Defined Asset Funds(sm)
Select Series
1999
3
IRA Ideal!
Defined Technology Portfolio(sm)
Merrill Lynch
100 Technology
Index
[Logo] Merrill Lynch
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THE TECHNOLOGY SECTOR o IT HAS BEEN CONSIDERED AN INVESTMENT ONLY FOR THOSE
WITH THE MOST ROBUST OF TEMPERAMENTS. THIS SECTOR HAS SHOWN WALL STREET LOFTY
HIGHS, AND HUMBLE LOWS, BUT WE BELIEVE THE TECHNOLOGY SECTOR OFFERS GREAT
POTENTIAL FOR THE FUTURE. DEFINED ASSET FUNDS(sm) GIVES YOU A CONVENIENT WAY TO
INVEST IN THE PROMISE OF TECHNOLOGY WITH THE NEW...
DEFINED TECHNOLOGY PORTFOLIO(sm)
Merrill Lynch
100 Technology
Index
The Merrill Lynch 100 Technology Index (ML 100 Index) is a benchmark for
technology stocks. It offers a cross section of 100 highly-capitalized
technology stocks, covering important areas of this sector such as computer
software, semi-conductors, telecommunications equipment, electronic data
processing and the Internet. The ML 100 Index also includes American Depositary
Receipts (ADRs) for international exposure. The ML 100 Index follows strict
quantitative rules to minimize subjectivity in stock selection, and only
includes stocks that have been tested for liquidity. You can follow the ML 100
Index on the American Stock Exchange using symbol MLO.
Technology: Rebalanced
The Defined Technology Portfolio offers you capital appreciation potential
with a diversified portfolio of technology stocks. By applying a Rebalancing
Model to the Merrill Lynch 100 Technology Index (ML 100 Index), this Portfolio,
which is held for about one year, seeks to outperform the Index by reweighting
each stock to increase potential return. Each year, Defined Asset Funds intends
to apply the Rebalancing Model to the ML 100 Index to create a new Portfolio.
The Enhanced Index Strategy
The Defined Technology Portfolio follows a disciplined "buy and hold"
strategy for index enhancement. It rebalances the Index to pursue enhanced
returns without increasing risk. You can choose to roll your investment into a
new Defined Technology Portfolio, if available, or you can redeem your
investment. Although this is a one-year investment, we recommend you continue
with this Strategy for at least three to five years for potentially more
consistent results.
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If your view of this industry sector should change, Defined Asset Funds
offers you the flexibility to exchange your investment for another Select or
Equity Investor Series Portfolio at a reduced sales charge.
The Rebalancing Model
Bernard V. Tew, Ph.D., Chairman of Q.E.D. Investments, designed his
quantitative model as a means for improving returns and controlling risks in
speculative equity sectors. Dr. Tew, as Portfolio Consultant for the Defined
Technology Portfolio, works together with Defined Asset Funds to apply the
following stock selection process:
Define the Universe
We begin by defining the universe of stocks. In this case, the ML 100
Index is used for its diversification within the technology sector, as well as
its screening for more highly capitalized stocks.
Reweight the Index
Stocks in the ML 100 Index are then analyzed by the Portfolio Consultant
for historical correlation relationships, to identify stocks whose prices move
inversely to one another. These relationships create a portfolio of stocks that
complement each other and reduce volatility.
Construct an Enhanced Portfolio
The ML 100 Index is then balanced, stock by stock, from most attractive to
least attractive. Stocks that are considered most attractive, those with the
best prices relative to potential performance, are the most heavily weighted.
Stocks with less attractive prices relative to returns are underweighted. This
reweighting is designed to enhance potential return.
Rebalance the Portfolio
Because the Model works best over a one-year period, Defined Asset Funds
and the Portfolio Consultant plan to construct a new Portfolio each year. The
Model will be reapplied to the ML 100 Index to determine the weightings for a
new Defined Technology Portfolio.
Why Technology Now?
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Imagine your world without cable TV, a cellular phone or a home computer.
How would your place of business operate without on line services and
networking capabilities? While technology companies have seen ups and downs,
it's an industry that continues to redefine the way we live. Although a number
of stocks represented in the Index have seen wide variations in performance
over the last several years and others are recent I.P.O.s, this sector
continues to have a long-term and growing impact on our future.
Defined Asset Funds -- Our Philosophy
At Defined Asset Funds, we are ever mindful that behind every investment
dollar lies something infinitely more important -- your investment goal. This
is why we offer a full range of defined investments designed to meet a variety
of objectives.
We are committed to providing our investors with some of today's most
attractive equity and fixed-income investments, within the convenient "buy and
hold" structure of a Unit Investment Trust. For income, for growth or for total
return, we believe that time in the market can be an effective strategy for
growing your portfolio.
At Defined Asset Funds, we set the foundation for all of our portfolios in
this way, because we too have an important goal in mind -- yours.
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<TABLE>
The Merrill Lynch 100 Technology Index*
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Name of Issuer Ticker Name of Issuer Ticker
Symbol Symbol
<S> <C> <C> <C> <C> <C>
1. 3Com Corporation COMS 51. Keane, Inc. KEA
2. Adaptec, Inc. ADPT 52. KLA-Tencor Corporation KLAC
3. ADC Telecommunications, Inc. ADCT 53. Lexmark International Group, LXK
Inc. (Class A)
4. Adobe Systems, Inc. ADBE 54. Linear Technology LLTC
Corporation
5. Advanced Micro Devices, Inc. AMD 55. LSI Logic Corporation LSI
6. Alcatel** ALA 56. Lucent Technologies, Inc. LU
7. Altera Corporation ALTR 57. Maxim Integrated Products, MXIM
Inc.
8. Amazon.com, Inc. AMZN 58. Micron Technology, Inc. MU
9. America Online, Inc. AOL 59. Microsoft Corporation MSFT
10. American Power Conversion APCC 60. Molex, Inc. MOLX
Corporation
11. Analog Devices, Inc. ADI 61. Motorola, Inc. MOT
12. Apple Computer, Inc. AAPL 62. National Semiconductor NSM
Corporation
13. Applied Materials, Inc. AMAT 63. Network Appliance, Inc. NTAP
14. Ascend Communications, Inc. ASND 64. Network Associates, Inc. NETA
15. ASM Lithography Holding N.V.** ASML 65. Newbridge Networks NN
Corporation**
16. At Home Corporation (Series A) ATHM 66. Nokia Corporation** NOK
- ----------------------
* Index as of 5/4/99.
** The issuer is a foreign corporation; any dividends will be
subject to withholding taxes.
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Name of Issuer Ticker Name of Issuer Ticker
Symbol Symbol
<S> <C> <C> <C> <C> <C>
17. Autodesk, Inc. ADSK 67. Nortel Networks NT
Corporation**
18. Automatic Data Processing, Inc. AUD 68. Novell, Inc. NOVL
19. Baan Company, N.V.** BAANF 69. Oracle Corporation ORCL
20. BMC Software, Inc. BMCS 70. Parametric Technology PMTC
Corporation
21. Broadcom Corporation (Class A) BRCM 71. Paychex, Inc. PAYX
22. Cadence Design Systems, Inc. CDN 72. PeopleSoft, Inc. PSFT
23. Ceridian Corporation CEN 73. PLATINUM Technology PLAT
International, Inc.***
24. Cisco Systems, Inc. CSCO 74. QUALCOMM, Inc. QCOM
25. Citrix Systems, Inc. CTXS 75. Quantum Corporation QNTM
26. Compaq Computer Corporation CPQ 76. Rational Software RATL
Corporation
27. Computer Associates International, CA 77. Samina Corporation SANM
Inc.
28. Computer Sciences Corporation CSC 78. SAP AG** SAP
29. Compuware Corporation CPWR 79. SCI Systems, Inc. SCI
30. Dell Computer Corporation DELL 80. Seagate Technology, Inc. SEG
31. eBay, Inc. EBAY 81. Siebel Systems, Inc. SEBL
32. ECI Telecommunications Limited** ECILF 82. Silicon Graphics, Inc. SGI
33. Electronic Arts, Inc. ERTS 83. Solectron Corporation SLR
34. Electronic Data Systems Corporation EDS 84. Sterling Commerce, Inc. SE
- ----------------------
*** Platinum Technology, Inc. is the subject of a cash tender offer and is
expected to be removed from the Merrill Lynch 100. The Trustee will hold
amounts deposited for the purchase of this security in cash, pending the
announcement of a substitute security in the Merrill Lynch 100. The cash will
then be used to purchase the substitute security.
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- -----------------------------------------------------------------------------------------------------------------------------------
Name of Issuer Ticker Name of Issuer Ticker
Symbol Symbol
<S> <C> <C> <C> <C> <C>
35. EMC Corporation EMC 85. STMicroelectronics N.V.** STM
36. Excite, Inc. XCIT 86. Storage Technology Corporation STK
37. First Data Corporation FDC 87. Sun Microsystems, Inc. SUNW
38. Fiserv, Inc. FISV 88. Synopsys, Inc. SNPS
39. FORE Systems, Inc. FORE 89. Tech Data Corporation TECD
40. Gartner Group, Inc. (Class A) IT 90. Telefonaktiebolaget LM Ericsson** ERICY
41. Gateway 2000, Inc. GTW 91. Tellabs, Inc. TLAB
42. General Instrument Corporation GIC 92. Teradyne, Inc. TER
43. Hewlett-Packard Company HWP 93. Texas Instruments, Inc. TXN
44. Inktomi Corporation INKT 94. Uniphase Corporation UNPH
45. Intel Corporation INTC 95. Unisys Corporation UIS
46. International Business Machines IBM 96. VERITAS Software VRTS
Corporation Corporation
47. Intuit, Inc. INTU 97. Vitesse Semiconductor Corporation VTSS
48. Iomega Corporation IOM 98. Xerox Corporation XRX
49. J.D. Edwards & Company JDEC 99. Xilinx, Inc. XLNX
50. Jabil Circuit, Inc. JBL 100. Yahoo!, Inc. YHOO
</TABLE>
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Equity Investor Funds
Other Merrill Lynch
Research-Based Funds
1999 Year-Ahead Domestic Portfolio
1999 Year-Ahead International Portfolio
Biotechnology Portfolio
European Monetary Union Portfolio
Financial Portfolio
Concept Series
Baby Boom Economy Portfolios(sm)
Health Care Trust (Pharmaceutical & Biotechnology Portfolio)
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund
Tele-Global Trust
Utility Portfolio
Select Series
Principled Values Portfolio(sm)
Select Ten Portfolio (DJIA)
United Kingdom Portfolio (Financial Times Index)
Select Growth Portfolio
Select Large-Cap Growth Portfolio
Select S&P Industrial Portfolio
Select Standard & Poor's Industry Turnaround Portfolio
Select Standard & Poor's Intrinsic Value Portfolio
Index Series
S&P 500 Trust
S&P MidCap Trust
Fixed-Income Funds
Corporate Funds
Government Funds
Municipal Funds
Invest in Technology Today!
You can start investing in technology with the Defined Technology Portfolio for
about $250. Call your financial professional for a free prospectus containing
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more complete information, including sales charges, expenses and risks. Please
read it carefully before you invest or send money.
Defining Your Risks
Please keep in mind the following factors when considering this investment.
Your financial professional will be happy to answer any questions you may have.
o There can be no assurance that the Portfolio will meet its objective.
o The Portfolio is designed for investors who can assume the additional
risks associated with aggressive growth equity investments, and may
not be appropriate for investors seeking capital preservation or high
current income.
o The Portfolio is composed of aggressive growth stocks that are subject
to extreme price volatility; therefore, it may be considered
speculative.
o The Portfolio consists exclusively of stocks from the technology
sector and should not be considered a complete investment program.
o The Portfolio does not reflect research, opinions or any buy or sell
recommendations from the Sponsor.
Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and, after the initial offering period, the charge
for organization costs.
In addition, the annual statement and the relevant tax reporting forms you
receive at year end will be based on the amount paid to you, net of the
deferred sales charge and the charge for organization costs, after the initial
offering period. Accordingly, you should not increase the tax basis in your
units by these charges.
Generally, dividends and any gains will be subject to tax each year. Net
capital gains, if any, on assets held over a year may qualify for a favorable
federal tax rate (currently no more than 20%) for individuals. However, on
rollovers of future Portfolios, if available, investors will defer recognition
of gains and losses on stocks that are transferred to the new Portfolio. Please
consult your tax advisor concerning state and local taxation.
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Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy. In
addition, all investors pay a deferred sales charge of $17.50 per 1,000 units,
about 1.75%, deducted over the last ten months of the Portfolio.
As a % of Public Amount Per
Offering Price 1,000 Units
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
Maximum Sales Charge 2.75% $27.50
Estimated Annual Expenses
(as a % of net assets) 0.171% $1.69
Estimated Organization Costs $2.05
If you sell your units before the termination date, the remaining balance of
your deferred sales charge, along with the estimated costs of selling Portfolio
securities, will be deducted from the proceeds you receive. If you roll over to
a successor Portfolio, if available, the initial sales charge will be waived.
You will only pay the deferred sales charge.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
Amount Total Sales Charge as a % of
Purchased Public Offering Price
Less than $50,000 2.75%
$50,000 to $99,999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
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$1,000,000 to $4,999,999 1.00%
$5,000,000 or more .60%
The information in this brochure is not complete and may be changed. We may not
sell the securities of the next Portfolio until the registration statement
filed with the Securities and Exchange Commission is effective. This brochure
is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where their offer or sale is not permitted.
[recycle logo] Printed on Recycled Paper 70116BR-5/99
[copyright logo] 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
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