IRA Ideal!
Defined Asset Funds[SM]
The Select S&P Industrial Portfolio
1998 Series D
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(*) 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 D(1)
- -------------------
(1) Initial date of deposit-June 15, 1998.
Name of Issuer Ticker Symbol Current Dividend Yield(2)
1. GENUINE PARTS COMPANY GPC 2.94%
2. ALLTEL CORPORATION AT 2.84
3. ROYAL DUTCH PETROLEUM COMPANY(3) RD 2.79
4. HEINZ (H.J.) COMPANY HNZ 2.36
5. WINN-DIXIE STORES, INC. WIN 2.34
6. KELLOGG COMPANY K 2.23
7. ANHEUSER-BUSCH COMPANIES, INC. BUD 2.19
8. CONAGRA, INC. CAG 1.97
9. MAY DEPARTMENT STORES COMPANY MAY 1.97
10. EMERSON ELECTRIC COMPANY EMR 1.93
11. PITNEY BOWES, INC. PBI 1.93
12. AMERICAN HOME PRODUCTS CORPORATION AHP 1.66
13. BESTFOODS, INC. BFO 1.56
14. TEXTRON, INC. TXT 1.56
15. ABBOTT LABORATORIES ABT 1.56
The Portfolio does not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors or Standard & Poor's.
- -------------------
(2) 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 June 12, 1998. There can be no
assurance that future dividends, if any, will be maintained at the
indicated rates.
(3) 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% 1/22/97-3/13/98 Series A 31.43%
2/24/97 Series B 28.14% 2/24/97-4/24/98 Series B 22.96%
4/21/97-5/22/98 Seriec C 35.59%
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.
- -------------------
(*) "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.
Avoid the teachings of speculators whose judgments are not confirmed by
experience.
LEONARDO DA VINCI
["Annual Total Return Comparison 1/1/73 through 3/31/98"]
[A mountain chart compares the cumulative annual performance from 1/1/73
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 (X)
axis compares the cumulative annual performance by YEAR , from 1973
through 3/31/98. The vertical or (Y) 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 (Y)
axis. At the end of this period, the right vertical or (Y) 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.
<TABLE>
<CAPTION>
Annual Total Returns
Year Strategy** DJIA S&P S&P Year Strategy** DJIA S&P S&P
500 Index Industrial 500 Index Industrial
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>
Average Annual Total Returns
For Periods ending 12/31/97 3 year 5 year 10 year 15 year 20 year 25 year
Strategy ** 26.63% 18.21% 20.34% 19.94% 19.07% 16.25%
DJIA 29.85% 21.81% 18.41% 18.21% 16.33% 13.01%
S&P 500 Index 30.82% 20.06% 17.89% 17.37% 16.41% 12.85%
S&P Industrial Index 29.16% 19.48% 17.41% 17.12% 16.25% 12.64%
The results shown above are hypothetical past performance of the Strategy (not
any Portfolio) and are no guarantee of future results. Returns represent price
changes plus dividends reinvested at each year end, divided by the initial
public offering price and do not reflect the deduction of any commissions or
taxes. Portfolio performance will differ from the Strategy because of
commissions, Portfolios are established and liquidated at different times
during the year, they normally purchase and sell stocks at prices different
from those used in determining Portfolio unit price, they are not fully
invested at all times and stocks may not be weighted equally.
** 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.
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 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) .240% $2.38
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.
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 $99,999 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-6/98
[Recycling logo] Printed on Recycled Paper
[Copyright logo] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
