Defined Asset Funds(SM)
Concept Series
4
IRA Ideal!
Real Estate
Income
Fund
Quality REITs with
High Current Income
[ML logo] Merrill Lynch
Looking for high current income in a volatile market? Defined Asset Funds(SM)
offers a convenient way to add balance to your portfolio with what we believe is
an attractive opportunity in the real estate industry...
Real Estate Income Fund 4
The REIT Advantage
REITs own, develop, acquire and manage income-producing properties.
Generally, a REIT specializes in either a specific type of property or
geographic area.
REITS can provide a convenient and cost-effective way to add balance to your
portfolio.
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REITs have shown attractive returns through various economic and market cycles.
Over the long-term, REITs tend to be a hedge against inflamation.
REITs have historically demonstrated a low correlation to price movements of
major indices.
REITs provide attractive dividends and potential for divided growth.
Attractive Dividends
Real Estate Investment Trusts (REITs) are a good source of income -- each year
they must distribute at least 95% of their income to shareholders.
Historically, REITs have provided attractive total returns for investors
through various economic and market cycles. Over the last few years, the size
of the REIT industry has grown significantly, and REITs have been a stabilizing
force in the U.S. real estate market.
Real Estate Income Fund 4
Our Portfolio of 25 equity REITs was selected for its current dividend yield as
well as its potential for capital appreciation and increasing dividends. The
Portfolio is diversified among different publicly traded REITs, representing
six major real estate sectors: Apartments, Regional Malls, Shopping Centers,
Health Care and both Office/Industrial and exclusively Industrial properties.
This allows you to invest in several different categories with geographic
diversity, which reduces your exposure to any individual REIT, or category of
REITs.
Quality REITs
Working with Portfolio Consultant Cohen & Steers, we selected each REIT stock
based on research including risk-adjusted potential returns, performance under
varying economic conditions, financial strength and flexibility, cash-flow
quality and growth potential. We also considered liquidity, yield and
diversification by category and geographic location. What's more, in the past
three years, many of the stocks in this Portfolio have increased their
dividends.
The Strategy
The Portfolio follows a "buy and hold" investment strategy, selecting stocks
and holding them for a two-year period. However, each stock is reviewed
regularly and can be sold in the event of a significant adverse development. At
the end of
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two years, we intend to reapply the screening process to create a new
Portfolio. You can choose to reinvest in a new Portfolio if available, or redeem
your investment.
Defined Funds Distinctions
o Defined Portfolio
o Diversification among 25 equity REITs.
o Two-year term.
o Monthly income - not quarterly like the stocks themselves.
o Option to reinvest in additional units at a reduced sales charge.
o Minimum investment of about $250.
o Liquidity (at a daily price based on the then-current net asset value,
which may be more or less than your cost).
[Pie chart]
A DEFINED PORTFOLIO
Company Symbol
Office/Industrial 28%
Arden Realty, Inc. ARI
Arden focuses exclusively on the acquisition, development and
redevelopment of office properties in Southern California.
Brandywine Realty Trust BDN
With office properties in the Middle Atlantic region,
Brandywine controls 20% of the office space in the
Philadelphia suburbs.
Cornerstone Properties, Inc. CPP
Cornerstone invests in office properties in prime central business
districts and major suburban office markets in U.S. metropolitan areas.
Highwoods Properties, Inc. HIW
The largest office property landlord in the Southeastern U.S.,
its primary markets are Raleigh-Durham and Piedmont, North
Carolina; Tampa, Orlando and South Florida; and Nashville,
Tennessee.
Liberty Property Trust LRY
This office/industrial real estate company owns and manages
properties across the Eastern U.S., with concentrations in
suburban Philadelphia, Florida, Richmond, suburban Detroit and
suburban Minneapolis.
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Mack-Cali Realty Corporation CLI
One of the largest suburban office REITs, with interests in
28 million square feet of suburban office property in 12
states and the District of Columbia, Mack-Cali has the largest market
share of the office business in Northern New Jersey.
SL Green Realty Corporation SLG
The company's niche strategy involves acquiring existing
office buildings that are in need of refurbishment and/or
re-tenanting, and applying its experience to create value at
the property level.
Apartments 20%
Apartment Investment and Management Company AIV
Based in Denver, Colorado, this company is the largest owner
and manager of apartments in the country.
Archstone Communities Trust ASN
This $5 billion REIT is focused on the ownership, management
and development of apartment properties primarily in the
Western and Southeastern U.S.
Charles E. Smith Residential Realty, Inc. SRW
This company owns and develops multi-family apartments in urban
markets, principally in Washington D.C., Chicago and Boston.
Essex Property Trust, Inc. ESS
Essex specializes in acquiring, developing and managing multi-family
residential properties, with interests in California, Oregon and
Washington.
Post Properties, Inc. PPS
One of the largest owner-developers of upscale multi-family
apartments with a primary focus on the Southeastern and
Southwestern U.S., Post owns nearly 33,000 units including
5,790 units under development.
Regional Malls 20%
JP Realty, Inc. JPR
Focused on the Intermountain region, this Salt Lake
City-based owner of regional malls and community shopping
centers acquires and develops retail properties.
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The Macerich Company MAC
Based in Santa Monica, California, this company acquires
dominant regional malls throughout the country, then
renovates and upgrades the properties.
Simon Property Group, Inc. SPG
Headquartered in Indianapolis, Simon is the largest owner of regional
malls in the country. Its $17 billion market capitalization also makes
Simon one of the largest REITs in the country.
Taubman Centers, Inc. TCO
This Detroit-based owner of 15 highly productive regional
malls has been a pioneer in the regional mall business. The
company is also pursuing a development strategy in select markets
throughout the country.
Urban Shopping Centers, Inc. URB
With properties located throughout the U.S., this company
owns, acquires, manages, leases, develops and redevelops
super-regional and regional malls.
Health Care 12%
Health Care Property Investors, Inc. HCP
One of the nation's largest owners of health care related
facilities in the U.S., this company's properties are
managed by many of the preeminent operators in the
health care industry.
Healthcare Realty Trust, Inc. HR
Healthcare Realty purchases and leases investment properties
and finances long-term care facilities as well as hospital
management, ambulatory and outpatient care companies in
the U.S.
Nationwide Health Properties, Inc. NHP
This company invests in health care related real estate with
holdings in 337 facilities in 33 states.
Shopping Centers 12%
Developers Diversified Realty Corporation DDR
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This $2.5 billion REIT focuses on the ownership, management and
development of retail shopping centers, and provides retail space to
Wal-Mart, Kmart and other national and local retailers.
JDN Realty Corporation JDN
JDN specializes in the development and asset management of
retail shopping centers anchored by value-oriented
retailers. Headquartered in Atlanta, it owns and operates 86
properties.
Regency Realty Corporation REG
When its announced merger with Pacific Retail Trust is
complete, Regency will be a $2 billion REIT. This national
retail REIT will focus on the ownership, development and
management of suburban neighborhood, grocery-anchored
shopping centers.
Industrial 8%
AMB Property Corporation AMB
Acquiring and operating industrial properties and community
shopping centers throughout the U.S., AMB also provides
real estate investment management services to institutional
investors.
First Industrial Realty Trust, Inc. FR
One of the largest owners of industrial space in the U.S., its primary
markets are Chicago and Detroit.
PROFESSIONALLY SELECTED BY
COHEN & STEERS
Founded in 1986, Cohen & Steers Capital Management, Inc. is considered to be a
leader in the REIT industry. Cohen & Steers has extensive investment
experience, substantial research capabilities and strong trading relationships
in the real estate industry. With $4.4 billion in assets under management, its
clients include large pension plans, endowment funds and investment companies.
Defined Asset Funds (SM)
Buy With Knowledge . Hold With Confidence
EQUITY INVESTOR FUNDS
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Other Concept Series
Baby Boom Economy Portfolios (SM)
Health Care Trust (Pharmaceutical & Biotechnology Portfolio)
Premier American Portfolio
Premier World Portfolio
Tele-Global Trust
Utility Portfolio
Select Series
Select Ten Portfolio (DJIA)
United Kingdom Portfolio
(Financial Times Index)
Select Growth Portfolio
Select Large-Cap Growth Portfolio
Select S&P Industrial Portfolio
Select Standard & Poor's
Industry Turnaround Portfolio
Select Standard & Poor's
Intrinsic Value Portfolio
Index Series
S&P 500 Trust
S&P MidCap Trust
FIXED-INCOME FUNDS
Corporate Funds
Government Funds
Municipal Funds
Defined Asset Funds - Our Philosophy
At Defined Asset Funds, we are ever mindful that behind every investment dollar
lies something infinitely more important - your investment goal. This is why we
offer a full range of defined investments designed to meet a variety of
objectives.
We are committed to providing our investors with some of today's most
attractive equity and fixed-income investments, within the convenient "buy and
hold" structure of a Unit Investment Trust. For income, for growth or for total
return, we believe that time in the market can be an effective strategy for
growing your portfolio.
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At Defined Asset Funds, we set the foundation for all of our portfolios in this
way, because we too have an important goal in mind - yours.
Start Building Your Portfolio Today!
You can get started with the Real Estate Income Fund 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.
Defined 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 Fund should not be considered a complete investment plan.
o The Fund is concentrated in the REIT industry. Real estate stocks are
subject to various risks including changes in management, declining
property values, increasing costs, vacancy rates (reflecting both general
economic conditions and competition) and lack of liquidity of their
investments. Shopping centers and, to a lesser extent, regional malls
could be adversely affected by increasing Internet sales. Tenants of
health care REITs have been adversely affected by legislation reducing
Medicare reimbursement levels.
o There can be no guarantee that the Fund 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.
Taxation
When seeking capital appreciation, managing tax liability on capital gains can
be vital to your overall return. By holding this Fund for more than one year,
individuals may be eligible for favorable federal tax rates on net long-term
capital gains (currently no more than 20%).
Generally, all income will be distributed each year and will be subject to tax,
whether or not reinvested. Please consult your tax advisor concerning state and
local taxation.
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Defining Your Costs
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 year (per 1,000 units)
collected in seven monthly payments of $2.50 from the Fund for a total of
$45.00.
As a % of Public
Offering Price Amount Per 1,000 Units
---------------- ----------------------
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge Year 1 1.75% $17.50
Deferred Sales Charge Year 2 1.75% $17.50
Maximum Sales Charge 4.50% $45.00
Estimated Annual Expenses
(as a % of net assets) 0.329% $3.26
Estimated Organization Costs $2.14
If you sell your investment before the final deferred sales charge installment
in either the first or second year, the remaining balance of your deferred
sales charge for that year will be deducted, along with the estimated cost of
selling Fund securities from the proceeds you receive. If you roll over to a
successor Portfolio, if available, the initial sales charge of 1% 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.
Total Sales Charge as a % of Public
Amount Purchased Offering Price
---------------- -----------------------------------
Less than $50,000 4.50%
$50,000 to $99,000 4.25%
$100,000 to $249,999 3.75%
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$250,000 to $999,999 3.50%
$1,000,000 or more 2.75%
[recycle logo] Printed on Recycled Paper 32693BR-5/99
[copyright logo] 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
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