IRA Ideal!
DEFINED ASSET FUNDS (SM)
The Select S&P Industrial Portfolio
1998 Series F
Take indexing to another level....
[ML 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 F(1)
Current
Dividend
Name of Issuer Ticker Symbol Yield(2)
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1. Royal Dutch Petroleum Company(3) RD 3.20%
2. Genuine Parts Company GPC 3.14
3. Kellogg Company K 2.88
4. Alltel Corporation AT 2.75
5. Winn-Dixie Stores, Inc. WIN 2.70
6. Heinz (H.J.) Company HNZ 2.49
7. ConAgra, Inc. CAG 2.31
8. May Department Stores Company MAY 2.25
9. Air Products & Chemicals, Inc. APD 2.16
10. Anheuser-Busch Companies, Inc. BUD 2.07
11. Emerson Electric Company EMR 2.02
12. Bestfoods BFO 1.98
13. Textron, Inc. TXT 1.84
14. Raytheon Company (Class B) RTN/B 1.77
15. Pitney Bowes, Inc. PBI 1.76
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The portfolio does 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 -- September 14, 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 September 11, 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
Past performance is no guarantee of future results.
<TABLE>
<CAPTION>
Series From Inception Through 6/30/98 Most Recently Completed Portfolio
Inception Series Return(4) Period Series Return(4)
<S> <C> <C> <C> <C> <C>
1/22/97 A 20.52% 1/22/97 - 3/13/98 A 31.43%
2/24/97 B 20.98 2/24/97 - 4/24/98 B 22.96
4/21/97 C 29.85 4/21/97 - 5/22/98 C 35.59
6/9/97 D 17.26 6/9/97 - 7/17/98 D 19.39
7/21/97 - 8/21/98 E 8.25
(4) Average annual total return represents 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 annual rollovers and different performance periods.
</TABLE>
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
differ from credit-worthiness rankings of bonds and 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.
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(*)"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. Leonardo da Vinci
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 Invested 1/1/73 Through 6/30/98
[Graphics]
[A mountain chart compares the cumulative annual performance from 1/1/73
through 6/30/98 of the Strategy [5] (ochre), the Dow Jones Industrial
Average (DJIA), 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 ("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 value 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 ending value of the DJIA ($242,620 ), the
ending value of the S&P 500 Index ($241,866) and the ending value of the
S&P Industrial Index ($232,888 ).]
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>
S&P S&P S&P
S&P 500 Industrial 500 Industrial
Year Strategy(5) DJIA Index Index Year Strategy(5) DJIA 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 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%
</TABLE>
Average Annual Total Returns
<TABLE>
<CAPTION>
For periods ending 12/31/97 3 year 5 year 10 year 15 year 20 year 25 year
<S> <C> <C> <C> <C> <C> <C>
Strategy(5) 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%
</TABLE>
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.
- ------------
(5) 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, 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, whether
or not reinvested. 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 Portfolios, if available, investors will defer recognition of gains and
losses for federal tax purposes on stocks that are contributed in kind to the
new Portfolio. Consult your tax advisor concerning state and local taxation.
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.
<TABLE>
As a % of Public Amount Per
Offering Price 1,000 Units
- ---------------------------------------------------------------------------------
<S> <C> <C>
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 $0.99
</TABLE>
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 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
-----------------------------------------------------------------
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%
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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 risks, 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
Equity Investor Funds
Other Select Series
Select Ten Portfolio (DJIA)
United Kingdom Portfolio (Financial Times Index)
Select Growth Portfolio
Select S&P Industry Turnaround Portfolio
Select Standard & Poor's Intrinsic Value Portfolio
Concept Series
Premier American Portfolio
Premier World Portfolio
Tele-Global Trust
Utility Portfolio
Index Series
S&P 500 Index Trust
S&P MidCap Index Trust
Fixed Income Funds
Corporate Funds
Government Funds
Municipal Funds
[RECYLCING logo] Printed on Recycled Paper 11579BR-9/98
[copyright symbol] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
