasts Ltd.
Company Ltd. The Wharf (Holdings) Ltd.
Hongkong Electric Wheelock and Company Ltd.
The Nikkei 225 Index. The Nikkei Stock Average, or Nikkei 225 Index is a
price-weighted index of 225 Japanese companies listed in the First Section of
the Tokyo Stock Exchange. The Nikkei 225 was first published in 1950, and is
well known both inside and outside Japan. The Nikkei 225 average is calculated
as a price-weighted average of the component stock prices, adjusted by a divisor
to account for non-market factors, rights and changes to the constituent issues.
The following are the stocks currently represented in the Nikkei 225 Index:
Ajinomoto Co. Inc. Iseki and Co. Ltd.
All Nippon Airways Co. Ltd. Ishikawajima-Harima Heavy
Aoki Corporation Industries
Asahi Breweries Ltd. Isuzu Motors Ltd.
Asahi Chemical Industry Co. Ltd. Itochu Corporation
Asahi Denka Kogyo K.K. Iwatani International Corporation
Asahi Glass Co. Ltd. Japan Energy Corporation
Bridgestone Corporation Japan Securities Finance Co. Ltd.
Canon Inc. Japan Steel Works Ltd.
Chichibu Onoda Cement Kajima Corporation
Corporation Kanebo Ltd.
Chiyoda Corporation Kansai Electric Power Co. Inc.
Chubu Electric Power Co., Inc. Kawasaki Heavy Ind. Ltd.
Citizen Watch Co. Ltd. Kawasaki Kisen Kaisha Ltd.
Dai Ichi Kangyo Bank Ltd. Kawasaki Steel Corporation
Dai Nippon Printing Co. Ltd. Keihin Electric Express
Dainippon Pharmaceutical Co. Railway Co.
Ltd. Keio Teito Electric
Daiwa House Industry Co. Ltd. Railway Co. Ltd.
Denki Kagaku Kogyo K.K. Keisei Electric Railway
Dowa Mining Co. Ltd. Co. Ltd.
Ebara Corporation Kikkoman Corporation
Fuji Bank Ltd. Kirin Brewery Co. Ltd.
Fuji Electric Co. Ltd. Kobe Steel Ltd.
Fuji Photo Film Co. Ltd. Komatsu Ltd.
Fuji Spinning Co. Ltd. Konica Corporation
Fujikura Ltd. Koyo Seiko Co. Ltd.
Fujita Corporation Kubota Corporation
Fujitsu Ltd. Kumagai Gumi Co.
Furukawa Co. Ltd. Kuraray Co. Ltd.
Furukawa Electric Co. Ltd. Kyokuyo
Hazama Corporation Kyowa Hakko Kogyo
Heiwa Real Estate Co. Ltd. Marubeni Corporation
Hino Motors Ltd. Marui Co., Ltd.
Hitachi Ltd. Maruzen Co., Ltd.
Hitachi Zosen Corporation Matsushita Electric Industrial Co.
Hokuetsu Paper Mills Ltd. Mazda Motor
Honda Motor Co. Ltd. Meidensha Corporation
Honen Corporation Industries Inc. Meiji Milk Products

<PAGE>
Meiji Seika Odakyu Electric Railway
Mercian Corporation OKI Electric Industry Co.
Minebea Co., Ltd. Okuma Corporation
Mitsubishi Bank Osaka Gas Co. Ltd.
Mitsubishi Chemical Corporation Pioneer Electronic Corporation
Mitsubishi Corporation Rasa Industries Ltd.
Mitsubishi Electric Corporation Ricoh Company Ltd.
Mitsubishi Estate Co. Ltd. Sakura Bank Ltd.
Mitsubishi Heavy Industries Sankyo Co. Ltd.
Mitsubishi Materials Corporation Sankyu Inc.
Mitsubishi Oil Co. Ltd. Sanwa Bank
Mitsubishi Papers Mills Ltd. Sanyo Electric Co. Ltd.
Mitsubishi Rayon Co. Ltd. Sapporo Breweries Ltd.
Mitsubishi Steel Manufacturing Sato Kogyo Co. Ltd.
Co. Seika Corporation
Mitsubishi Trust and Sharp Corporation
Banking Corporation Shimizu Corporation
Mitsubishi Warehouse and Shimura Kako Co., Ltd.
Transport Shin Etsu Chemical Co. Ltd.
Mitsui and Co. Ltd. Shinagawa Refractories
Mitsui Engineering and Co. Ltd.
Shipbuilding Co. Ltd. Shionogi and Co. Ltd.
Mitsui Fuddsan Co. Ltd. Showa Shell Sekiyu K.K.
Mitsui Marine and Fire Showa Denko K.K.
Insurance Co. Showa Line Ltd.
Mitsui Mining and Smelting Ltd. Showa Electric Wire and
Mitsui Mining Co. Ltd. Cable Co. Ltd.
Mitsui O.S.K. Lines Ltd. Sony Corporation
Mitsui Soko Co. Ltd. Sumitomo Bank Ltd.
Mitsui Trust and Banking Sumitomo Chemical Co. Ltd.
Co. Ltd. Sumitomo Coal Mining
Mitsukoshi Ltd. Co. Ltd.
Morinaga and Co. Ltd. Sumitomo Corporation
Nachi Fujikoshi Corporation Sumitomo Electric Industries
Navix Line Ltd. Ltd.
NEC Corporation Sumitomo Heavy Industries Ltd.
New Oji Paper Co. Sumitomo Metal Industries Ltd.
NGK Insulators Ltd. Sumitomo Metal Mining Ltd.
Nichirei Corporation Sumitomo Osaka Cement Co. Ltd.
Nichiro Corporation Suzuki Motor Corporation
Nichiro Gyogyo Kaisha Ltd. Taisei Corporation
Nihon Cement Co. Ltd. Takara Shuzo
Niigata Engineering Co. Ltd. Takeda Chemical Industries
Nikko Securities Co. Ltd. Teijin Ltd.
Nikon Corporation Teikoku Oil
Nippon Beet Sugar Manufacturing Tekken Corporation
Co. Toa Corporation
Nippon Carbide Industries Toagosei Chemical Industry
Co. Inc. Tobishima Corporation
Nippon Carbon Co. Ltd. Tobu Railway
Nippon Chemical Industrial Toei Co.
Co. Ltd. Toho Rayon
Nippon Denko Co. Ltd. Toho Zinc Co. Ltd.
Nippon Express Co. Ltd. Tokai Carbon Co. Ltd.
Nippon Flour Mills Co. Ltd. Tokio Marine and Fire
Nippon Kayaku Co. Ltd. Insurance Co.
Nippon Light Metal Co. Ltd. Tokyo Dome Corporation
Nippon Metal Industry Co. Ltd. Tokyo Electric Power Co. Inc.
Nippon Oil Co. Ltd. Tokyo Gas Co. Ltd.
Nippon Paper Ind. Co. Ltd. Tokyo Rope Mfg.
Nippon Piston Ring Co. Ltd. Tokyu Corporation
Nippon Sharyo Ltd. Tokyu Department Store
Nippon Sheet Glass Co. Ltd. Tomen Corporation
Nippon Shinpan Co. Ltd. Tonen Corporation
Nippon Soda Co. Ltd. Toppan Printing Co. Ltd.
Nippon Steel Corporation Topy Industries
Nippon Suisan Kaisha Ltd. Toray Industries
Nippon Synthetic Chemical Toshiba Corporation
Industry Tosoh Corporation
Nippon Telegraph and Toto Ltd.
Telephone NTT Toyo Seikan Kaisha
Nippon Yakin Kogyo Toyo Tire & Rubber Company
Nippon Yusen K.K. Toyobo Co. Ltd.
Nippondenso Co. Ltd. Toyota Motor Corporation
Nissan Chemical Industries Ltd. UBE Industries Unitika Ltd.
Nissan Motor Co. Ltd. Yamaha Corporation
Nisshin Flour Milling Co. Ltd. Yamanouchi Pharmaceutical
Nisshin Oil Mills Ltd. Yasuda Fire & Marine
Nisshinbo Insurance
Nissho Iwai Corporation Yokogawa Electric
Nitto Boseki Co. Ltd. Yokohama Rubber Company
NKK Corporation Ltd.
NOF Corporation Yuasa Corporation
Nomura Securities Co. Ltd.
Noritake Co. Ltd.
NSK Limited
NTN Corporation
Obayashi Corporation

PORTFOLIO SELECTION
The Fund consists of three separate portfolios, the United Kingdom
Portfolio, the Hong Kong Portfolio and the Japan Portfolio, which contain common
stocks in the FT Index, the Hang Seng Index and the Nikkei 225 Index,
respectively, having the highest dividend yield as of the dates indicated in
Part A. 'Highest dividend yield' means the yield for each Security calculated by
adding the most recent interim and final dividends declared on that Security and
3

<PAGE>
dividing the result by the market value of that Security. This rate is
historical and there is no assurance that any dividends will be declared or paid
in the future on the Securities. No leverage or borrowing is used nor do the
Portfolios contain other kinds of securities to enhance yield.

The Strategy selection process is a straightforward, objective, mathematical
application that ignores any subjective factors concerning an issuer in the
related index, an industry or the economy generally. The application of the
Strategy may cause a Portfolio to own a stock that the Sponsors do not recommend
for purchase and, in fact, the Sponsors may have sell recommendations on a
number of the stocks in a Portfolio at the time the stocks are selected for
inclusion in the Portfolio. Various theories attempt to explain why a common
stock is among the ten highest yielding stocks in the related index at any given
time: the issuer may be in financial difficulty or out of favor in the market
because of weak earnings or performance or forecasts or negative publicity;
uncertainties relating to pending or threatened litigation or pending or
proposed legislation or government regulation; the stock may be a cyclical stock
reacting to national or international economic developments; or the market may
be anticipating a reduction in or the elimination of the company's dividend.
Some of the foregoing factors may be relevant to only a segment of an issuer's
overall business yet the publicity may be strong enough to outweigh otherwise
solid business performance. In addition, companies in certain industries have
historically paid high dividends.

The deposit of the Securities in each Portfolio on the initial date of
deposit established a proportionate relationship among the number of shares of
each Security in that Portfolio. During the 90-day period following the initial
date of deposit the Sponsors may deposit additional Securities in order to
create new Units, maintaining to the extent practicable that original
proportionate relationship. Deposits of additional Securities subsequent to the
90-day period must generally replicate exactly the proportionate relationship
among the number of shares of each Security in a Portfolio at the end of the
initial 90-day period. The ability to acquire each Security at the same time
will generally depend upon the Security's availability and any restrictions on
the purchase of that Security under the federal securities laws or otherwise.

Additional Units may also be created by the deposit of cash (including a
letter of credit) with instructions to purchase additional Securities. This
practice could cause both existing and new investors to experience a dilution of
their investments and a reduction in their anticipated income because of price
fluctuations in the Securities between the time of the cash deposit and the
actual purchase of the additional Securities and because the associated
brokerage fees will be an expense of the Portfolio. To minimize the risk of
price fluctuations when purchasing Securities, each Portfolio will try to
purchase Securities as close to the Evaluation Time or at prices as close to the
evaluated prices as possible and may purchase Securities on exchanges other than
the London, Hong Kong and Tokyo Stock Exchanges. A Portfolio may also enter into
program trades with unaffiliated broker/dealers, which could have the effect of
increasing brokerage commissions while reducing market risk.

Because each Portfolio in a Defined Asset Fund is a preselected portfolio,
you know the securities before you invest. Of course, the Portfolios will change
somewhat over time, as Securities are purchased upon creation of additional
Units, as Securities are sold to meet Unit redemptions or in other limited
circumstances.

PORTFOLIO SUPERVISION

Each Portfolio follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. Although each Portfolio is regularly reviewed, because of the
Strategy the Portfolio is unlikely to sell any of the Securities other than to
satisfy redemptions of units, or to cease buying additional shares in connection
with the issuance of Additional Units. More specifically, adverse developments
concerning a Security including the adverse financial condition of the issuer, a
failure to maintain a current dividend rate, the institution of legal
proceedings against the issuer, a default under certain documents materially and
adversely affecting the future declaration of dividends, or a decline in the
price or the occurrence of other market or credit factors (including a public
tender offer or a merger or acquisition transaction) that might otherwise make
retention of the Security detrimental to the interest of investors, will
generally not cause a Portfolio to dispose of a Security or cease buying it.
Furthermore, each Portfolio will likely continue to hold a Security and purchase
additional shares notwithstanding its ceasing to be included among the ten
highest dividend yielding stocks in the related Index or even its deletion from
that Index.

4
<PAGE>
RISK FACTORS

An investment in a Portfolio entails certain risks, including the risk that
the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
relevant stock market worsens and the risk that holders of common stocks have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Moreover, common stocks do not represent an obligation of
the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital provided by debt securities. Common stocks in
general may be especially susceptible to general stock market movements and to
volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises. The
Sponsors cannot predict the direction or scope of any of these factors.

Foreign Issuers. Investments in securities of foreign issuers involve risks
that are different from investments in securities of domestic issuers. These
risks may include future political and economic developments, withholding taxes,
the possibility of exchange controls or other governmental restrictions on the
payment of dividends, less publicly available information and the absence of
uniform accounting, auditing and financial reporting standards, practices and
requirements.

The information set forth below has been extracted from various governmental
and private publications, but no representation can be made as to its accuracy;
furthermore, no representation is made that any correlation exists between the
state of the economy of the United Kingdom and the value of any Securities held
by the United Kingdom Portfolio, between the economy of Hong Kong and the value
of any Securities held by the Hong Kong Portfolio or between the economy of
Japan and the value of any Securities held by the Japan Portfolio.

UNITED KINGDOM PORTFOLIO RISK FACTORS

The United Kingdom Portfolio contains common stocks of British companies
engaged in such industries as banking, the chemical industry, the building and
construction industry, the transportation industry, telecommunications and
insurance. Many of these industries are subject to extensive government
regulation which may have a materially adverse effect on the performance of
their securities.

The economy of the United Kingdom is focused upon the private services
sector, which includes the wholesale and retail sector, banking, finance,
insurance, and tourism. Services as a whole account for a majority of the United
Kingdom's gross national product and make a significant contribution to the
country's balance of payments. In addition, the United Kingdom, as a member of
the European Union (the 'EU'), formerly known as the European Community, is
subject to the effects of the recent rapid political and social change
throughout Europe although the extent and nature of future economic development
in the United Kingdom and Europe and the impact of such development upon the
value of the securities in the United Kingdom Portfolio is impossible to
predict.

HONG KONG RISK FACTORS

The Portfolio contains common stocks of companies trading on The Stock
Exchange of Hong Kong Limited (the 'Hong Kong Stock Exchange'). Hong Kong,
having been a colony of the United Kingdom since the 1840's, reverted to the
sovereignty of the People's Republic of China ('China') on July 1, 1997. Under
British rule, the Hong Kong government generally followed a laissez-faire policy
towards industry, and over the ten year period between 1983 and 1993, Real Gross
Domestic Product increased at an average annual rate of approximately 6%. There
are no major import, export or foreign exchange restrictions, and regulation of
business is generally minimal with certain exceptions, including regulated entry
into certain sectors of the economy.

When sovereignty over Hong Kong reverted from the United Kingdom to China,
Hong Kong became a Special Administrative Region ('SAR') of China. The Joint
Declaration signed by China and the United Kingdom in 1984 provides that the
basic policies of China regarding Hong Kong will be stipulated in the Basic Law
of Hong Kong which was enacted by the National People's Congress of China in
1990. Although the Basic Law provides that Hong Kong will have a high degree of
legislative, judicial and economic autonomy, there can be no assurance that the
general economic position of Hong Kong will not be adversely affected as a
consequence of the exercise of Chinese sovereignty over Hong Kong. In addition,
business confidence in Hong Kong can be significantly affected by political
developments and statements by public figures in China, which in turn can affect
markets and business performance. The Basic Law also provides that the socialist
system and policies shall not be practiced in the Hong Kong SAR, and that the
previous capitalist system and way of life shall remain unchanged for 50 years.
In addition, the Basic Law provides that the laws previously in force in Hong
Kong shall be maintained, except for any laws that contravene the Basic

5
<PAGE>
Law, and subject to any amendment by the legislature of the Hong Kong SAR. The
Basic Law further provides that the government of the Hong Kong SAR shall
provide an appropriate economic and legal environment for the maintenance of the
status of Hong Kong as an international financial center. The power of
interpretation of the Basic Law is vested in the Standing Committee of the
National People's Congress of China, although the courts of the Hong Kong SAR
may interpret the Basic Law in adjudicating cases before them, subject to
certain limitations. No assurance can be given as to the effect of the
resumption of Chinese sovereignty or the implementation or interpretation of the
Basic Law on Hong Kong or the Hong Kong stock market.

It is possible that the outcome of these matters and the actions of the Hong
Kong SAR government and other parties both in Hong Kong and abroad as well as
any perceived instability in China's government or economic, political or social
situation may damage public confidence, increase market volatility or have an
adverse effect on the Hong Kong stock market.

Hong Kong Stock Exchange. The Hong Kong Stock Exchange, with a total market
capitalization as of January 31, 1998 of approximately HKD 2,620,577 million
(U.S. $335,971 million), is the second largest stock market in Asia, measured by
market capitalization, behind that of Japan. As of that date, 661 companies and
1,460 securities (including ordinary shares, warrants and other derivative
instruments) were listed on the Hong Kong Stock Exchange. The Securities and
Futures Commission exercises supervision of the securities, financial investment
and commodities futures industry.

The constituent stocks of the Hang Seng Index are subject to change, and
delisting of shares of any issuers may have an adverse impact on the performance
of the Portfolio, although delisting would not necessarily result in the
disposal of the stock of these companies, nor would it prevent the Portfolio
from purchasing such Securities in connection with the issuance of additional
Units or the purchase of additional Hong Kong Securities. Jardine Matheson
Holdings Ltd. and Jardine Strategic Holdings Ltd. delisted from the Hong Kong
Stock Exchange as of November 30, 1994 and three other Jardine affiliates
delisted as of February 28, 1995. These five Jardine companies represented
almost 10% of the total capitalization of the Hang Seng Index at that time. In
addition, following Hong Kong's reversion to Chinese sovereignty, an increased
number of Chinese companies may become listed in Hong Kong, thereby changing the
composition of the stock market and, potentially, the composition of the Hang
Seng Index.

Hong Kong Real Estate and Property Companies. The Portfolio is considered to
be concentrated in common stocks of companies engaged in real estate asset
management, development, leasing, property sales and other related activities.
Many factors may have an adverse impact on the companies in this industry,
including economic recession, the cyclical nature of real estate markets,
competitive overbuilding, unusually adverse weather conditions, changing
demographics, changes in governmental regulations (including tax laws and
environmental, building, zoning and sales regulations), increases in real estate
taxes or costs of material and labor, the inability to secure performance
guarantees or insurance as required, the unavailability of investment capital
and the inability to obtain construction financing or mortgage loans at rates
acceptable to builders and purchasers of real estate. A recent rise in interest
rates due to currency crises in Asia have hurt real estate prices in Hong Kong.

Additionally, a number of Hong Kong real estate companies are now involved
in the purchase and development of real estate in China, especially in the
cities of Beijing, Shanghai, Guangzhou and Shenzen. The property market in a
number of these cities has experienced a rise in construction costs and a
growing supply of residential and office space.

JAPAN PORTFOLIO RISK FACTORS

The Japan Portfolio contains common stocks of Japanese companies trading on
the Tokyo Stock Exchange (the 'TSE').

Volatility of the TSE. Although the market for Japanese stocks traded on the
First Section of the TSE is substantial in terms of trading volume and
liquidity, the TSE has nonetheless exhibited significant market volatility in
the past several years. The general weakness in TSE prices since 1989 has
adversely affected financial institutions (including banks and insurance
companies) heavily invested in the market, in turn contributing to weakness in
the Japanese economy.

Political Factors. Reports of official improprieties, resignations and
political reallignments have recently been followed by significant economic
reforms. There is currently uncertainty as to the future of Japan's political
outlook (including the influence and effectiveness of Japan's bureaucracy) and
the impact of these political factors on the Japanese economy and the stock
market.

Economic Factors. The Japanese economy is experiencing its worst recession
since World War II in the 1990s and the economy has been largely stagnant since
October 1993. Strains on the financial system in the form of non-performing
loans of financial institutions and real estate companies have been one of the
major causes of Japan's economic weakness. The bad debt problem has required and
may continue to require disproportionate contributions by

6
<PAGE>
major banks, and has contributed to insolvency of several major financial
institutions as well as the restriction of credit in the domestic economy.
Japanese exports could be adversely affected by pressure from trading partners
- -- particularly the U.S. -- to improve trade imbalances.

In recent months, while the values of stocks and real estate assets have
continued to stagnate, certain other aspects of the domestic economy have
deteriorated. Declining consumer demand, reduced capital investment by
corporations, the direct and indirect effects of weakening currencies elsewhere
in Asia and other factors have adversely affected the profitability of Japanese
corporations. Lending by commercial banks has been constrained by capital
adequacy considerations, leading to a credit crunch that has adversely affected
borrowers dependent upon banks for financing. Certain large financial
institutions have failed, contributing to instability in the financial sector.
While the Government has undertaken certain measures to stimulate the domestic
economy and to support financial institutions, the impact of such measures has
been limited.

VOLATILITY

Foreign stock prices may be more volatile then U.S. stock prices. The
following table demonstrates the volatility of the Hang Seng Index and the
Nikkei 225 Index in comparison to that of the FT Index and the Dow Jones
Industrial Average by showing for each index the number of trading days during
the period from January 1, 1989 through December 31, 1997, on which the value of
the index in local currency gains or lost 1%, 2% and 3% of its value as of the
previous trading day.

NUMBER OF TRADING DAYS WITH GAINS OR LOSSES SHOWN
-----------------------------------------------------------------
NIKKEI DOW JONES
PERCENTAGE GAINS OR LOSSES HANG SENG 225 FT INDUSTRIAL
IN VALUE OF INDEX INDEX INDEX INDEX AVERAGE
- ------------------------------------- ----------- -------- ----- --------------
<S> <C> <C> <C> <C>

1%................................... 803 804 375 465
2%................................... 293 302 58 49
3%................................... 117 120 13 15
</TABLE>

Previous performance is no guarantee of future results; any index may
display more or less volatility in the future. In 1989, the Hang Seng Index rose
to 3,310 in May from its previous year-end level of 2,687 but fell to 2,094 in
early June following the events at Tiananmen Square. The Hang Seng Index
gradually climbed in subsequent months but fell by 181 points on October 13,
1989 (approximately 6.5%) following a substantial fall in the U.S. stock
markets, and at the year end closed at a level of 2,837. Also, during 1994 the
Hang Seng Index lost approximately 31% of its value. On October 23, 1997, the
Hang Seng Index dropped by 1,211 points (approximately 10.4%) and had lost 18%
of its value by the end of the week. The decline was triggered initially by the
Hong Kong monetary authority's decision to raise interest rates in order to
protect the Hong Kong dollar against speculative activity by currency traders.
The rising interest rates and fear of potential currency devaluation led to
volatile trading, especially in interest-rate sensitive banking and property
company stocks, and a drop in the value of the Hang Seng Index of as much as
13.7% in one day on October 28, 1997. By October 30, 1997, the Hang Seng Index
had lost approximately 20% of its value from the previous year, and
approximately 35% from the record high reached in August 1997.

FOREIGN EXCHANGE RATES

Because securities of non-U.S. issuers generally pay dividends and trade in
foreign currencies, there is the risk that the U.S. dollar value of these
securities will vary with fluctuations in foreign exchange rates. Currencies are
geneally traded by leading international commercial banks and institutional
investors. From time to time, central banks in a number of countries also are
major buyers and sellers of foreign currencies, mostly to prevent or reduce
substantial exchange rate fluctuations. Most foreign currencies have fluctuated
widely in value against the U.S. dollar because of changing investor
perceptions, currency speculation by institutional investors, supply and demand
of the respective currency, the soundness of the world economy and the relative
strength of the respective economy, the impact of actual and proposed government
policies, interest rate differentials between currencies and the balance of
imports and exports of goods and services and transfers of income and capital
from one country to another.

For example, during 1997, the Japanese yen has dropped approximately 12.71%
against the US dollar to a low of 130.57 on December 31, 1997. The yen has
fallen 61.9% from a high of 80.63 against the US dollar on April 18, 1995 to its
current level. In comparison, the British pound has fallen 4.01% against the US
dollar from the year's start (to close 1.6454 on December 31, 1997) although it
reached a peak of 1.7112 and traded on an average of 1.6389 over the year. Since
1983, the Hong Kong dollar has been 'pegged' to the U.S. dollar at a rate of HKD
7.80 to US$1, although there is no guarantee that the Hong Kong dollar will
continue to be pegged to the U.S. dollar at such rate, or at all, in the future.
If the Hong Kong dollar ceased to be pegged to the U.S. dollar, or were devalued
relative to the U.S. dollar, there could be an adverse effect on the value of
the Hong Kong Portfolio.

7
<PAGE>
The following table shows fluctuations in the value of the British pound,
Hong Kong dollar and Japanese yen relative to the U.S. dollar in the past 20
years.

CHANGES IN FOREIGN CURRENCY EXCHANGE RATES

RANGE OF RANGE OF
FLUCTUATIONS CHANGE IN FLUCTUATIONS
U.S. U.K. POUND HONG KONG CHANGE IN RANGE OF
DOLLAR/ STERLING/ DOLLAR/ HONG KONG FLUCTUATIONS CHANGE IN
U.K. POUND U.S. U.S. DOLLAR/ JAPANESE YEN/ JAPANESE YEN/
PERIOD STERLING* DOLLAR** DOLLAR* U.S. DOLLAR** U.S. DOLLAR* U.S. DOLLAR**
- ----- ----------- ---------- ----------- ---------------- -------------- --------------------
<S> <C> <C> <C> <C> <C> <C>

1978 2.095-1.807 6.32 4.840-4.601 -4.07 242.54-177.39 18.92
1979 2.332-1.979 8.52 5.243-4.739 -3.02 250.75-193.75 -23.18
1980 2.452-2.134 6.75 5.211-4.784 -3.68 259.47-202.30 15.31
1981 2.427-1.763 -25.00 6.155-5.125 -10.62 245.39-199.05 -8.33
1982 1.933-1.593 -18.18 6.940-5.662 -14.45 278.16-218.75 -6.87
1983 1.623-1.415 -11.30 8.750-6.472 -19.78 247.58-226.75 1.19
1984 1.492-1.158 -25.43 7.990-7.775 -0.55 251.25-222.70 -8.14
1985 1.494-1.044 19.94 7.860-7.722 0.15 263.43-200.25 20.15
1986 1.555-1.377 2.03 7.825-7.766 0.20 202.70-152.00 20.65
1987 1.886-1.468 21.21 7.814-7.750 0.58 159.40-121.25 23.95
1988 1.896-1.663 -3.48 7.824-7.768 -0.81 136.52-121.10 -3.29
1989 1.823-1.500 -12.04 7.816-7.773 0.10 149.62-123.60 -15.01
1990 1.976-1.595 16.37 7.817-7.754 0.09 159.90-125.05 5.53
1991 1.999-1.602 -3.24 7.875-7.711 0.27 141.90-124.90 8.10
1992 2.004-1.505 -23.44 7.777-7.723 0.44 134.53-119.35 -0.02
1993 1.590-1.417 -2.36 7.766-7.723 0.25 126.10-101.10 10.58
1994 1.637-1.461 5.46 7.753-7.730 -0.18 113.10- 96.77 10.76
1995 1.641-1.530 -0.77 7.768-7.730 0.04 104.29- 81.09 -3.85
1996 1.714-1.493 9.32 7.742-7.724 -0.01 116.21-103.45 -12.01
1997 1.711-1.578 -4.01 7.742-7.784 -0.19 130.80-111.20 -12.71

</TABLE>

- ---------
* DRI/McGrawHill.
** Ibbotson Associates.

The Trustee is required to conduct a Portfolio's foreign currency
conversions either on a spot (i.e., cash) or forward foreign exchange basis,
whichever will synchronize the currency conversions as exactly as practicable
with the settlement dates of the relevant foreign stock or with the dividend
distribution dates of the Portfolio, as the case may be. Foreign currency
conversions are generally conducted on a principal basis and foreign exchange
dealers realize a profit based upon the difference between the price at which
they are willing to buy a particular currency (bid price) and the price at which
they are willing to sell the currency (offer price). The cost to the Portfolio
of engaging in these foreign currency conversions also varies with such factors
as the currency involved, the length of the contract period and the market
conditions then prevailing. Portfolio evaluations include the cost of buying or
selling a forward foreign exchange contract in the relevant currency to
correspond to the settlement period for purchases and redemptions of Units.

EXCHANGE CONTROLS

At the present time the Sponsors do not believe that any of the Securities
is subject to exchange control restrictions which would materially interfere
with payment to a Portfolio of amounts due on the Securities. There can be no
assurance that exchange control regulations might not be adopted in the future
which might adversely affect payments to a Portfolio. In addition, the adoption
of exchange control regulations or other legal restrictions could have an
adverse impact on the marketability of international securities in a Portfolio
and on the ability of that Portfolio to satisfy redemptions.

LIQUIDITY

Sales of foreign securities by a Portfolio in United States securities
markets are ordinarily subject to severe restrictions and will generally be made
only in foreign securities markets. Securities may be traded in foreign
countries where the securities markets are not as developed or efficient and may
not be as liquid as those in the United States. A foreign market's liquidity
might become impaired as a result of economic or political turmoil in a country
in whose currency a Portfolio had a substantial portion of its assets invested,
or should relations between the United States and such foreign country
deteriorate markedly. Additionally, the principal trading market for the
Securities, even if otherwise listed, may be the over-the-counter market in
which liquidity will depend on whether dealers will make a market in the
Securities.

8
<PAGE>
LITIGATION AND LEGISLATION

The Sponsors do not know of any pending litigation as of the initial date of
deposit that might reasonably be expected to have a material adverse effect on a
Portfolio, although pending litigation may have a material adverse effect on the
value of Securities in a Portfolio. In addition, at any time after the initial
date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in a Portfolio or the
issuers of the Securities. Changing approaches to regulation may have a negative
impact on certain companies represented in a Portfolio. There can be no
assurance that future litigation, legislation, regulation or deregulation will
not have a material adverse effect on a Portfolio or will not impair the ability
of the issuers of the Securities to achieve their business goals.

LIFE OF THE PORTFOLIOS

The size and composition of a Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units or
participating in a rollover. Each Portfolio will be terminated no later than the
mandatory termination date specified in Part A of the Prospectus. They will
terminate earlier upon the disposition of the last Security in that Portfolio or
upon the consent of investors holding 51% of the Units. A Portfolio may also be
terminated earlier by the Sponsors once its total assets have fallen below the
minimum value specified in Part A of the Prospectus. A decision by the Sponsors
to terminate a Portfolio early, which will likely be made following the
rollover, will be based on factors such as its size relative to its original
size, the ratio of Portfolio expenses to income, and the cost of maintaining a
current prospectus. See Trust Termination.

HOW TO BUY UNITS

Units are available from any of the Sponsors at the Public Offering Price.
The Public Offering Price varies each Business Day with changes in the value of
the Portfolio and other assets and liabilities of the Fund.

PUBLIC OFFERING PRICE

Units are charged a combination of Initial and Deferred Sales Charges equal,
in the aggregate, to a maximum charge of 2.75% of the Public Offering Price or,
for quantity purchases of units of all Select Portfolios by an investor and the
investor's spouse and minor children, or by a single trust estate or fiduciary
account, made on a single day, the following percentages of the public offering
price:

APPLICABLE SALES CHARGE
(GROSS UNDERWRITING PROFIT)
---------------------------
AS % OF
PUBLIC AS % OF NET
OFFERING AMOUNT
AMOUNT PURCHASED PRICE INVESTED
- --------------------------------------------- ----------- ------------
Less than $50,000............................ 2.75% 2.778%
$50,000 to $99,999........................... 2.50 2.519
$100,000 to $249,999......................... 2.00 2.005
$250,000 to $999,999......................... 1.75 1.750
$1,000,000 or more........................... 1.00 1.000

Prudential Securities Incorporated, which will participate only in rollover
sales, will receive a preferred dealer concession of $13.00 per 1,000 Units of a
Portfolio.

The Deferred Sales Charge is a monthly charge of $1.75 per 1,000 units and
is accrued in ten monthly installments commencing on the date indicated in Part
A of this Prospectus. Units redeemed or repurchased prior to the accrual of the
final Deferred Sales Charge installment will have the amount of any remaining
installments deducted from the redemption or repurchase proceeds or deducted in
calculating an in-kind distribution, although this deduction will be waived in
the event of the death or disability (as defined in the Internal Revenue Code of
1986) of an investor. The Initial Sales Charge is equal to the aggregate sales
charge, determined as described above, less the aggregate amount of any
remaining installments of the Deferred Sales Charge.

It is anticipated that Securities will not be sold to pay the Deferred Sales
Charge until after the date of the last installment. Investors will be at risk
for market price fluctuations in the Securities from the several installment
accrual dates to the dates of actual sale of Securities to satisfy this
liability.

Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co., Inc. may purchase Units subject only to the
Deferred Sales Charge.

9
<PAGE>
EVALUATIONS

Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's Day, Martin Luther King, Jr. Day, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. In addition, for the United Kingdom Portfolio, 'business day' shall
exclude the following U.K. holidays: Easter Monday, May Day, Summer Bank Holiday
and Boxing Day; for the Hong Kong Portfolio, 'business day' shall also exclude
the following Hong Kong holidays in 1998: the day following the Ching Ming
Festival (April 6), Easter Monday, first day of July, Sino-Japanese War Victory
Day (August 17), National Day (October 1) and the following day, the day
following the Mid-Autumn Festival (October 6) and Chung Yeung Festival (October
28); and for the Japan Portfolio, 'business day' shall also exclude the
following Japanese Holidays: the four-day Year End Holiday, Adults Day, National
Foundation Day observance, Vernal Equinox Day, Greenery Day, Constitution
Memorial Day, Childrens Day observance, Respect for the Aged Day observance,
Autumnal Equinox Day, Health-Sports Day, Culture Day observance and Emperor's
Birthday. If the Securities are listed on a securities exchange, evaluations are
generally based on closing sales prices on that exchange (unless the Trustee
deems these prices inappropriate) or, if closing sales prices are not available,
at the mean between the closing bid and offer prices. If the Securities are not
listed or if listed but the principal market is elsewhere, the evaluation is
generally determined based on sales prices of the Securities on the over-the-
counter market or, if sales prices in that market are not available, on the
basis of the mean between current bid and offer prices for the Securities or for
comparable securities or by appraisal or by any combination of these methods.
Neither the Sponsors nor the Trustee guarantee the enforceability, marketability
or price of any Securities. All evaluations are converted to U.S. dollars at the
then current exchange rates which include the cost of a forward foreign exchange
contract in the relevant currency to correspond to the requirement that the
Trustee settle redemption requests in U.S. dollars within seven days.

NO CERTIFICATES

All investors are required to hold their Units in uncertificated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company ('DTC').

HOW TO REDEEM OR SELL UNITS

You can redeem your Units at any time for net asset value. In addition, the
Sponsors have maintained an uninterrupted secondary market for Units for over 20
years and will ordinarily buy back Units at net asset value. The following
describes these two methods to redeem or sell Units in greater detail.

REDEEMING UNITS

You can always redeem your Units for net asset value. This can be done by
contacting your broker, dealer or financial institution that holds your Units in
street name. In certain instances, additional documents may be required such as
a trust instrument, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian.

Within seven days after the receipt of your request (and any necessary
documents), a check will be mailed to you in an amount equal to the net asset
value of your Units. Because of the sales charge, market movements or changes in
the Portfolio, net asset value at the time you redeem your Units may be greater
or less than the original cost of your Units. Net asset value is calculated each
Business Day by adding the value of the Securities, declared but unpaid
dividends on the Securities, cash and the value of any other Fund assets;
deducting unpaid taxes or other governmental charges, accrued but unpaid Fund
expenses and any remaining Deferred Sales Charges, unreimbursed Trustee
advances, cash held to redeem Units or for distribution to investors and the
value of any other Fund liabilities; and dividing the result by the number of
outstanding Units. After the initial offering period, net asset value will be
reduced to reflect the cost to the Fund of liquidating Securities to pay the
redemption price.

As long as the Sponsors are maintaining a secondary market for Units (as
described below), the Trustee will not actually redeem your Units but will sell
them to the Sponsors for net asset value. If the Sponsors are not maintaining a
secondary market, the Trustee will redeem your Units for net asset value or will
sell your Units in the over-the-counter market if the Trustee believes it will
obtain a higher net price for your Units. If the Trustee is able to sell the
Units for a net price higher than net asset value, you will receive the net
proceeds of the sale.

If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors based on market and credit factors determined to be in the best
interest of the Fund. These sales are often made at times when the Securities
would not otherwise be sold and may result in lower prices than might be
realized otherwise and may also reduce the size and diversity of the Fund. If
Securities

10
<PAGE>
sales are made during a time when additional Units are being created by the
purchase of additional Securities (as described under Portfolio Selection),
Securities will be sold in a manner designed to maintain, to the extent
practicable, the proportionate relationship among the number of shares of each
Security in the Portfolio.

Any investor owning Units representing at least the lesser of Securities
with a value of at least U.S.$250,000 or 10% of the net asset value of a
Portfolio who redeems those Units prior to the rollover notification date
indicated in Part A of the Prospectus may, in lieu of cash redemption, request
distribution in kind of an amount and value of Securities per Unit equal to the
otherwise applicable Redemption Price per Unit. Whole shares of each Security
together with cash from the Capital Account equal to any fractional shares to
which the investor would be entitled (less any Deferred Sales Charge payable)
will be paid over to a distribution agent and either held for the account of the
investor or disposed of in accordance with instructions of the investor. Any
brokerage commissions as well as any transfer and ongoing custodial fees on
sales of Securities in connection with in-kind redemptions will be borne by the
redeeming investors. The in-kind redemption option may be terminated by the
Sponsors at any time upon prior notice to investors.

Redemptions may be suspended or payment postponed (i) if the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (ii) if
the SEC determines that trading on the New York Stock Exchange is restricted or
that an emergency exists making disposal or evaluation of the Securities not
reasonably practicable or (iii) for any other period permitted by SEC order.

SPONSORS' SECONDARY MARKET FOR UNITS

The Sponsors, while not obligated to do so, will buy back Units at net asset
value without any other fee or charge as long as they are maintaining a
secondary market for Units. Because of the sales charge, market movements or
changes in the portfolio, net asset value at the time you sell your Units may be
greater or less than the original cost of your Units. The Sponsors may resell
the Units to other buyers or redeem the Units by tendering them to the Trustee.
You should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices for Units.

The Sponsors may discontinue the secondary market for Units without prior
notice if the supply of Units exceeds demand or for other business reasons.
Regardless of whether the Sponsors maintain a secondary market, you have the
right to redeem your Units for net asset value with the Trustee at any time, as
described above.

TRUST TERMINATION

Notice of impending termination of each Portfolio will be provided to
investors. A proportional share of the expenses associated with termination,
including brokerage costs incurred in disposing of Securities, will be borne by
investors remaining at that time. These expenses will reduce the amount of cash
or Securities those investors are to receive in any final distribution.

Upon termination of a Portfolio, the Trustee will distribute the Securities
and any cash in the Portfolio to a distribution agent that will act as agent for
the investors. Unless an investor elects to receive an in-kind distribution of
Securities, as discussed below, the distribution agent will, as promptly as
practicable, sell the investor's pro rata share of the Securities and distribute
to the investor the proceeds of the sale, less brokerage and other related
expenses, and the investor's pro rata share of any cash from the Portfolio.

Any investor holding units at the termination of the Portfolio may, by
written notice to the Trustee at least ten business days prior to termination,
elect to received an in kind distribution of the investor's pro rata share of
the Securities remaining in the Portfolio at that time (net of the investor's
share of expenses). Fractional shares of Securities will be sold by the
distribution agent and the net proceeds distributed to investors. Investors
subsequently selling Securities received in kind will incur brokerage costs at
that time which may exceed the value of any tax deferral obtained through the
in-kind distribution. Securities received in an in-kind termination distribution
may not be contributed to acquire units of another Series.

ROLLOVER

In lieu of redeeming their units or receiving liquidation proceeds in cash
or in kind upon termination of a Portfolio, investors who hold their Units with
one of the Sponsors may elect, by contacting their financial adviser prior to
the rollover notification date indicated in Part A, to exchange their Units in
the Portfolio for units of next year's corresponding Select Ten International
Portfolio (if available). No election to roll over may be made prior to 30 days
before the date of the rollover, and any rollover election will be revocable at
any time prior to the date of the rollover. It is expected that the terms of the
new portfolio will be substantially the same as those of the Portfolio.

The rollover of an investor's Units is intended to be effected in a manner
that will not result in the recognition of either gain or loss for U.S. federal
income tax purposes with respect to Securities that are included in the new
portfolio

11
<PAGE>
('Duplicated Securities'). Units held by an investor who elects the rollover
option will be redeemed through an in-kind distribution to a distribution agent
of the investor's pro rata share of Securities. The distribution agent will then
adjust the Securities distributed to the investor so that its composition
matches the investment profile of the new portfolio. This adjustment will
involve the sale of non-Duplicated Securities and, possibly, of a portion of
certain Duplicated Securities in order to rebalance the portfolio, and the
purchase of replacement Securities. Any excess sales proceeds, net of sales
related expenses, will be distributed to the investor. After this adjustment the
distribution agent will make an in-kind contribution of the adjusted Securities
to the new portfolio. Upon receipt of the in-kind contribution, the trustee of
the new portfolio will issue the appropriate number of units in the new
portfolio to the investor.

An investor who elects the rollover option will recognize capital gain or
loss with respect to the Securities, including fractional Securities, sold by
the distribution agent, but will not recognize gain or loss with respect to the
Duplicated Securities that are contributed in kind to the new portfolio. The
Sponsors intend to provide investors with information that will assist them in
determining their tax liability on an eventual sale of the Duplicated
Securities.

The Sponsors intend to cause the distribution agent to sell those Securities
that will not be contributed to the new portfolio, and then to create units of
the new portfolio, in each case as quickly as possible subject to the Sponsors'
sensitivity that the concentrated sale and purchase of large volumes of
securities may affect market prices in a manner adverse to the interest of
investors. Accordingly, the Sponsors may, in their sole discretion, undertake a
more gradual sale of Securities and a more gradual creation of units of the new
portfolio to help mitigate any negative market price consequences caused by this
large volume of securities trades. In order to minimize potential losses caused
by market movement during the rollover period, the Sponsors may enter into
program trades, which may increase brokerage commissions payable by investors.
There can be no assurance, however, that any trading procedures will be
successful or might not result in less advantageous prices. Pending the
investment of rollover proceeds in securities to comprise the new portfolio,
those moneys may be uninvested for several days.

Investors who participate in the rollover will not be entitled to receive a
cash distribution with which to pay any taxes incurred as a result of the
rollover procedure. Investors who do not participate in the rollover or
otherwise redeem their Units will continue to hold their Units until the
termination of the Portfolio; however, depending upon the extent of
participation in the rollover, the aggregate size of the Portfolio will be
reduced which could result in an increase in per Unit expenses.

The Sponsors may, in their sole discretion and without penalty or liability
to investors, decide not to sponsor new 1999 International portfolios or to
modify the terms of the rollover. Prior notice of any decision would be provided
to investors.

The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an 'exchange offer' for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsors have received exemptive orders under
Section 11(c) which they believe permit them to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsors' position and
additional regulatory approvals may be required.

INCOME, DISTRIBUTIONS AND REINVESTMENT

INCOME AND DISTRIBUTIONS

The annual U.S. dollar income per Unit that is earned by a Portfolio, after
deducting estimated annual Portfolio expenses per Unit, will depend primarily
upon the amount of dividends declared and paid by the issuers of the Securities,
fluctuations in U.S. dollar exchange rates and changes in the expenses of the
Portfolio and, to a lesser degree, upon the level of purchases of additional
Securities and sales of Securities. There is no assurance that dividends on the
Securities will continue at their current levels or be declared at all.

Each Unit in a Portfolio receives an equal share of distributions of
dividend income on the Securities in that Portfolio net of estimated expenses.
Because dividends on the Securities are not received at a constant rate
throughout the year, any distribution may be more or less than the amount then
credited to the Income Account. Dividends received are credited to an Income
Account in the relevant foreign currency and converted into U.S. dollars at the
current exchange rate upon declaration of a Portfolio distribution. Other
receipts are credited to a Capital Account after conversion into U.S. dollars at
the current rate. A Reserve Account may be created by withdrawing from the
Income and Capital Accounts amounts considered appropriate by the Trustee to
reserve for any material amount that may be payable out of a Portfolio. Funds
held by the Trustee in the various accounts do not bear interest. In addition,
distributions of amounts necessary to pay the Deferred Sales Charge will be made
from the Capital Account to an account maintained by the Trustee for purposes of
satisfying investors' sales charge obligations. Although the Sponsors may
collect the Deferred Sales Charge monthly, to keep Units more fully invested the
Sponsors currently do not anticipate

12
<PAGE>
sales of Securities to pay the Deferred Sales Charge until after the rollover
notification date. Proceeds of the disposition of any Securities not used to pay
Deferred Sales Charge or to redeem Units will be held in the Capital Account and
distributed on the final Distribution Day or following liquidation of the
Portfolios.

REINVESTMENT

Principal and income distributions on Units may be reinvested by
participating in the reinvestment plan. Under the plan, the Units acquired for
investors will be either Units already held in inventory by the Sponsors or new
Units created by the Sponsors' deposit of additional Securities, contracts to
purchase additional Securities or cash (or a bank letter of credit in lieu of
cash) with instructions to purchase additional Securities. Deposits or purchases
of additional Securities will generally be made so as to maintain the then
existing proportionate relationship among the number of shares of each Security
in a Portfolio. Units acquired by reinvestment will not be subject to the
initial sales charge but will be subject to any remaining installments of
Deferred Sales Charge. The Sponsors reserve the right to amend, modify or
terminate the reinvestment plan at any time without prior notice. Investors
holding Units in 'street name' should contact their broker, dealer or financial
institution if they wish to participate in the reinvestment plan.

PORTFOLIO EXPENSES

Estimated annual Portfolio expenses are listed in Part A of the Prospectus;
if actual expenses exceed the estimate, the excess will be borne by the
Portfolio. The estimated expenses do not include any brokerage commissions
payable by the Portfolio in buying and selling Securities. Trustee fees shown in
Part A of this Prospectus assume that the Portfolios will reach a size estimated
by the Sponsors and are based on a sliding fee scale that reduces the per 1,000
units Trustee's fee as the size of a Portfolio increases. The Trustee's annual
fee is payable in monthly installments. The Trustee also benefits when it holds
cash for a Portfolio in non-interest bearing accounts. Possible additional
charges include Trustee fees and expenses for extraordinary services, costs of
indemnifying the Trustee and the Sponsors, costs of action taken to protect the
Fund and other legal fees and expenses, Fund termination expenses and any
governmental charges. The Trustee has a lien on Portfolio assets to secure
reimbursement of these amounts and may sell Securities for this purpose if cash
is not available. The Sponsors receive an annual fee currently estimated at
$0.35 per 1,000 Units to reimburse them for the cost of providing Portfolio
supervisory services. While the fee may exceed their costs of providing these
services to the Fund, the total supervision fees from all Series of Equity
Investor Fund will not exceed their costs for these services to all of those
Series during any calendar year. The Sponsors may also be reimbursed for their
costs of providing bookkeeping and administrative services to Defined Asset
Funds, currently estimated at $0.10 per 1,000 Units. The Trustee's and Sponsors'
fees may be adjusted for inflation without investors' approval.

Expenses incurred in establishing the Portfolios, including the cost of the
initial preparation of documents relating to the Portfolios, any foreign trading
costs (including commissions, custodial fees and stamp taxes), Federal and State
registration fees, the initial fees and expenses of the Trustee, legal expenses
and any other out-of-pocket expenses, will be paid by the Portfolios and
amortized over the life of the Portfolios. Advertising and selling expenses will
be paid from the Underwriting Account at no charge to the Portfolios. Defined
Asset Funds can be a cost-effective way to purchase and hold investments. Annual
operating expenses are generally lower than for managed funds. Because Defined
Asset Funds have no management fees, limited transaction costs and no ongoing
marketing expenses, operating expenses are generally less than 0.25% a year.
When compounded annually, small differences in expense ratios can make a big
difference in your investment results.

TAXES

U.S. TAXATION

The following discussion addresses only the tax consequences of Units held
as capital assets and does not address the tax consequences of Units held by
persons with special tax circumstances, such as dealers, financial institutions,
insurance companies or former U.S. citizens or long term residents.

As used herein, the term 'U.S. Investor' means an owner of a Unit in the
United Kingdom Portfolio, Hong Kong Portfolio or Japan Portfolio that is, for
United States federal income tax purposes, (i) a citizen or resident of the
United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any political
subdivision thereof, or (iii) an estate or trust the income of which is subject
to United States federal income taxation regardless of its source. An investor
that is not a U.S. Investor but whose income from a Unit is effectively
connected with such Investor's conduct of a United States trade or business will
generally be taxed in the same manner as a U.S. Investor but should consult his
or its tax adviser in this regard.

13
<PAGE>
The following discussion relates only to U.S. Investors. Since the
Portfolios hold only Securities of non-U.S. issuers, it is expected that income
earned by investors who are not U.S. Investors will not be treated as
U.S.-source income and should not be subject to any U.S. withholding tax.

In the opinion of Davis Polk & Wardwell, special counsel for the Sponsors,
under existing law:

The Portfolios are not associations taxable as corporations for federal
income tax purposes. Each U.S. Investor will be considered the owner of a
pro rata portion of each Security in a Portfolio under the grantor trust
rules of Sections 671-679 of the Internal Revenue Code of 1986, as amended
(the 'Code'). Each U.S. Investor will be considered to have received all of
the dividends paid on his pro rata portion of each Security and any exchange
gain or loss resulting from the conversion into U.S. dollars of any such
dividends paid in foreign currency when such amounts are received or
converted by the Portfolio, regardless of whether such dividends are subject
to withholding taxes or used to pay a portion of the Portfolio's expenses or
whether they are automatically reinvested (see Reinvestment).

Dividends considered to have been received by a corporate U.S. Investor
will not qualify for the dividends-received deduction because the
dividends-received deduction is generally only available for dividends
received from domestic corporations.

The United Kingdom Portfolio will report as gross income earned by U.S.
Investors their pro rata share of dividends received by the Portfolio as
well as their pro rata share of the associated Tax Credit Amount (as defined
in 'United Kingdom Taxation' below), notwithstanding that it is not certain
that U.S. Investors will receive any refund of U.K. taxes. Those U.S.
Investors who hold Units on the relevant record date for dividends on the
underlying Securities held by the United Kingdom Portfolio should be
entitled, subject to applicable limitations, to either a credit or a
deduction for foreign taxes legally owed with respect to such dividend
payments and should consult their tax advisers in this regard. IRAs and
other plans addressed below under 'Retirement Plans' should note that they
are not likely to be eligible to claim any Treaty Payment (as defined below
under 'United Kingdom Taxation', which provides further details).

The Japan Portfolio will report as gross income earned by U.S. Investors
their pro rata share of dividends received by the Portfolio as well as their
pro rata share of the amount withheld with respect to such dividends. Those
U.S. Investors who hold Units on the relevant record date for dividends on
the underlying Securities held by the Japan Portfolio should be entitled,
subject to applicable limitations, to either a credit or a deduction for
foreign taxes legally owed with respect to such dividend payments and should
consult their tax advisers in this regard. For further details, see
'Japanese Taxation' below.

An individual U.S. Investor who itemizes deductions will be entitled to
deduct his pro rata share of Portfolio expenses only to the extent that this
amount together with the U.S. Investor's other miscellaneous deductions
exceeds 2% of his adjusted gross income. The Code further restricts the
ability of an individual U.S. Investor with an adjusted gross income in
excess of a specified amount (for 1998, $124,500 or $62,250 for a married
person filing a separate return) to claim itemized deductions (including his
pro rata share of Portfolio expenses).

The U.S. Investor's basis in his Units will equal the cost of his Units,
including the initial sales charge. A portion of the sales charge is
deferred until the termination of the Portfolio or the redemption of the
Units. The proceeds received by a U.S. Investor upon such event will reflect
deduction of the deferred amount (the 'Deferred Sales Charge') and a charge
for organizational expenses. The annual statement and the relevant tax
reporting forms received by U.S. Investors will be based upon the amounts
paid to them, net of the Deferred Sales Charge and the charge for
organizational expenses. Accordingly, U.S. Investors should not increase
their basis in their Units by the Deferred Sales Charge or any amount used
to pay organizational expenses.

A U.S. Investor will generally recognize capital gain or loss when the
U.S. Investor disposes of his Units for cash (by sale or redemption) or when
the Trustee disposes of the Securities from the Portfolio. A U.S. Investor
will not recognize gain or loss upon the distribution of a pro rata amount
of each of the Securities by the Trustee to a U.S. Investor (or to his
agent) in redemption of Units or upon termination of the Portfolio, except
to the extent of cash received in lieu of fractional shares. The redeeming
U.S. Investor's basis for such Securities will be equal to his basis for the
same Securities (previously represented by his Units) prior to such
redemption, and his holding period for such Securities will include the
period during which he held his Units. Capital gain on a disposition of
Units or Securities by U.S. Investors will generally be U.S. source income.
Any foreign currency gain or loss with respect to an investment in the
Portfolio will generally be treated as ordinary income or loss.

A U.S. investor who elects to roll over into a new portfolio (a 'rollover
investor') will not recognize gain or loss either upon the distribution of
Securities by the Trustee to the distribution agent or upon the contribution
of

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Duplicated Securities (as defined under Rollover) to the new portfolio. The
rollover investor will generally recognize capital gain or loss as a
consequence of the distribution agent's sale of non-Duplicated Securities.
The rollover investor's basis for the Duplicated Securities that are
contributed in kind to the new portfolio will be equal to his basis for the
same Duplicated Securities prior to the rollover.

Net capital gain (the excess of net long-term capital gains over net
short-term capital losses) may be taxed at lower rates than ordinary income
for certain individuals and other noncorporate taxpayers. A capital gain or
loss is long-term if the asset is held for more than one year and short-term
if held for one year or less. The deduction of capital losses is subject to
limitations. The lower net capital gain tax rates will be unavailable to
those noncorporate U.S. Investors who, as of the mandatory termination date
(or earlier termination of a Portfolio), have held their Units for less than
a year and a day. Similarly, with respect to a noncorporate rollover
investor, this lower rate will be unavailable for gains on non-Duplicated
Securities if, as of the beginning of the rollover period, the rollover
investor has held his or her shares for less than a year and a day.
Investors will not be entitled to the new 20% maximum federal tax rate for
capital gains derived from a Portfolio because they will not have held their
Units for more than 18 months. However, a rollover investor's holding period
for the contributed Duplicated Securities will include the period during
which he held an interest in the same Duplicated Securities through an
investment in the Portfolio and in prior years' corresponding Select Ten
International Portfolios. Investors should consult their tax advisers
regarding these matters.

Under the income tax laws of the State and City of New York, the
Portfolios are not associations taxable as corporations and the income of
the Portfolios will be treated as the income of the U.S. Investors in the
same manner as for federal income tax purposes.

The foregoing discussion relates only to the tax treatment of U.S.
Investors with regard to federal and certain aspects of New York State and
City income taxes. U.S. Investors may be subject to taxation in New York or
in other U.S. or foreign jurisdictions and should consult their own tax
advisers in this regard.

* * * *

At the termination of a Portfolio, the Trustee will furnish to each investor
an annual statement containing information relating to the dividends received by
the Portfolio on the Securities, the cash proceeds received by the Portfolio
from the disposition of any Security (resulting from redemption or the sale by
the Portfolio of any Security), and the fees and expenses paid by the Portfolio.
The Trustee will also furnish annual information returns to each investor and to
the Internal Revenue Service.

UNITED KINGDOM TAXATION

The following discussion addresses certain U.K. tax consequences of the
ownership of Units of the United Kingdom Portfolio held by certain U.S.
Investors only. For the U.S. tax consequences to U.S. Investors, see U.S.
Taxation. The discussion does not address the tax consequences for non-U.S.
investors, who should consult their own tax advisers in this respect.

General. In the opinion of Linklaters & Paines, the Sponsors' U.K. special
counsel, based on the description of the United Kingdom Portfolio in the
Prospectus and on certain representations made by special U.S. counsel to the
Sponsors, this summary accurately describes the material U.K. tax consequences
to certain U.S. Investors in the U.K. Portfolio. This summary is based upon
current U.S. law, U.K. taxation law, U.K. Inland Revenue practice, the U.S./U.K.
convention relating to taxes on income and capital gains (the 'Treaty') and the
U.S./U.K. estate and gift taxes convention (the 'Estate Tax Treaty'). The
summary is a general guide only and is subject to any changes in any of the
aforesaid after the date of this Prospectus (including changes on a retroactive
basis) which may affect the tax analysis described below. Accordingly,
prospective investors should consult their U.K. tax advisers as to the U.K. tax
consequences of owning Units of the United Kingdom Portfolio applicable to their
circumstances.

Taxation of Dividends. Subject to the following paragraph, a U.K. resident
individual who receives a dividend from a U.K. company is generally entitled to
a tax credit, which is either offset against U.K. tax liabilities, or, in
certain circumstances, repaid. Under the Treaty, a U.S. Investor who is resident
in the U.S. for the purposes of the Treaty may be entitled to repayment of the
tax credit, but such repayment is subject to U.K. withholding tax of 15% on the
sum of the dividend and the tax credit.

For dividends paid by U.K. companies before April 6, 1999, the tax credit
(before such withholding) is equal to one quarter of the dividend (the 'Tax
Credit Amount'). Although such a U.S. Investor who held shares directly in a
U.K. company could generally claim a refund of part of the Tax Credit Amount
attributable to the dividend (a 'Treaty Payment'), the ability of such a U.S.
Investor in the United Kingdom Portfolio to claim a Treaty Payment is unclear
where dividend payments are made to an entity such as the Fund. Accordingly, for
such a U.S. Investor to be able to claim Treaty Payments, it would be necessary
to agree to a special procedure with the U.K. Inland Revenue in

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advance. In the absence of agreeing to such a procedure, U.S. Investors may not
in practice be able to claim a Treaty Payment from the U.K. Inland Revenue.

For dividends paid by a U.K. company on or after April 6, 1999, the tax
credit is to be reduced to one-ninth of the dividend. U.S. investors should note
that it will not hereafter be possible to claim a Treaty Payment in respect of
dividends paid on or after April 6, 1999 on the securities listed in FT Index
held in the 'United Kingdom Portfolio'.

A U.K. company may elect for a dividend to be a 'foreign income dividend'
rather than an ordinary dividend. No tax credits are attributable to such
foreign income dividends.

Taxation of Capital Gains. U.S. Investors who are neither resident nor
ordinarily resident in the U.K. will not be liable for U.K. tax on gains arising
on the disposal of Units unless the Units are used, held or acquired for the
purposes of a trade, profession or vocation carried on in the U.K. through, or
for the purposes of, a permanent establishment or fixed base as defined in the
Treaty.

U.K. Inheritance Tax. Individual U.S. Investors who are domiciled in the
U.S. (as defined by the Estate Tax Treaty) and who are not U.K. nationals (as
defined by the Estate Tax Treaty) will generally not be subject to U.K.
inheritance tax on death or on lifetime gifts of Units in the United Kingdom
Portfolio provided that any applicable U.S. federal gift or estate tax is paid,
unless the Units are part of the business property of U.K. permanent
establishments or pertain to U.K. fixed bases used for the performance of
personal services. Where the Units have been settled on trust, the Units will
generally not be subject to U.K. inheritance tax unless the settlor, at the time
of settlement, was not domiciled in the U.S. or was a U.K. national provided
that any applicable U.S. federal gift or estate tax is paid. In the exceptional
case where Units are subject to both U.K. inheritance tax and to U.S. federal
gift or estate tax, the Estate Tax Treaty generally provides for U.K. tax paid
to be credited against tax payable in the U.S., or for tax paid in the U.S. to
be credited against tax payable in the U.K., based on rules set out in the
Estate Tax Treaty.

* * * *

As mentioned in 'United Kingdom -- Taxation of Dividends' above, for a U.S.
Investor to be able to claim Treaty Payments it would be necessary to agree a
special procedure with the Inland Revenue in advance. The Inland Revenue operate
a special procedure under which trustees of funds like the Fund may claim Treaty
Payments on behalf of Investors. The Inland Revenue have agreed to such
procedure in respect of the Fund, under the terms of which the Trustee may claim
Treaty Payments on behalf of U.S. Investors in the United Kingdom Portfolio. The
amount of any Treaty Payment obtained by the Trustee with respect to a dividend
will be reflected in the net asset value of the Portfolio and will be
distributed to investors on the first Distribution Date after the Treaty Payment
is received by the Portfolio.

HONG KONG TAXATION

The following discussion addresses only the Hong Kong tax consequences to
investors of Units in the Hong Kong Portfolio. The taxation of non-U.S.
investors in their own countries of residence as a result of their ownership,
sale, exchange or other disposition of Units in the Hong Kong Portfolio will be
governed by the internal tax laws of the countries of residence of the non-U.S.
investors. Accordingly, non-U.S. investors should consult their tax advisers in
this regard.

The Sponsors have been advised by Johnson Stokes & Master, the Sponsors'
special Hong Kong counsel, that the following summary accurately describes the
Hong Kong tax consequences under existing law to all investors of Units of the
Hong Kong Portfolio. This discussion is for general purposes only and assumes
that the investor is not carrying on a trade, profession or business in Hong
Kong and has no profits arising in or derived from Hong Kong in respect of the
carrying on of such trade, profession or business. Investors should consult
their tax advisers as to the Hong Kong tax consequences of ownership of the
Units of the Hong Kong Portfolio applicable to their particular circumstances.

Taxation of Dividends. Amounts in respect of dividends paid to investors of
Units of the Hong Kong Portfolio are not taxable in Hong Kong and therefore will
not be subject to the deduction of any withholding tax in Hong Kong.

Profits Tax. An investor of Units of the Hong Kong Portfolio (other than a
person carrying on a trade, profession or business in Hong Kong) will not be
subject to Hong Kong profits tax on any gain or profits made on the realization
or other disposal of his units.

Hong Kong Estate Duty. Units of the Hong Kong Portfolio should generally not
give rise to a liability to Hong Kong estate duty, if the value of the property
passing on the death of a deceased that is situated in Hong Kong does not exceed
HK$7 million. Prospective investors should consult their own tax advisers in
this regard.

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JAPANESE TAXATION

The Sponsors have been advised by Tomotsune Kimura and Mitomi, the Sponsors'
special Japanese counsel, that dividends paid to the Japan Portfolio by Japanese
corporations will be subject to a withholding tax of 20%. Generally, a 'resident
of the United States' that holds shares in a Japanese corporation and has no
permanent establishment in Japan is entitled to a reduced withholding tax rate
of 15% under the Convention between Japan and the United States of America for
the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income (the 'Convention') if an application signed by such
resident or its agent is filed with the appropriate tax authority. The
Convention defines the term 'resident of the United States' to include trusts
which are treated as residents of the United States for United States income tax
purposes. In light of the fact that the Japan Portfolio is not a taxable entity
for federal income tax purposes (see 'Taxes--U.S. Taxation'), the Japan
Portfolio would not qualify as a U.S. resident within the meaning of the
Convention, and consequently, each investor in the Japan Portfolio will be
treated as the recipient of his pro rata share of dividends paid to the Japan
Portfolio and will be required to file the specified application in order to
benefit from the reduced withholding rate. The national tax authority of Japan
takes the position that the Trustee may not file the required application on
behalf of the investors. Accordingly, investors may not in practice be able to
benefit from the reduced withholding rate provided by the Convention. In
addition, Japanese gift and inheritance taxes may be imposed with respect to
Units of the Japan Portfolio upon legatees, heirs or donees of individuals who
are holders thereof.

Securities transaction taxes will be imposed in the event of sales of
portfolio securities within Japan, currently at the rate of 0.21% of the sales
prices thereof. However, gains derived from sales of portfolio securities within
Japan will not be subject to Japanese income tax, assuming that the transferor
does not have a permanent establishment in Japan.

* * * *

The aforesaid discussion addresses the Japanese tax consequences to
residents of the United States (within the meaning of the Convention) of holding
Units of the Japan Portfolio. The discussion does not address the tax
consequences to an investor who is a non-resident of the United States.
Accordingly, such a non-resident investor should consult his own tax adviser in
this respect.

RETIREMENT PLANS

This Series of Equity Income Fund may be well suited for purchase by
Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing plans are
exempt from federal taxation. All distributions from such plans are generally
treated as ordinary income but may, in some cases, be eligible for special 5 or
10 year averaging (prior to the year 2000) or tax-deferred rollover treatment.
Investors holding IRAs, Keogh plans and other tax-deferred retirement plans
should consult their plan custodian as to the appropriate disposition of
distributions. Investors considering participation in any of these plans should
review specific tax laws related thereto and should consult their attorneys or
tax advisers with respect to the establishment and maintenance of any of these
plans. These plans are offered by brokerage firms, including the Sponsor of this
Fund, and other financial institutions. Fees and charges with respect to such
plans may vary.

Retirement Plans for the Self-Employed--Keogh Plans. Units may be purchased
by retirement plans established for self-employed individuals, partnerships or
unincorporated companies ('Keogh plans'). The assets of a Keogh plan must be
held in a qualified trust or other arrangement which meets the requirements of
the Code. Keogh plan participants may also establish separate IRAs (see below)
to which they may contribute up to an additional $2,000 per year ($4,000 in a
spousal account).

Individual Retirement Account--IRA. Any individual can establish an IRA or
make use of a qualified IRA arrangement for the purchase of Units of the Fund.
Any individual (including one covered by an employer retirement plan) can make a
contribution to an IRA equal to the lesser of $2,000 ($4,000 in a spousal
account) or 100% of earned income; the investment must be made in cash. However,
the deductible amount of a contribution by an individual covered by an employer
retirement plan will be reduced if the individual or the individual's spouse is
covered by an employer maintained retirement plan and the individual's adjusted
gross income exceeds $25,000 (in the case of a single individual), $40,000 (in
the case of a married individual filing a joint return) or $200 (in the case of
a married individual filing a separate return). These income threshholds will
gradually be increased by the year 2004 to $50,000 for a single individual and
$80,000 for a married individual filing jointly. Certain transactions which are
prohibited under Section 408 of the Code will cause all or a portion of the
amount in an IRA to be deemed to the distributed and subject to tax at that
time. Unless nondeductible contributions were made in 1987 or a later year, all
distributions from an IRA will be treated as ordinary income but generally are
eligible for tax-deferred rollover treatment. Taxable

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distributions made before attainment of age 59 1/2, except in the case of the
participant's death or disability or where the amount distributed is part of a
series of substantially equal periodic (at least annual) payments that are to be
made over the life expectancies of the participant and his or her beneficiary,
are generally subject to a surtax in an amount equal to 10% of the distribution.
The 10% surtax will be waived for withdrawals for certain educational and first-
time homebuyers expenses. The Taxpayer Relief Act of 1997 provides, subject to
certain income limitations, for a special type of IRA under which contributions
would be non-deductible but distributions would be tax-free if the account were
held for at least five years and the account holder was at least 59 1/2 at the
time of distribution.

Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing plan
for employees of a corporation may purchase Units.

RECORDS AND REPORTS

Each Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Portfolio,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.

With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of a
Portfolio, the Trustee sends each investor of record a statement summarizing
transactions in the Portfolio's accounts including amounts distributed from
them, identifying Securities sold and purchased and listing Securities held and
the number of Units outstanding at termination and stating the Redemption Price
per 1,000 Units at termination, and the fees and expenses paid by the Portfolio,
among other matters. Portfolio accounts may be audited by independent
accountants selected by the Sponsors and any report of the accountants will be
available from the Trustee on request.

TRUST INDENTURE

Each Portfolio is a 'unit investment trust' created under New York law by a
Trust Indenture among the Sponsors and the Trustee. This Prospectus summarizes
various provisions of the Indentures, but each statement is qualified in its
entirety by reference to the Indentures.

An Indenture may be amended by the Sponsors and the Trustee without consent
by investors to cure ambiguities or to correct or supplement any defective or
inconsistent provision, to make any amendment required by the SEC or other
governmental agency or to make any other change not materially adverse to the
interest of investors (as determined in good faith by the Sponsors). An
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in a Portfolio
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.

The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsors will use their best
efforts to appoint a successor promptly; however, if upon resignation no
successor has accepted appointment within 30 days after notification, the
resigning Trustee may apply to a court of competent jurisdiction to appoint a
successor.

Any Sponsor may resign so long as one Sponsor with a net worth of $2,000,000
remains. A new Sponsor may be appointed by the remaining Sponsors and the
Trustee to assume the duties of the resigning Sponsor. If there is only one
Sponsor and it fails to perform its duties or becomes incapable of acting or
bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indentures and liquidate the Fund or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.

The Sponsors and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of a
Sponsor) or reckless disregard of duty. The Indentures contain customary
provisions limiting the liability of the Trustee.

MISCELLANEOUS

LEGAL OPINION

The legality of the Units has been passed upon by Davis Polk & Wardwell, 450
Lexington Avenue, New York, New York 10017, as special counsel for the Sponsors.

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AUDITORS

The Statements of Condition in Part A of the Prospectus were audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.

TRUSTEES

The Trustees and their addresses are stated on the back cover of the
Prospectus. Each Trustee is subject to supervision by the Federal Deposit
Insurance Corporation, the Board of Governors of the Federal Reserve System and
the State of New York Banking Department.