IRA Ideal!
Defined
Asset FundsSM
Select Ten Portfolio
[LOGO]
A Defined
Strategy for
Total Return
[ML LOGO] Merrill Lynch
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SELECTING INVESTMENTS FOR YOUR PORTFOLIO CAN BE
COMPLICATED--UNLESS YOU HAVE A STRATEGY.
Maybe you've heard of "The Dow Ten" or even "The Dogs of the Dow," However you
refer to it, this contrarian strategy of investing each year in the ten highest
dividend-yielding stocks of the Dow Jones Industrial Average* (DJIA) looks for
value by selecting established stocks whose prices may be depressed. After all,
to a contrarian investor, bad news can be good news, and unfavorable
developments may create special opportunities.
The Strategy
The Select Ten Portfolio seeks total return by holding the ten highest dividend-
yielding stocks of the DJIA for about one year (the "Strategy"). When a
Portfolio ends, you may choose to reinvest your proceeds into the next
Portfolio, if available, or you can redeem your investment. Although this is a
one-year investment, we recommend you stay with the Strategy for at least three
to five years for potentially more consistent results.
Hypothetical Results
We analyzed the Strategy to see how it could have performed. The Strategy (with
Portfolio sales charges and expenses deducted) would have underperformed the
DJIA in 13 and the S&P 500 Index* in 12 of the last 26 years, and would have
produced a loss in five of those years.
Past Performance of Prior Select Ten Portfolios
Past performance is no guarantee of future results.
<TABLE>
Series From Inception
Through 12/31/98 Most Recently
(including annual rollovers) Completed Portfolio
Inception Series Return Period Series Return
- ------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C>
5/17/91 B 15.84% 5/27/97-6/30/98 B 11.29%
1/3/92 A 15.00 1/27/97-2/27/98 A 18.90
9/1/92 C 18.63 9/22/97-10/23/98 C 6.79
7/22/96 3 19.45 7/28/97-8/28/98 3 1.59
11/1/96 5 13.48 11/10/97-12/18/98 5 6.66
</TABLE>
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<TABLE>
<S> <C> <C> <C> <C> <C>
1/2/97 J 11.84 1/2/97-1/30/98 J 12.87
2/25/97 1 8.92 2/25/97-3/27/98 1 19.38
4/28/97 2 14.33 4/28/97-6/5/98 2 24.49
9/3/97 4 9.37 9/3/97-10/2/98 4 2.02
</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.
Defining Your Risks
Please keep in mind the following facts when considering this investment:
o The Portfolio is designed for investors who can assume the risks associated
with equity investments. It 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 or that stock prices will not decrease.
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.
- --------
* Dow Jones & Company, Inc., owner of the name "Dow Jones Industrial
Average," is unaffiliated with, and did not participate in the creation of the
Portfolio or the selection of its stocks, and has neither reviewed nor approved
any information in the prospectus relating to the Portfolio. "S&P 500 Index"
is a trademark of The McGraw-Hill Companies, Inc.
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o Owning units of this Portfolio may result in annual federal, state and local
taxes, much of which can be deferred by rolling over into the next portfolio.
Please consult your tax advisor.
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"). 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 ($468,607),
the ending value of the DJIA ($250,890), and the ending value of the S&P 500
Index ($263,820).]
For the 25 years ending 12/31/98, these figures would have been: Strategy
$483,520, DJIA $288,778, and S&P 500 Index $309,140.
Past performance of the Strategy is no guarantee of future results of any
Portfolio. Results shown represent price changes plus dividends reinvested at
year ends, and do not reflect deduction of any commissions or taxes. Only
Strategy performance reflects the deduction of Portfolio sales charges (2.75%
for the first year, 1.75% for each following year) and estimated expenses.
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, Portfolios are not fully invested at all times
and stocks may not be weighted equally.
Act Now!
You can get started with the Select Ten Portfolio for about $250. Simply return
the attached coupon to receive a free copy of our brochure. Ask your financial
professional for a free prospectus containing more complete information on the
Select Ten Portfolio, including sales charges, expenses and risks. Please
read it carefully before you invest or send money.
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The information in this mailer 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 mailer is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where their offer or sale is not permitted.
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