IRA Ideal!
Defined Asset Funds (SM)
The Select S&P Industrial Portfolio
1998 Series H
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 H(1)
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(1) Initial date of deposit- December 14, 1998.
<PAGE>
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Current
Ticker Dividend
Name of Issuer Symbol Yield(2)
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1. UST, INC. UST 4.98%
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2. ROYAL DUTCH PETROLEUM RD 3.32
COMPANY(3)>
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3. GENUINE PARTS COMPANY GPC 3.14
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4. KELLOGG COMPANY K 2.67
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5. HEINZ (H.J.) COMPANY HNZ 2.51
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6. WINN-DIXIE STORES, INC. WIN 2.41
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7. CONAGRA, INC. CAG 2.28
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8. ALLTEL CORPORATION AT 2.23
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9. MAY DEPARTMENT STORES COMPANY MAY 2.16
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10. EMERSON ELECTRIC COMPANY EMR 2.11
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11. AIR PRODUCTS & CHEMICALS, INC. APD 1.88
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12. BESTFOODS BFO 1.88
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13. NEWELL COMPANY NWL 1.87
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14. ANHEUSER-BUSCH COMPANIES, INC. BUD 1.77
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15. AMERICAN HOME PRODUCTS AHP 1.71
CORPORATION
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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.
Past Performance of Prior Select S&P Industrial Portfolios
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(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 December 11, 1998. There can be no assurance that future
dividends, if any, will be maintained at the indicated rates.
(3) This issuer is a foreign corporation; any dividends will be subject to
withholding taxes.
2
<PAGE>
Past performance is no guarantee of future results.
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Series From Inception Through 9/30/98
(including annual rollovers) Most Recently Completed Portfolio
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Inception Series Return Period Series Return
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1/22/97 A 11.46% 1/22/97-3/13/98 A 31.43%
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2/24/97 B 12.56 2/24/97-4/24/98 B 22.96
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4/21/97 C 20.91 4/21/97-5/22/98 C 35.59
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6/9/97 D 7.64 6/9/97-7/17/98 D 19.39
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7/21/97 E 4.66 7/21/97-8/21/98 E 8.25
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9/8/97 F 7.74
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The chart above shows average annual total returns which represent price
changes plus dividends reinvested, divided by the initial public offering
price, and reflects 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.
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,(4) 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(4). 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
<PAGE>
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.
Defined Asset Funds-- Time In The Market
We believe that the disciplined strategy of buying and holding with a
long-term view can help in meeting our investors' needs. For income, for
growth or for total return, time in the market can be an effective strategy
for growing your portfolio, and this philosophy is the cornerstone of Defined
Asset Funds.
(4)"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 judgements 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 9/30/98
[A mountain chart compares the hypothetical past performance of the Strategy
(ochre) from 1/1/73 through 9/30/98, 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 ("net of sales charges and expenses")(5).
The horizontal (X) axis compares the cumulative annual performance by year,
from 1/1/73 through 9/30/98. The vertical (Y) axis reflects the dollar amount
value for each index from 1/1/73 through 9/30/98. The initial value of each
investment is $10,000. Throughout the aforementioned period, increases in
each investment
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(5) Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses.
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<PAGE>
builds towards the Y axis. At the end of this period, the Y
axis reflects the ending value of the Strategy ($419,926), the ending value of
the DJIA ($213,831), the ending value of the S&P 500 Index ($218,020) and the
ending value of the S&P Industrial Index ($214,880).]
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
(with Portfolio sales charges and expenses deducted) 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>
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S&P S&P
S&P 500 Industrial S&P 500 Industrial
Year Strategy(4) DJIA Index Index Year Strategy(4) DJIA Index Index
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<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
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1974 -5.35 -23.14 -26.47 -26.54 1988 42.04 15.95 16.58 15.80
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1975 40.63 44.40 36.92 36.78 1989 35.40 31.71 31.11 29.30
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1976 30.89 22.72 23.53 22.59 1990 0.96 -0.57 -3.20 -0.84
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1977 -6.53 -12.71 -7.19 -8.20 1991 27.06 23.93 30.51 30.39
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1978 6.06 2.69 6.39 7.50 1992 11.50 7.34 7.67 5.63
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1979 26.47 10.52 18.02 18.40 1993 2.28 16.72 9.97 8.90
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1980 18.23 21.41 31.50 32.98 1994 11.41 4.95 1.30 3.75
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1981 7.67 -3.40 -4.83 -6.69 1995 36.68 36.48 37.10 34.26
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1982 25.87 25.79 20.26 20.14 1996 12.25 28.57 22.69 22.70
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1983 24.72 25.68 22.27 22.79 1997 33.34 24.78 33.10 30.80
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1984 12.34 1.06 5.95 4.09 9/30/98 -2.58 0.57 6.06 9.54
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1985 29.98 32.78 31.43 30.08
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1986 28.78 26.91 18.37 18.54 Average 15.62% 12.63% 12.71% 12.65%
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</TABLE>
5
<PAGE>
Average Annual Total Returns
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For periods ending 3 year 5 year 10 year 15 year 20 year 25 year
12/31/97
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Strategy(4) 26.63% 18.21% 20.34% 19.94% 19.07% 16.25%
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DJIA 29.85% 21.81% 18.41% 18.21% 16.33% 13.01%
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S&P 500 Index 30.82% 20.06% 17.89% 17.37% 16.41% 12.85%
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S&P Industrial Index 29.16% 19.48% 17.41% 17.12% 16.25% 12.64%
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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.
Defining Your Risks
Please keep in mind the following factors 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. Stock
prices can be volatile.
o There can be no assurance that the Portfolio will meet its objective,
that dividend rates will be maintained or that stock prices will not
decrease during the life of the Portfolio.
o The value of your investment will fluctuate with the prices of the
underlying stocks.
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.
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<PAGE>
o This Portfolio may be considered concentrated in the food industry.
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 net capital 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% for individuals.
However, on rollovers of future Portfolios, if available, investors will defer
recognition of gains and losses for federal tax purposes on stocks that are
transferred 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.
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As a % of
Public Amount Per
Offering Price 1,000 Units
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Initial Sales Charge 1.00% $10.00
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Deferred Sales Charge 1.75% $17.50
==========================
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Maximum Sales Charge 2.75% $27.50
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Estimated Annual Expenses
(as a % of net assets) 0.183% $1.81
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Estimated Organization Costs $0.98
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<PAGE>
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 sales charge will be
waived. You will only pay the deferred sales charge.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
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Amount Total Sales Charge as a % of
Purchased Public Offering Price
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Less than $50,000 2.75%
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$50,000 to $99,999 2.50%
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$100,000 to $249,999 2.00%
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$250,000 to $999,999 1.75%
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$1,000,000 or more 1.00%
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Select Now!
You can get started with the Select S&P Industrial Portfolio for about $250.
Call your financial professional for a free prospectus containing more
complete information, including sales charges, expenses and risks. Please read
it carefully before you invest or send money.
The information in this brochure is not complete and may be changed. We may
not sell the securities of the next Portfolio until the registration statement
filed with the Securities and Exchange Commission is effective. This brochure
is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Defined Asset Funds(SM)
Buy With Knowledge o Hold With Confidence
8
<PAGE>
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
Real Estate Income Fund
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
11579BR-12/98
(Copyright logo) 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
