IRA Ideal!
Defined Asset Funds (SM)
SELECT SERIES
Standard & Poor's
Intrinsic Value Portfolio
1998
SERIES
C
A Value Approach
to Selecting
Mid to Large Cap
Growth Stocks
[ML LOGO] Merrill Lynch
A Value Approach to Selecting Mid to Large Cap Growth Stocks
AT ONE TIME, it was thought that intrinsic value and "book" or liquidation
value were the same. Intrinsic Value, however, goes beyond these traditional
measurements in search of earnings value. The screening process asks what is
the company's business worth? What is its future earnings potential?
Standard & Poor's*,(0) our Portfolio Consultant, seeks to determine if the
current market price justifies the purchase of a stock. The goal is to
identify those stocks whose intrinsic value is higher than the current market
price.
Determining Intrinsic Value
Standard & Poor's has developed a proprietary analytical process using a
combination of fundamental and valuation measurements which seeks to identify
stocks with growth potential. This process uses a quantitative analysis and a
series of screens to select stocks for the Intrinsic Value Portfolio.
The Standard & Poor's Intrinsic Value Portfolio
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* Standard &Poor's is a trademark of The McGraw-Hill Companies, Inc. and
has been licensed for use by Defined Asset Funds. The Portfolio is not
sponsored, managed, sold or promoted by Standard & Poor's.
<PAGE>
The Portfolio seeks capital appreciation by investing, for about one year, in
stocks believed to have potential for growth based on a combination of
fundamental and valuation measurements. After one year, you may roll your
investment into a new Portfolio, if available. Although this 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.
About Defined Asset Funds--Time In The Market
We believe that the disciplined strategy of buying and holding stocks 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 philsophy is the cornerstone of Defined
Asset Funds (SM).
<TABLE>
<CAPTION>
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Select S&P Intrinsic Value Portfolio- The Screening Process
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<S> <C> <C>
Free Cash Flow Compustat Companies with High Free Cash Flow
greater than $20 Database Free Cash Flow of more than $20 million for
million 10,258 the last year. This measure is calculated by
Stocks adding a company's net income,
depreciation and amortization, and then
subtracting its capital expenditures. This is
intended to identify companies with high
positive cash flows.
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Net Margins of 1,552 Stocks Profitability
15% or more Net Profit Margins of 15% or more for the
last year. This represents net income,
divided by sales. It measures a company's
franchise value.
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Return on 220 Stocks Return on Equity of more than 15% for the
equity of 15% last three fiscal years and the last four
or more quarters.
Return on equity is net income as a
percentage of common equity. This is
intended to measure how efficiently the
company is using its capital.
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Select S&P Intrinsic Value Portfolio- The Screening Process
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<S> <C> <C>
Market 94 Stocks Market Acceptance
Acceptance Good Value of reinvested earnings. To pass
this screen, growth in market capitalization
must exceed the growth in retained earnings
of the company over the last five years. This
screen selects companies that have been able
to add more than a dollar of market value for
every additional dollar of earnings retained.
This measures market acceptance and
momentum.
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Eliminate 47 Stocks Eliminate Overpriced Stocks
Overpriced Stock trades below Intrinsic Value. Only
Stocks stocks whose current price is below the
present value of their estimated free cash
flow, as calculated by Standard & Poor's,
will be included.
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Defined Funds 33 Stocks Liquidity
Liquidity Intrinsic Defined Asset Funds reviews the remaining
Screen Value stocks for market capitalization, liquidity
Portfolio and other factors. Only the stocks that pass
all of the screens are included in the Intrinsic
Value Portfolio.
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</TABLE>
Past Performance of Prior Standard & Poor's Intrinsic Value Portfolios
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Past performance is no guarantee of future results.
Series From Inception Through Most Recently Completed Portfolio
9/30/98 (including annual rollovers)
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Inception Series Return+ Period Series Return+
11/21/96 C 3.47% 11/21/96- C 7.08%
12/19/97
3
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4/2/97 A 6.30 4/2/97- A 32.93
5/15/98
8/6/97 B -21.40 8/6/97- B -8.51
9/2/98
+ 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 annual rollovers and different performance periods.
<TABLE>
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SELECT S&P INTRINSIC VALUE PORTFOLIO - 1998 SERIES C
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COMPANY SYMBOL DESCRIPTION % OF PORTFOLIO
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ELECTRONIC COMPONENTS 18.94%
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<S> <C> <C> <C>
Altera Corporation ALTR Designs, manufactures and markets
programmable logic devices and
developmental tools.
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EMC Corporation EMC Develops and markets new computer
memory devices for information storage
and retrieval.
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Gentex Corporation GNTX Designs, develops, manufactures and
markets products using electro-optic
technology.
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Intel Corporation INTC Worldwide manufacturer and vendor of
micro-computer components and related
products.
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Linear Technology LLTC Designs, manufactures and markets
Corporation linear integrated circuits for
telecommunications applications.
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Xilinx, Inc. XLNX Largest supplier of programmable logic
devices and computer chips that can be
custom-programmed by the user.
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MEDICAL/HEALTH CARE 18.74%
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American Home AHP Discovers, develops, manufactures,
Products Corporation distributes and sells health care and
agricultural products.
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Ballard Medical BMP Manufactures and markets specialized
Products medical products which are sold to
hospitals and medical facilities in 66
countries.
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Biomet, Inc. BMET Designs, develops, produces, and
markets products used primarily for
othopedic surgical and non-surgical
therapy.
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Johnson & Johnson JNJ Manufactures and sells a variety of
health care and other products including
surgical instruments and non-
prescription drugs.
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Lincare Holdings, Inc. LNCR Operating over 260 centers, Lincare
supplies oxygen and other vital
respiratory therapy services to in-home
patients.
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Watson WPI Develops, produces, markets, and
Pharmaceuticals, Inc. distributes off-patent and branded
pharmaceutical products.
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FINANCIAL SERVICES 15.35%
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CMAC Investment CMT The holding company for
Corporation Commonwealth Mortgage Assurance
Company, CMAC provides private
mortgage insurance coverage.
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Franklin Resources, Inc. BEN Franklin specializes in mutual fund
operations, insurance products, and also
manages real estate.
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MGIC Investment MTG One of the leading providers of
Corporation mortgage insurance to lenders.
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Price (T.Rowe) TROW An investment advisor to T. Rowe Price
Associates Mutual Funds, other sponsored
investment products and private
accounts.
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<PAGE>
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SLM Holding SLM Provides financial services, processing
Corporation capabilities and information technology
for educational institutions, lenders,
students and others.
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COMPUTER SOFTWARE 9.53%
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BMC Software, Inc. BMCS Provides systems management solutions
for host mainframe and distributed
information systems. BMC also sells
and provides maintenance, enhancement
and support services for its products.
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Cognos, Inc.(1) COGNF Supplies business intelligence software
and develops software tools for
application development.
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Microsoft Corporation MSFT Develops, manufactures, licenses and
supports computer software products.
Microsoft offers operating systems,
networking, database and spreadsheet
programs, books and other computer
products.
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TELECOMMUNICATIONS 9.43%
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Ameritech Corporation AIT Provides a variety of communication
services including local and long
distance telephone, paging and on-line
services.
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ECI ECILF Designs, develops manufactures and
Telecommunications(2) markets digital telecommunications and
data transmission systems for
corporations.
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Tellabs, Inc. TLAB Designs, manufactures, markets and
services data, video and voice signals.
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(1) This is a Canadian corporation. The current annual dividends per share, if
any, will be subject to witholding tax.
(2) This is an Israeli corporation. The current annual dividends per
share, if any, will be subject to withholding tax.
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<PAGE>
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PROPERTY/CASULTY INSURANCE 9.35%
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HSB Group, Inc. HSB This holding company provides
insurance against losses from accidents
to boilers, pressure vessels and
mechanical/electrical equipment.
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Mercury General MCY A specialty writer of auto insurance for
Corporation all risk classifications, Mercury operates
primarily in California.
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Mutual Risk MM Provides risk-management services for
Management, Ltd.(3) clients who need an alternative to
commercial insurance for their risk
exposure.
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AIRLINES 3.18%
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COMAIR Holdings, Inc. COMR The holding company for COMAIR,
Inc., a regional air carrier that serves
approximately 80 cities.
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METAL PROCESSORS 3.15%
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Kaydon Corporation KDN Designs, manufactures and sells
custom-engineered products including
filters, shaft seals, bearing systems and
components.
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TOBACCO 3.14%
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UST, Inc. UST Through its subsidiaries, it produces and
markets smokeless tobacco products.
UST also markets wine, craft beers and
cigars.
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PUBLISHING/NEWSPAPERS 3.12%
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Washington Post WPO Diversified media organization whose
Company principal operations include
newspaper/magazine publishing,
broadcasting and cableTV systems.
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(3) This is a Bermuda corporation. The current annual dividends per
share, if any, will not be subject to withholding tax.
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<PAGE>
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BUILDING PRODUCTS 3.09%
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Lone Star Industries, LCE Produces cement, concrete, sand, gravel
Inc. and precast concrete products.
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MULTIMEDIA 2.98%
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Gannett Company, Inc. GCI Owns/operates 87 daily newspapers
including USA Today, as well as 20
major market television stations and a
cable division serving five states.
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</TABLE>
Defining Your Risks
Please keep in mind the following factors when considering this investment.
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 having above-average price volatility.
It may not be appropriate for investors seeking preservation of capital or
current income.
o There can be no assurance that the Portfolio will meet its objectives or
that it will outperform general stock indexes, especially during periods of
sharply rising stock prices.
o The value of your investment will fluctuate with the prices of the
underlying stocks. Stock prices can be volatile. There can be no
assurance that these prices will not decrease.
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% for individuals.
8
<PAGE>
However, on rollovers to future Portfolios, if available, investors will defer
recognition of gains and losses on stocks that are transferred to the new
Portfolio. Please 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.
As a % of Public Amount Per 1,000 Units
Offering Price
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Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
=========================================
Maximum Sales Charge 2.75% $27.50
Estimated Annual Operating 0.196% $1.94
Expenses
(as a % of net assets)
Estimated Organization Costs $3.03
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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.
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 Purchased Total Sales Charge as a % of 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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9
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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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Don't Delay
Call your financial professional for a free prospectus containing more complete
information, including all sales charges, expenses and risks. Read the
prospectus carefully before you invest.
The information in this brochure is not complete and may be changed. We
may not sell 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 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 Industrial Portfolio
Select S&P Industry Turnaround Portfolio
Concept Series
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund
Tele-Global Trust
Utility Portfolio
Equity Investor Funds
10
<PAGE>
Index Series
S&P 500 Index Trust
S&P MidCap Index Trust
FIXED-INCOME FUNDS
Corporate Funds
Government Funds
Municipal Trusts
11571BR-12/98
(copyright logo) 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
