IRA Ideal!
Defined Asset Funds[SM]
The Select S&P Industrial Portfolio
1998 Series C
Take
indexing
to
another
level...
[Logo] Merrill Lynch
Indexing - it's a strategy to mirror the returns of major indices. Why not take
a step beyond?
The S&P Industrial Portfolio takes indexing to another level.
Instead of simply replicating an index, the Select S&P Industrial Strategy
attempts to single out stocks within the index for a combination of value,
capital appreciation and current dividend income.
The Portfolio seeks total return through a contrarian strategy of selecting 15
stocks from the S&P Industrial Index(1) with high dividend yields and potential
value.
The Strategy
Like most Portfolios in the Select Series, the Select S&P Industrial Portfolio
employs a "buy and hold" style of investing which follows a disciplined
strategy. Each year, we intend to reapply the screening process to select a new
Portfolio. You can reinvest in the next Portfolio, if available, at a reduced
sales charge, or you can redeem your investment. Although each Portfolio is a
one-year investment, we recommend you stay with the Strategy for at least three
to five years for potentially more consistent results.
Select S&P Industrial Portfolio-1998 Series C(2)
Ticker Current
Name of Issuer Symbol Dividend Yield(3)
- -------------- ------ -----------------
1. GENUINE PARTS COMPANY GPC 2.79%
2. ALLTEL CORPORATION AT 2.65%
3. ROYAL DUTCH PETROLEUM COMPANY4 RD 2.63%
4. HEINZ (H.J.) COMPANY HNZ 2.33%
5. SBC COMMUNICATIONS, INC. SBC 2.29%
6. KELLOGG COMPANY K 2.26%
7. ANHEUSER-BUSCH COMPANIES, INC. BUD 2.25%
8. CONAGRA, INC. CAG 2.15%
9. MAY DEPARTMENT STORES COMPANY MAY 2.00%
10. AMERICAN HOME PRODUCTS CORPORATION AHP 1.92%
11. EMERSON ELECTRIC COMPANY EMR 1.87%
12. PITNEY BOWES, INC. PBI 1.86%
13. ABBOTT LABORATORIES ABT 1.67%
14. BESTFOODS, INC. BFO 1.60%
15. NEWELL COMPANY NWL 1.48%
The Portfolio does not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors or Standard & Poor's.
Past Performance of Prior Select S&P Industrial Portfolios
- --------
1 "Standard & Poor's," "S&P", "S&P 500" and the "S&P Industrial Index"
are trademarks of The Mc Graw-Hill Companies, Inc. and have been licensed for
use by Defined Asset Funds. The Portfolio is not sponsored, managed, sold or
promoted by Standard & Poor's. The name "Dow Jones Industrial Average" is the
property of Dow Jones & Company, Inc.
2 Initial date of deposit-April 27,1998
3 Current dividend yield for each stock was calculated by annualizing
the last monthly, quarterly or semi-annual ordinary dividend received on that
stock and dividing the result by its market value as of the close of trading on
April 24,1998. There can be no assurance that future dividends, if any, will be
maintained at the indicated rates.
4 This issuer is located in The Netherlands. the current semi-annual
dividend per share will be subject to withholding taxes of The Netherlands.
Past Performance of Prior Select S & P Industrial 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 3/31/98 Most Recently Completed Portfolio
- ------------------------------------- -----------------------------------
Inception Return Period Return
1/22/97 Series A 25.71% 1/22/97- Series A 31.43%
3/13/98
2/24/97 Series B 28.14% 2/24/97- Series B 22.96%
4/24/98
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 they
reflect a reduced sales charge on rollovers and different performance periods,
and Portfolios may not be fully invested at all times.
The Selection Process
The Select S&P Industrial Portfolio looks for potential values in the equity
market by investing in companies in the S&P Industrial Index that may be
currently out of favor. It does this through a disciplined four-part screening
process:
1. Defining the Universe: We begin with the S&P Industrial Index, a sub-set
of the S&P 500 Index*, which includes only industrial stocks. Defined
Asset Funds then removes any stocks that are part of the Dow Jones
Industrial Average* (DJIA).
2. Quality Screen: We include only stocks that are ranked A+ or A by Standard
& Poor's*. Standard & Poor's determines these stock rankings using a
computerized system which focuses primarily on the growth and stability of
per-share earnings and dividends. It then assigns a symbol to each stock,
which ranges from A+ for the highest ranked stocks to D for those stocks
which Standard & Poor's considers to be the most speculative. These
rankings are not intended to predict stock price movements.
3. Market Capitalization: We then rank the stocks by their market
capitalization from highest to lowest, and eliminate the lowest 25%. This
allows the Portfolio to avoid smaller, less liquid issues.
4. Highest Dividend Yield: Finally we rank the remaining stocks according to
dividend yield which identifies companies whose prices may have declined.
From that group, we select the 15 highest-yielding stocks for the
Portfolio.
Avoid the teachings of speculators whose judgments are not confirmed by
experience.
LEONARDO DA VINCI
Hypothetical Results
[A mountain chart, captioned "Hypothetical Growth of $10,000 invested 1/1/1973
through 3/31/98" compares the cumulative annual performance from 1973 through
3/31/98 of the Strategy (ochre), the Dow Jones Industrial Average (DJIA) (pink),
the S&P 500 Index (purple) and the S&P Industrial Index (green). An ochre box in
the upper left quadrant indicates the components of the Strategy performance
section of the chart. The horizontal or (Y) axis compares the cumulative annual
performance by YEAR , from 1973 through 3/31/98. The vertical or (X) axis
reflects DOLLAR AMOUNT value for each index from 1973 ending 3/31/98. The
initial value of each investment is $10,000. Throughout the period from 1973
through March 31, 1998, increases in each investment build towards the right
vertical or (X) axis. At the end of this period, the right vertical or (X) axis,
reflects the ending value of the STRATEGY ($461,218), the ending value of the
DJIA ($237,538), the ending value of the S&P 500 Index ($234,178) and the ending
value of the S&P Industrial Index ($225,002).]
Since stocks in the Portfolio were chosen solely by applying the Strategy, we
analyzed the Strategy to see how it could have performed. Past performance of
the Strategy is no guarantee of future results of any Portfolio. The Strategy
would have underperformed the DJIA in 8, the S&P 500 Index in 9, and the S&P
Industrial Index in 8 of the last 25 years. There can be no assurance that any
Portfolio will outperform these indices.
Annual Total Returns
<TABLE>
Year Strategy DJIA S&P 500 S&P Year Strategy DJIA S&P S&P
** Index Industrial ** 500 Industrial
Index Index Index
- ---- ------- ------ ------- ---------- ----- --------- ------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1973 -20.13% -13.12% -14.66% -14.61% 1987 2.52 6.02 5.67 9.13
1974 -5.35 -23.14 -26.47 -26.54 1988 42.04 15.95 16.58 15.80
1975 40.63 44.40 36.92 36.78 1989 35.40 31.71 31.11 29.30
1976 30.89 22.72 23.53 22.59 1990 0.96 -0.57 -3.20 -0.84
1977 -6.53 -12.71 -7.19 -8.20 1991 27.06 23.93 30.51 30.39
1978 6.06 2.69 6.39 7.50 1992 11.50 7.34 7.67 5.63
1979 26.47 10.52 18.02 18.40 1993 2.28 16.72 9.97 8.90
1980 18.23 21.41 31.50 32.98 1994 11.41 4.95 1.30 3.75
1981 7.67 -3.40 -4.83 -6.69 1995 36.68 36.48 37.10 34.26
1982 25.87 25.79 20.26 20.14 1996 12.25 28.57 22.69 22.70
1983 24.72 25.68 22.27 22.79 1997 33.34 24.78 33.10 30.80
1984 12.34 1.06 5.95 4.09 3/31/98 7.00 11.72 13.92 14.70
1985 29.98 32.78 31.43 30.08
1986 28.78 26.91 18.37 18.54 Avg. 16.39% 13.37% 13.30% 13.12%
</TABLE>
* "Standard & Poor's," "S&P", "S&P 500" and the "S&P Industrial Index" are
trademarks of The McGraw-Hill Companies, and have been licensed for use by
Defined Asset Funds. The Portfolio is not sponsored, managed, sold or promoted
by Standard & Poor's. The name "Dow Jones Industrial Average" is the property of
Dow Jones & Company, Incorporated.
** Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses.
Defining Your Risks
The following are important facts to keep in mind when considering this
investment. Please read them carefully. Your financial professional will be
happy to answer any questions you may have.
o The Portfolio is designed for investors who can assume the risks associated
with equity investments, and may not be appropriate for investors 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 There can be no assurance that the Portfolio will meet its objective.
o The value of your investment will fluctuate with the prices of the underlying
stocks. There can be no assurance that dividend rates will be maintained or that
stock prices will not decrease.
o These stocks may have higher yields because they or their industries are
experiencing financial difficulties or are out of favor. There can be no
assurance that the market factors which caused these relatively low prices and
high yields will change.
Tax 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 on the amount paid to you, net of the deferred sales
charge and the charge for organizational expenses. Accordingly, you should not
increase the tax basis in your units by these sales charges and expenses.
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 28%. However, on rollovers of future Portfolios, if
available, investors will defer recognition of gains and losses on stocks that
are contributed in kind to the new Portfolio. Investors may also be eligible for
a 20% maximum federal tax rate on gains from stocks when they are sold.
Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy. 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.
If you sell your units before termination, the remaining balance of your
deferred sales charge will be deducted along with the estimated costs of selling
Portfolio securities from the proceeds you receive. If you roll over to a
successor Portfolio, if available, the initial charge will be waived.
You will only pay the deferred sales charge and operating expenses.
As a % of Amount Per
Public Offering Price 1,000 Units
--------------------- -----------
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) .233% $2.31
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
Amount Total Sales Charges as a % of
Purchased Public Offering Price
--------- ------------------------------
Less than $50,000 2.75%
$50,000 to $999,999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
$1,000,000 or more 1.00%
Select Now!
You can get started with the Select S&P Industrial Portfolio with as little as
$250. Call your financial professional for a free prospectus containing more
complete information, including all charges and expenses. Please read the
prospectus carefully before you invest.
Additional Select S&P Industrial Portfolios containing the then-highest
dividend-yielding stocks may be offered in the future. Information contained
herein is subject to amendment. A registration statement relating to the stocks
of the next Portfolio has been filed with the Securities and Exchange
Commission. The stocks of that Portfolio may not be sold nor may offers to buy
be accepted prior to the time the registration statement becomes effective. This
brochure shall not constitute an offer to sell or the solicitation of an offer
to buy nor shall there be any sale of these stocks in any state in which such an
offer, solicitation, or sale would be unlawful prior to registration or
qualification under the securities laws of any such state.
Defined Asset Funds
Buy With Knowledge o Hold With Confidence
Other Select Series
Select Growth Portfolio
Select S&P Industry
Turnaround Portfolio
Select S&P Intrinsic Value
Portfolio
Select Ten Portfolios
Select Ten Portfolio
(DJIA)
Hong Kong Portfolio
(Hang Seng Index)
Japan Portfolio
(Nikkei Indes)
United Kingdom Portfolio
(Financial Times Index)
Equity Investor Funds
Concept Series
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund 2
Tele-Global Trust 3
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
International Bond Funds
Municipal Investment Trusts
11579BR - 4/98
[Copyright]1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated, Member SIPC.
