Defined Asset Funds(sm)
Select Series
1999
B
IRA Ideal!
The Select S&P Industrial Portfolio
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) Select S&P Industrial Portfolio can help.
Instead of simply replicating an index, the Select S&P Industrial Portfolio
singles out stocks within the S&P Industrial Index(1) 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.
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(1) "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.
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Select S&P Industrial Portfolio -- 1999 Series B(2)
Current
Name of Issuer Ticker Symbol Dividend Yield(3)
1. HEINZ (H.J.) COMPANY HNZ 2.91%
2. CONAGRA, INC. CAG 2.71
3. WINN-DIXIE STORES, INC. WIN 2.57
4. EMERSON ELECTRIC COMPANY EMR 2.39
5. MAY DEPARTMENT STORES COMPANY MAY 2.38
6. ROHM AND HAAS COMPANY ROH 2.14
7. BESTFOODS BFO 2.05
8. AIR PRODUCTS & CHEMICALS, INC. APD 2.00
9. ALLTEL CORPORATION AT 1.85
10. V.F. CORPORATION VFC 1.71
11. AVERY DENNISON CORPORATION AVY 1.69
12. HERSHEY FOODS CORPORATION HSY 1.69
13. PITNEY BOWES, INC. PBI 1.67
14. TEXTRON, INC. TXT 1.66
15. NEWELL RUBBERMAID, INC. NWL 1.60
The Portfolio does not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors or Standard & Poor's(1).
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(2) Initial date of deposit -- March 29, 1999
(3) 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
March 26, 1999. There can be no assurance that future dividends, if any,
will be maintained at the indicated rates.
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Past Performance of the Prior Select S&P Industrial Portfolios
Past performance is no guarantee of future results.
Series From Inception Through 12/31/98 Most Recently Completed Portfolio
(including annual rollovers)
Inception Series Return Period Series Return
1/22/97 A 18.20% 1/22/97-3/13/98 A 31.43%
2/24/97 B 19.65 2/24/97-4/24/98 B 22.96
4/21/97 C 26.03 4/21/97-5/22/98 C 35.59
6/9/97 D 16.12 6/9/97-7/17/98 D 19.39
7/21/97 E 14.56 7/21/97-8/21/98 E 8.25
9/8/97 F 18.07 9/8/97-10/2/98 F 9.95
10/20/97 G 10.31 10/20/97-12/4/98 G 14.22
12/2/97 H 11.52
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(1), which includes only industrial stocks. Defined
Asset Funds then removes any stocks that are a part of the Dow Jones
Industrial Average(1) (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
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intended to predict stock price movements.
3. Market Capitalization: We then rank the stocks by their 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.
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(4).........$614,575 S&P 500 Index..................$309,140
DJIA................$288,778 S&P Industrial Index...........$306,527
Growth of $10,000 Invested Over 26 Years -- 1/1/73 Through 12/31/98
[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 12/31/98 of the Strategy(4) (ochre), the Dow Jones Industrial Average
(DJIA) (pink), the S&P 500 Index (purple) and the S&P Industrial Index (green).
An ochre box in the upper left quadrant indicates the components of the Strategy
performance section of the chart. The horizontal or (Y) axis compares the
cumulative annual performance by YEAR, from 1973 through 1998. The vertical or
(X) axis reflects DOLLAR AMOUNT value for each index from 1973 ending 1998. 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
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(4) Net of Portfolio sales charges (2.75% for the first year,
1.75% for each subsequent year) and estimated expenses.
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STRATEGY ($496,125), the ending value of the S&P 500 Index ($263,820), the
ending value of the S&P Industrial Index ($261,743) and the ending value of the
DJIA ($250,890).]
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(4) DJIA Index Index Year Strategy(4) 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 11.53 7.34 7.67 5.63
1979 26.47 10.52 18.02 18.40 1993 2.28 16.72 9.97 8.90
1980 18.23 21.41 31.50 32.98 1994 11.41 4.95 1.30 3.75
1981 7.67 -3.40 -4.83 -6.69 1995 36.68 36.48 37.10 34.26
1982 25.87 25.79 20.26 20.14 1996 12.25 28.57 22.69 22.70
1983 24.72 25.68 22.27 22.79 1997 33.34 24.78 33.10 30.80
1984 12.34 1.06 5.95 4.09 1998 15.10 18.00 28.34 33.43
1985 29.98 32.78 31.43 30.08
1986 28.78 26.91 18.37 18.54 Average 16.20% 13.19% 13.41% 13.38%
</TABLE>
Average Annual Total Returns
For periods ending 12/31/98 3 year 5 year 10 year 15 year 20 year 25 year
Strategy(4) 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 Index 27.97% 23.82% 19.03% 17.74% 17.50% 14.71%
S&P Industrial Index 28.89% 24.43% 19.09% 17.77% 17.51% 14.67%
Returns shown represent price changes plus dividends reinvested at year ends,
divided by the initial public offering price and do not reflect deduction of any
commissions or taxes. Portfolio performance will differ from the Strategy
because of commissions, Portfolios are established and liquidated at different
times during the year, they normally purchase and sell stocks at prices
different from those used in determining Portfolio unit price, they are not
fully invested at all times and stocks may not be weighted equally.
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[logo] Defined Asset Funds
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
Baby Boomer Economy Portfolio
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 Trusts
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. That is why
we offer a full range of defined investments designed to meet a variety of
objectives.
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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.
Take a step beyond!
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.
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 its 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 The 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.
A Tax-Efficient Structure
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When seeking capital appreciation, managing tax liability on capital gains can
be vital to your overall return. By holding this fund for more than one year,
individuals may be eligible for the favorable federal tax rates on net
long-term capital gains (currently no more than 20%).
Generally, dividends and any gains will be subject to tax each year, whether or
not reinvested. If you purchase this Portfolio during the initial offering
period, you will be eligible for the tax-deferred rollover feature, which
enables you to carry forward your cost basis on stocks transferred to future
portfolios, if available, until you choose to sell you investment. Please
contact you 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
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Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
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Maximum Sales Charge 2.75% $27.50
Estimated Annual Operating Expenses
(as a % of net assets) 0.166% $1.64
Estimated Organization Costs $0.65
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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 a successor Portfolio, if available, the initial charge will be waived. You
will only pay the deferred sales charge.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
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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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 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 in not permitted.
11579BR-3/99
[recycle logo] Printed on Recycled Paper
(C)1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated, Member SIPC.
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