IRA Ideal!
DEFINED ASSET FUNDS
SELECT GROWTH PORTFOLIO
1998 Series C
A Disciplined Approach to Growth Stock Investing
[ML logo] Merrill Lynch
SELECT GROWTH PORTFOLIO
Deciding which investments may support your long-term investment objectives at
a level of risk that is acceptable to you can be difficult. This is
particularly true if you're interested in incorporating aggressive growth
stocks into your portfolio. While many mutual funds and money managers follow
a "growth stock" investment style, there is no generally accepted definition
of a growth stock and no easy way to select them. That's why we've developed
the Select Growth Portfolio. It's designed to provide definition and
discipline to aggressive growth stock investing.
How The Portfolio Was Selected
A quantitative selection model was developed by O'Shaughnessy Capital
Management, Inc., a registered investment advisor (the Portfolio Consultant).
This model was used to screen a universe of over 5,000 stocks and identify
growth stocks believed to be reasonably priced with an attractive growth
potential.
Here's How It Worked:
First, growth was defined by selecting stocks with consensus estimated earnings
per share growth of 20% for the next year. Then, to give a longer-term view
and to avoid short-term run ups, the Portfolio Consultant screened for a 20%
estimated consensus earnings per share growth for the next 3 to 5 years.
Second, value was considered by selecting growth stocks with Price to Earnings
Ratios not exceeding their estimated 3 to 5 year earnings growth rates. This
was to remove expensive stocks.
Third, relative strength was determined by separating out stocks with strong
price performance over the prior six months.
Fourth, the Portfolio Consultant weeded out the smaller companies with market
capitalization below $750 million.
Finally, the 10 stocks considered most attractive were selected by the
Sponsors.
The securities will be selected and held without regard to any buy or sell
recommendations of any of the Sponsors.
Investor Profile
This Portfolio is designed for investors whose primary objective is long-term
growth. The investor should have the willingness and ability to withstand
extreme price volatility from aggressive growth stocks for the potential of
greater rewards over time. Investors are encouraged to follow the Strategy
for at least three years.
Past Performance of Prior Select Growth Portfolios
The chart below shows average annual total returns for the following Series,
which assume annual "rollovers" into the next Portfolio. We've also included
returns for the most recently completed Portfolio of each Series.
Series From Inception Through 6/30/98
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Inception Return
02/14/95 Series A 20.76%
06/06/95 Series B 22.90
08/01/95 Series C -1.28
11/01/95 Series D 11.47
Most Recently Completed Portfolio
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Period Return
02/10/97-03/13/98 Series A 33.77%
05/12/97-06/19/98 Series B 32.10
08/12/96-09/12/97 Series C 98.34
11/12/96-12/19/97 Series D 21.25
Past performance is no guarantee of future results. Average annual total
returns represent price changes plus dividends reinvested, divided by the
initial public offering price, and reflect maximum sales charges and expenses.
Returns for Series From Inception differ from Most Recently Completed
Portfolio because the former figures reflect a reduced sales charge on
rollovers and different performance periods.
The Select Growth Strategy
The Portfolio is based on the Strategy of buying 10 screened growth stocks and
holding them for about a year. At the end of the year, we expect to select a
new Portfolio through reapplication of the Strategy and you may reinvest in
the new Portfolio, if available.
This is a one-year investment but, like all equity investing, a longer-term
view is appropriate. To reduce the effect of short-term volatility, we
recommend following the Strategy for at least three years. There can be no
guarantee that the Portfolio will achieve its objective over its one-year life
or over consecutive one-year periods.
Defined Portfolio
This pre-selected Portfolio will remain relatively fixed throughout its
one-year life. You will always know how your dollars are invested.
Convenience Defined
One advantage of our fixed Portfolio of growth stocks is its convenience; the
convenience of acquiring a portfolio of securities through one purchase. The
Portfolio invests in 10 stocks but makes it convenient with only one price to
track. Prices are quoted weekly in Barron's.
No Sell Decisions
The Portfolio will follow a disciplined strategy of buying and holding for
about one year. You may also have the option of reinvesting after a year to
continue with the Strategy.
Exchange Option
You can exchange units of these funds for units of certain other Defined Asset
Funds. You may also exchange into these funds from certain other funds at a
reduced sales charge.
Low Cost
The minimum amount required to purchase this investment is about $250.
The Portfolio
(1) AES Corporation
(AES) AES and its subsidiaries provide electricity to customers. The company
has an interest in 34 power plants in the U.S., Argentina, Brazil, Pakistan,
Hungary, Kazakstan, China and the U.K.
(2) Allied Waste Industries, Inc.
(AWIN) This non-hazardous solid waste management company has operations in 18
states located in the Midwest, Northeast, Southeast and Southwest U.S.
(3) Biogen, Incorporated
(BGEN) Develops, manufactures and markets drugs for human health care. The
company focuses on developmental biology and gene therapy and sells "AVONEX"
to treat relapsing forms of multiple sclerosis.
(4) CKE Restaurants, Incorporated(*)
(CKR) Owns, operates and franchises quick-service restaurants. The company
operates 3,981 restaurants primarily under the "Hardee's" and "Carl's Jr."
names.
(5) Federal-Mogul Corporation(*)
(FMO) Manufactures and distributes precision parts, primarily vehicular
components. It also engineers products for original equipment manufacturers of
automobiles, light and heavy trucks, construction vehicles and industrial
products.
(6) HEALTHSOUTH Corporation
(HRC) Provides outpatient surgery and rehabilitative health-care services. The
company has more than 1,850 patient care locations in the U.S., Australia and
the U.K.
(7) Heilig-Meyers Company(*)
(HMY) Operates more than 1,200 home furnishing stores throughout the U.S.
under the names "Heilig-Meyers", "Mattress Discounters", "Rhodes" and "The
RoomStore."
(8) MBNA Corporation(*)
(KRB) The parent company of MBNA America Bank, N.A. Through the Bank, the
company issues premium and standard bank credit cards. MBNA also provides
retail deposits, individual loans and card and financial transactions
processing.
(9) Network Associates, Incorporated
(NETA) Supplies enterprise network security and management solutions. Its
products are marketed under the brand name "Total Virus Defense", "Total
Network Security", "Total Network Visibility" and "Total ServiceDesk."
(10) QUALCOMM, Incorporated
(QCOM) Develops, manufactures, markets, licenses and operates communications
systems and products based on its proprietary digital wireless technologies.
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(*) Only these stocks currently pay dividends. The current annual
dividends per share for the Securities in Portfolio numbers 4, 5, 7 and 8
are $0.08, $0.01, $0.28 and $0.36, respectively, based on the latest
quarterly, semi-annual or annual declaration; there can be no assurance
that future dividend payments, if any, will be maintained in an amount
equal to these dividends.
DEFINED ASSET FUNDS SELECT GROWTH PORTFOLIO
Defining Your Risks
The following are important facts to keep in mind when considering this
investment for your portfolio. Please read them carefully. Your financial
professional will be happy to answer any questions you may have.
o The Portfolio consists of aggressive growth stocks which are subject to
extreme price volatility. Therefore, the Portfolio should be
considered speculative and not a complete equity investment program.
o The Portfolio is designed for investors who can assume the risks
associated with equity investments. It is not appropriate for those
seeking capital preservation or high current income. U.S. equity
markets have been at historically high levels and no assurance can be
given that these levels will continue.
o The value of your investment will fluctuate with the prices of the
underlying stocks. There can be no assurance that dividend rates or
stock prices will not decrease over the life of the Portfolio.
o The model and the Portfolio Consultant have a limited track record.
Since February 1995, when the first Portfolio was offered, the model
has generally underperformed the S&P 500 Index and other equity
indexes.
o It is unlikely that the Portfolio will change over its one-year life,
even if the stock market decreases in value or there are adverse
developments affecting the stocks held.
Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and, after the initial offering period, the
charge for organization costs. In addition, the annual statement and the
relevant tax reporting forms you receive at year end will be based on the
amount paid to you, net of the deferred sales charge and, after the initial
offering period, the charge for organization costs. Accordingly, you should
not increase the tax basis in your units by these charges.
Generally, dividends and any gains will be subject to tax each year. Capital
gains, if any, on assets held over a year will be taxed up to the maximum
federal tax rate of 20%. However, on rollovers to future Portfolios, if
available, investors will defer recognition of gains and losses on stocks that
are transferred to the new Portfolio.
Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy.
In addition, all investors pay a deferred sales charge of $17.50 per 1,000
units, about 1.75%, deducted over the last ten months of the Portfolio.
As a % of Public Amount Per
Offering Price 1,000 Units
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Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
Maximum Sales Charge 2.75% $27.50
Estimated Annual Operating
Expenses (as a % of net assets) 0.178% $1.76
Estimated Organization Costs $3.23
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If you sell your units before the final installment, the remaining deferred
sales charge for that year will be deducted, along with the estimated costs of
selling Portfolio securities. If you roll over to a successor Portfolio, if
available, the initial charge will be waived.
Volume Purchase Documents
For larger purchases, the overall sales charges are reduced to put more of
your investment dollars to work for you.
Amount Total Sales Charge as a %
Purchased of Public Offering Price
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Less than $50,000 2.75%
$50,000 to $99,999 2.50%
$100,000 to $249,999 2.00%
$250,000 ro $999,999 1.75%
$1,000,000 or more 1.00%
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Select Now
Call your financial professional to see how the Select Growth Portfolio can
fit into your financial plan. A free prospectus containing more complete
information, including all charges and expenses, is available. Read the
prospectus carefully before you invest.
DEFINED ASSET FUNDS
Buy With Knowledge o Hold With Confidence
Other Select Series
Select Ten Portfolio (DJIA)
United Kingdom Portfolio (Financial Times Index)
Select S&P Industrial Portfolio
Select S&P Industry Turnaround Portfolio
Select S&P Intrinsic Value Portfolio
Equity Investor Funds Concept Series
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund 2
Tele-Global Trust 4
Equity Investor Funds Index Series
S&P 500 Index Trust 2
S&P MidCap Index Trust
Other Defined Asset Funds
Corporate Income Funds
Government Securities Income Funds
Municipal Investment Trusts
[Recycling logo] Printed on Recycled Paper 11591BR-8/98
[Copyright logo] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
