IRA
Ideal!
DEFINED ASSET FUNDS[SM]
The Select
S&P Industrial
Portfolio
1998 Series E
[G R A P H I C S]
Take
indexing
to another
level...
[ML LOGO] Merrill Lynch
[GRAPHICS]
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 E(1)
Name of Issuer Ticker Current Dividend Yield(2)
Symbol
1. Royal Dutch Petroleum RD 2.93%
Company(3)
2. Genuine Parts Company GPC 2.85
3. Alltel Corporation AT 2.67
4. Kellogg Company K 2.49
5. ConAgra Inc. CAG 2.35
6. Heinz (H.J.) Company HNZ 2.29
7. Winn-Dixie Stores, Inc. WIN 2.21
8. Anheuser-Busch Companies, BUD 2.11
Inc.
9. Emerson Electric Company EMR 1.97
10. May Department Stores MAY 1.96
Company
11. Air Products & Chemicals, APD 1.80
Inc.
12. Sara Lee Corporation SLE 1.71
13. Pitney Bowes, Inc. PBI 1.69
14. American Home Products AHP 1.62
Corporation
15. Textron, Inc. TXT 1.57
The Portfolio dos not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors or Standard & Poor's.
(1) Initial date of deposit -- July 27, 1998.
(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 July
24, 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 6/30/98
Inception Return
1/22/97 Series A 20.52%
2/24/97 Series B 20.98%
4/21/97 Series C 29.85%
6/9/97 Series D 17.26%
Most Recently Completed Portfolio
Period Return
1/22/97-3/13/98 Series A 31.43%
2/24/97-4/24/98 Series B 22.96%
4/21/97-5/22/98 Series 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 the former figures reflect a reduced sales charge on rollovers and
different performance periods.
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 a 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. From that group, we select the 15 highest-yielding stocks,
whose prices may be undervalued, for the Portfolio.
(*) "Standard & Poor's,", "S&P," "S&P 500" and the "S&P Industrial Index" are
trademarks of The McGraw-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.
LEONARD DA VINCI
[GRAPHIC CHART]
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 Invested 1/1/73 Through 6/30/98
[A mountain chart compares the cumulative annual performance from 1/1/73 through
6/30/98 of the Strategy (4) (ochre), the DJIA (pink), the S&P 500 Index (purple)
and S&P Industrial Index (green). An ochre box in the upper left quadrant
indicates the components of the Strategy performance section of the chart ("net
of sales charges and expenses"). The horizontal (X) axis compares the cumulative
annual performance by year, from 1/1/73 through 6/30/98. The vertical (Y) axis
reflects the dollar amount of performance for each index from 1/1/73 through
6/30/98. The initial value of each investment is $10,000. Throughout the
aforementioned period, increases in each investment builds towards the Y axis.
At the end of this period, the Y axis reflects the ending value of the Strategy
($459,661 ), the DJIA ($242,620), the S&P 500 Index ($241,866) and the S&P
Industrial Index ($232,888).]
[Graphic Box]
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>
<CAPTION>
Year Strategy(4) DJIA S&P 500 S&P Year Strategy(4) DJIA S&P S&P
Index Industrial 500 Industria
Index Index l 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 6/30/98 6.64 14.11 17.66 18.72
1985 29.98 32.78 31.43 30.08
1986 28.78 26.91 18.37 18.54 Average 16.20% 13.32% 13.31% 13.14%
<CAPTION>
Average Annual Total Returns
<S> <C> <C> <C> <C> <C> <C>
For periods ending 12/31/97 3 year 5 year 10 year 15 year 20 year 25 year
Strategy(4) 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.
(4) 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 20%. However, on rollovers of future Portfolio, if
available, investors will defer recognition of gains and losses on stocks that
are contributed in kind 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 1,000 Units
Offering Price
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
============================================
Maximum Sales Charge 2.75% $27.50
Estimated Annual .172% $1.70
Operating Expenses
(as a % of net assets)
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 Purchased Total Sales Charge as a % of 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)
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
Utility Portfolio
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
11579BR-7/98
[copyright logo] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
</TABLE>
