IRA Ideal!
Defined Asset Funds(SM)
The Select S&P Industrial Portfolio
1999 Series A
Take Indexing to Another Level
[LOGO] Merrill Lynch
Indexing -- it's a strategy to mirror the returns of major indices. Why not
take a step beyond?
The Defined Asset Funds(SM) S&P Industrial Portfolio can help.
Instead of simply replicating an index, the Select S&P Industrial Portfolio
singles out stocks within the S&P Industrial Index(*) for a combination of
value, capital appreciation potential and current dividend income.
The Portfolio seeks total return through a contrarian strategy of selecting 15
stocks from the index with high dividend yields and potential value.
The Strategy
The Select S&P Industrial Portfolio employs a disciplined "buy and hold"
strategy. Each year, we intend to reapply the screening process to select a
new Portfolio. You can reinvest in the next Portfolio, if available, at a
reduced sales charge, or you can redeem your investment. Although each
Portfolio is a one-year investment, we recommend you stay with the Strategy
for at least three to five years for potentially more consistent results.
Select S&P Industrial Portfolio -- 1999 Series A(+)
Current
Name of Issuer Ticker Symbol Dividend Yield(++)
-------------- ------------- ------------------
1. ROYAL DUTCH PETROLEUM COMPANY (Section) RD 3.79%
2. GENUINE PARTS COMPANY GPC 3.31
3. HEINZ (H.J.) COMPANY HNZ 2.46
4. KELLOGG COMPANY K 2.42
5. WINN-DIXIE STORES, INC. WIN 2.38
6. EMERSON ELECTRIC COMPANY EMR 2.29
7. CONAGRA, INC. CAG 2.23
8. MAY DEPARTMENT STORES COMPANY MAY 2.20
9. ALLTEL CORPORATION AT 2.05
10. AIR PRODUCTS & CHEMICALS, INC. APD 2.03
11. BEST FOODS BFO 2.01
12. AVERY DENNISON CORPORATION AVY 1.84
13. NEWELL COMPANY NWL 1.78
14. HERSHEY FOODS CORPORATION HSY 1.57
15. AMERICAN HOME PRODUCTS CORPORATION AHP 1.52
The Portfolio does not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors or Standard & Poor's(*).
(+) Initial date of deposit -- February 16,1999
(++) Current dividend yield for each stock was calculated by annualizing the
last monthly, quarterly or semi-annual ordinary dividend received on that
stock and dividing the result by its market value as of the close of trading
on February 16, 1999. There can be no assurance that future dividends, if any,
will be maintained at the indicated rates.
(Section) Because this issuer is a foreign corporation, any dividends will be
subject to withholding taxes.
Past Performance of the Prior Select S&P Industrial Portfolios
Past performance is no guarantee of future results.
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Series From Inception Through 12/31/98 Most Recently Completed Portfolio
(including annual rollovers)
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Inception Series Return Period Series Return
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1/22/97 A 18.20% 1/22/97-3/13/98 A 31.43%
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2/24/97 B 19.65 2/24/97-4/24/98 B 22.96
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4/21/97 C 26.03 4/21/97-5/22/98 C 35.59
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6/9/97 D 16.12 6/9/97-7/17/98 D 19.39
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7/21/97 E 14.56 7/21/97-8/21/98 E 8.25
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9/8/97 F 18.07 9/8/97-10/2/98 F 9.95
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10/20/97 G 10.31 10/20/97-12/4/98 G 14.22
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12/2/97 H 11.52
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The chart above shows average annual total returns which represent price changes
plus dividends reinvested, divided by the initial public offering price, and
reflects maximum sales charges and expenses. Returns for Series From Inception
differ from Most Recently Completed Portfolio because the former figures
reflect a reduced sales charge on annual rollovers and different performance
periods.
The Selection Process
The Select S&P Industrial Portfolio looks for potential values in the equity
market by investing in companies in the S&P Industrial Index that may be
currently out of favor. It does this through a disciplined four-part screening
process:
1. Defining the Universe: We begin with the S&P Industrial Index, a sub-set of
the S&P 500 Index(*), which includes only industrial stocks. Defined Asset
Funds then removes any stocks that are a part of the Dow Jones Industrial
Average(*) (DJIA).
2. Quality Screen: We include only stocks that are ranked A+ or A by Standard &
Poor's. Standard & Poor's determines these stock rankings using a
computerized system which focuses primarily on the growth and stability of
per-share earnings and dividends. It then assigns a symbol to each stock,
which ranges from A+ for the highest ranked stocks to D for those stocks
which Standard & Poor's considers to be the most speculative. These rankings
differ from credit-worthiness rankings of bonds and are not intended to
predict stock price movements.
3. Market Capitalization: We then rank the stocks by market capitalization from
highest to lowest, and eliminate the lowest 25%. This allows the Portfolio
to avoid smaller, less liquid issues.
4. Highest Dividend Yield: Finally, we rank the remaining stocks according to
dividend yield. From that group, we select the l5 highest-yielding stocks
for the Portfolio whose prices may be undervalued.
Defined Asset Funds -- Time In The Market
We believe the disciplined strategy of buying and holding securities with a
long-term view can help meet your needs. For income, for growth or for total
return, time in the market can be an effective strategy for growing your
portfolio. This philosophy is the cornerstone of Defined Asset Funds.
(*) "Standard & Poor's," "S&P", "S&P 500 Index" and the "S&P Industrial Index"
are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use
by Defined Asset Funds. The Portfolio is not sponsored, managed, sold or
promoted by Standard & Poor's. The name "Dow Jones Industrial Average" is the
property of Dow Jones & Company, Inc.
Avoid the teachings of speculators whose judgments are not confirmed by
experience.
LEONARDO DA VINCI
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 Invested Over 25 Years--1/1/74 through 12/31/98
Strategy..................$614,575 DJIA.....................$288,778
S&P 500 Index.............$309,140 S&P Industrial Index.....$306,527
[A mountain chart, captioned "Growth of $10,000 Invested Over 26 Years-
1/1/73 Through 12/31/98" compares the cumulative annual performance from 1973
through 1998 of the Strategy (ochre), the Dow Jones Industrial Average
(DJIA) (pink), the S&P 500 Index (purple) and the S&P Industrial Index
(green). The horizontal or (Y) axis compares the cumulative annual performance
by YEAR, from 1973 through 12/31/98. The vertical or (X) axis reflects DOLLAR
AMOUNT value for each index from 1973 ending 12/31/98. The initial value of
each investment is $10,000. Throughout the period from 1973 through December
31, 1998, increases in each investment build towards the right vertical or (X)
axis. At the end of this period, the right vertical or (X) axis, reflects the
ending value of the STRATEGY ($496,125), the ending value of the DJIA
($250,890), the ending value of the S&P 500 Index ($263,820) and the ending
value of the S&P Industrial Index ($261,743).]
Since stocks in the Portfolio were chosen solely by applying the Strategy, we
analyzed the Strategy to see how it could have performed. Past performance of
the Strategy is no guarantee of future results of any Portfolio. The Strategy
(with Portfolio sales charges and expenses deducted) would have underperformed
the DJIA in 9, the S&P 500 Index in 10, and the S&P Industrial Index in 9 of
the last 26 years. There can be no assurance that any Portfolio will
outperform these indices.
Annual Total Returns
<TABLE>
S&P S&P
S&P 500 Industrial S&P 500 Industrial
Year Strategy DJIA Index Index Year Strategy DJIA Index Index
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1973 -20.13% -13.12% -14.66% -14.61% 1987 2.52 6.02 5.67 9.13
1974 -5.35 -23.14 -26.47 -26.54 1988 42.04 15.95 16.58 15.80
1975 40.63 44.40 36.92 36.78 1989 35.40 31.71 31.11 29.30
1976 30.89 22.72 23.53 22.59 1990 0.96 -0.57 -3.20 -0.84
1977 -6.53 -12.71 -7.19 -8.20 1991 27.06 23.93 30.51 30.39
1978 6.06 2.69 6.39 7.50 1992 11.50 7.34 7.67 5.63
1979 26.47 10.52 18.02 18.40 1993 2.28 16.72 9.97 8.90
1980 18.23 21.41 31.50 32.98 1994 11.41 4.95 1.30 3.75
1981 7.67 -3.40 -4.83 -6.69 1995 36.68 36.48 37.10 34.26
1982 25.87 25.79 20.26 20.14 1996 12.25 28.57 22.69 22.70
1983 24.72 25.68 22.27 22.79 1997 33.34 24.78 33.10 30.80
1984 12.34 1.06 5.95 4.09 1998 15.10 18.00 28.34 33.43
1985 29.98 32.78 31.43 30.08 Average 16.20% 13.19% 13.41% 13.38%
1986 28.78 26.91 18.37 18.54
</TABLE>
Average Annual Total Returns
For periods 3 year 5 year 10 year 15 year 20 year 25 year
ending
12/31/98
Strategy 19.52% 21.06% 17.83% 19.29% 19.57% 17.91%
DJIA 23.71% 22.08% 18.62% 17.71% 17.14% 14.40%
S&P 500 27.97% 23.82% 19.03% 17.74% 17.50% 14.71%
Index
S&P 28.89% 24.43% 19.09% 17.77% 17.51% 14.67%
Industrial
Index
Returns shown represent price changes plus dividends reinvested at year ends,
divided by the initial public offering price and do not reflect the deduction
of any commissions or taxes. Portfolio performance will differ from the
Strategy because of commissions, Portfolios are established and liquidated at
different times during the year, they normally purchase and sell stocks at
prices different from those used in determining Portfolio unit price, they are
not fully invested at all times and stocks may not be weighted equally.
Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses.
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 The Portfolio is designed for investors who can assume the risks
associated with equity investments, and may not be appropriate for
investors seeking capital preservation.
o There can be no assurance that the Portfolio will meet its objective,
that dividend rates will be maintained, that stock prices will not
decrease or that the Portfolio will outperform the indices.
o The value of your investment will fluctuate with the prices of the
underlying stocks. Stock prices can be volatile.
o These stocks may have higher yields because they or their industries
are experiencing financial difficulties or are out of favor. There
can be no assurance that the market factors which caused these
relatively low prices and high yields will change.
o This Portfolio is concentrated in the food industry.
o Portfolio results of this value-oriented Strategy may vary from the
S&P Industrial Index for various reasons. For example, the S&P
Industrial Index performance may be driven by stocks not held in the
Portfolio, such as growth stocks.
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, after the initial offering period, the charge for
organization costs. Accordingly, you should not increase the tax basis in
your units by these charges.
Generally, dividends and any net capital gains will be subject to tax each
year, whether or not reinvested. Capital gains, if any, on assets held over a
year will be taxed up to the maximum federal tax rate of 20% for individuals.
However, on rollovers of future Portfolios, if available, investors will defer
recognition of gains and losses for federal tax purposes on stocks that are
transferred to the new Portfolio. Please consult your tax advisor concerning
state and local taxation.
Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy. In
addition, all investors pay a deferred sales charge of $17.50 per 1,000 units,
about 1.75%, deducted over the last ten months of the Portfolio.
As a % of
Public Offering Amount per
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) 0.168% $1.66
Estimated Organization Costs $0.63
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If you sell your units before termination, the remaining balance of your
deferred sales charge will be deducted, along with the estimated costs of
selling Portfolio securities, from the proceeds you receive. If you roll over
to 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.
Total Sales Charge
as a % of the Public
Amount Purchased Offering Price
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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%
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Select Now!
You can get started with the Select S&P Industrial Portfolio for about $250.
Call your financial professional for a free prospectus containing more complete
information, including sales charges, expenses and risks. Please read it
carefully before you invest or send money.
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.
Defined Asset Funds(SM)
Buy With Knowledge o Hold With Confidence
Equity Investor Funds
Other Select Series
Select Ten Portfolio (DJIA)
United Kingdom Portfolio (Financial Times Index)
Select Growth Portfolio
Select S&P Industry Turnaround Portfolio
Select Standard & Poor's Intrinsic Value Portfolio
Concept Series
Health Care Trust (Pharmaceutical & Biotechnology Portfolio)
Premier American Portfolio
Premier World Portfolio
Real Estate Income Fund
Tele-Global Trust
Utility Portfolio
Index Series
S&P 500 Trust
S&P MidCap Trust
Fixed-Income Funds
Corporate Funds
Government Funds
Municipal Funds
[Recycle Logo] Printed on Recycled Paper 11579BR-2/99
[Copyright]1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated, Member SIPC.
