EQUITY INVESTOR FD SEL TEN PORT 1999 INTL SE A UK PORT DAF
487, 1999-02-03
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<PAGE>
   
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 3, 1999
 
                                                      REGISTRATION NO. 333-70593
    
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
 
                   ------------------------------------------
 
                                AMENDMENT NO. 1
                                       TO
                                    FORM S-6
 
                   ------------------------------------------
 
                   FOR REGISTRATION UNDER THE SECURITIES ACT
                    OF 1933 OF SECURITIES OF UNIT INVESTMENT
                        TRUSTS REGISTERED ON FORM N-8B-2
 
                   ------------------------------------------
 
A. EXACT NAME OF TRUST:
 
                              EQUITY INVESTOR FUND
   
                SELECT TEN PORTFOLIO 1999 INTERNATIONAL SERIES A
                            UNITED KINGDOM PORTFOLIO
    
                              DEFINED ASSET FUNDS
 
B. NAMES OF DEPOSITORS:
 
               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                           SALOMON SMITH BARNEY INC.
                            PAINEWEBBER INCORPORATED
                           DEAN WITTER REYNOLDS INC.
 
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:
 

 MERRILL LYNCH, PIERCE,  SALOMON SMITH BARNEY INC.
     FENNER & SMITH        388 GREENWICH STREET
      INCORPORATED              23RD FLOOR
   DEFINED ASSET FUNDS      NEW YORK, NY 10013
      P.O. BOX 9051
PRINCETON, NJ 08543-9051
 
PAINEWEBBER INCORPORATED DEAN WITTER REYNOLDS INC.
   1285 AVENUE OF THE         TWO WORLD TRADE
        AMERICAS             CENTER_59TH FLOOR
   NEW YORK, NY 10019       NEW YORK, NY 10048

 
D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:
 

  TERESA KONCICK, ESQ.
      P.O. BOX 9051
   
PRINCETON, NJ 08543-9051                               MICHAEL KOCHMAN
    
                                                      388 GREENWICH ST.
                                                     NEW YORK, NY 10013
 
                                COPIES TO:
    ROBERT E. HOLLEY      PIERRE DE SAINT PHALLE,    DOUGLAS LOWE, ESQ.
   1285 AVENUE OF THE              ESQ.           DEAN WITTER REYNOLDS INC.
        AMERICAS           450 LEXINGTON AVENUE        TWO WORLD TRADE
   NEW YORK, NY 10019       NEW YORK, NY 10017        CENTER_59TH FLOOR
                                                     NEW YORK, NY 10048

 
E. TITLE OF SECURITIES BEING REGISTERED:
 
  An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
       promulgated under the Investment Company Act of 1940, as amended.
 
F. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC.
 
 As soon as practicable after the effective date of the registration statement.
 
/ x / Check box if it is proposed that this filing will become effective upon
   
filing on February 3, 1999, pursuant to Rule 487.
    
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
                                     DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
 

                              EQUITY INVESTOR FUND
   
                              SELECT TEN PORTFOLIO
                              1999 INTERNATIONAL SERIES A
                              UNITED KINGDOM PORTFOLIO
    
                              (A UNIT INVESTMENT TRUST)
                              O   TOTAL RETURN FROM:
                              --    CAPITAL APPRECIATION
                              --    CURRENT DIVIDEND INCOME
   
                              O   10 HIGHEST DIVIDEND YIELDING STOCKS IN THE
                                  FINANCIAL TIMES INDUSTRIAL ORDINARY SHARE
                                  INDEX
    
                              O   REINVESTMENT OPTION

 

SPONSORS:                      -------------------------------------------------
Merrill Lynch,                 The Securities and Exchange Commission has not
Pierce, Fenner & Smith         approved or disapproved these Securities or
Incorporated                   passed upon the adequacy of this prospectus. Any
Salomon Smith Barney Inc.      representation to the contrary is a criminal
PaineWebber Incorporated       offense.
Dean Witter Reynolds Inc.      Prospectus dated February 3, 1999.

 
<PAGE>
- --------------------------------------------------------------------------------
 
   
Defined Asset FundsSM
DEFINED ASSET FUNDSSM IS AMERICA'S OLDEST AND LARGEST FAMILY OF UNIT INVESTMENT
TRUSTS, WITH OVER $115 BILLION SPONSORED OVER THE LAST 25 YEARS. DEFINED ASSET
FUNDS HAS BEEN A LEADER IN UNIT INVESTMENT TRUST RESEARCH AND PRODUCT
INNOVATION. OUR FAMILY OF FUNDS HELPS INVESTORS WORK TOWARD THEIR FINANCIAL
GOALS WITH A FULL RANGE OF QUALITY INVESTMENTS, INCLUDING MUNICIPAL, CORPORATE
AND GOVERNMENT BOND PORTFOLIOS, EQUITY PORTFOLIOS AND INTERNATIONAL BOND AND
EQUITY PORTFOLIOS.
    
 
DEFINED ASSET FUNDS OFFER A NUMBER OF ADVANTAGES:
 
   O A DISCIPLINED STRATEGY OF BUYING AND HOLDING WITH A LONG-TERM VIEW IS THE
CORNERSTONE OF DEFINED ASSET FUNDS.
 
O FIXED PORTFOLIO: DEFINED FUNDS FOLLOW A BUY AND HOLD INVESTMENT STRATEGY;
  FUNDS ARE NOT MANAGED AND PORTFOLIO CHANGES ARE LIMITED.
O DEFINED PORTFOLIOS: WE CHOOSE THE STOCKS AND BONDS IN ADVANCE, SO YOU KNOW
  WHAT YOU'RE INVESTING IN.
O PROFESSIONAL RESEARCH: OUR DEDICATED RESEARCH TEAM SEEKS OUT STOCKS OR BONDS
  APPROPRIATE FOR A PARTICULAR FUND'S OBJECTIVES.
O ONGOING SUPERVISION: WE MONITOR EACH PORTFOLIO ON AN ONGOING BASIS.
NO MATTER WHAT YOUR INVESTMENT GOALS, RISK TOLERANCE OR TIME HORIZON, THERE'S
PROBABLY A DEFINED ASSET FUND THAT SUITS YOUR INVESTMENT STYLE. YOUR FINANCIAL
PROFESSIONAL CAN HELP YOU SELECT A DEFINED ASSET FUND THAT WORKS BEST FOR YOUR
INVESTMENT PORTFOLIO.
 

CONTENTS
                                                                PAGE
                                                          -----------
RISK/RETURN SUMMARY.....................................           3
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT................           8
   INCOME...............................................           8
   RECORDS AND REPORTS..................................           8
THE RISKS YOU FACE......................................           8
   FOREIGN ISSUER RISK..................................           8
   LITIGATION AND LEGISLATION RISKS.....................          10
SELLING OR EXCHANGING UNITS.............................          11
   SPONSORS' SECONDARY MARKET...........................          11
   SELLING UNITS TO THE TRUSTEE.........................          11
   ROLLOVER/EXCHANGE OPTION.............................          12
HOW THE FUND WORKS......................................          13
   PRICING..............................................          13
   EVALUATIONS..........................................          13
   INCOME...............................................          13
   EXPENSES.............................................          14
   PORTFOLIO CHANGES....................................          14
   PORTFOLIO TERMINATION................................          14
   NO CERTIFICATES......................................          15
   TRUST INDENTURE......................................          15
   LEGAL OPINION........................................          15
   AUDITORS.............................................          16
   SPONSORS.............................................          16
   TRUSTEE..............................................          16
   UNDERWRITERS' AND SPONSORS' PROFITS..................          16
   PUBLIC DISTRIBUTION..................................          16
   CODE OF ETHICS.......................................          17
   YEAR 2000 ISSUES.....................................          17
TAXES...................................................          17
SUPPLEMENTAL INFORMATION................................          19
FINANCIAL STATEMENTS....................................          20
   REPORT OF INDEPENDENT ACCOUNTANTS....................          20
   STATEMENT OF CONDITION...............................          20

 
                                       2
<PAGE>
- --------------------------------------------------------------------------------
 
RISK/RETURN SUMMARY
 

       1.  WHAT IS THE PORTFOLIO'S OBJECTIVE?
        O  The Portfolio seeks total return through a combination of
           current dividend income and capital appreciation.
           You can participate in the Portfolio by purchasing units.
           Each unit represents an equal share of the stocks in the
           Portfolio and receives an equal share of dividend income.
       2.  WHAT IS THE PORTFOLIO'S INVESTMENT STRATEGY?
   
        O  Its strategy is to invest in a fixed portfolio of
           approximately equal amounts of the 10 highest
           dividend-yielding common stocks of the 30 stocks in the
           Financial Times Industrial Ordinary Share Index (the 'FT
           Index'), as of two business days prior to the date of this
           prospectus. The Sponsors reserve the right to adjust the
           Portfolio to account for mergers and other corporate
           restructurings.
    

 

        O  The Portfolio plans to hold the stocks in the Portfolio for
           about one year. At the end of the year, we will liquidate
           the Portfolio and apply the same Strategy to select a new
           portfolio, if available.
        o  Each Select Ten International Portfolio is designed to be
           part of a longer term strategy. We believe that more
           consistent results are likely if the Strategy is followed
           for at least three to five years but you are not required
           to stay with the Strategy or to roll over your investment.
           You can sell your units any time.

 

       3.  WHAT INDUSTRIES ARE REPRESENTED IN THE PORTFOLIO?
           Based upon the principal business of each issuer and
           current market values, the Portfolio represents the
           following industries:

 

                                                 APPROXIMATE
                                                  PORTFOLIO
                                                  PERCENTAGE

 

   
        o  Chemicals                                   20%
        o  Airlines                                    10
        o  Building & Construction                     10
        o  Insurance                                   10
        o  Music Recording & Retailing                 10
        o  Retail                                      10
        o  Sugar                                       10
        o  Transportation/Marine                       10
        o  Wines/Spirits                               10
    

 

       4.  WHAT ARE THE SIGNIFICANT RISKS?
           YOU CAN LOSE MONEY BY INVESTING IN THE PORTFOLIO. THIS CAN
           HAPPEN FOR VARIOUS REASONS, INCLUDING:
        o  The common stocks in the Portfolio generally have
           attributes that have caused them to have lower prices or
           higher dividend yields relative to the other stocks in the
           FT Index.
           For example:

           --the issuers may be having financial problems;
           --the stocks may be out of favor with the market because
             of weak performance, poor earnings forecasts, negative
             publicity or litigation/legislation; and
           --the stocks may be reacting to general market cycles.

        o  The market factors that caused the relatively low prices
           and high dividend yields of the stocks may change.
        o  Stock prices can be volatile.
        o  Dividend rates on the stocks or share prices may decline
           during the life of the Portfolio.

 
                                       3
<PAGE>

- --------------------------------------------------------------------------------
 
                               Defined Portfolio
- --------------------------------------------------------------------------------
 
Equity Investor Fund
 
Select Ten Portfolio 1999 International Series A
 
United Kingdom Portfolio
 
Defined Asset Funds
 
<TABLE><CAPTION>

                                                                                    PRICE
   
                                        PERCENTAGE              CURRENT           PER SHARE          COST
NAME OF ISSUER                       OF PORTFOLIO (1)     DIVIDEND YIELD (2)     TO PORTFOLIO  TO PORTFOLIO (3)
- ----------------------------------------------------------------------------------------------------------------
 
<S>                                 <C>              <C>                    <C>             <C>    <C>      <C>
1. Imperial Chemical Industries PLC           9.76%                 6.18%        $      8.487   $     32,252.23
 
2. Allied Domecq PLC                         10.10                  5.22                7.947         33,376.25
 
3. Peninsular and Oriental Steam
    Navigation Company                        9.98                  4.61               10.994         32,983.01
 
4. British Airways PLC                       10.02                  4.54                6.136         33,135.39
 
5. Royal & Sun Alliance Insurance
    Group PLC                                 9.99                  4.51                7.861         33,014.96
 
6. Tate & Lyle PLC                            9.93                  4.47                6.701         32,837.18
 
7. Blue Circle Industries PLC                10.01                  4.44                5.423         33,082.95
 
8. EMI Group PLC                             10.11                  4.00                6.554         33,425.40
 
9. Marks & Spencer PLC                       10.22                  3.91                6.034         33,789.15
 
10. BOC Group PLC                             9.88                  3.59               14.206         32,673.33
                                     -----------------                                         -----------------
                                            100.00%                                             $    330,569.85
    
                                     -----------------                                         -----------------
                                     -----------------                                         -----------------

</TABLE>
 
- ------------------------------------
 
(1) Based on Cost to Portfolio in U.S. dollars.
 
(2) Current Dividend Yield for each security was calculated by annualizing the
    last monthly, quarterly or semi-annual ordinary dividend declared on the
    security and dividing the result by its market value as of the close of
    trading on February 3, 1999.
   
 
(3) Valuation by the Trustee made on the basis of closing sale prices at the
    evaluation time on February 3, 1999, the initial date of deposit, converted
    
    into U.S. dollars on the offer side of the exchange rate at the evaluation
    time on that date. The value of the Securities on any subsequent business
    day will vary.
 
                      ------------------------------------
 
The securities were acquired on February 3, 1999 and are represented entirely by
contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or co-managers of a public offering of the securities in
this Portfolio during the last three years. Affiliates of the Sponsors may serve
as specialists in the securities in this Portfolio on one or more stock
exchanges and may have a long or short position in any of these securities or
options on any of them, and may be on the opposite side of public orders
executed on the floor of an exchange where the securities are listed. An
officer, director or employee of any of the Sponsors may be an officer or
director of one or more of the issuers of the securities in the Portfolio. A
Sponsor may trade for its own account as an odd-lot dealer, market maker, block
positioner and/or arbitrageur in any of the securities or in options on them.
Any Sponsor, its affiliates, directors, elected officers and employee benefits
programs may have either a long or short position in any securities or in
options on them.
                      ------------------------------------
 
                   PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY
                   PROSPECTUS
                   FOR A FUTURE FUND IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
                   DIFFERENT
                   STOCKS FROM THOSE DESCRIBED ABOVE.
 
RISK/RETURN SUMMARY (Continued)
 

        o  The Portfolio may continue to purchase or hold the stocks
           originally selected even though their market value or yield
           may have changed, they may no longer be included in the FT
           Index or they may be subject to sell recommendations from
           one or more of the Sponsors.

 

       5.  IS THIS PORTFOLIO APPROPRIATE FOR YOU?
           Yes, if you want current dividend income and capital
           appreciation. You will benefit from a professionally
           selected and supervised portfolio whose risk is reduced by
           investing in international equity securities of different
           issuers in a variety of industries.
           The Portfolio is not appropriate for you if you are not
           comfortable with the Strategy or are unwilling to take the
           risk involved with an international equity investment. It
           may not be appropriate for you if you are seeking
           preservation of capital or high current income.

 

       6.  WHAT ARE THE PORTFOLIO'S FEES AND EXPENSES?
           This table shows the costs and expenses you may pay,
           directly or indirectly, when you invest in the Portfolio.

 

   
           ESTIMATED ANNUAL OPERATING
           EXPENSES
                                                            AMOUNT
                                              AS A % OF  PER 1,000
                                              NET ASSETS     UNITS
                                                        ----------
                                                       -----------
                                                .088%   $    0.87
           Trustee's Fee
                                                .046%   $    0.45
           Portfolio Supervision,
           Bookkeeping and
           Administrative Fees
                                                .072%   $    0.72
           Other Operating Expenses
                                           ----------  -----------
                                                .206%   $    2.04
           TOTAL

 

           ORGANIZATION COSTS per 1,000 units          $    1.43
    
           (deducted from Portfolio assets at
           the close of the initial offering
           period)

 

           INVESTOR FEES
           Maximum Sales Fee (Load) on new
           purchases (as a percentage of
           $1,000 invested)                                2.75%
           You will pay an up-front sales fee of approximately 1.00%,
           as well as a total deferred sales fee of $17.50 ($1.75 per
           1,000 units deducted monthly from the Portfolio's net asset
           value over the last 10 months of the Portfolio's life,
   
           commencing April 1, 1999).
    
           The maximum sales fees are as follows:

 

                                                 YOUR MAXIMUM
                                                    SALES FEE
                     IF YOU INVEST:                  WILL BE:
           -----------------------------------  -----------------
           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%

 

           EXAMPLE
           This example may help you compare the cost of investing in
           the Portfolio to the cost of investing in other funds.
           The example assumes that you invest $10,000 in the
           Portfolio for the periods indicated and sell all your units
           at the end of those periods. The example also assumes a 5%
           return on your investment each year and that the
           Portfolio's operating expenses stay the same. Although your
           actual costs may be higher or lower, based on these
           assumptions your costs would be:

 

            1 Year     3 Years     5 Years      10 Years
             $313        $757       $1,227       $2,525

 
                                       4
<PAGE>
 
   
       7.  HOW HAVE UNITED KINGDOM PORTFOLIOS PERFORMED IN THE PAST?
 

     The following table shows the actual performance of prior Portfolios. The
returns assume that investors reinvested all dividends and paid the maximum
sales fees. The table also shows returns for the latest completed portfolios
(through termination, not rollover), which are generally higher than the
cumulative performance figures because market prices have declined since their
completion dates. Of course, past performance is no guarantee of future results.
    
 

            CUMULATIVE PERFORMANCE
               (INCLUDING ANNUAL
              ROLLOVERS) THROUGH
                                            LATEST COMPLETED PORTFOLIO
                   12/31/98
           -------------------------
 STARTING    ANNUALIZED   --------------------------------------ANNUALIZED
 SERIES        DATE          RETURN             TERM                 RETURN
- ---------  ------------  -----------  -------------------------  -----------
A          1/5/94              6.16%           1/27/97- 2/27/98       16.97%
B          6/21/93             8.11            5/27/97- 6/30/98       31.56
C          9/28/93             7.83            9/17/97-10/24/98        3.85
3          7/22/96            15.59            7/28/97- 8/22/98       19.78
5          11/1/96            11.08           11/10/97-12/18/98        6.98
1          2/25/97            14.78            2/25/97- 3/27/98       29.25

 
                                       5
<PAGE>
   
 8. HOW WOULD THE STRATEGY HAVE PERFORMED HISTORICALLY?
 
Although the Strategy Stocks underperformed the FT Index in six of the last 20
years (eight years if Portfolio sales charges and expenses were deducted from
Strategy Stock performance), their total return over the entire period
outperformed the FT Index. This is why the Sponsors recommend following the
Strategy for at least three to five years. Portfolio performance may vary from
that of the index shown below for a variety of reasons. For example, the
Portfolio has invested in a limited subset of index stocks, and therefore its
performance may not keep pace with index performance to the extent the index is
driven by stocks not held in the Portfolio. In addition, the Portfolio stocks
may have been chosen for specific characteristics that are at odds with the
characteristics of the stocks driving the market at a given time. For example,
we may have chosen value stocks at a time when growth stocks are performing
well. Past performance is no guaranty of future results of the Strategy or any
Select Ten United Kingdom Portfolio.
                         COMPARISON OF TOTAL RETURNS(1)
           (STRATEGY FIGURES REFLECT CONVERSION INTO U.S. DOLLARS AT
              APPLICABLE CURRENCY EXCHANGE RATES AND DEDUCTION OF
             SALES FEES AND EXPENSES BUT NOT BROKERAGE COMMISSIONS)
 

        YEAR           STRATEGY (2)                FT INDEX
- --------------------  -----------------  -------------------------
1979                           1.50%                   3.59%
1980                          28.25                   31.77
1981                          -8.70                   -5.30
1982                          42.32                    0.42
1983                          40.35                   21.94
1984                           3.33                    2.15
1985                          77.20                   54.74
1986                          31.09                   24.36
1987                          46.45                   38.99
1988                           9.31                    6.74
1989                          26.87                   22.80
1990                           7.14                   10.29
1991                          14.56                   14.65
1992                           2.09                   -2.33
1993                          35.96                   18.40
1994                           3.32                    1.89
1995                           8.76                   17.63
1996                          12.27                   20.05
1997                          10.03                   16.98
1998                          21.58                   10.81
Average Annual
Return                        19.15%                  14.67%

 
Changes in the exchange rates of the pound sterling relative to the U.S. dollar
affected these figures significantly in certain years. These changes ranged from
minus 20.22% in 1984 to plus 27.22% in 1987, and averaged minus 0.11% over the
last 20 years.*
- ------------------------------------
 
 *  Source: Bloomberg. The Sponsors have not independently verified these data,
    but they have no reason to believe these data are incorrect in any material
    respect.
 
(1) To compute Total Returns, we add changes in market value and dividends that
    would have been received during the year, and divide the sum by the opening
    market value for the year. Individual year returns do not take into account
    any reinvestment of dividend income. Return from a Portfolio will differ
    from constructed Strategy returns for several reasons including the
    following:
 
     o each Portfolio bears brokerage commissions in buying and selling stocks;
       Strategy returns do not reflect any commissions;
 
     o Strategy returns are for calendar years, while Portfolios begin and end
       on various dates;
 
     o units are bought and sold based on closing stock prices and currency
       exchange rates, while Portfolios may buy and sell stocks at prices and
       currency exchange rates during the trading day;
 
     o Portfolios may not be fully invested at all times; and
 
     o stocks in a Portfolio may not be weighted equally at all times.
 
(2) When we ranked the common stocks by dividend yields (as described on page
    3), we based the yields on the interim and final dividends for each stock
    and the stock price at the market opening on the first trading day of the
    year on the London Stock Exchange.
    
 
                                       6
<PAGE>
 

       9.  IS THE PORTFOLIO MANAGED?
           Unlike a mutual fund, the Portfolio is not managed and
           stocks are not sold because of market changes. The Sponsors
           monitor the portfolio and may instruct the Trustee to sell
           securities under certain limited circumstances. However,
           given the investment philosophy of the Portfolio, the
           Sponsors are not likely to do so.

 

      10.  HOW DO I BUY UNITS?
           The minimum investment is $250.
           You can buy units from any of the Sponsors. The Sponsors
           are listed later in this prospectus.
   
           UNIT PRICE PER 1,000 UNITS              $999.96
           (as of February 3, 1999)
           Unit price is based on the net asset value of the Portfolio
           plus the up-front sales fee. Unit price also includes the
           estimated organization costs shown on page 4.
           The Portfolio stocks are valued by the Trustee on the basis
           of their closing prices at 11:30 a.m. Eastern time every
           business day. Unit price changes every day with changes in
           the prices of the stocks.
    

 

      11.  HOW DO I SELL UNITS?
           You may sell your units at any time to any Sponsor or the
           Trustee for the net asset value determined at the close of
           business on the date of sale, less any remaining deferred
           sales fee and the costs of liquidating securities to meet
           the redemption.

 

   
      12.  HOW ARE DISTRIBUTIONS MADE AND TAXED?
           The Portfolio pays distributions of any dividend income,
           net of expenses, on the 25th of July and December, 1999, if
           you own units on the 10th of those months. For tax
           purposes, you will be considered to have received all the
           dividends paid on your pro rata portion of each security in
           the Portfolio when those dividends are received by the
           Portfolio regardless of whether you reinvest your dividends
           in the Portfolio. A portion of the dividend payments may be
           used to pay expenses of the Portfolio.
    
      13.  WHAT OTHER SERVICES ARE AVAILABLE?
           REINVESTMENT
           You may choose to reinvest your distributions into
           additional units of the Portfolio. You will pay only the
           deferred sales fee remaining at the time of reinvestment.
           Unless you choose reinvestment, you will receive your
           income distributions in cash.
           EXCHANGE PRIVILEGES
           You may exchange units of this Portfolio for units of
           certain other Defined Asset Funds. You may also exchange
           into this Portfolio from certain other funds. We charge a
           reduced sales fee on designated exchanges.

 
                                       7
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
 
INCOME
 
The Portfolio will pay to you any income it has received four times during its
life. Because the Portfolio generally pays dividends as they are received,
individual income payments will fluctuate based upon the amount of dividends
declared and paid by each issuer. Other reasons your income may vary are:
 
   o changes in the Portfolio because of additional securities purchases or
     sales;
 
   o a change in the Portfolio's expenses; and
 
   o the amount of dividends declared and paid.
 
There can be no assurance that any dividends will be declared or paid.
 
RECORDS AND REPORTS
 
You will receive:
 
o a notice from the Trustee if new equity securities are deposited in exchange
  or substitution for equity securities originally deposited;
 
o a final report on Portfolio activity; and
 
o annual tax information. This will also be sent to the IRS. You must report the
  amount of income received during the year. Please contact your tax adviser in
  this regard.
 
You may inspect records of Portfolio transactions at the Trustee's office during
regular business hours.
 
THE RISKS YOU FACE
 
UNITED KINGDOM
 
   
The Portfolio contains stocks of British companies engaged in such industries
as:
 
   o banking;
 
   o the chemical industry;
 
   o the building and construction industry;
 
   o the transportation industry;
 
   o telecommunications; and
 
   o insurance.
 
Many of these industries are subject to extensive government regulation which
may have a materially adverse effect on the performance of stocks in these
industries.
 
FOREIGN ISSUER RISK
 
Investments in securities of foreign issuers involve risks that are different
from investments in securities of domestic issuers. They may include:
 
   o political and economic developments;
 
   o possibility of withholding taxes;
 
   o exchange controls or other governmental restrictons on the payment of
     dividends;
 
   o conversion of local currency to U.S. dollars upon the sale of Portfolio
      Securities;
 
   o less publicly available information; and
 
   o absence of uniform accounting, auditing and financial reporting standards,
      practices and requirements.
 
American Depositary Shares and Receipts
 
American depositary shares and receipts are issued by an American bank or trust
company to evidence ownership of underlying common stock issued by a foreign
corporation and deposited in a depositary facility. The terms and conditions of
the depositary facility may result in less liquidity or lower market prices for
the ADRs than for the underlying shares. Certain of the Portfolio Securities
were purchased in ADR form in the United States.
    
 
                                       8
<PAGE>
   
Foreign Currency Risk
 
Because securities of non-U.S. issuers generally pay dividends and trade in
foreign currencies, there is the risk that the U.S. dollar value of these
securities will vary with fluctuations in foreign exchange rates. Changes in the
exchange rates of the pound sterling relative to the U.S. dollar ranged from
minus 20.22% in 1984 to plus 27.22% in 1987, and averaged minus 0.11% over the
last 20 years.
 
At the present time the Sponsors do not believe that any of the Portfolio
Securities is subject to exchange control restrictions which would materially
interfere with payment to the Portfolio of amounts due on the Portfolio
Securities. The adoption of exchange control regulations or other legal
restrictions could have an adverse impact on the marketability of international
securities in the Portfolio and on the ability of the Portfolio to satisfy
redemptions. There can be no assurance that exchange control regulations might
not be adopted in the future that would adversely affect payments to the
Portfolio.
 
On January 1, 1999, the European Monetary Union (EMU) introduced a new single
currency, the euro. The United Kingdom will not introduce the euro at this time.
A newly created European Central Bank (ECB) has the authority to direct the
monetary policy for this region, including the determination of interest rates.
These changes may affect the European capital markets, and the related risks may
increase the volatility in world capital markets. This, in turn, may affect the
Portfolio's performance. The risks for the portfolio associated with the
introduction of the euro include:
 
   o The exchange rates between the U.S. dollar and European currencies may
      become more volatile and unstable;
 
   o European entities may face substantial conversion costs which may not have
      been accurately anticipated and which may affect issuer profitability and
      creditworthiness;
 
   o greater volatility in exchange rates between the currencies of
     participating and non-participating countries, especially when these, or
     other non-participating countries, will adopt the euro at some later point;
 
   o Some financial contracts (e.g. bank loan agreements, derivative contracts,
     and foreign exchange contracts) that refer to existing national currencies
     may be subject to some legal uncertainties when these currencies are
     converted into the euro.
 
   o Depending on how the tax authorities rule on this issue, the euro
     conversion may result in a 'realization event' for a financial instrument
     denominated in a non-euro currency;
 
   o Suitable clearing, settlement and operational systems of banks and other
      financial institutions may not be ready for the euro conversion;
 
   o European interest rates and exchange rates could become more volatile as
     the European Central Bank and market participants search for a common
      understanding of policy targets and instruments; and
 
   o The currency unification could be partially or completely reversed, causing
      uncertainty in world markets and creating unanticipated expenses as a
     result of having to undo changes made in anticipation of the euro's
     introduction;
    
 
                                       9
<PAGE>
   
These or other factors may cause market disruptions and could adversely affect
the value of foreign securities, currencies and financial contracts held by the
Portfolio.
 
Changes In Law
 
Recent changes in law will result in material changes in the manner in which the
United Kingdom taxes dividends paid on or after April 6, 1999. It is possible
that these changes will have the effect of motivating United Kingdom companies
to make changes in their dividend policies, which may affect the stocks held in
the portfolio. It is unclear what the effect of this change will be to any
quantitative investment strategy.
 
Liquidity
 
Sales of foreign securities in United States securities markets are ordinarily
subject to severe restrictions and will generally be made only in foreign
securities markets. You should know that:
 
   o securities may be traded in foreign countries where the securities markets
     are not as developed or efficient and may not be as liquid as those in the
     United States;
 
   o a foreign market's liquidity might become impaired as a result of economic
     or political turmoil, or if relations between the United States and such
     foreign country deteriorate markedly; and
 
   o the principal trading market for the Portfolio Securities, even if
     otherwise listed, may be the over-the-counter market in which liquidity
     will depend on whether dealers will make a market in the Portfolio
     Securities.
    
 
LITIGATION AND LEGISLATION RISKS
 
Philip Morris Companies common stock represents approximately 10% of the value
of the Portfolio. Pending legal proceedings against Philip Morris cover a wide
range of matters including product liability and consumer protection. Damages
claimed in many of the smoking and health cases alleging personal injury (both
individual and class actions), and in health cost recovery cases brought by
governments, unions and similar entities seeking reimbursement for healthcare
expenditures, aggregate many billions of dollars.
 
On November 23, 1998, Philip Morris entered into a Master Settlement Agreement
with 46 state governments to settle the asserted and unasserted healthcare cost
recovery and certain other claims against them. The Agreement is subject to
final judicial approval in each of the settling states. It is expected that
Philip Morris will charge approximately $2 billion as a pretax expense in 1998
as a result of the settlement. Philip Morris believes the agreement will likely
materially adversely affect the business, volume, cash flows and/or operating
income and financial position of the company in future years. The degree of the
adverse impact will depend, among other things, on the rates of decline in
United States cigarette sales in the premium and discount segments, the
company's share of the domestic premium and discount cigarette segments, and the
effect of any resulting cost advantage of manufacturers not subject to the
agreement.
 
The Sponsors cannot predict the outcome of the litigation pending against Philip
Morris or how the current uncertainty concerning the settlement will ultimately
be resolved. The Sponsors cannot predict whether these and other possible
developments will have a material effect on the price of Philip Morris stock
over the term of the Portfolio, which could in turn adversely affect Unit
prices.
 
                                       10
<PAGE>
Other than as described above we do not know of any pending litigation that
might have a material adverse effect upon the Portfolio.
 
Future tax legislation could affect the value of the Portfolio by:
 
   o reducing the dividends-received deduction or
 
   o increasing the corporate tax rate resulting in less money available for
     dividend payments.
 
SELLING OR EXCHANGING UNITS
 
You can sell your units at any time for a price based on their net asset value.
Your net asset value is calculated each business day by:
 
   o adding the value of the Portfolio Securities, cash and any other Portfolio
      assets;
 
   o subtracting accrued but unpaid Portfolio expenses, unreimbursed Trustee
      advances, cash held to buy back units or for distribution to investors,
     and any other Portfolio liabilities; and
 
   o dividing the result by the number of outstanding units.
 
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the Portfolio.
 
As of the close of the initial offering period, the price you receive will be
reduced to pay the Portfolio's estimated organization costs.
 
If you sell your units before the final deferred sales fee installment, the
amount of any remaining payments will be deducted from your proceeds.
 
SPONSORS' SECONDARY MARKET
 
While we are not obligated to do so, we will buy back units at net asset value
less any remaining deferred sales fee and the cost of liquidating Securities to
meet the redemption. We may resell the units to other buyers or to the Trustee.
 
We have maintained a secondary market continuously for more than 25 years, but
we could discontinue it without prior notice for any business reason.
 
SELLING UNITS TO THE TRUSTEE
 
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by contacting your broker, dealer or financial
institution that holds your units in street name. Sometimes, additional
documents are needed such as a trust document, certificate of corporate
authority, certificate of death or appointment as executor, administrator or
guardian.
 
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
 
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee will sell your units in the over-the-counter market if it
believes it can obtain a higher price. In that case, you will receive the net
proceeds of the sale.
 
If the Portfolio does not have cash available to pay you for the units you are
selling, the agent for the Sponsors will select securities to be sold. These
sales could be made at times when the securities would not otherwise be sold and
may result in your receiving less than you paid
 
                                       11
<PAGE>
for your unit and also reduce the size and diversity of the Portfolio.
 
If you sell units with a value of at least $250,000, you may choose to receive
your distribution 'in kind.' If you so choose, you will receive securities and
cash with a total value equal to the price of your units. The Trustee will try
to distribute securities in the portfolio pro rata, but it reserves the right to
distribute only one or a few securities. The Trustee will act as your agent in
an in-kind distribution and will either hold the securities for your account or
transfer them as you instruct. You must pay any transaction costs as well as
transfer and ongoing custodial fees on sales of securities distributed in kind.
 
There could be a delay in paying you for your units:
 
   o if the New York Stock Exchange is closed (other than customary weekend and
      holiday closings);
 
   o if the SEC determines that trading on the New York Stock Exchange is
     restricted or that an emergency exists making sale or evaluation of the
     securities not reasonably practicable; and
 
   o for any other period permitted by SEC order.
 
ROLLOVER/EXCHANGE OPTION
 
When this Portfolio is about to terminate, you may have the option to roll your
proceeds into the next Select Ten International United Kingdom Portfolio if one
is available.
 
   
If you hold your Units with one of the Sponsors and notify your financial
adviser by February 9, 2000, your units will be redeemed and certain distributed
securities plus the proceeds from the sale of the remaining distributed
securities will be reinvested in units of a new Select Ten International United
Kingdom Portfolio. If you decide not to roll over your proceeds, you will
receive a cash distribution (or, if you so choose, an in-kind distribution)
after the Portfolio terminates.
 
The Portfolio will terminate by March 10, 2000. You may, by written notice to
the Trustee at least ten business days prior to termination, elect to receive an
in-kind distribution of your pro rata share of the Securities remaining in the
Portfolio at that time (net of your share of expenses). Of course you can sell
    
your Units at any time prior to termination.
 
You may exchange units of this Portfolio for units of another Select or Focus
Series or certain other Defined Asset Funds any time before this Portfolio
terminates. If you continue to hold your Units, you may exchange units of this
Portfolio for units of certain other Defined Asset Funds at a reduced sales fee
if your investment goals change. To exchange units, you should talk to your
financial professional about what Portfolios are exchangeable, suitable and
currently available.
 
We may amend or terminate the options to exchange your units or roll your
proceeds at any time without notice.
 
                                       12
<PAGE>
HOW THE FUND WORKS
 
PRICING
 
Units are charged a combination of initial and deferred sales fees.
 
In addition, during the initial offering period, a portion of the price of a
unit also consists of cash to pay all or some of the costs of organizing the
Portfolio including:
 
   o cost of initial preparation of legal documents;
 
   o federal and state registration fees;
 
   o initial fees and expenses of the Trustee;
 
   o initial audit; and
 
   o legal expenses and other out-of-pocket expenses.
 
The estimated organization costs will be deducted from the assets of the
Portfolio as of the close of the initial offering period.
 
The deferred sales fee is generally a monthly charge of $1.75 per 1,000 units
and is accrued in ten monthly installments. Units redeemed or repurchased prior
to the accrual of the final deferred sales fee installment will have the amount
of any remaining installments deducted from the redemption or repurchase
proceeds or deducted in calculating an in-kind distribution, however, this
deduction will be waived in the event of the death or disability (as defined in
the Internal Revenue Code of 1986) of an investor. The initial sales fee is
equal to the aggregate sales fee less the aggregate amount of any remaining
installments of the deferred sales fee.
 
It is anticipated that securities will not be sold to pay the deferred sales fee
until after the date of the last installment. Investors will be at risk for
market price fluctuations in the securities from the several installment accrual
dates to the dates of actual sale of securities to satisfy this liability.
 
EVALUATIONS
 
   
The Trustee values the securities on each business day (i.e., any day other than
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
In addition, the United Kingdom Portfolio 'business day' shall also exclude the
following U.K. holidays: Easter Monday, May Day, Summer Bank Holiday and Boxing
Day. If the securities are listed on a national securities exchange or the
Nasdaq National Market, evaluations are generally based on closing sales prices
on that exchange or that system or, if closing sales prices are not available,
at the mean between the closing bid and offer prices.
    
 
INCOME
 
   
o The annual U.S. dollar income per unit, after deducting estimated annual
  Portfolio expenses per unit, will depend primarily upon the amount of
  dividends declared and paid by the issuers of the securities, fluctuations in
  U.S. dollar exchange rates and changes in the expenses of the Portfolio and,
  to a lesser degree, upon the level of purchases of additional securities and
  sales of securities. There is no assurance that dividends on the securities
  will continue at their current levels or be declared at all.
    
 
o Each unit receives an equal share of distributions of dividend income net of
   estimated expenses. Because dividends on the securities are not received at a
  constant rate throughout the year, any distribution may be more or less than
  the amount then credited to the income account. The Trustee
 
                                       13
<PAGE>
   
   credits dividends received to an Income Account which are converted into U.S.
   dollars at the current exchange rate and other receipts to a Capital Account
   after conversion into U.S.dollars at the current rate. The Trustee may
   establish a reserve account by withdrawing from the these accounts amounts it
   considers appropriate to pay any material liability. These accounts do not
   bear interest.
    
 
EXPENSES
 
The Trustee is paid a fee monthly. It also benefits when it holds cash for the
Portfolio in non-interest bearing accounts. The Trustee may also receive
additional amounts:
 
   o for extraordinary services and costs of indemnifying the Trustee and the
      Sponsors;
 
   o costs of actions taken to protect the Portfolio and other legal fees and
      expenses;
 
   o expenses for keeping the Portfolio's registration statement current; and
 
   o Portfolio termination expenses and any governmental charges.
 
The Sponsors are currently reimbursed up to 45 cents per 1,000 units annually
for providing portfolio supervisory, bookkeeping and administrative services and
for any other expenses properly chargeable to the Portfolio. While this fee may
exceed the amount of these costs and expenses attributable to this Portfolio,
the total of these fees for all Series of Defined Asset Funds will not exceed
the aggregate amount attributable to all of these Series for any calendar year.
Certain of these expenses were previously paid for by the Sponsors.
 
The Trustee's and Sponsors' fees may be adjusted for inflation without
investors' approval.
 
The deferred sales fees you owe are paid from the Capital Account. Although we
may collect the deferred sales charge monthly, to keep Units more fully invested
we do not currently plan to pay the deferred sales charge until after the
rollover notification date.
 
The Sponsors will pay advertising and selling expenses at no charge to the
Portfolio. If Portfolio expenses exceed initial estimates, the Portfolio will
owe the excess. The Trustee has a lien on Portfolio assets to secure
reimbursement of Portfolio expenses and may sell securities if cash is not
available.
 
PORTFOLIO CHANGES
 
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio.
 
We decide whether to offer units for sale that we acquire in the secondary
market after reviewing:
 
   o diversity of the Portfolio;
 
   o size of the Portfolio relative to its original size;
 
   o ratio of Portfolio expenses to income; and
 
   o cost of maintaining a current prospectus.
 
PORTFOLIO TERMINATION
 
When the Portfolio is about to terminate you will receive a notice, and you will
be unable to sell your units after that time. Unless you choose to receive an
in-kind distribution of securities, we will sell any remaining securities, and
you will receive your final distribution in cash.
 
                                       14
<PAGE>
You will pay your share of the expenses associated with termination, including
brokerage costs in selling securities. This may reduce the amount you receive as
your final distribution.
 
NO CERTIFICATES
 
All investors are required to hold their Units in uncertificated form and in
'street name' by their broker, dealer or financial institution at the Depository
Trust Company.
 
TRUST INDENTURE
 
The Portfolio is a 'unit investment trust' governed by a Trust Indenture, a
contract among the Sponsors and the Trustee, which sets forth their duties and
obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
 
The Sponsors and the Trustee may amend the Indenture without your consent:
 
   o to cure ambiguities;
 
   o to correct or supplement any defective or inconsistent provision;
 
   o to make any amendment required by any governmental agency; or
 
   o to make other changes determined not to be materially adverse to your best
     interest (as determined by the Sponsors).
 
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Portfolio without your written consent.
 
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
 
   o it fails to perform its duties;
 
   o it becomes incapable of acting or bankrupt or its affairs are taken over by
      public authorities; or
 
   o the Sponsors determine that its replacement is in your best interest.
 
Investors holding 51% of the units may remove the Trustee. The Trustee may
resign or be removed by the Sponsors without the consent of investors. The
resignation or removal of the Trustee becomes effective when a successor accepts
appointment. The Sponsors will try to appoint a successor promptly; however, if
no successor has accepted within 30 days after notice of resignation, the
resigning Trustee may petition a court to appoint a successor.
 
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
 
   o remove it and appoint a replacement Sponsor;
 
   o liquidate the Portfolio; or
 
   o continue to act as Trustee without a Sponsor.
 
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
 
The Trust Indenture contains customary provisions limiting the liability of the
Trustee and the Sponsors.
 
LEGAL OPINION
 
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, has given an opinion that the units are
validly issued.
 
                                       15
<PAGE>
AUDITORS
 
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
 
SPONSORS
 
The Sponsors are:
 
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
 
P.O. Box 9051,
Princeton, NJ 08543-9051
 
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
 
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
 
DEAN WITTER REYNOLDS INC., Two World Trade Center--59th Floor,
New York, NY 10048, is a selected dealer for the Portfolio.
 
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
 
TRUSTEE
 
The Chase Manhattan Bank, Unit Trust Department, 4 New York Plaza--6th Floor,
New York, New York 10004, is the Trustee. It is supervised by the Federal
Deposit Insurance Corporation, the Board of Governors of the Federal Reserve
System and New York State banking authorities.
 
UNDERWRITERS' AND SPONSORS' PROFITS
 
Underwriters receive sales charges when they sell units. Sponsors also realize a
profit or loss on deposit of the securities shown under Defined Portfolio. Any
cash made available by you to the Sponsors before the settlement date for those
units may be used in the Sponsors' businesses to the extent permitted by federal
law and may benefit the Sponsors.
 
A Sponsor or Underwriter may realize profits or sustain losses on stocks in the
Portfolio which were acquired from underwriting syndicates of which it was a
member.
 
   
During the initial offering period, the Sponsors also may realize profits or
sustain losses on units they hold. The profit or loss from the Portfolio will
include the receipt of applicable sales charges, fluctuation in the price per
unit, a loss of $1,850.79 on the initial deposit of the securities and a gain or
loss on subsequent deposits of securities. In maintaining a secondary market,
the Sponsors will also realize profits or sustain losses in the amount of any
difference between the prices at which they buy units and the prices at which
    
they resell or redeem them.
 
PUBLIC DISTRIBUTION
 
During the initial offering period, units will be distributed to the public by
the Sponsors and dealers who are members of the National Association of
Securities Dealers, Inc.
 
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
 
                                       16
<PAGE>
Prudential Securities Incorporated, which will participate only in rollover
sales, will receive a preferred dealer concession of $13.00 per 1,000 units of
this Portfolio.
 
CODE OF ETHICS
 
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
reporting of personal securities transactions by its employees with access to
information on portfolio transactions. The goal of the code is to prevent fraud,
deception or misconduct against the Portfolio and to provide reasonable
standards of conduct.
 
YEAR 2000 ISSUES
 
   
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Portfolio. The Year 2000 Problem may adversely affect the issuers of the
securities contained in the Portfolio, but we cannot predict whether any impact
will be material to the Portfolio as a whole.
 
TAXES
 
U.S. TAXATION
 
    
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. You should
consult your own tax adviser about your particular circumstances.
 
In the opinion of our counsel, under existing law:
 
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
 
The Portfolio will not be taxed as a corporation for federal income tax
purposes, and you will be considered to own directly your share of each Security
in the Portfolio.
 
   
GAIN OR LOSS UPON DISPOSITION
    
 
You will generally recognize gain or loss when you dispose of your units for
cash (by sale or redemption) or when the Trustee disposes of the Securities in
the Portfolio. You generally will not recognize gain or loss on Securities
distributed to you 'in-kind,' either in redemption of your units or upon
termination of the Portfolio. Your basis for Securities distributed to you will
be the same as the portion of your basis in your units which are attributable to
the distributed Securities, and your holding period for the distributed
Securities will include your holding period in your units.
 
If you elect to roll over your investment in the portfolio, you will not
recognize gain or loss on your units except to the extent that your share of the
Securities in the Portfolio is sold and the proceeds are paid to you. Your basis
in the Securities that are rolled over into a new portfolio will be the same as
the portion of your basis in your units which was attributable to the rolled
over Securities.
 
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain or loss from the Portfolio will be long-term if you are considered
to have held your investment which produces the gain or loss for more than
 
                                       17
<PAGE>
one year and short-term if you held it for one year or less. Because the
deductibility of capital losses is subject to limitations, you may not be able
to deduct all of your capital losses. You should consult your tax adviser in
this regard.
 
YOUR TAX BASIS IN THE SECURITIES
 
Your aggregate tax basis in your units will be equal to the cost of the units,
including the sales fee. You should not increase your basis in your units by
deferred sales charges or organizational expenses. The tax reporting form and
annual statements you receive will be based on the net amounts paid to you, from
which these expenses will already be deducted.
 
EXPENSES
 
If you are an individual who itemizes deductions, you may deduct your share of
Portfolio expenses, but only to the extent that your share of the expenses,
together with your other miscellaneous deductions, exceeds 2% of your adjusted
gross income. Your ability to deduct Portfolio expenses will be limited further
if your adjusted gross income exceeds a specified amount (currently, $124,500 or
$62,250 for a married person filing separately).
 
STATE AND LOCAL TAXES
 
Under the income tax laws of the State and City of New York, the Portfolio will
not be taxed as a corporation, and the income of the Portfolio will be treated
as the income of the investors in the same manner as for federal income tax
purposes.
 
FOREIGN INVESTORS
 
If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will be subject to 30% withholding tax (or a lower
applicable treaty rate) on distributions. You should consult your tax adviser
about the possible application of federal, state and local, and foreign taxes.
 
   
UNITED KINGDOM TAXATION
 
The following summary describes some of the important UK tax consequences of
holding units in the United Kingdom Portfolio. It applies to certain U.S.
investors only and does not apply to non-U.S. investors. The summary is intended
as a general guide only and you should consult your own tax adviser about your
particular circumstances.
 
In the opinion of our counsel, under existing law:
 
TAX ON DIVIDENDS
 
A UK resident individual who receives a dividend from a UK company is generally
entitled to a tax credit, which is either offset against UK tax liabilities or,
in certain circumstances, repaid.
 
You will not be able to claim any refund of the tax credit for dividends paid on
or after April 6, 1999. If you are resident in the US for purposes of the income
tax treaty between the US and the UK (the 'Treaty') you may be able to claim a
refund of part of the tax credit for dividends paid before April 6, 1999.
Although a US investor who is resident in the US for the purposes of the Treaty
between the US and the UK and who holds shares directly in a UK company can
generally claim a refund of part of the tax credit from the UK Inland Revenue,
it is unclear whether you will be entitled to any refund since you invest
indirectly in UK companies through the Fund. Unless a special procedure is
agreed with the
    
 
                                       18
<PAGE>
   
UK Inland Revenue in advance, you may not be able to claim any refund.
 
A UK company may elect for a dividend paid before April 6, 1999 to be paid as a
'foreign income dividend' rather than an ordinary dividend. A foreign income
dividend does not carry a tax credit and so you will not be entitled to any
refund.
 
TAX ON DISPOSAL OF UNITS
 
US investors who are neither resident nor ordinarily resident in the UK will not
generally be liable for UK tax on gains arising on the disposal of units.
However, they may be liable if the units are used, held or acquired for the
purposes of a trade, profession or vocation carried on in the UK. Individual US
investors may also be liable if they have previously been resident or ordinarily
resident in the UK and become resident or ordinarily resident in the UK in the
future.
 
INHERITANCE TAX
 
Individual US investors who are domiciled in the US and who are not UK nationals
will generally not be subject to UK inheritance tax on death or on gifts of the
units made during their lifetimes, provided any applicable US federal gift or
estate tax is paid. They may be subject to UK inheritance tax if the units are
used in a business in the UK or relate to the performance of personal services
in the UK.
 
Where the units are held on trust, the units will generally not be subject to UK
inheritance tax unless the settlor, at the time of settlement, was domiciled in
the UK, in which case they may be subject to tax.
 
It is very unlikely that the units will be subject to both UK inheritance tax
and US federal gift or estate tax. If they were, one of the taxes could
generally be credited against the other.
    
 
RETIREMENT PLANS
 
You may wish to purchase units for an Individual Retirement Account ('IRAs') or
other retirement plan. Generally, capital gains and income received in each of
these plans are exempt from federal taxation. All distributions from these types
of plans are generally treated as ordinary income but may, in some cases, be
eligible for tax-deferred rollover treatment. You should consult your attorney
or tax adviser about the specific tax rules relating to these plans. These plans
are offered by brokerage firms, including the Sponsors of this Portfolio, and
other financial institutions. Fees and charges with respect to such plans may
vary.
 
SUPPLEMENTAL INFORMATION
 
You can receive at no cost supplemental information about the Portfolio by
calling the Trustee. The supplemental information includes more detailed risk
disclosure and general information about the structure and operation of the
Portfolio. The supplemental information is also available from the SEC.
 
                                       19
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
   
The Sponsors, Trustee and Holders of Equity Investor Fund, Select Ten Portfolio
1999 International Series A, United Kingdom Portfolio, Defined Asset Funds (the
    
'Portfolio'):
 
   
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Portfolio as of February 3, 1999.
This financial statement is the responsibility of the Trustee. Our
responsibility is to express an opinion on this financial statement based on our
    
audit.
 
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
 
   
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Portfolio as of February 3,
1999 in conformity with generally accepted accounting principles.
    
 
DELOITTE & TOUCHE LLP
New York, N.Y.
   
February 3, 1999
    
 
   
                 STATEMENT OF CONDITION AS OF FEBRUARY 3, 1999
 
TRUST PROPERTY
 

Investments--Contracts to purchase Securities(1).........$         330,569.85
                                                         --------------------
           Total.........................................$         330,569.85
                                                         --------------------
                                                         --------------------
LIABILITY AND INTEREST OF HOLDERS
     Reimbursement of Sponsors for organization
       expenses(2).......................................$             477.49
                                                         --------------------
     Subtotal                                                          477.49
                                                         --------------------
Interest of Holders of 333,908 Units of fractional
  undivided interest outstanding:(3)
  Cost to investors(4)...................................$         333,894.64
  Gross underwriting commissions and organization
    expenses(5)(2).......................................           (3,802.28)
                                                         --------------------
     Subtotal                                                      330,092.36
                                                         --------------------
           Total.........................................$         330,569.85
                                                         --------------------
                                                         --------------------

 
- ---------------
 
          (1) Aggregate cost to the Portfolio of the securities listed under
Defined Portfolio based on the U.S. dollar offer side value of the relevant
exchange rate determined by the Trustee at 4:00 p.m., Eastern time on February
3, 1999. The contracts to purchase securities are collateralized by an
irrevocable letter of credit which has been issued by DG Bank, New York Branch,
in the amount of $332,420.64 and deposited with the Trustee. The amount of the
letter of credit includes $330,569.85 for the purchase of securities.
 
          (2) A portion of the Public Offering Price consists of securities in
an amount sufficient to pay all or a portion of the costs incurred in
establishing the Portfolio. These costs have been estimated at $1.43 per 1,000
Units. A distribution will be made as of the close of the initial offering
period to an account maintained by the Trustee from which the organization
expenses obligation of the investors will be satisfied.
 
          (3) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in this statement of
condition, the number of Units offered on the Initial Date of Deposit will be
adjusted to maintain the $999.96 per 1,000 Units offering price only for that
day. The Public Offering Price on any subsequent business day will vary.
 
          (4) Aggregate public offering price computed on the basis of the U.S.
dollar value of the underlying securities based on the U.S. dollar offer side
value of the relevant exchange rate at 4:00 p.m., Eastern time on February 3,
1999.
 
          (5) Assumes the maximum initial sales charge per 1,000 units of 1.00%
of the Public Offering Price. A deferred sales charge of $1.75 per 1,000 Units
is payable on April 1, 1999 and thereafter on the 1st day of each month through
January 1, 2000. Distributions will be made to an account maintained by the
Trustee from which the deferred sales charge obligation of the investors to the
Sponsors will be satisfied. If units are redeemed prior to January 1, 2000, the
remaining portion of the distribution applicable to such units will be
transferred to such account on the redemption date.
    
 
                                       20
<PAGE>
                             Defined
                             Asset FundsSM
 

HAVE QUESTIONS ?                         EQUITY INVESTOR FUND
Request the most                         SELECT TEN PORTFOLIO
   
recent free Information                  1999 INTERNATIONAL SERIES A
Supplement that gives more               UNITED KINGDOM PORTFOLIO
    
details about the Fund,                  (A Unit Investment Trust)
by calling:                              ---------------------------------------
The Chase Manhattan Bank                 This Prospectus does not contain
1-800-323-1508                           complete information about the
                                         investment company filed with the
                                         Securities and Exchange Commission in
                                         Washington, D.C. under the:
                                         o Securities Act of 1933 (file no.
   
                                         333-70593) and
    
                                         o Investment Company Act of 1940 (file
                                         no. 811-3044).
                                         TO OBTAIN COPIES AT PRESCRIBED RATES--
                                         WRITE: Public Reference Section of the
                                         Commission
                                         450 Fifth Street, N.W., Washington,
                                         D.C. 20549-6009
                                         CALL: 1-800-SEC-0330.
                                         VISIT: http://www.sec.gov.
                                         ---------------------------------------
                                         No person is authorized to give any
                                         information or representations about
                                         this Fund not contained in this
                                         Prospectus or the Information
                                         Supplement, and you should not rely on
                                         any other information.
                                         ---------------------------------------
                                         When units of this Fund are no longer
                                         available, this Prospectus may be used
                                         as a preliminary prospectus for a
                                         future series, but some of the
                                         information in this Prospectus will be
                                         changed for that series.
                                         Units of any future series may not be
                                         sold nor may offers to buy be accepted
                                         until that series has become effective
                                         with the Securities and Exchange
                                         Commission. No units can be sold in any
                                         State where a sale would be illegal.

 
                                                      32744--2/99
<PAGE>
      PAGE 1
 
                                   PART II
            ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS
 
A.  The following  information relating  to the  Depositors is  incorporated by
reference to  the SEC filings indicated and made a part of this Registration
Statement.
 
 I. Bonding  arrangements  of  each  of the  Depositors  are  incorporated  by
reference to Item A of Part II to the Registration Statement on Form S-6 under
the  Securities  Act  of 1933  for  Municipal Investment  Trust  Fund, Monthly
Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
 
 II. The date of organization of each of the Depositors is set forth in  Item B
of Part II to the Registration Statement on Form S-6 under the Securities  Act
of  1933  for Municipal  Investment  Trust Fund,  Monthly  Payment Series--573
Defined Asset  Funds  (Reg.  No.  333-08241) and  is  herein  incorporated  by
reference thereto.
 
III. The Charter and By-Laws of each of the Depositors are incorporated herein
by  reference to  Exhibits 1.3 through  1.12 to the  Registration Statement on
Form S-6 under the Securities Act of 1933 for Municipal Investment Trust Fund,
Monthly Payment Series--573 Defined Asset Funds (Reg. No. 333-08241).
 
IV. Information as to Officers and Directors of the Depositors has been  filed
pursuant  to Schedules A and D of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of  1934 and is incorporated  by reference to the  SEC
filings indicated and made a part of this Registration Statement:
 
Merrill Lynch, Pierce, Fenner & Smith Incorporated........       8-7221
Salomon Smith Barney Inc. ................................       8-8177
PaineWebber Incorporated..................................      8-16267
Dean Witter Reynolds Inc. ................................      8-14172
 
     B.  The Internal Revenue  Service Employer Identification  Numbers of the
Sponsors and Trustee are as follows:
 
Merrill Lynch, Pierce, Fenner & Smith Incorporated........     13-5674085
Salomon Smith Barney Inc. ................................     13-1912900
PaineWebber Incorporated..................................     13-2638166
Dean Witter Reynolds Inc. ................................     94-0899825
The Bank of New York, Trustee.............................     13-4941102
 
                                 UNDERTAKING
The Sponsors undertake that they will not instruct the Trustee to accept  from
(i)  AMBAC Indemnity  Corporation; Financial Guaranty  Insurance Company, MBIA
Insurance Corporation or any  other insurance company  affiliated with any  of
the  Sponsors, in settlement of  any claim, less than  an amount sufficient to
pay any principal or  interest (and, in the  case of a taxability  redemption,
premium)  then  due on  any  Security in  accordance  with the  municipal bond
guaranty insurance policy attached to such  Security or (ii) any affiliate  of
the  Sponsors who has any  obligation with respect to  any Security, less than
the full amount due pursuant to the obligation, unless such instructions  have
been approved by the Securities and Exchange Commission pursuant to Rule 17d-1
under the Investment Company Act of 1940.
 
                                     II-1


 
             SERIES OF EQUITY INCOME FUND AND EQUITY INVESTOR FUND
        DESIGNATED PURSUANT TO RULE 487 UNDER THE SECURITIES ACT OF 1933
 

                                                                    SEC
   
SERIES NUMBER                                                   FILE NUMBER
- --------------------------------------------------------------------------------
    
  Equity Income Fund, Investment Philosophy Series 1991
Selected Industrial Portfolio...............................           33-39158
  Equity Investor Fund, Select S&P Industrial Portfolio 1998
Series H....................................................          333-64577

 
                       CONTENTS OF REGISTRATION STATEMENT
The Registration Statement on Form S-6 comprises the following papers and
documents:
 
     The facing sheet of Form S-6.
 
     The Cross-Reference Sheet (incorporated by reference to the Cross-Reference
Sheet to the Registration Statement of Defined Asset Funds Municipal Insured
Series, 1933 Act File No. 33-54565).
 
     The Prospectus.
 
     Additional Information not included in the Prospectus (Part II).
 
The following exhibits:
 

1.1            --Form of Trust Indenture (incorporated by reference to Exhibit
                 1.1 to the Registration Statement of Equity Income Fund, Select
                 S&P Industrial Portfolio 1997 Series A. 1933 Act File No.
                 33-05683.
1.1.1          --Form of Standard Terms and Conditions of Trust Effective
                 October 21, 1993 (incorporated by reference to Exhibit 1.1.1 to
                 the Registration Statement of Municipal Investment Trust Fund,
                 Multistate Series--48, 1933 Act File No. 33-50247).
1.2            --Form of Master Agreement Among Underwriters (incorporated by
                 reference to Exhibit 1.2 to the Registration Statement of The
                 Corporate Income Fund, One Hundred Ninety-Fourth Monthly
                 Payment Series, 1933 Act File No. 2-90925).
3.1            --Opinion of counsel as to the legality of the securities being
                 issued including their consent to the use of their names under
                 the headings 'How The Fund Works--Legal Opinion' in the
                 Prospectus.
5.1            --Consent of independent accountants.
   
9.1            --Information Supplement.
24             --Powers of Attorney.
    

 
                                      R-1
<PAGE>
                                   SIGNATURES
 
     The registrant hereby identifies the series numbers of Equity Income Fund
and Equity Investor Fund listed on page R-1 for the purposes of the
representations required by Rule 487 and represents the following:
 
     1) That the portfolio securities deposited in the series as to which this
        registration statement is being filed do not differ materially in type
        or quality from those deposited in such previous series;
 
     2) That, except to the extent necessary to identify the specific portfolio
        securities deposited in, and to provide essential information for, the
        series with respect to which this registration statement is being filed,
        this registration statement does not contain disclosures that differ in
        any material respect from those contained in the registration statements
        for such previous series as to which the effective date was determined
        by the Commission or the staff; and
 
     3) That it has complied with Rule 460 under the Securities Act of 1933.
 
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT HAS
DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
   
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 3RD DAY OF
FEBRUARY 1999.
    
 
               SIGNATURES APPEAR ON PAGES R-3, R-4, R-5 AND R-6.
 
     A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
 
     A majority of the members of the Board of Directors of Salomon Smith Barney
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
 
     A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
 
     A majority of the members of the Board of Directors of Dean Witter Reynolds
Inc. has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
 
                                      R-2
<PAGE>
               MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                                   DEPOSITOR
 

By the following persons, who constitute  Powers of Attorney have been filed
  a majority of                             under
  the Board of Directors of Merrill         Form SE and the following 1933 Act
  Lynch, Pierce,                            File
   
  Fenner & Smith Incorporated:              Number: 333-70593
    

 
      HERBERT M. ALLISON, JR.
      GEORGE A. SCHIEREN
      JOHN L. STEFFENS
   
      J. DAVID MEGLEN
    
      (As authorized signatory for Merrill Lynch, Pierce,
      Fenner & Smith Incorporated and
      Attorney-in-fact for the persons listed above)
 
                                      R-3
<PAGE>
                           SALOMON SMITH BARNEY INC.
                                   DEPOSITOR
 

By the following persons, who constitute a majority of      Powers of Attorney
  the Board of Directors of Salomon Smith Barney Inc.:        have been filed
                                                              under the 1933 Act
                                                              File Numbers:
                                                              333-63417 and
                                                              333-63033

 
      MICHAEL A. CARPENTER
      DERYCK C. MAUGHAN
 
      By GINA LEMON
       (As authorized signatory for
       Salomon Smith Barney Inc. and
       Attorney-in-fact for the persons listed above)
 
                                      R-4
<PAGE>
                            PAINEWEBBER INCORPORATED
                                   DEPOSITOR
 

By the following persons, who constitute  Powers of Attorney have been filed
  the Board of Directors of PaineWebber     under
  Incorporated:                             the following 1933 Act File
                                            Number: 2-61279

 
      MARGO N. ALEXANDER
      TERRY L. ATKINSON
      BRIAN M. BAREFOOT
      STEVEN P. BAUM
      MICHAEL CULP
      REGINA A. DOLAN
      JOSEPH J. GRANO, JR.
      EDWARD M. KERSCHNER
      JAMES P. MacGILVRAY
      DONALD B. MARRON
      ROBERT H. SILVER
      MARK B. SUTTON
      By
       ROBERT E. HOLLEY
       (As authorized signatory for
       PaineWebber Incorporated
       and Attorney-in-fact for the persons listed above)
 
                                      R-5
<PAGE>
                           DEAN WITTER REYNOLDS INC.
                                   DEPOSITOR
 

By the following persons, who constitute  Powers of Attorney have been filed
  a majority of                             under Form SE and the following 1933
  the Board of Directors of Dean Witter     Act File Numbers: 33-17085 and
  Reynolds Inc.:                            333-13039

 
      RICHARD M. DeMARTINI
      ROBERT J. DWYER
      CHRISTINE A. EDWARDS
      JAMES F. HIGGINS
      MITCHELL M. MERIN
      STEPHEN R. MILLER
      RICHARD F. POWERS III
      PHILIP J. PURCELL
      THOMAS C. SCHNEIDER
      WILLIAM B. SMITH
      By
       MICHAEL D. BROWNE
       (As authorized signatory for
       Dean Witter Reynolds Inc.
       and Attorney-in-fact for the persons listed above)
 
                                      R-6

<PAGE>
                                                                     EXHIBIT 3.1
                             DAVIS POLK & WARDWELL
                              450 LEXINGTON AVENUE
                            NEW YORK, NEW YORK 10017
                                 (212) 450-4000
                                                                FEBRUARY 3, 1999
EQUITY INVESTOR FUND,
SELECT TEN PORTFOLIO 1999 INTERNATIONAL SERIES A
UNITED KINGDOM PORTFOLIO
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
DEAN WITTER REYNOLDS INC.
C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, N.J. 08543-9051
(609) 282-8500
Dear Sirs:
 
     We have acted as special counsel for you, as sponsors (the 'Sponsors') of
Equity Investor Fund, Select Ten Portfolio 1999 International Series A, United
Kingdom Portfolio, Defined Asset Funds (the 'Fund'), in connection with the
issuance of units of fractional undivided interest in the Fund (the 'Units') in
accordance with the Trust Indenture relating to the Fund (the 'Indenture').
 
     We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.
 
     Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsors and (ii) the Units, when duly issued and delivered by
the Sponsors and the Trustee in accordance with the Indenture, will be legally
issued, fully paid and non-assessable.
 
     We hereby consent to the use of this opinion as Exhibit 3.1 to the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the heading 'How The Fund Works--Legal Opinion.'
 
                                          Very truly yours,
 
                                          DAVIS POLK & WARDWELL

<PAGE>
                                                                     EXHIBIT 5.1
                       CONSENT OF INDEPENDENT ACCOUNTANTS
The Sponsors and Trustee of Equity Investor Fund, Select Ten Portfolio 1999
International Series A, United Kingdom Portfolio, Defined Asset Funds:
 
We consent to the use in this Registration Statement No. 333-70593 of our report
dated February 3, 1999, relating to the Statement of Condition of Equity
Investor Fund, Select Ten Portfolio 1999 International Series A, United Kingdom
Portfolio, Defined Asset Funds and to the reference to us under the heading
'Miscellaneous--Auditors' in the Prospectus which is a part of this Registration
Statement.
 
DELOITTE & TOUCHE LLP
New York, NY
February 3, 1999

<PAGE>

                       DEFINED ASSET FUNDS
                      INFORMATION SUPPLEMENT
                       EQUITY INVESTOR FUND

This Information Supplement provides additional information concerning the
structure, operations and risks of trusts (each, a "Portfolio") of Equity
Investor Fund--Defined Asset Funds not found in the prospectuses for the
Portfolios. This Information Supplement is not a prospectus and does not include
all of the information that a prospective investor should consider before
investing in a Portfolio. This Information Supplement should be read in
conjunction with the prospectus for the Portfolio in which an investor is
considering investing ("Prospectus"). Copies of the Prospectus can be obtained
by calling or writing the Trustee at the telephone number and address indicated
on the back cover of the Prospectus. This Information Supplement is dated
February 1, 1999. Capitalized terms have been defined in the Prospectus.
 
                        TABLE OF CONTENTS
 
                                                             Page

Description of Portfolio Investments . . . . . . . . . . . . . .2
  Portfolio Supervision. . . . . . . . . . . . . . . . . . . . .2
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . .2
  Equity Securities. . . . . . . . . . . . . . . . . . . . . . .2
  International Risk Factors . . . . . . . . . . . . . . . . . .3
Concentration. . . . . . . . . . . . . . . . . . . . . . . . . .7
  The Food and Beverage Industry . . . . . . . . . . . . . . . .7
  Consumer Products Companies. . . . . . . . . . . . . . . . . .7
  The Health Care Industry . . . . . . . . . . . . . . . . . . .8
  The Financial Industry . . . . . . . . . . . . . . . . . . . 10
  Manufacturing Companies. . . . . . . . . . . . . . . . . . . 12
  Natural Gas Companies. . . . . . . . . . . . . . . . . . . . 14
  Petroleum Refining Companies . . . . . . . . . . . . . . . . 15
  Technology Companies . . . . . . . . . . . . . . . . . . . . 16
  Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . 18
  The Telecommunications Industry. . . . . . . . . . . . . . . 21
  Foreign Issuers .  . . . . . . . . . . . . . . . . . . . . . 24
  The Real Estate Industry . . . . . . . . . . . . . . . . . . 26
  Standard & Poor's Indexes. . . . . . . . . . . . . . . . . . 28

Termination and Rollover (for Portfolios structured as grantor trusts for 
tax purposes)30
<PAGE>

               DESCRIPTION OF PORTFOLIO INVESTMENTS

Portfolio Supervision Each Portfolio is a unit investment trust which normally
follows a buy and hold investment strategy. Traditional methods of investment
management for mutual funds typically involve frequent changes in portfolio
holdings based on economic, financial and market analyses. Because a Portfolio
is not actively managed the adverse financial condition of an issuer or its
failure to maintain its current dividend rate will not necessarily require the
sale of its securities from a Portfolio. In the event a public tender offer is
made for a security or a merger or acquisition is announced affecting a
security, the Sponsors may instruct the Trustee to tender or sell the security
on the open market when in its opinion it is in the best interest of investors
to do so. The Sponsors may also instruct a Trustee to sell a security in the
following circumstances: (i) failure to declare or pay a regular dividend on a
security or anticipated dividends generally; (ii) institution of certain legal
proceedings; (iii) other legal questions or impediments affecting the security
or payments on that security; (iv) default under certain documents adversely
affecting the declaration or payment of anticipated dividends on the security,
the issuer's general credit standing or the sound investment character of the
security, or a default on other outstanding securities of the same issuer; (v)
if a security becomes inconsistent with a Portfolio's investment objectives;
(vi) if the sale is necessary or advisable to maintain the qualification of the
Portfolio as a Regulated Investment Company under the Internal Revenue Code or
to provide funds to make any distribution for a taxable year as required by the
Internal Revenue Code; or (vii) decline in security price or other market or
credit factors that, in the opinion of Defined Asset Funds research, makes
retention of the security detrimental to the interests of investors. If there is
a failure to declare or pay a regular dividend on a security or anticipated
dividends generally on that security and the Agent for the Sponsors fails to
instruct the Trustee within 30 days after notice of the failure, the Trustee
will sell the security. Any monies allocated to the purchase of a security will
generally be held for the purchase of the security. However, a Portfolio may not
be able to buy each security at the same time, because of unavailability of the
security or because of any restrictions applicable to the Portfolio relating to
the purchase of the security by reason of the federal securities laws or
otherwise. Voting rights with respect to the securities will be exercised by the
Trustee in accordance with directions given by the Sponsors. 

RISK FACTORS

Equity Securities

An investment in Units of a Portfolio should be made with an understanding of
the risks inherent in an investment in equity securities, including the risk
that the financial condition of the issuers of the securities may become
impaired or that the general condition of the relevant stock market may worsen
(both of which may contribute directly to a decrease in the value of the
securities and thus in the value of the Units). Common stocks may be especially
susceptible to general stock market movements and to volatile increases and
decreases in value as market confidence in and perceptions of the issuers
change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises.

     Holders of common stocks incur more risk than holders of preferred stocks
and debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Holders of common stocks of the type held by a Portfolio
have a right to receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. By contrast, holders of preferred stocks have the right to
receive dividends at a fixed rate when and as declared by the issuer's board of
directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends payable
to the holders of cumulative preferred stock. Preferred stocks are also entitled
to rights on liquidation which are senior to those of common stocks. Moreover,
common stocks do not represent an obligation of the issuer and therefore do not
offer any assurance of income or provide the degree of protection of capital
provided by debt securities. Indeed, the issuance of debt securities or even
preferred stock will create prior claims for payment of principal, interest,
liquidation preferences and dividends which could adversely affect the ability
and inclination of the issuer to declare or pay dividends on its common stock or
the rights of holders of common stock with respect to assets of the issuer upon
liquidation or bankruptcy. Further, unlike debt securities which typically have
a stated principal amount payable at maturity (whose value, however, will be
subject to market fluctuations prior thereto), common stocks have neither a
fixed principal amount nor a maturity and have values which are subject to
market fluctuations for as long as the stocks remain outstanding. The value of
the securities in a Portfolio thus may be expected to fluctuate over the entire
life of the Portfolio to values higher or lower than those prevailing on the
Portfolio's initial date of deposit.

International Risk Factors

     Foreign Issuers. Investments in Portfolios consisting partially or entirely
of securities of foreign issuers involve investment risks that are different in
some respects from an investment in a Portfolio that invests partially or
entirely in securities of domestic issuers. Those investment risks include
future political and economic developments and the possible establishment of
exchange controls or other governmental restrictions which might adversely
affect the payment or receipt of payment of dividends on the relevant
securities. In addition, for foreign issuers that are not subject to the
reporting requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer. Also,
foreign issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements such as those
applicable to domestic issuers.

     Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies, and even if purchased by a Fund in American Depositary Receipt
("ADR") form in the United States, are principally traded in foreign currencies.
Therefore, there is a risk that the United States dollar value of these
securities will vary with fluctuations in the United States dollar foreign
exchange rates for the relevant currencies. Moreover, for those Securities that
are ADRs, currency fluctuations will affect the U.S. dollar equivalent of the
local currency price of the underlying domestic shares and, as a result, are
likely to affect the value of the ADRs and consequently the value of the
Securities. In addition, the rights of holders of ADRs may be different than
those of holders of the underlying shares, and the market for ADRs may be less
liquid than that for the underlying shares. ADRs evidence American Depositary
Shares which, in turn, represent common stock deposited with a custodian in a
depositary. ADRs may be sponsored or unsponsored. In an unsponsored facility,
the depositary initiates and arranges the facility at the request of market
makers and acts as agent for the ADR holder, while the company itself is not
involved in the transaction. In a sponsored facility, the issuing company
initiates the facility and agrees to pay certain administrative and
shareholder-related expenses. Sponsored facilities use a single depositary and
entail a contractual relationship between the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositories with no
contractual relationship to the company. ADRs are registered securities pursuant
to the Securities Act of 1933 and may be subject to the reporting requirements
of the Securities Exchange Act of 1934.

Foreign Exchange Rates.

A Portfolio of securities that are principally traded in foreign currencies 
involves investment risks that are substantially different from an investment 
in a fund which invests in securities that are principally traded in United 
States dollars. This is because the United States dollar value of a Portfolio 
(and hence of the Units) and of the distributions from the Portfolio will vary 
with fluctuations in the United States dollar foreign exchange rates for the 
relevant currencies. Most foreign currencies have fluctuated widely in value
against the United States dollar for many reasons, including supply and demand
of the respective currency, the soundness of the world economy and the strength 
of the respective economy as compared to the economies of the United States 
and other countries.

     The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty, which established a system of fixed
exchange rates and the convertibility of the United States dollar into gold
through foreign central banks. Starting in 1971, growing volatility in the
foreign exchange markets caused the United States to abandon gold convertibility
and to effect a small devaluation of the United States dollar. In 1973, the
system of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most Western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating international
market. Many smaller or developing countries have continued to "peg" their
currencies to the United States dollar although there has been some interest in
recent years in "pegging" currencies to "baskets" of other currencies or to a
Special Drawing Right administered by the International Monetary Fund. Since
1983, the Hong Kong dollar has been pegged to the U.S. dollar although there is
no guarantee that the Hong Kong dollar will continue to be "pegged" to the U.S.
dollar in the future. In Europe the Euro has been developed. Currencies are
generally traded by leading international commercial banks and institutional
investors (including corporate treasurers, money managers, pension funds and
insurance companies.) From time to time, central banks in a number of countries
also are major buyers and sellers of foreign currencies, mostly for the purpose
of preventing or reducing substantial exchange rate fluctuations.

     Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual and
proposed government policies on the value of currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well particularly
with respect to transfers of capital.) Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling large
amounts of the same currency or currencies. However, over the long term, the
currency of a country with a low rate of inflation and a favorable balance of
trade should increase in value relative to the currency of a country with a high
rate of inflation and deficits in the balance of trade. The Trustee will
estimate current exchange rates for the relevant currencies based on activity in
the various currency exchange markets. However, since these markets are volatile
and are constantly changing, depending on the activity at any particular time of
the large international commercial banks, various central banks, large
multi-national corporations, speculators and other buyers and sellers of foreign
currencies, and since actual foreign currency transactions may not be instantly
reported, the exchange rates estimated by the Trustee may not be indicative of
the amount in United States dollars a Portfolio would receive had the Trustee
sold any particular currency in the market.

     The Trustee is required to conduct the foreign exchange transactions of a
Portfolio either on a spot (i.e., cash) buying basis or on a forward foreign
exchange basis, whichever will synchronize the currency conversions as exactly
as practicable with the settlement dates of the foreign stock or with the
dividend distribution dates of the Portfolio, as the case may be. These forward
foreign exchange transactions will generally be of as short a duration as
practicable and will generally settle on the date of receipt of the applicable
foreign currency involving specific receivables or payables of the Portfolio
accruing in connection with the purchase and sale of its securities and income
received on the securities or the sale and redemption of Units. These
transactions are accomplished by contracting to purchase or sell a specific
currency at a future date and price set at the time of the contract. The cost to
a Portfolio of engaging in these foreign currency transactions varies with such
factors as the currency involved, the length of the contract period and the
market conditions then prevailing. Since transactions in foreign currency
exchange are usually conducted on a principal basis, fees or commissions are not
normally involved. Although foreign exchange dealers trade on a net basis they
do realize a profit based upon the difference between the price at which they
are willing to buy a particular currency (bid price) and the price at which they
are willing to sell the currency (offer price). The relevant exchange rate used
for evaluations of securities will include the cost of buying or selling, as the
case may be, of any forward foreign exchange contract in the relevant currency
to correspond to the requirement that Units when purchased settle on a regular
basis and that the Trustee settle redemption requests in United States dollars
within seven days. Exchange Controls. On the basis of the best information
available to the Sponsors at the present time none of the securities, except as
otherwise indicated in a Portfolio's prospectus, is subject to exchange control
restrictions under existing law which would materially interfere with payment to
a Portfolio of amounts due on securities either because the particular
jurisdictions have not adopted any currency regulations of this type or because
the issues qualify for an exemption or the Portfolio, as an extraterritorial
investor, has qualified its purchase of securities as exempt by following
applicable "validation" or similar regulatory or exemptive procedures. However,
there can be no assurance that exchange control regulations might not be adopted
in the future which might adversely affect payments to a Portfolio.

     In addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in a Portfolio and on the ability of a Portfolio to satisfy its
obligation to redeem Units tendered to the Trustee for redemption. Liquidity.
Foreign securities generally have not been registered under the Securities Act
of 1933 and may not be exempt from the registration requirements of the Act.
Sales of non-exempt securities by a Portfolio in United States securities
markets are subject to severe restrictions and may not be practicable.
Accordingly, sales of these securities by a Portfolio will generally be effected
only in foreign securities markets. Although the Sponsors do not believe that a
Portfolio will encounter obstacles in disposing of the securities, investors
should realize that the securities may be traded in foreign countries where the
securities markets are not as developed or efficient and may not be as liquid as
those in the United States. To the extent the liquidity of these markets becomes
impaired, however, the value of a Portfolio when responding to a substantial
volume of requests for redemption of Units (should redemptions be necessary
despite the market making activities of the Sponsors) received at or about the
same time could be adversely affected. This might occur, for example, as a
result of economic or political turmoil in a country in whose currency a
Portfolio had a substantial portion of its assets invested, or should relations
between the United States and a foreign country deteriorate markedly. Even
though the securities are listed, the principal trading market for the
securities may be in the over-the-counter market. As a result, the existence of
a liquid trading market for the securities may depend on whether dealers will
make a market in the securities. There can be no assurance that a market will be
made for any of the securities, that any market for the securities will be
maintained or of the liquidity of the securities in any markets made. In
addition, a Portfolio may be restricted under the Investment Company Act of 1940
from selling securities to any Sponsor. The price at which the securities may be
sold to meet redemptions and the value of a Portfolio will be adversely affected
if trading markets for the securities are limited or absent.

Concentration

     A Portfolio may contain or be concentrated in securities of issuers engaged
in the categories discussed below. An investment in a Portfolio should be made
with an understanding of the risks that these securities may entail, certain of
which are described below. The Food and Beverage Industry

     The Portfolio may be concentrated in stocks of the food and beverage
industry, including manufacturers of packaged foods, processors of agricultural
products, beverage companies and food distributors. There are many factors that
may have an adverse impact on the value of the stocks of these companies and
their ability to pay dividends. These factors include the sensitivity of
revenues, earnings, and financial condition to economic conditions, changing
consumer demands or preferences, fluctuations in the prices of agricultural
commodities, fluctuations in the cost of other raw materials such as packaging,
and the effects of inflation on pricing flexibility. The revenues and earnings
of these companies can also be affected by extensive competition that can result
in lost sales or in lower margins resulting from efforts to maintain market
share. Food and beverage companies are also subject to regulation under various
federal laws such as the Food, Drug, and Cosmetic Act as well as state, local
and foreign law and regulations. Costs associated with changing regulatory
restrictions, such as food labeling requirements, could adversely affect
earnings. Food and beverage companies are also becoming increasingly exposed to
risk associated with international operation, including foreign currency
fluctuations and future political and economic developments in other countries.
Other risk factors include potential deterioration in financial condition
resulting from litigation related to product liability, accidents, or trademark
or patent disputes; unfunded pension liability; changing accounting standards,
such as Statement of Financial Accounting Standard No. 106, which requires
accrual accounting for postretirement benefits other than pensions; and
leveraged buyouts, takeovers, or recapitalizations. Consumer Products Companies

     Investment in securities issued by consumer products companies should be
made with an understanding of the many factors which may have an adverse impact
on the credit quality of the particular company or industry. These include
cyclicality of revenues and earnings, changing consumer demands, regulatory
restrictions, products liability litigation and other litigation resulting from
accidents, extensive competition (including that of low-cost foreign companies),
unfunded pension fund liabilities and employee and retiree benefit costs and
financial deterioration resulting from leveraged buy-outs, takeovers or
acquisitions. In general, expenditures on consumer products will be affected by
the economic health of consumers. A continuing weak economy with its consequent
effect on consumer spending would have an adverse effect on the industry. Other
factors of particular relevance to the profitability of the industry are the
effects of increasing environmental regulation on packaging and on waste
disposal, the continuing need to conform with foreign regulations governing
packaging and the environment, the outcome of trade negotiations and their
effect on foreign subsidies and tariffs, foreign exchange rates, the price of
oil and its effect on energy costs, inventory cutbacks by retailers,
transportation and distribution costs, health concerns relating to the
consumption of certain products, the effect of demographics on consumer demand,
the availability and cost of raw materials and the ongoing need to develop new
products and to improve productivity.

The Health Care Industry

     Companies in the health care industry face numerous risks. Most health care
companies are extensively regulated. All are subject to extreme cost-containment
pressures and as a result they cannot readily raise prices for their products or
services, or may experience price declines. Most are subject to intensive
competition and are required to spend vast amounts of capital to keep pace with
technological innovation. These constraints affect the various health care
sectors in the Portfolio in specific ways. Strategic alliances are being formed
by pharmaceutical companies, biotechnology companies, HMOs, hospitals, and to a
lesser extent other health care companies to reduce costs and benefit from
economies of scale. The inability to form such alliances on favorable terms or
to compete with other alliances could adversely affect a company's profits and
the price of its securities.

     Many problems faced by pharmaceutical companies, biotechnology companies
and medical technology companies typify those faced by health care industry in
general. These companies are regulated by the federal Food and Drug
Administration (the "FDA"). The FDA regulates the development, manufacture and
marketing of all drugs and medical products. Before a product can be sold it
must receive FDA approval, a long and very costly process. Governments and
large, private health care consumers are exerting strenuous efforts to contain
health care costs. The federal government and increasing numbers of insurance
companies reimburse health care providers on a "prospective payment basis". This
means the physician or hospital is only paid a predetermined amount depending
upon the patient's diagnosis. If the cost of treatment exceeds the predetermined
amount, the physician or hospital will lose money, if it is less, money will be
made. This creates an incentive to prescribe cheaper, generic substitutes for
brand-name drugs and causes significant profit erosion for drug companies. Some
states have laws requiring pharmacists to dispense generic drugs unless
precluded by the prescribing physician. Other states set up auctions among drug
companies to determine which company will agree to meet their needs at the
lowest price. Therefore, the cost of marketing a drug is increasing while at the
same time it is becoming increasingly difficult to recoup that cost. Future
trends in drug pricing remain unclear. HMOs and other third-party payors are
gaining power and demanding larger discounts.

     Pharmaceutical companies must devote large amounts of risk capital to
research and development in order to develop new and unique drugs with patent
protection from generic substitutes and other competitors. Pharmaceutical
companies, biotechnology companies and medical technology companies also face
the risk of large product liability suits and consequently expensive liability
insurance. Finally, technological change is becoming increasingly rapid and
products tend to become obsolete more quickly than before.

     Medical Technology Companies. Medical technology companies face the risk
that hospitals will reduce spending on supplies and devices to maximize profits
(See Health Care Reform below). Medical technology companies must invest
significant capital in research and development to remain competitive. Hospitals
are also increasingly demanding discounts and that pressure may continue to grow
as hospitals consolidate.

     Hospital Management Companies. Hospital management companies are subject to
extensive regulation on federal, state and local levels. Many states require
hospital management companies to submit their financial statements for review
and some even regulate the rates they charge. When treatment costs are
reimbursed by third parties such as Medicare or Medicaid, hospitals have to work
within the discipline of the prospective payment system and also face more
specific cost- containment measures. Many hospital management companies have
recently consolidated. The success of the consolidated companies is dependant
upon the ability to successfully integrate management and policy to take
advantage of economies of scale. The effort to reduce costs has resulted in a
movement away from more expensive inpatient treatment to treatment on an
out-patient basis or in specialized facilities. The increase in managed care
facilities has significantly decreased the demand for traditional hospital care.
This has reduced bed-occupancy rates in the large general hospitals and affected
revenues adversely.


     Hospitals may be adversely affected by competitive pressure to consolidate.
There can be no assurance that hospitals will be able to make profitable
acquisitions. Hospitals may be subject to federal, state or insurer inquiries or
investigations, which may lead to sanctions. Hospitals also face the risk of
large liability suits and must carry expensive liability insurance and maintain
loss reserves, which may not be sufficient to cover claims. To the extent
hospital management companies are adversely impacted by any of the foregoing,
services companies and medical technology companies would also be affected
adversely.

Biotechnology Companies. 

     The biotechnology industry in general is an emerging growth industry.
Biotechnology companies are regulated by the FDA to the same extent as
traditional pharmaceutical companies. As emerging growth companies, they may be
thinly capitalized and more susceptible to general market fluctuations than
companies with greater capitalization. Earnings are generally retained to
finance the company's expansion and thus no dividends may be paid and additional
capital may be required to market new products on a commercial basis.
Biotechnology companies may also be dependent for their revenues upon only a few
products and upon larger pharmaceutical companies (who may be their competitors)
to produce and market their products. This dependence upon a limited range of
products increases the problems that would be caused by product obsolescence, a
risk that is greater in a rapidly developing area like biotechnology. Managed
Care. HMOs are subject to federal and state regulation which adds to the cost of
health care coverage. Specifically, states are beginning to raise concern about
how HMOs try to control pharmaceutical costs. Most states require HMOs to
provide periodic financial reports and some even require HMOs to maintain
minimum reserve requirements. Several states have recently rejected proposed
legislation that would allow consumers to sue managed-care plans for not
providing the proper degree of care or for bad medical decisions made by the
plan's employees. Similar legislation is still pending in six states. HMOs are
paid a fixed membership fee. Some HMOs are turning to "capitation," where they
contract to provide services for a certain population for a set price,
regardless of whether or not the service is provided. Depending on the
negotiated provisions of the contract, costs in excess of set fees may be borne
either by the HMO or the health care provider or shared by both. HMOs run the
risk that inflation, epidemics, lack of financial controls among professional
staff and the need to acquire new technology will increase treatment costs and
erode profits.

     Physician practice management companies have been consolidating to improve
their competitive position. The combinations have often not been as successful
as projected. Nursing Homes. Nursing homes face federal, state and local
governmental regulation. Failure to comply with applicable laws and regulations
could result, in extreme circumstances, in the revocation of facility's license.
Regulatory changes such as the recent change in the Medicare reimbursement
system may have an adverse impact. States may also reduce Medicaid reimbursement
for long-term care. Competition is also increasing from companies providing
rehabilitation therapy, home care services, respiratory treatment and clinical
labs. Nursing homes often expand through acquisitions. There is no assurance
that suitable acquisitions can be identified or completed in the future. Even if
successfully completed, acquisitions may entail unanticipated business risks or
legal liabilities.

     Information Technology. These companies must deal with compliance with the
year 2000. They are also subject to very competitive pricing and rapidly
changing technology. Health Care Reform. A number of legislative proposals
concerning health care have been introduced in the U.S. Congress in recent years
or have been reported to be under consideration. These proposals span a wide
range of topics, including cost controls, national health insurance, incentive
for competition in the provision of health care services, tax incentives and
penalties related to health care insurance premiums, and promotion of prepaid
health care plans. It is not possible to predict the effect of any of these
proposals if enacted. The Financial Industry

     Financial institutions may be subject to extensive governmental regulation
which may limit both the amount and types of loans and other financial
commitments they can make as well as the interest rates and other fees they can
charge. The following sectors may be represented in the Portfolio: Banking. The
profitability of a bank is largely dependent upon the credit quality of its loan
portfolio which, in turn, is affected by the institution's underwriting
criteria, concentrations within the portfolio and specific industry and general
economic conditions. The operating performance of financial institutions is also
impacted by changes in interest rates, the availability and cost of funds, the
intensity of competition and the degree of governmental regulation. The
activities of U.S. banks and bank holding companies are subject to comprehensive
federal and state regulation which is expected to continue to change over the
life of the Portfolio. Federal regulators may impose restrictions on dividend
payment policies, and transactions between banks and their parent holding
companies, as well as establish requirements for the level of the allowance for
loan losses. In addition, federal regulators require banks and thrifts to
maintain minimum capital requirements; to the extent additional equity is issued
to meet the requirements, outstanding equity holdings will be diluted. Recent
changes in federal and state regulations which will permit greater consolidation
and branching within the industry may lead to increased competition among larger
bank complexes. Legislation is currently being considered which would reduce the
separation between commercial and investment banking businesses. The enactment
of any new legislation or regulations, or any change in interpretation or
enforcement of existing laws or regulations, may affect the profitability of
participants in the banking industry.

     The banking industry is particularly susceptible to downturns in economic
conditions and volatility in political conditions as well as fiscal or monetary
policies of governmental units. Banking operations depend heavily on the
availability and cost of capital, and are highly sensitive to interest rate
levels.

     Banks are subject to substantial competition from other banking and thrift
institutions and from other financial service institutions for deposits, as well
as corporate and retail customers. To the extent a bank's portfolio is
concentrated in assets related to a particular industry or geographic region,
the bank's operating results will be subject to additional risks associated with
that industry or region. Loan portfolios of banks have been adversely affected
by depressed conditions in certain markets, including real estate, agriculture
and energy. Profitability, therefore, is subject to significant fluctuation.
Banks are also exposed to the risks of a deflationary economy, which may
diminish the value of a bank's direct investments and contribute to loan
defaults if the value of secured property or other collateral for loans
declines.

Thrifts. 

     The savings and loan or thrift industry is generally subject to similar
risks as the banking industry, including, interest rate changes, credit risks
and regulatory risks. Such risks may have different effects on the thrift
industry because of differences in the general composition of their loan
portfolios. The loan portfolios of thrifts, therefore, may be less diversified
than bank portfolios and have a greater concentration in real estate, consumer
and small business loans. The loan portfolios of thrifts may also be
concentrated in the geographic area in which they are located. Local market
conditions, particularly if the economic base of the area depends on a depressed
industry, may have adverse effects on the financial condition of thrifts. The
enactment of any new legislation or regulations, or any change in interpretation
or enforcement of existing laws or regulations, may affect the profitability of
participants in the thrift industry. No assurance can be given as to what form
any legislation or regulation would take, if enacted, or what effects any new
legislation or regulation would have on the thrift industry.

Insurance. 

     Insurance companies are subject to extensive regulation and supervision by
state insurance commissioners who regulate the standards of solvency, the nature
of and limitations on investments, reports of financial condition, and reserve
requirements for unearned premiums, losses and other matters. A significant
portion of the assets of insurance companies are required by law to be held in
reserve against potential claims on policies and is not available to general
creditors. Although the federal government does not regulate the business of
insurance, federal initiatives including pension regulation, controls on medical
costs, minimum standards for no-fault automobile insurance, national health
insurance, tax law changes affecting life insurance companies and repeal of the
antitrust exemption for the insurance business can significantly impact the
insurance business. Insurance companies are also affected by state and federal
judicial and regulatory decisions that redefine risk exposure in areas such as
products liability, workers' compensation and disability benefits. Developments
in these areas may reduce short-term profitability of certain lines of
insurance, but long-term effects may be minimized through revision of coverage
and policy terms. Insurance companies' profitability depends largely on
actuarial assumptions based on past experience and on the investment returns on
reserve and surplus funds. The occurrence of certain significant and unforeseen
events may therefore have an adverse effect on the financial condition of
insurance companies. Certain types of insurance, such as property and casualty
insurance, may be impacted by natural catastrophes or environmental and asbestos
claims under decades-old policies or similar events. In addition, insurance
companies are affected by real estate and equity market returns, interest rate
levels, economic conditions and price and marketing competition. Deregulation of
the financial services industry may result in greater diversification of
products offered by financial services companies and expose insurance companies
to increased competition. Financial Services. The financial services industry
includes credit card issuers, asset management companies and companies that
provide private mortgage insurance, home equity loans, point-of-sale loans for
various durable goods and other consumer and commercial loans. Companies in the
credit card and certain other businesses are subject to the demands of a
competitive market, including increased use of solicitations, target marketing
and pricing competition. Because of increased competition, some credit card
issuers have pursued customers with lower credit quality and have experienced
rising delinquency rates. Profitability for credit card issuers is largely
dependent on the ability to generate new receivables as well as on their
continued ability to fund themselves by asset securitization, the level of
delinquencies and losses and pricing power. Social, legal and economic factors,
including inflation, unemployment levels and interest rates, may result in
changes in the market demand, credit use and payment patterns of customers. No
assurance can be given as to what effect these factors may have on the credit
card industry. Asset management companies also operate in a competitive
environment and their profitability is dependent upon the performance of their
funds relative to that of competing firms and to conditions in the equity and
fixed income markets in general. Companies in other areas of the financial
services industry are dependent on federal housing legislation and other laws
and regulations that affect the demand for home equity loans and mortgage
insurance. These companies are also subject to insurance laws and regulations in
the jurisdictions where they do business. Future changes in laws or regulations
relating to this industry may adversely affect market demand, restrict premium
rates or otherwise impair transactions in this industry. Companies in this
industry are exposed to credit risk and may be adversely affected by economic
events such as national or regional economic recession, falling housing prices,
rising unemployment rates and changes in interest rates. Manufacturing Companies


     Growth in the manufacturing industry is closely linked to expansion in the
domestic and global economies. The ongoing global recession with its consequent
effect on industrial growth, employment and consumer spending in addition to any
increase in oil prices or in interest rates may lead to a decrease in demand for
the products of companies engaged in manufacturing industrial and automotive
products. Also, since the federal government and many state, local and foreign
governments now have a budget deficit, financial expenditures by these entities
on capital improvements may be extremely limited. The lack of funds allocated by
public entities to capital improvement projects may adversely affect
manufacturers engaged in the production of industrial materials used for capital
improvements or for the upgrade of the infrastructure. Indeed, government
contracts with certain issuers may contain unfavorable provisions, including
provisions allowing the government to terminate these contracts without prior
notice, or to audit and redetermine amounts payable to the issuer pursuant to
these contracts or to require the issuer to pay for cost overruns. Additionally,
legislation to limit excess profits on government contracts is introduced in the
United States Congress from time to time. Cutbacks in defense spending by the
federal and foreign governments has adversely impacted many of the companies
engaged in the aerospace and arms/defense sectors of the manufacturing industry.

     Environmental and safety issues increasingly affect the manufacturing
industry. Issuers may experience decreases in profitability as legislative
mandates impose costs associated with compliance with environmental regulations
and manufacturing more environmentally sound and safer equipment. Furthermore,
the cost of product liability insurance and the inability of some manufacturing
companies to obtain this insurance may have an adverse impact on the industry.
Financial Accounting Standard Board regulations with regard to accounting for,
among other things, post retirement benefits may lead to changes in accounting
which could have significant negative effects on reported earnings and reported
long term liabilities and book value of some manufacturing companies. The lack
of demand for new home and office construction will affect the demand for
certain tools and industrial machinery products. Inflation, slow growth in
personal disposable income, tighter loan qualification standards, higher down
payments, the lower rate of job creation, increased cost of vehicle ownership
and operation and oil prices will also affect companies engaged in
manufacturing, particularly in the automotive industry. Shortages of skilled
labor, particularly in the machine tools industry, may become a major problem in
the future.

     The long-term outlook is largely dependent upon the growth and
competitiveness of the U.S. manufacturing base. Increased consolidation and
merger activity increases competitiveness in general but individual companies
may experience severe financial problems due to this increased competitiveness.
Strong competition from foreign nations, particularly Latin American and Pacific
Rim countries which have lower labor costs, will severely impact the
profitability of the U.S. manufacturing business. The continuing establishment
of manufacturing and sales facilities abroad to take advantage of international
marketing operations is crucial and the success of these foreign operations
could be affected by a strengthening of the dollar which could lead to a
decrease in demand for U.S. products, the outcome of trade negotiations which
will affect foreign tariffs on U.S. exports abroad and U.S. taxes on foreign
imports to the U.S. and the ability to provide attractive financing packages to
customers in the current tight credit market.

     U.S. manufacturers may also experience increased outlays of capital in
their efforts to manufacture products which comply with foreign standards for
certain manufacturing products. Also, since contracts may often be concluded
with entities or governments of unstable foreign nations in, for example,
Eastern Europe, South America or the Middle East, completion of and payment for
certain products and services will be subject to the risks associated with
political instability such as the risk of insurrection, hostilities from the
local population, government policies against businesses owned by non-nationals
and the possibility of expropriation. Certain of these nations may not honor
obligations under contracts when payments are due. Furthermore, it may be more
difficult to enforce a judgment against a foreign contracting party. Natural Gas
Companies

     Stocks of companies engaged in the exploration and production, transmission
or distribution of natural gas may include integrated natural gas companies that
explore for and produce natural gas and transport and deliver it to customers;
natural gas transmission companies, commonly called pipelines, that sell at
wholesale to other pipelines and to distribution companies; natural gas
distribution companies that service residential, commercial and industrial
customers; natural gas exploration and production companies; and drilling
companies that service natural gas exploration and production companies. These
companies derive or are expected to derive at least 25% of their sales and
operating income from the natural gas industry. Factors which the Sponsors
believe may increase demand for natural gas include the encouragement of the use
of natural gas by the recent amendments to the Clean Air Act, the cleanliness of
natural gas as a fuel coupled with the increased concern about the environment,
use by electric utilities of natural gas as a primary fuel source as a result of
the repeal of the Fuel Use Act in 1987 and the increased use of natural gas in
co-generation of electricity. The profitability of natural gas operations could
be enhanced by the 1990 amendments to the Clean Air Act, which should increase
demand for natural gas products by electric utilities and other energy
consumers. The Commerce Department predicts that natural gas will be a growing
source of energy during the 1990s, because of projected higher costs for oil and
because natural gas is a cleaner burning fuel. The transportation industry may
make increased use of natural gas in order to meet more stringent mileage and
emissions requirements. There are significant constraints on increased use of
natural gas however, including a potential need for additional pipelines.
Additionally, companies involved in natural gas processing may experience
difficulties in the long term if product prices do not keep pace with potential
increases in gas costs.

     Natural gas utilities are generally subject to extensive regulation by
state utility commissions or by the Federal Energy Regulatory Commission
("FERC"), in the case of pipeline companies, which, for example, establish the
rates that may be charged and the appropriate rate of return on an approved
asset base. FERC, through Order 636, unbundles natural gas services and allows
for additional competition. Certain natural gas utilities have had difficulty
from time to time in persuading regulators, who are subject to political
pressures, to grant rate increases necessary to maintain an adequate return on
investment and voters in many states have the ability to influence limits on
rate adjustments (for example, through election of utilities commissioners, by
initiative or by referendum). Any unexpected limitations could negatively affect
the profitability of natural gas utilities. In addition, gas pipeline and
distribution companies have had difficulties in adjusting to short and surplus
energy supplies, enforcing or being required to comply with long-term contracts
and avoiding litigation from their customers, on the one hand, or suppliers, on
the other. General problems of the natural gas utility industry include
difficulty in obtaining timely and adequate rate increases, recovery of
take-or-pay costs, the uncertainty of transmission service costs for both
interstate and intrastate transactions, changes in tax laws which adversely
affect a natural gas utility's ability to operate profitably, reduced demand for
natural gas in certain areas of the country, competition from electricity and
oil in the residential and commercial markets, restrictions on operations and
increased insurance premiums and other costs and delays attributable to
environmental considerations, uncertain availability and increased cost of
capital and availability and cost of natural gas for resale. Pipeline companies
may be subject to increased competition because of approval by FERC of the
construction of new pipelines and delays because of the need to obtain FERC
approval of new gas contracts. The natural gas utility business is highly
seasonal and weather sensitive. In addition, natural gas competes directly with
oil for industrial uses and large industries have retained the flexibility to
switch from natural gas to oil; consequently, a fall in oil prices could prevent
natural gas prices from rising or result in a loss of customers because of
conversions to oil. Natural gas competes with coal in the utility market as a
boiler fuel. Exploration and production companies could be impacted in a period
of declining natural gas prices. Further, any future scientific advances
concerning new sources of energy and fuels or legislative changes with respect
to the energy industry or the environment could have a negative impact on the
natural gas industry. And, while legislation has recently been enacted to
deregulate certain aspects of the natural gas industry, no assurances can be
given that new or additional regulations will not be adopted. Each of the
problems referred to could adversely affect the financial stability of the
issuers of any natural gas stocks in a Fund.

Petroleum Refining Companies

     The factors which will most likely shape the petroleum refining and
marketing industry in the future include the price and availability of oil,
general global economic conditions, changes in United States regulatory
policies, international events and the continued decline in U.S. production of
crude oil. Possible effects of these factors may be increased U.S. and world
dependence on oil from both the Organization of Petroleum Exporting Countries
("OPEC") and non-OPEC sources, highly uncertain and potentially more volatile
oil prices and a higher rate of growth for natural gas production than for other
fuels.

     The refining industry is highly competitive with margins sensitive to
supply and demand cycles. Declining U.S. crude oil production will likely lead
to increased dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruption. The existence of surplus crude oil production
capacity and the willingness to adjust production levels are the two principal
requirements for stable crude oil markets. Without excess capacity, supply
disruptions in some countries cannot be compensated for by others.

     Although unused capacity can contribute to market stability, it also
creates pressure to overproduce and contributes to market uncertainty. The
likely restoration of a large portion of Kuwait and Iraq's production and export
capacity over the next few years could lead to market disruptions in the absence
of substantial growth in world oil demand. Formerly, OPEC members attempted to
exercise control over production levels in each country through a system of
mandatory production quotas. The mandatory system has since been replaced with a
voluntary system. Production under the new system has had to be curtailed on at
least one occasion as a result of weak prices, even in the absence of supplies
from Iraq. The pressure to deviate from mandatory quotas, if they are reimposed,
is likely to be substantial and could lead to a weakening of prices.
Fluctuations in demand for oil-related products could also effect the
profitability of oil companies. If world oil demand increases additional
capacity and production will be required to compensate for expected sharp drops
in U.S. crude oil production and exports from the former Soviet Union. Only a
few OPEC countries, particularly Saudi Arabia, have the petroleum reserves that
will allow the required increase in production capacity to be attained. Given
the large-scale financing that is required, the prospect that such expansion
will occur soon enough to meet the increased demand is uncertain. However, no
assurance can be given that the demand for or the price of oil will increase or
that if either anticipated increase does take place, it will not be marked by
great volatility. Lower consumer demand due to increases in energy efficiency,
gasoline reformulations that call for less crude oil, warmer winters or a
general slowdown in economic growth in this country and abroad, could negatively
affect the price of oil and the profitability of oil companies. Cheaper oil
could also decrease demand for natural gas.

     Refiners are subject to extensive federal, state and local environmental
laws and regulations that will pose serious challenges to the industry over the
coming decade. Refiners are likely to be required to commit considerable
resources to plant additions and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as the 1990
amendments to the Clean Air Act. If the cost of these changes is substantial
enough to cut deeply into profits, smaller refiners may be forced out of the
industry entirely. Additionally, refining operations are hazardous due, in part,
to the highly flammable nature of crude oil, natural gas and refined products.
As a result, refining operations are subject to personal injury and property
damage incidents.

     Any future scientific advances concerning new sources of energy and fuels
or legislative changes relating to the energy industry or the environment could
have a negative impact on the petroleum product or natural gas industry. While
legislation has been enacted to deregulate certain aspects of the oil industry,
no assurances can be given that new or additional regulations will not be
adopted. Each of the problems referred to above could adversely affect the
financial stability of the issuers of any petroleum industry stocks in a
Portfolio. Technology Companies

     A Portfolio may be concentrated in stocks of issuers that manufacture
semiconductors, computers, electronics components, software, integrated systems
and other related products. These kinds of companies present certain risks that
may not exist to the same degree in other industries. The industry is rapidly
developing and highly competitive, both domestically and internationally.
Technology stocks, in general, tend to be relatively volatile as compared to
other types of investments. While volatility may create investment
opportunities, it does entail risk. Companies throughout the technology field
include many smaller and less seasoned companies. These types of companies may
present greater opportunities for capital appreciation, but usually involve
greater risks. These companies may have limited product lines, markets or
financial resources, or may have limited management or marketing personnel. In
addition, the securities that have wide institutional holding are more volatile
than the securities with lower institutional holding. The industry is also
strongly affected by worldwide scientific and technological developments and the
products of these companies may rapidly fall into obsolescence. Certain of these
companies may offer products or services that are subject to (or may become
subject to) government regulation and may, therefore, be affected adversely by
government policies. Other factors that characterize the industry include low
barriers to entry, short product life cycles, aggressive pricing and reduced
profit margins, dramatic and often unpredictable changes in growth rates, a high
degree of investment needed to maintain competitiveness, frequent new product
introduction, the need to enhance existing products, intense competition from
large established companies, and potential competition from small start up
companies. In addition, these companies are subject to events that affect
manufacturing companies in general, such as increases in material or labor
costs, changes in distribution channels and the need to manage inventory levels
in line with product demand.

     The Semiconductor Industry. The semiconductor industry is characterized by
rapid change in both product and manufacturing process technology. As a result,
companies are required to introduce, on an ongoing basis, more advanced process
technologies in order to respond to customer requirements. Shortages of supplies
for raw materials and equipment could occur in the future in various critical
materials and equipment due to interruption of supply or increased industry
demand. Any such shortages could result in higher costs or production delays
which could have a material adverse effect on an issuer's business and financial
condition. The industry is subject to a variety of governmental regulations
related to the use, discharge and disposal of toxic, volatile or otherwise
hazardous materials used in the manufacturing process. Any failure by a company
to use, discharge or dispose of hazardous materials appropriately could subject
it to substantial liability or could require it to suspend or adversely modify
its manufacturing operations. The semiconductor industry historically has been
characterized by wide fluctuations in product supply and demand. From time to
time, the industry also has experienced significant downturns. These downturns
have been characterized by diminished product demand, production overcapacity
and accelerated erosion of average selling prices of semiconductor products. In
some cases, these downturns have lasted for more than a year. No assurance can
be given that any company's business will not be adversely affected in the
future by cyclical conditions in the semiconductor industry. Furthermore, there
can be no assurance that changes in environmental regulations in the future will
not require companies to make significant capital expenditures to modify,
supplement or replace equipment or to change methods of disposal or discharge or
the manner in which they manufacture products or operate their business. Fixed
costs represent a substantial portion of the total operating costs of a
semiconductor manufacturing operation. As a result, any failure by a company to
operate at near full capacity, whether due to mechanical failure, lack of
orders, fire or natural disaster, or other causes could result in diminished
profitability or losses. The consequences of a fire, natural disaster or similar
occurrence affecting production could be particularly significant for any
company. These companies are also dependent to a substantial degree upon skilled
professional and technical personnel and there is considerable competition for
the services of qualified personnel in the semiconductor industry.


Utilities

     The ability of utilities to pay dividends is dependent on various factors,
including the percentage of earnings paid out in the form of dividends ("pay out
ratio"), the rates they may charge their customers, the demand for a utility's
services and the cost of providing those services. Utilities, in particular
investor-owned utilities, are subject to extensive regulation relating to the
rates which they may charge customers. Utilities can experience regulatory,
political and consumer resistance to rate increases. Utilities engaged in
long-term capital projects are especially sensitive to regulatory lags in
granting rate increases. Any difficulty in obtaining timely and adequate rate
increases could adversely affect a utility's results of operations.

     The demand for a utility's services is influenced by, among other factors,
competition, weather conditions and economic conditions. Electric utilities, for
example, have experienced increased competition as a result of the availability
of other energy sources, the effects of conservation on the use of electricity,
self-generation by industrial customers and the generation of electricity by
co-generators and other independent power producers. Also, increased competition
will result from the approval by the Federal Energy Regulatory Commission
("FERC") of a proposal that forces electric utilities to open their transmission
systems to power generated by competitors. Utilities which distribute natural
gas also are subject to competition from alternative fuels, including fuel oil,
propane and coal. In addition, there is the possibility in the future of a trend
toward utilities breaking off assets under the constraints of competition, for
example, spinning off generating plants, which will no longer be regulated. The
movement to introduce competition in the investor-owned electric utility
industry is likely to induce them to maintain rates as low as possible. In this
effort to keep rates low, utilities may have trouble raising rates to completely
recover investment in generating plant.

     The utility industry is an increasing cost business making the cost of
generating electricity more expensive and heightening its sensitivity to
regulation. A utility's costs are influenced by the utility's cost of capital,
the availability and cost of fuel and other factors. In addition, natural gas
pipeline and distribution companies have incurred increased costs as a result of
long-term natural gas purchase contracts containing "take or pay" provisions
which require that they pay for natural gas even if natural gas is not taken by
them. There can be no assurance that a utility will be able to pass on these
increased costs to customers through increased rates. Utilities could in the
future incur substantial capital expenditures for plant and equipment. In the
future they will also incur increasing capital and operating expenses to comply
with environmental legislation such as the Clean Air Act of 1990, and other
energy, licensing and other laws and regulations relating to, among other
things, air emissions, the quality of drinking water, waste water discharge,
solid and hazardous substance handling and disposal, and siting and licensing of
facilities. Environmental legislation and regulations are changing rapidly and
are the subject of current public policy debate and legislative proposals. It is
increasingly likely that some or many utilities will be subject to more
stringent environmental standards in the future that could result in significant
capital expenditures. Future legislation and regulation could include, among
other things, regulation of so-called electromagnetic fields associated with
electric transmission and distribution lines as well as emissions of carbon
dioxide and other so-called greenhouse gases associated with the burning of
fossil fuels. Compliance with these requirements may limit a utility's
operation, offset by credits having been built up, or require substantial
investments in new equipment and, as a result, may adversely affect a utility's
results of operations.

     The electric utility industry in general is subject to various external
factors including (a) the effects of inflation upon the costs of operation and
construction, (b) uncertainties in predicting future load requirements, (c)
increased financing requirements coupled with limited availability of capital,
(d) exposure to cancellation and penalty charges on new generating units under
construction, (e) problems of cost and availability of fuel, (f) compliance with
rapidly changing and complex environmental, safety and licensing requirements,
(g) litigation and proposed legislation designed to delay or prevent
construction of generating and other facilities, (h) the uncertain effects of
conservation on the use of electric energy, (i) uncertainties associated with
the development of a national energy policy, (j) regulatory, political and
consumer resistance to rate increases and (k) increased competition as a result
of the availability of other energy sources. These factors may delay the
construction and increase the cost of new facilities, limit the use of, or
necessitate costly modifications to, existing facilities, impair the access of
electric utilities to credit markets, or substantially increase the cost of
credit for electric generating facilities. The Sponsors cannot predict at this
time the ultimate effect of such factors on the ability of any issuers to meet
their obligations with respect to Debt Obligations.

     The National Energy Policy Act ("NEPA") makes it mandatory for a utility to
permit non-utility generators of electricity access to its transmission system
for wholesale customers, thereby increasing competition for electric utilities.
NEPA also mandated demand-side management policies to be considered by
utilities. NEPA prohibits FERC from mandating electric utilities to engage in
retail wheeling, which is competition among suppliers of electric generation to
provide electricity to retail customers (particularly industrial retail
customers) of a utility. However, under NEPA, a state can mandate retail
wheeling under certain conditions.

     There is concern by the public, the scientific community, and the U.S.
Congress regarding environmental damage resulting from the use of fossil fuels.
Congressional support for the increased regulation of air, water, and soil
contaminants is building and there are a number of pending or recently enacted
legislative proposals which may affect the electric utility industry. In
particular, on November 15, 1990, legislation was signed into law that
substantially revises the Clean Air Act (the "1990 Amendments"). The 1990
Amendments seek to improve the ambient air quality throughout the United States
by the year 2000. A main feature of the 1990 Amendments is the reduction of
sulphur dioxide and nitrogen oxide emissions caused by electric utility power
plants, particularly those fueled by coal. Under the 1990 Amendments the U.S.
Environmental Protection Agency ("EPA") must develop limits for nitrogen oxide
emissions by 1993. The sulphur dioxide reduction will be achieved in two phases.
Phase I addresses specific generating units named in the 1990 Amendments. In
Phase II the total U.S. emissions will be capped at 8.9 million tons by the year
2000. The 1990 Amendments contain provisions for allocating allowances to power
plants based on historical or calculated levels. An allowance is defined as the
authorization to emit one ton of sulphur dioxide.

     The 1990 Amendments also provide for possible further regulation of toxic
air emissions from electric generating units pending the results of several
federal government studies to be conducted over the next three to four years
with respect to anticipated hazards to public health, available corrective
technologies, and mercury toxicity.

     Electric utilities which own or operate nuclear power plants are exposed to
risks inherent in the nuclear industry. These risks include exposure to new
requirements resulting from extensive federal and state regulatory oversight,
public controversy, decommissioning costs, and spent fuel and radioactive waste
disposal issues. While nuclear power construction risks are no longer of
paramount concern, the emerging issue is radioactive waste disposal. In
addition, nuclear plants typically require substantial capital additions and
modifications throughout their operating lives to meet safety, environmental,
operational and regulatory requirements and to replace and upgrade various plant
systems. The high degree of regulatory monitoring and controls imposed on
nuclear plants could cause a plant to be out of service or on limited service
for long periods. When a nuclear facility owned by an investor-owned utility or
a state or local municipality is out of service or operating on a limited
service basis, the utility operator or its owners may be liable for the recovery
of replacement power costs. Risks of substantial liability also arise from the
operation of nuclear facilities and from the use, handling, and possible
radioactive emissions associated with nuclear fuel. Insurance may not cover all
types or amounts of loss which may be experienced in connection with the
ownership and operation of a nuclear plant and severe financial consequences
could result from a significant accident or occurrence. The Nuclear Regulatory
Commission (the "NRC") has promulgated regulations mandating the establishment
of funded reserves to assure financial capability for the eventual
decommissioning of licensed nuclear facilities. These funds are to be accrued
from revenues in amounts currently estimated to be sufficient to pay for
decommissioning costs.

     The Public Utility Holding Company Act of 1935 (the "1935 Act") regulates,
among other things, certain acquisitions of voting securities of electric
utility companies and gas utility companies by anyone who is an "affiliate" of a
public utility company (a person or organized group of persons that directly or
indirectly owns, controls or holds with power to vote 5% or more of the
outstanding voting securities of a public utility company). In addition, the
1935 Act requires a "holding company" (among other categories, a company which
directly or indirectly owns, controls or holds with power to vote 10% or more of
the outstanding voting securities of a public utility company or a "holding
company") to register as such with the Securities and Exchange Commission and be
otherwise subject to certain restrictions on the acquisition of securities and
other interests in public utility companies. No Fund intends to make any
investment that would result in its becoming subject to the 1935 Act. If a Fund
were considered to be a member of an organized group of persons, the 1935 Act
might limit the Fund's acquisition of the voting securities of public utility
companies by reason of the control by the group of 5% or more of the voting
securities of a public utility company.

     New legislation will eliminate some of the barriers that prevent utilities
from offering telecommunications services, providing opportunities for
additional revenue and earnings growth. Currently, registered utilities must
obtain Securities and Exchange Commission approval to provide telecommunications
services. The Telecommunications Act of 1996; Communication Decency Act of 1996
(the "Communications Act"), which became law on February 8, 1996, permits
greater competition, ending restrictions on utilities entering
telecommunications markets and repealing SEC authority under the 1935 Act. Many
utilities are considering partnerships with communications companies. A utility
company, in leveraging its network to provide telecommunications, faces many
options with different levels of investment and risk.

The Telecommunications Industry

     The telecommunications industry is subject to varying degrees of
competitive regulatory, political and economic risk which may affect the price
of the stocks of companies involved in such industry. Such risks depend on a
number of factors including the country in which a company is located.
Telecommunications companies in both developed and emerging countries are
undergoing significant change due to varying and evolving levels of governmental
regulation or deregulation and technological advances as well as other factors.
As a result, competitive pressures are intense and the securities of such
companies may be subject to rapid price volatility. In addition, companies
offering telephone services are experiencing increasing competition from each
other and alternate service providers. The cellular telephone industry also
faces increased competition as the Federal Communications Commission ("FCC") has
sold additional spectrum to personal communications service providers, doubling
the competitors in a service area. All telecommunications companies in both
developed and emerging countries are subject to the additional risk that
technological innovations will make their products and services obsolete.

United States.

     A Portfolio may be concentrated in stocks of companies that are engaged in
providing local, long-distance and cellular services, in the manufacture of
telecommunications products and in a wide range of other activities including
directory publishing, information systems and the operation of voice, data and
video telecommunications networks. Technological innovations in fiber optics,
cellular products and services, voice messaging, call waiting and automatic
dialing offer additional potential for significant expansion. Advances like
formation of a national cellular grid may also contribute to the growth of this
industry.

Regional Bell Holding Companies.

     The five RBHCs, which were spun off from AT&T in 1984, are seeking to
increase profits through the development and sale of new high-margined products,
such as caller ID, voicemail, call return, call waiting and interactive
multimedia, to their existing customer base. To the extent that the demand for
such products is less than anticipated, the price of securities of RBHCs could
be adversely affected. Many of the RBHCs are also aggressively looking to expand
into overseas markets through both direct and indirect investment. The impact of
this expansion on the price of securities of the RBHCs is uncertain. These
companies provide near monopoly local and intrastate telephone service as well
as cellular and other generally unregulated services. A Portfolio may contain
the securities of certain independent telephone companies which are subject to
regulation by the FCC and state utility commissions and of certain long-distance
telecommunications carriers, certain telecommunications equipment manufacturers
and certain non-U.S. companies which provide telecommunications services or
equipment mainly outside the United States. International communications
facilities in the United States are also subject to the jurisdiction of the FCC,
and the provision of service to foreign countries is subject to the approval of
the FCC and the appropriate foreign governmental agencies.

The Telecommunications Act of 1996.

     The Telecommunications Act of 1996; Communication Decency Act of 1996 (the
"Communications Act") permits greater competition in the local and long distance
telephone and equipment manufacturing markets. In addition, it changed the
regulatory structure governing the RBHCs from one based on rate of return to one
based on price. Prior to passage of the Communications Act, the RBHCs provided
local telephone service, including exchange access for long-distance companies,
directory advertising and new customer equipment. Many RBHCs, pursuant to
waivers, could also engage in a broad range of businesses including foreign
consulting, servicing computers and marketing or leasing office equipment. The
RBHCs are allowed to provide long distance services, video services and
manufacturing. AT&T, which since 1984 has provided interexchange long-distance
service in competition with numerous other providers, is now allowed to also
provide local telephone service and video services. AT&T also provides certain
other products, services and customer equipment.

     The independent telephone companies, like the RBHCs, provide local
telecommunications service, but operate in more rural areas. These companies
were not subject to the consent decree and therefore could provide the full
range of telecommunications services including local exchange and long distance
services, the installation of business systems, telephone consulting, the
manufacture of telecommunications equipment, operation of voice and data
networks and directory publishing. Cellular service is providing an increasing
component of the revenues of the RBHCs and independent telephone companies. Both
the RBHCs and independents are subject to regulation by the FCC and state
regulatory authorities. Long-distance companies which provide long-distance
telecommunications services are subject to regulation by the FCC. The
long-distance industry is consolidating into larger carriers and will experience
increased competition as local telephone companies and cable television
operators enter the long distance market. Conversely, local exchange carriers,
be they RBHCs or independents will also face competition in their local markets
from long- distance providers and cable television operators.

     Business conditions of the telecommunications industry may affect the
ability of the issuers of the Securities in the Fund to meet their obligations.
The FCC and certain state utility regulators have introduced certain incentive
plans such as price-cap regulation. Price-cap regulation offers local exchange
carriers an opportunity to share in higher earnings provided they become more
efficient. These new approaches to regulation by the FCC and various state or
other regulatory agencies result in increased competition, and could lead to
greater risks as well as greater rewards for operating telephone companies.
Technology has tended to offset the effects of inflation and is expected to
continue to do so. Under traditional regulation, continuing cost increases, to
the extent not offset by improved productivity and revenues from increased
volume of business, would result in a decreasing rate of return and a continuing
need for rate increases. The long-distance industry has been increasingly opened
to competition over the last number of years. As a result, the major
long-distance companies compete actively for market share. Indeed, to meet
increasing competition, telephone companies will have to commit substantial
capital, technological and marketing resources. Many telecommunications
companies are currently considering partnerships with utilities, positioning
themselves to provide high-speed, two-way video services and high quality
telephone service.

     Cellular and cable companies provide wireless services including paging,
dispatch and cellular services throughout the U.S. Most of the RBHCs,
independents as well as long distance companies, are seeking to increase their
share of the cellular market in view of perceived future growth prospects. It is
unclear what effect, if any, increased competition between wireless and
traditional services will have on the telecommunications industry. Other
potential competition for local service has also developed. The deregulated
cellular telephone industry has a limited operating history and there is
significant uncertainty regarding its future, particularly with regard to
increased competition, the continued growth in the number of customers, the
usage and pricing of cellular services, and the cost of providing cellular
services, including the cost of attracting new customers, developing new
technology and the ability to obtain licenses to provide cellular services.
Recent industry developments may provide increased competition and reduced
revenues from cellular service for RBHCs and independent telephone companies.
The uncertain outcomes of future labor agreements and employee and retiree
benefit costs may also have a negative impact on profitability. Telephone usage,
and therefore revenues, could also be adversely affected by any sustained
economic recession. Each of these problems would adversely affect the
profitability of the telecommunications issuers of the Securities in the Fund
and their ability to meet their obligations.

     Telecommunications equipment companies design, manufacture, and distribute
telecommunication equipment such as central office switching equipment,
switches, displays, mobile and cellular equipment and systems, network
transmission equipment, PBXS, satellite, microwave, antennas, and digital
communications networks. Growth of these companies may result from telephone
service industry expansion, modernization requirements and possible new
technology such as interactive television. As less developed countries modernize
their telecommunications infrastructure, the demand for these products
increases. This segment of the industry is subject to rapidly changing
technology and the risk of technological obsolescence although it is generally
not subject to regulation as other telecommunications services are. In addition,
the Portfolio may contain securities issued by telephone companies which provide
telecommunications services or equipment outside the United States; these
companies are subject to regulation by foreign governments or governmental
authorities which have broad authority regulating the provision of
telecommunications services and the use of certain telecommunication equipment.
Consequently, certain Securities in the Fund may be affected by the rules and
regulations adopted by regulatory agencies in other countries from time to time.

     Foreign Telecommunications Issues. Many European, Latin American and Asian
telephone systems appear to have significant growth potential. The international
sector in a Portfolio consists predominantly of former government-owned
telecommunications systems that have been privatized in stages. Most are similar
to AT&T before 1984 in their dominance of local, long-distance and international
service within their country. As governments privatize their systems by selling
stock to the public, telephone service is likely to expand and, as a result of
greater efficiency, potentially become more profitable. On the other hand, the
countries are allowing more companies to compete with the recently privatized
companies. Many of these companies have expanded into other countries. The
Sponsors believe there is significant potential for expansion of telephone
services in foreign countries. Of course, there can be no assurance of whether
or when telephone service in these countries will expand or its effects on the
non-U.S. companies represented in any Portfolio. Foreign Issuers

     If certain of the Securities in a Portfolio are Securities of foreign
issuers, an investment in the Fund involves certain risks that are different
from the risks of a fund that invests entirely in securities of domestic
issuers. These investment risks include future foreign political and economic
developments, the possible establishment of exchange controls or other
governmental laws or restrictions which might adversely affect the payment or
receipt of payment of dividends on the relevant Securities and currency risk.
With respect to certain countries, there is the possibility of expropriation of
assets, confiscatory taxation, economic, political or social instability or
diplomatic developments which could affect the value of investments in those
countries. In selecting the non- U.S. Securities for a Portfolio, the Sponsors
have attempted to minimize this country risk. In addition, for the foreign
issuers that are not subject to the reporting requirements of the Securities
Exchange Act of 1934, there may be less publicly available information than is
available from a domestic issuer. Also, foreign issuers are not necessarily
subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to domestic issuers.
However, the Sponsors anticipate that adequate information will be available to
allow the Sponsors to supervise the Portfolio.

     In addition, earnings and dividends for foreign companies are in non-U.S.
currencies. Therefore, the U.S. dollar value of the stock and dividends of these
companies will vary with fluctuations in the U.S. dollar foreign exchange rates
for the relevant currencies. Most foreign currencies have fluctuated widely in
value against the United States dollar for many reasons, including supply and
demand of the respective currency, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries. Therefore, for any securities of issuers whose
earnings are stated in foreign currencies, or which pay dividends in foreign
currencies or which are traded in foreign currencies, there is a risk that their
United States dollar value will vary with fluctuations in the United States
dollar foreign exchange rates for the relevant currencies.

     On the basis of the best information available to the Sponsors at the
present time none of the Securities in subject to exchange control restrictions
under existing law which would materially interfere with payment to the Fund of
dividends due on, or proceeds from the sale of, the Securities either because
the particular jurisdictions have not adopted any currency regulations of this
type or because the issues qualify for an exemption, or the Fund, as an
extraterritorial investor, has qualified its purchase of the Securities as
exempt by following applicable "validation" or similar regulatory or exemptive
procedures. However, there can be no assurance that exchange control regulations
might not be adopted in the future which might adversely affect payments to the
Fund. In addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in the Portfolio and on the ability of the Fund to satisfy its
obligation to redeem Units tendered to the Trustee for redemption. American
Depositary Shares and Receipts. Many Securities of foreign issuers are purchased
in ADR form in the United States. ADRs evidence American Depositary Shares which
represent common stock deposited with a custodian in a depositary. American
Depositary Shares ("ADSs"), and receipts therefore ("ADRs"), are issued by an
American bank or trust company to evidence ownership of underlying securities
issued by a foreign corporation. These instruments may not necessarily be
denominated in the same currency as the securities into which they may be
converted. Generally, ADSs and ADRs are designed for use in the United States
securities markets. For purposes of this Prospectus, the term ADR generally
includes ADSs.

     ADRs represent common stock deposited with a custodian in a depositary.
ADRs may be sponsored or unsponsored. In an unsponsored facility, the depositary
initiates and arranges the facility at the request of market makers and acts as
agent for the ADR holder, while the company itself is not involved in the
transaction. In a sponsored facility, the issuing company initiates the facility
and agrees to pay certain administrative and shareholder-related expenses.
Sponsored facilities use a single depositary and entail a contractual
relationship between the issuer, the shareholder and the depositary; unsponsored
facilities involve several depositaries with no contractual relationship to the
company. The terms and conditions of depositary facilities may result in less
liquidity or lower market prices for ADRs than for the underlying shares.

     For those Securities that are ADRs, currency fluctuations will also affect
the U.S. dollar equivalent of the local currency price of the underlying
domestic share and, as a result, are likely to affect the value of the ADRs and
consequently the value of the Securities. The depositary bank that issues an ADR
generally charges a fee, based on the price of the ADR, upon issuance and
cancellation of the ADR. This fee would be in addition to the brokerage
commissions paid upon the acquisition or surrender of the security. In addition,
the depositary bank incurs expenses in connection with the conversion of
dividends or other cash distributions paid in local currency into U.S. dollars
and such expenses are deducted from the amount of the dividend or distribution
paid to holders, resulting in a lower payout per underlying share represented by
the ADR than would be the case if the underlying share were held directly.
Furthermore, foreign investment laws in certain countries may restrict ownership
by foreign nationals of certain classes of underlying shares. Accordingly, the
ADR representing a class of securities may not possess voting rights, if any,
equivalent to those in respect of the underlying shares. Certain tax
considerations, including tax rate differentials, arising from applications of
the tax laws of one nation to the nationals of another and from certain
practices in the ADR market may also exist with respect to certain ADRs. In
varying degrees, any or all of these factors may affect the value of the ADR
compared with the value of the underlying shares in the local market. ADRs are
registered securities pursuant to the Securities Act of 1933 and may be subject
to the reporting requirements of the Securities Exchange Act of 1934. The Real
Estate Industry

     Certain Portfolios may be concentrated in common stocks of companies
engaged in real estate asset management, development, leasing, property sales
and other related activities. Investment in securities issued by these real
estate companies should be made with an understanding of the many factors which
may have an adverse impact on the credit quality of the particular company or
industry. Generally, these include economic recession, the cyclical nature of
real estate markets, competitive overbuilding, unusually adverse weather
conditions, changing demographics, changes in governmental regulations
(including tax laws and environmental, building, zoning and sales regulations),
increases in real estate taxes or costs of material and labor, the inability to
secure performance guarantees or insurance as required, the unavailability of
investment capital and the inability to obtain construction financing or
mortgage loans at rates acceptable to builders and purchasers of real estate.
Additional risks include an inability to reduce expenditures associated with a
property (such as mortgage payments and property taxes) when rental revenue
declines, and possible loss upon foreclosure of mortgaged properties if mortgage
payments are not paid when due. Real Estate Investment Trusts. REITs are
financial vehicles that have as their objective the pooling of capital from a
number of investors in order to participate directly in real estate ownership or
financing. REITs are generally fully integrated operating companies that have
interests in income- producing real estate. REITs are differentiated by the
types of real estate properties held and the actual geographic location of
properties and fall into two major categories: equity REITs emphasize direct
property investment, holding their invested assets primarily in the ownership of
real estate or other equity interests, while mortgage REITs concentrate on real
estate financing, holding their assets primarily in mortgages secured by real
estate. REITS obtain capital funds for investment in underlying real estate
assets by selling debt or equity securities on the public or institutional
capital markets or by bank borrowings. Thus, the returns on common equities of
the REITs will be significantly affected by changes in costs of capital and,
particularly in the case of highly "leveraged" REITs, i.e. those with large
amounts of borrowings outstanding, by changes in the level of interest rates.

     The objective of an equity REIT is to purchase income-producing real estate
properties in order to generate high levels of cash flow from rental income and
a gradual asset appreciation, and they typically invest in properties such as
office, retail, industrial, hotel and apartment buildings and health care
facilities.

     Overbuilding of commercial real estate projects in the 1980's often
resulted in increased vacancy rates, intense competition for tenants, declining
rents and deteriorating physical conditions. Coupled with the depressed real
estate market, it became more difficult to obtain financing from traditional
sources. Various REITs have acquired substantial established properties at
depressed prices and have renovated existing properties to enhance their
potential. Factory outlets, a new type of retail property, attract shoppers by
offering name-brand merchandise at steep discounts, which can result in higher
occupancy and eventually, higher rents. Expanding store size and
diversification, a trend of the 1990's, has been enhanced by REIT investments,
which have supported the recovering real estate market.

     Investment in REITs should be made with an understanding of the many
factors that may have an adverse impact on the performance of a particular REIT,
its cash available for distribution, the credit quality of a particular REIT or
the real estate industry generally (described above). Additional risks include
the financial health of tenants, e.g., consolidation and increased competition
in the retail industry, dependency on the management skill of both the officers
of the REITs and the managers of the underlying properties, variations in rental
income and space availability and vacancy rates in terms of supply and demand.
Potential conflicts of interest often exist with a founding developer or outside
manager.

     Performance by individual REITs is dependent on the types of real estate
investments held. For example, the effect of interest rate fluctuations will be
less on equity REITs than on mortgage REITs and the nature of the underlying
assets of an equity REIT may be considered more tangible than that of a mortgage
REIT. In addition, equity REITs may be affected by changes in the value of the
underlying property it owns.

     REIT investment managers may concentrate investments in specific geographic
areas, depending on their proximity to and knowledge of local real estate
conditions; the impact of economic conditions on REITs can also be expected to
vary with geographic location. Investors should also be aware that REITs may not
be diversified and are subject to the risks of financing projects. REITs are
also subject to defaults by borrowers, self-liquidation, the maker's perception
of the REIT industry generally, and the possibility of failing to qualify for
tax-free pass-through of income under the Internal Revenue Code of 1986, as
amended (the "Code"), and to maintain exemption from the Investment Company Act
of 1940. In the event of a default by a borrower or lessee, the REIT may
experience delays in enforcing its rights as a mortgagee or lessor and may incur
substantial costs associated with protecting its investments.

     Certain REITs may be structured as UPREITs. This form of REIT owns an
interest in a partnership that owns real estate, which can result in a potential
conflict of interest between shareholders who may want to sell an asset and
partnership interest holders who would be subject to tax liability if the REIT
sells the property. In some cases, REITS have entered into "no sell" agreements,
which are designed to avoid a taxable event to the holders of partnership units
by preventing the REIT from selling the property. This kind of arrangement could
mean that the REIT would refuse a lucrative offer for an asset or be forced to
hold on to a poor asset. Since "no sell" agreements are often undisclosed, it is
often unknown whether specific REITs have entered into this kind of arrangement.

REIT Taxation.

     Each REIT will generally state its intention to operate in such manner as
to qualify for taxation as a "real estate investment trust" under Sections
856-860 of the Code, although, of course, no assurance can be given that each
REIT will at all times so qualify. The REIT provisions of the Code contain three
gross income requirements:

     1. At least 75% of the REIT gross income must be derived directly or
indirectly from statutorily specified investments in real property or mortgages
on real property.

     2. At least 95% of the REIT gross income must be of the type meeting the
75% requirements or must be derived from dividends, interest, or gains from the
sale or disposition of stock or securities.

     3. Short-term gans from the disposition of stock or securities, gains from
the disposition of property where the property was held primarily for sale to
customers in the ordinary course of business, and gains from the disposition of
real property held for less then 4 years must total less than 30% of the REIT's
gross income.

     At the close of each quarter of a REIT's taxable year, it also must satisfy
three tests relating to the nature of its assets. First, at least 75% of the
value of its total assets must be represented by real estate assets, cash, cash
items, and government securities. In addition, not more than 25% of this total
assets may be represented by securities (other than those includible in the 75%
asset class). Also, of the investments included in the 25% asset class, the
value of any one issuer's securities owned may not exceed 5% of the value of its
total assets, nor can it own more than 10% of any one issuer's outstanding
voting securities.

     So long as an issuer qualifies as a REIT, it will, in general, be subject
to Federal income tax only on income that is not distributed to stockholders. In
order to qualify as a REIT for any taxable year, a REIT must, among other
things, distribute to its stockholders an amount at least equal to the sum of
95% of its taxable income.

     Failure to qualify for taxation as a REIT in any taxable year will subject
an issuer to tax on its taxable income at regular corporate rates. Distributions
to stockholders in any year in which an issuer fails to qualify as a REIT will
not be deductible by the issuer. Unless entitled to relief under specific
statutory provisions, the issuer would not qualify for taxation as a REIT for
the next four taxable years after failing to qualify in any year. Each REIT may
also be subject to state, local or other taxation in various state, local or
other jurisdictions.


Standard & Poor's Indexes

     The S&P 500 Index. The S&P 500 Index is composed of 500 selected common
stocks, most of which are listed in the New York Stock Exchange. This well-known
index, originally consisting of 233 stocks in 1923, was expanded to 500 stocks
in 1957 and was restructured in 1976 to a composite consisting of industrial,
financial and transportation market sectors. It contains a variety of companies
with diverse capitalization, market-value weighted to represent the overall
market. The Index represents approximately 76% of U.S. stock market
capitalization. As of December 31, 1998, the mean market capitalization of the
companies in the S&P 500 Index is approximately $18.8 billion.


     The S&P MidCap Index. The S&P MidCap Index is composed of 400 selected
common stocks listed on the New York Stock Exchange, or the American Stock
Exchange or quoted on the Nasdaq National Market. The MidCap Index Stocks were
chosen for market size, liquidity and industry group representation. As of
December 31, 1998, the mean market capitalization of the companies in the S&P
MidCap Index was approximately $2.2 billion. The S&P MidCap Index was created
June 5, 1991.

     The S&P Index Trusts. Since the objective of the Fund is to provide
investment results that duplicate substantially the price and yield performance
(in other words, the total return) of the S&P 500 Index, in the case of the S&P
500 Trust, and the S&P MidCap Index, in the case of the S&P MidCap Trust, the
Portfolio of each Trust will at any time consist of as many of the Index Stocks
as is feasible. Each Trust will at all times be invested in no less than 95% of
the Index Stocks. Although, at any time, a Trust may fail to own certain of the
Index Stocks, each Trust will be substantially totally invested in Index Stocks
and the Sponsors expect to maintain a theoretical correlation of between .97 and
 .99 between the investment performance of the relevant Index and that derived
from ownership of Units. Adjustments will be made in accordance with computer
program output to bring the weightings of the Securities more closely into line
with their weightings in the relevant Index as each Trust invests in new
Securities in connection with the creation of new Units, as companies are
dropped from or added to either Index or as Securities are sold to meet
redemptions. These adjustments will be made on the business day following the
relevant transaction in accordance with computer program output showing which
Securities are under- or over- represented in each Portfolio. Adjustments may
also be made at other times to bring either Portfolio into line with the
applicable Index. The proceeds from any such sale will be invested in those
Index Stocks which the computer program output indicates are most
under-represented.

     The Sponsors anticipate that the selection of any additional Index Stocks
deposited or purchased in connection with the creation of additional Units of a
Trust will be those stocks which are most under-represented in the Portfolio
based upon the computer program output and the applicable Index as of the date
prior to the date of such subsequent deposit or purchase. Securities sold in
order to meet redemptions will be those stocks which are most over-represented
in the Portfolio based upon the computer program output and the applicable Index
as of the date prior to the date of such sale. Finally, from time to time
adjustments may be made in either Portfolio because of changes in the
composition of the applicable Index. Based on past history, it is anticipated
that most such changes will occur as a result of merger or acquisition activity.
In such cases, the Fund, as shareholder of a company which is the object of such
merger or acquisition activity, will presumably receive various offers from
would-be acquirors of the company. The Trustees will not be permitted to accept
any such offers until such time as the company has been deleted from the
applicable Index. Since, in most cases, a company is removed from an Index only
after the consummation of a merger or acquisition of the company, it is
anticipated that the Fund will generally acquire, in exchange for the stock of
the deleted company, whatever consideration is being offered to shareholders of
that company who have not tendered their shares prior to such time. Any cash
received in such transactions will be reinvested in the most under-represented
Index Stocks. Any securities received as a part of the consideration which are
not included in the relevant Index will be sold as soon as practicable and
reinvested in the most under-represented Index Stocks.

     In attempting to duplicate the proportionate relationships represented by
the S&P 500 Index and the S&P MidCap Index the Sponsors do not anticipate
purchasing or selling shares in quantities of less than round lots. In addition,
certain Index Stocks may at times not be available in the quantities in which
the computer program specifies that they be purchased. For these reasons, among
others, precise duplication of this proportionate relationship may not ever be
possible but nevertheless will continue to be the goal in connection with all
acquisitions or dispositions of Securities. As the holder of the Securities, the
Trustees will have the right to vote all of the voting stocks in the Portfolio
and will vote such stocks in accordance with the instructions of the Sponsors
except that, if the Trustee holds any of the common stocks of Merrill Lynch &
Co., Inc., Prudential Insurance Company of America (the parent of Prudential
Securities Incorporated) or Citigroup Inc. (as long as it remains the parent of
Salomon Smith Barney Inc.) or any other common stock of companies which are
affiliates of the Sponsors, the Trustee will vote such stock in the same
proportionate relationship as all other shares of such companies are voted.

     Standard and Poor's only relationship to the Portfolios is the licensing of
the right to use the S&P 500 Index and the S&P MidCap Index as bases for
determining the composition of the Portfolios and to use the related trademarks
and tradenames in the name of the Fund and in the Prospectus and related sales
literature to the extent that the Sponsors deem appropriate or desirable under
Federal and state securities laws and to indicate the source of the Indexes. The
Indexes are determined, comprised and calculated without regard to the Funds.

     S&P does not guarantee the accuracy and/or the completeness of the S&P 500
Index or the S&P MidCap Index or any data included therein and S&P shall have no
liability for any errors, omissions, or interruptions therein. S&P makes no
warranty, express or implied, as to results to be obtained by the sponsors, the
funds, any person or any entity from the use of the S&P Index or the S&P MidCap
Index or any data included therein. S&P makes no express or implied warranties,
and expressly disclaims all warranties of merchantability or fitness for a
particular purpose or use, with respect to the S&P 500 Index or the S&P MidCap
Index or any data included therein. Without limiting any of the foregoing, in no
event shall S&P have any liability for any special, punitive, indirect, or
consequential damages (including lost profits), even if notified of the
possibility of such damages.

TRUST TERMINATION AND ROLLOVER - (for Portfolios structured as grantor trusts
for tax purposes)

     Notice of impending termination of the Portfolio will be provided to
investors. A proportional share of the expenses associated with termination,
including brokerage costs incurred in disposing of Securities, will be borne by
investors remaining at that time. These expenses will reduce the amount of cash
or Securities those investors are to receive in any final distribution. Upon
termination of the Portfolio, the Trustee will distribute the Securities and any
cash in the Portfolio to a distribution agent that will act as agent for the
investors. Unless an investor elects to receive an in-kind distribution of
Securities, as discussed below, the distribution agent will, as promptly as
practicable, sell the investor's pro rata share of the Securities and distribute
to the investor the proceeds of the sale, less brokerage and other related
expenses, and the investor's pro rata share of any cash from the Portfolio.

     Any investor holding units at the termination of the Portfolio may, by
written notice to the Trustee at least ten business days prior to termination,
elect to receive an in-kind distribution of the investors pro rata share of the
Securities remaining in the Portfolio at that time (net of the investor's share
of expenses). Fractional shares of Securities will be sold by the distribution
agent and the net proceeds distributed to investors. Investors subsequently
selling Securities received in kind will incur brokerage costs at that time
which may exceed the value of any tax deferral obtained through the in-kind
distribution. Securities received in an in-kind termination distribution may not
be contributed to acquire units of another Series.

     In lieu of redeeming their units or receiving liquidation proceeds in cash
or in kind upon termination of the Portfolio, investors who hold their Units
with one of the Sponsors may elect, by contacting their financial adviser prior
to the rollover notification date indicated in the prospectus, to exchange their
Units for units of a corresponding new portfolio (if one is offered). No
election to roll over may be made prior to 30 days before the date of the
rollover, and any rollover election will be revocable at any time prior to the
date of the rollover. It is expected that the terms of the new portfolio will be
substantially the same as those of the Portfolio.

     The rollover of an investor's Units is intended to be effected in a manner
that will not result in the recognition of either gain or loss for U.S. federal
income tax purposes with respect to Securities that are included in the new
portfolio ("Duplicated Securities"). Units held by an investor who elects the
rollover option will be redeemed through an in-kind distribution to a
distribution agent of the investor's pro rata share of Securities. The
distribution agent will then adjust the Securities distributed to the investor
so that its composition matches the investment profile of the new portfolio.
This adjustment will involve the sale of non-Duplicated Securities and,
possibly, of a portion of certain Duplicated Securities in order to rebalance
the portfolio, and the purchase of replacement Securities. Any excess sales
proceeds, net of sales related expenses, will be distributed to the investor.
After this adjustment the distribution agent will make an in-kind contribution
of the adjusted Securities to the new portfolio. Upon receipt of the in-kind
contribution, the trustee of the new portfolio will issue the appropriate number
of units in the new portfolio to the investor. An investor who elects the
rollover option will recognize capital gain or loss with respect to the
Securities, including fractional Securities, sold by the distribution agent, but
will not recognize gain or loss with respect to the Duplicated Securities that
are contributed in kind to the new portfolio. The Sponsors intend to provide
investors with information that will assist them in determining their tax
liability on an eventual sale of the Duplicated Securities.

     The Sponsors intend to cause the distribution agent to sell those
Securities that will not be contributed to the new portfolio, and then to create
units of the new portfolio, in each case as quickly as possible subject to the
Sponsors' sensitivity that the concentrated sale and purchase of large volumes
of securities may affect market prices in a manner adverse to the interest of
investors. Accordingly, the Sponsors may, in their sole discretion, undertake a
more gradual sale of Securities and a more gradual creation of units of the new
portfolio to help mitigate any negative market price consequences caused by this
large volume of securities trades. In order to minimize potential losses caused
by market movement during the rollover period, the Sponsors may enter into
program trades, which may increase brokerage commissions payable by investors.
There can be no assurance, however, that any trading procedures will be
successful or might not result in less advantageous prices. Pending the
investment of rollover proceeds in securities to comprise the new portfolio,
those moneys may be uninvested for several days.

     Investors who participate in the rollover will not be entitled to receive a
cash distribution with which to pay any taxes incurred as a result of the
rollover procedure. Investors who do not participate in the rollover or
otherwise redeem their Units will continue to hold their Units until termination
of the Portfolio; however, depending upon the extent of participation in the
rollover, the aggregate size of the Portfolio will be reduced which could result
in an increase in per Unit expenses.

     The Sponsors may, in their sole discretion and without penalty or liability
to investors, decide not to sponsor a new portfolio or to modify the terms of
the rollover. Prior notice of any decision would be provided to investors.

     The Division of Investment Management of the SEC is of the view that the
rollover option constitutes an "exchange offer", for the purposes of Section
11(c) of the Investment Company Act of 1940, and would therefore be prohibited
absent an exemptive order. The Sponsors have received exemptive orders under
Section 11(c) which they believe permit them to offer the rollover, but no
assurance can be given that the SEC will concur with the Sponsors' position and
additional regulatory approvals may be required.

     The Sponsors believe that the gradual redemption, liquidation and
investment in the new Portfolio will help mitigate any negative market price
consequences stemming from the trading of large volumes of securities and of the
underlying securities in the new Portfolio in a short, publicized period of
time. The above procedures may, however, be insufficient or unsuccessful in
avoiding such price consequences. There can be no assurance that the procedures
will effectively mitigate any adverse price consequences of heavy volume trading
or that the procedures will produce a better price for investors than might be
obtained on any given day during the rollover period. In fact, market price
trends may make it advantageous to sell or buy more quickly or more slowly than
permitted by these procedures. Rollover investors could then receive a less
favorable average unit price than if they bought all their units of the new
Portfolio on any given day of the period. Historically, the prices of securities
selected by the Sponsors as good investments have generally risen over the first
few days following the announcement.

     It should also be noted that during this period an investor will be at risk
to the extent that securities are not sold and will not have the benefit of any
stock appreciation to the extent that monies have not been invested; for this
reason, the Sponsors will be inclined to sell and purchase the securities in as
short a period as they can without materially adversely affecting the price of
the securities.

     Investors who do not inform the Trustee that they wish to have their Units
so redeemed and liquidated will continue to hold Units of a Portfolio until that
Portfolio is terminated. These remaining investors will not realize capital
gains or losses due to the rollover and will not be charged any additional sales
charge. If a large percentage of investors become rollover investors, the
aggregate size of a Portfolio will be sharply reduced. As a consequence,
expenses, if any, in excess of the amount to be borne by the Trustee would
constitute a higher percentage amount per Unit than prior to the rollover in the
new Portfolio. Also, because of the lesser number of Units in a Portfolio, and
possibly also due to a value reduction, however temporary, in Units caused by
the Sponsors' sales of securities, a Portfolio might also reduce to the minimum
value that would allow the Sponsors to choose to liquidate that Portfolio
without the consent of the remaining investors. The securities remaining in a
Portfolio after the rollover will be sold by the Sponsors as quickly as possible
without, in their judgment, materially adversely affecting the market price of
the securities.



MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                            
                POWER OF ATTORNEY
                            

     KNOW ALL MEN BY THESE PRESENTS that the undersigned director of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation (hereinafter
called the "Corporation"), does hereby constitute and appoint Kenneth D.
Barbuscio, Ernest V. Fabio, Gerard J. Fenerty, Timothy J. Mahoney, J. David
Meglen, Michael J. Perini, and any person who shall hold the position of Manager
of the Control Department of the Defined Asset Funds Division of the
Corporation, and each of them, his true and lawful attorneys and agents, with
full power to act without the others, for him and in his name, place and stead,
in any and all capacities, to do any and all acts and things, and execute in his
name any and all instruments, which said attorneys and agents may deem necessary
or advisable in order to enable the Corporation to comply with the Securities
Act of 1933 and the Investment Company Act of 1940, and any requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under said Acts of (i) units of fractional undivided interest in
one or more series of Corporate Income Fund; Defined Asset Funds; Equity
Investor Fund; Government Securities Income Fund; International Bond Fund;
Municipal Investment Trust Fund or any other unit investment trust fund (or
other unit based investment vehicles not involving active management)
established in accordance with the Investment Company Act of 1940 for which
Merrill Lynch, Pierce, Fenner & Smith Incorporated, alone or with others, will
act as Depositor or Sponsor and/or Underwriter, and (ii) the aforesaid trusts,
including specifically power and authority to sign his name to any and all
Notifications of Registration and/or Registration Statements to be filed with
the Securities and Exchange Commission under either of the said Acts in respect
to such units and trusts, any amendment (including post-effective amendment) or
application for amendment of such Notifications of Registration and/or
Registration Statements, and any Prospectuses, exhibits, financial statements,
schedules or any other documents filed therewith, and to file the same with the
Securities and Exchange Commission; and each of the undersigned does hereby
ratify and confirm all that said attorneys and agents, and each of them, shall
do or cause to be done by virtue hereof. Any one of said agents and attorneys
shall have, and may exercise, without the others, all the powers hereby
conferred.


  IN WITNESS HEREOF, the undersigned has signed his name hereto in
the City of New York as of this ____ day of ________________, 1998.



                      _____________________________
                               Herbert M. Allison, Jr.
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                      
             POWER OF ATTORNEY

                      
     KNOW ALL MEN BY THESE PRESENTS that the undersigned director of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation (hereinafter
called the "Corporation"), does hereby constitute and appoint Kenneth D.
Barbuscio, Ernest V. Fabio, Gerard J. Fenerty, Timothy J. Mahoney, J. David
Meglen, Michael J. Perini, and any person who shall hold the position of Manager
of the Control Department of the Defined Asset Funds Division of the
Corporation, and each of them, his true and lawful attorneys and agents, with
full power to act without the others, for him and in his name, place and stead,
in any and all capacities, to do any and all acts and things, and execute in his
name any and all instruments, which said attorneys and agents may deem necessary
or advisable in order to enable the Corporation to comply with the Securities
Act of 1933 and the Investment Company Act of 1940, and any requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under said Acts of (i) units of fractional undivided interest in
one or more series of Corporate Income Fund; Defined Asset Funds; Equity
Investor Fund; Government Securities Income Fund; International Bond Fund;
Municipal Investment Trust Fund or any other unit investment trust fund (or
other unit based investment vehicles not involving active management)
established in accordance with the Investment Company Act of 1940 for which
Merrill Lynch, Pierce, Fenner & Smith Incorporated, alone or with others, will
act as Depositor or Sponsor and/or Underwriter, and (ii) the aforesaid trusts,
including specifically power and authority to sign his name to any and all
Notifications of Registration and/or Registration Statements to be filed with
the Securities and Exchange Commission under either of the said Acts in respect
to such units and trusts, any amendment (including post-effective amendment) or
application for amendment of such Notifications of Registration and/or
Registration Statements, and any Prospectuses, exhibits, financial statements,
schedules or any other documents filed therewith, and to file the same with the
Securities and Exchange Commission; and each of the undersigned does hereby
ratify and confirm all that said attorneys and agents, and each of them, shall
do or cause to be done by virtue hereof. Any one of said agents and attorneys
shall have, and may exercise, without the others, all the powers hereby
conferred.


  IN WITNESS HEREOF, the undersigned has signed his name hereto in
the City of New York as of this ____ day of ________________, 1998.



                      _____________________________
                               George A. Schieren
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
                      
             POWER OF ATTORNEY
                            

     KNOW ALL MEN BY THESE PRESENTS that the undersigned director of Merrill
Lynch, Pierce, Fenner & Smith Incorporated, a Delaware corporation (hereinafter
called the "Corporation"), does hereby constitute and appoint Kenneth D.
Barbuscio, Ernest V. Fabio, Gerard J. Fenerty, Timothy J. Mahoney, J. David
Meglen, Michael J. Perini, and any person who shall hold the position of Manager
of the Control Department of the Defined Asset Funds Division of the
Corporation, and each of them, his true and lawful attorneys and agents, with
full power to act without the others, for him and in his name, place and stead,
in any and all capacities, to do any and all acts and things, and execute in his
name any and all instruments, which said attorneys and agents may deem necessary
or advisable in order to enable the Corporation to comply with the Securities
Act of 1933 and the Investment Company Act of 1940, and any requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
registration under said Acts of (i) units of fractional undivided interest in
one or more series of Corporate Income Fund; Defined Asset Funds; Equity
Investor Fund; Government Securities Income Fund; International Bond Fund;
Municipal Investment Trust Fund or any other unit investment trust fund (or
other unit based investment vehicles not involving active management)
established in accordance with the Investment Company Act of 1940 for which
Merrill Lynch, Pierce, Fenner & Smith Incorporated, alone or with others, will
act as Depositor or Sponsor and/or Underwriter, and (ii) the aforesaid trusts,
including specifically power and authority to sign his name to any and all
Notifications of Registration and/or Registration Statements to be filed with
the Securities and Exchange Commission under either of the said Acts in respect
to such units and trusts, any amendment (including post-effective amendment) or
application for amendment of such Notifications of Registration and/or
Registration Statements, and any Prospectuses, exhibits, financial statements,
schedules or any other documents filed therewith, and to file the same with the
Securities and Exchange Commission; and each of the undersigned does hereby
ratify and confirm all that said attorneys and agents, and each of them, shall
do or cause to be done by virtue hereof. Any one of said agents and attorneys
shall have, and may exercise, without the others, all the powers hereby
conferred.


  IN WITNESS HEREOF, the undersigned has signed his name hereto in
the City of New York as of this ____ day of ________________, 1998.



                      _____________________________
                                John L. Steffens

<TABLE> <S> <C>

<ARTICLE> 6
<MULTIPLIER> 1
       
<S>                             <C>
<PERIOD-TYPE>                   OTHER
<FISCAL-YEAR-END>                          JAN-31-1999
<PERIOD-END>                               FEB-03-1999
<INVESTMENTS-AT-COST>                          330,570
<INVESTMENTS-AT-VALUE>                         330,570
<RECEIVABLES>                                        0
<ASSETS-OTHER>                                     477
<OTHER-ITEMS-ASSETS>                                 0
<TOTAL-ASSETS>                                 331,047
<PAYABLE-FOR-SECURITIES>                             0
<SENIOR-LONG-TERM-DEBT>                              0
<OTHER-ITEMS-LIABILITIES>                          477
<TOTAL-LIABILITIES>                                477
<SENIOR-EQUITY>                                      0
<PAID-IN-CAPITAL-COMMON>                       330,570
<SHARES-COMMON-STOCK>                           44,600
<SHARES-COMMON-PRIOR>                                0
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<NET-ASSETS>                                   330,570
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<DISTRIBUTIONS-OF-INCOME>                            0
<DISTRIBUTIONS-OF-GAINS>                             0
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<NUMBER-OF-SHARES-SOLD>                         44,600
<NUMBER-OF-SHARES-REDEEMED>                          0
<SHARES-REINVESTED>                                  0
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<AVG-DEBT-PER-SHARE>                                 0
        

</TABLE>


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