IRA Ideal!
Defined Asset Funds (SM)
The Select S&P Industrial Portfolio 1999 Series J
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 Defined Asset Funds(SM) Select S&P Industrial Portfolio can help.
Instead of simply replicating an index, the Select S&P Industrial Portfolio
singles out stocks within the S&P Industrial Index* for a combination of value,
capital appreciation potential and current dividend income.
The Portfolio seeks total return through a contrarian strategy of selecting 15
stocks from the index with high dividend yields and potential value.
The Strategy
The Select S&P Industrial Portfolio employs a disciplined "buy and hold"
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 -- 1999 Series J(1)
Name of Issuer Ticker Symbol Current Dividend
Yield(2)
1. UST, Inc. UST 4.93%
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1 Initial date of deposit-January 11,1999.
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 January 8, 1999. There can be no assurance that future dividends, if any,
will be maintained at the indicated rates.
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2. Royal Dutch Petroleum Company (4) RD 3.44
3. Genuine Parts Company GPC 3.08
4. Kellogg Company K 2.51
5. Heinz (H.J.) Company HNZ 2.42
6. Winn-Dixie Stores, Inc. WIN 2.19
7. ConAgra, Inc. CAG 2.09
8. Emerson Electric Company EMR 2.00
9. May Department Stores Company MAY 1.98
10. Alltel Corporation AT 1.94
11. Bestfoods BFO 1.82
12. Newell Company NWL 1.75
13. Air Products & Chemicals, Inc. APD 1.70
14. Anheuser-Busch Companies, Inc. BUD 1.68
15. American Home Products Corporation AHP 1.59
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
Past performance is no guarantee of future results.
<TABLE>
Series From Inception Through 12/31/98 Most Recently Completed Portfolio
(including annual rollovers)
Inception Series Return Period Series Return
<S> <C> <C> <C> <C> <C>
1/22/97 A 18.20% 1/22/97-3/13/98 A 31.43%
2/24/97 B 19.65 2/24/97-4/24/98 B 22.96
4/21/97 C 26.03 4/21/97-5/22/98 C 35.59
6/9/97 D 16.12 6/9/97-7/17/98 D 19.39
7/21/97 E 14.56 7/21/97-8/21/98 F 8.25
9/8/97 F 18.07 9/8/97-10/2/98 G 9.95
10/20/97 G 10.31 10/20/97-12/4/98 H 14.22
12/2/97 H 11.52
</TABLE>
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.
- ----------
(4) This issue is a foreign corporation; any dividends will be subject to
withholding taxes.
2
<PAGE>
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 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
for the Portfolio whose prices may be undervalued.
Defined Asset Funds --
Time In The Market
We believe the disciplined strategy of buying and holding securities 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. This philosophy is the cornerstone of Defined Asset
Funds.
Avoid the teachings of speculators whose judgments are not confirmed by
experience.
LEONARDO DA VINCI
3
<PAGE>
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 Invested 1/1/73 Through 12/31/98
[A mountain chart compares the hypothetical past performance of the Strategy
(ochre) from 1/1/73 through 12/31/98, the Dow Jones Industrial Average (DJIA)
(pink), and the S&P 500 Index* (purple). 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")(3). The horizontal (X) axis
compares the cumulative annual performance by year, from 1/1/73 through
12/31/98. The vertical (Y) axis reflects the dollar amount value for each index
from 1/1/73 through 12/31/98. 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 ($496,125), the ending value of the DJIA ($250,890), S&P
500 Index ($263,820) and ending value of the S&P Industrial Index ($261,743).]
For the 25 years ending 12/31/98, these figures would have been: Strategy
$614,575, DJIA $288,778, S&P 500 Index $309,140 and S&P Industrial Index
$306,527.
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 9 and the S&P 500 Index in 10 and the S&P Industrial Index in 9 of
the last 26 years. There can be no assurance that any Portfolio will outperform
these indices.
Annual Total Returns
<TABLE>
S&P 500 S&P S&P S&P
Year Strategy DJIA Index Industrial Year Strategy DJIA 500 Industrial
Index 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
- --------
3 Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses.
4
<PAGE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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 1998 15.10 18.00 28.34 33.43
1985 29.98 32.78 31.43 30.08
1986 28.78 26.91 18.37 18.54 Average 16.20% 13.19% 13.41% 13.38%
</TABLE>
Average Annual Total Returns
<TABLE>
For periods ending 3 year 5 year 10 year 15 year 20 year 25 year
12/31/98
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Strategy(3) 19.52% 21.06% 17.83% 19.29% 19.57% 17.91%
DJIA 23.38% 21.85% 18.53% 17.63% 17.08% 14.40%
S&P 500 Index 27.62% 23.58% 18.94% 17.67% 17.45% 14.71%
S&P Industrial Index 28.54% 24.19% 18.99% 17.70% 17.46% 14.67%
</TABLE>
Returns shown represent price changes plus dividends reinvested at year ends,
divided by the initial public offering price and do not reflect 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
5
<PAGE>
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, and may not be appropriate for investors seeking
capital preservation.
o There can be no assurance that the Portfolio will meet its objective, that
dividend rates will be maintained, that stock prices will not decrease
on that the Portfolio will outperform the indices.
o The value of your investment will fluctuate with the prices of the underlying
stocks. Stock prices can be volatile.
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.
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 the charge for organizational costs, after the
initial offering period. 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. 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.
6
<PAGE>
As a % of
Public Amount Per
Offering Price 1,000 Units
-------------- -----------
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) 0.177% $1.75
Estimated Organization Costs $0.80
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.
Amount Total Sales Charge as a % of
Purchased 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 today with the Select S&P Industrial Portfolio for about
$250. Call your financial professional for a free prospectus containing more
complete information,
7
<PAGE>
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.
(recycle logo) Printed on Recycled Paper
11579BR-1/99
(copyright logo) 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
Defined Asset Funds (SM)
Buy With Knowledge.Hold With Confidence
EQUITY INVESTOR FUNDS
Other Select Series
SelectTen 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
8
<PAGE>
S&P MidCap Index Trust
Fixed-Income Funds
Corporate Funds
Government Funds
Municipal Funds
9
