IRA Ideal!
Defined Asset Funds (SM)
SELECT SERIES
Standard & Poor's
Intrinsic Value Portfolio
1999
SERIES A
A Value Approach
to Selecting
Growth Stocks
[ML LOGO] Merrill Lynch
A Value Approach to Selecting Mid to Large Cap Growth Stocks
AT ONE TIME, it was thought that intrinsic value and "book" or liquidation
value were the same. Intrinsic Value, however, goes beyond these traditional
measurements in search of earnings value. The screening process asks, what is
the company's business worth? What is its future earnings potential?
Standard & Poor's*, our Portfolio Consultant, seeks to determine if the
current market price justifies the purchase of a stock. The goal is to
identify those stocks whose intrinsic value is higher than the current market
price.
Determining Intrinsic Value
Standard & Poor's has developed a proprietary analytical process using a
combination of fundamental and valuation measurements which seeks to identify
stocks with growth potential. This process uses a quantitative analysis and a
series of screens to select stocks for the Intrinsic Value Portfolio.
- ------------
* Standard & Poor's is a trademark of The McGraw-Hill Companies, Inc. and
has been licensed for use by Defined Asset Funds. The Portfolio is not
sponsored, managed, sold or promoted by Standard & Poor's.
The Standard & Poor's Intrinsic Value Portfolio
The Portfolio seeks capital appreciation by investing, for about one year, in
stocks believed to have potential for growth based on a combination of
fundamental and valuation measurements. After one year, you may roll your
investment into a new Portfolio, if available. Although this 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.
About Defined Asset Funds(SM) -- 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.
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.
<TABLE>
- ------------------------------------------------------------------------------------------
Select S&P Intrinsic Value Portfolio- The Screening Process
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Free Cash Flow Compustat Companies with High Free Cash Flow
greater than $20 Database Free Cash Flow of more than $20 million for
million 10,087 the last year. This measure is calculated by
Stocks adding a company's net income,
depreciation and amortization, and then
subtracting its capital expenditures. This is
intended to identify companies with high
positive cash flows.
- ------------------------------------------------------------------------------------------
Net Margins of 1,537 Stocks Profitability
15% or more Net Profit Margins of 15% or more for the
last year. This represents net income,
divided by sales. It measures a company's
franchise value.
- ------------------------------------------------------------------------------------------
Return on 224 Stocks Return on Equity of more than 15% for the
equity of 15% last three fiscal years and the last four
or more quarters.
Return on equity is net income as a
percentage of common equity. This is
intended to measure how efficiently the
company is using its capital.
- ------------------------------------------------------------------------------------------
Market 86 Stocks Market Acceptance
Acceptance Good Value of reinvested earnings. To pass
this screen, growth in market capitalization
must exceed the growth in retained earnings
of the company over the last five years. This
screen selects companies that have been able
to add more than a dollar of market value for
every additional dollar of earnings retained.
This measures market acceptance and
momentum.
- ------------------------------------------------------------------------------------------
Eliminate 46 Stocks Eliminate Overpriced Stocks
Overpriced Stock trades below Intrinsic Value. Only
Stocks stocks whose current price is below the
present value of their estimated free cash
flow, as calculated by Standard & Poor's,
will be included.
- ------------------------------------------------------------------------------------------
Defined Funds 27 Stocks Liquidity
Liquidity Intrinsic Defined Asset Funds reviews the remaining
Screen Value stocks for market capitalization, liquidity
Portfolio and other factors. Only the stocks that pass
all of the screens are included in the Intrinsic
Value Portfolio.
</TABLE>
Past Performance of Prior Standard & Poor's Intrinsic Value Portfolios
- --------------------------------------------------------------------------------
Past performance is no guarantee of future results.
Series From Inception Through Most Recently Completed Portfolio
3/31/99 (including annual rollovers)
- --------------------------------------------------------------------------------
Inception Series Return Period Series Return
- --------------------------------------------------------------------------------
11/21/96 C 11.34% 12/3/97- C 13.15%
1/15/99
4/2/97 A 23.26 4/2/97- A 32.93
5/15/98
8/6/97 B 1.06 8/6/97- B -8.51
9/2/98
The chart above shows average annual total returns that represent price changes
plus dividends reinvested, divided by the initial public offering price, and
reflect 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.
<TABLE>
SELECT STANDARD & POOR'S INTRINSIC VALUE PORTFOLIO - 1999
SERIES A
COMPANY SYMBOL DESCRIPTION % OF PORTFOLIO
- -------------------------------------------------------------------------------------------
FINANCIAL SERVICES 23%
- -------------------------------------------------------------------------------------------
<S> <C> <C>
CMAC Investment CMT The holding company for
Corporation Commonwealth Mortgage Assurance
Company, CMAC provides private
mortgage insurance coverage.
- -------------------------------------------------------------------------------------------
Franklin Resources, Inc. BEN Specializes in mutual fund operations,
insurance products, and also manages
real estate.
- -------------------------------------------------------------------------------------------
MGIC Investment MTG One of the leading providers of
Corporation mortgage insurance to lenders.
- -------------------------------------------------------------------------------------------
SLM Holding SLM Provides financial services, processing
Corporation capabilities and information technology
for educational institutions, lenders,
students and others.
- -------------------------------------------------------------------------------------------
T. Rowe Price TROW An investment advisor to Rowe Price
Associates, Inc. Mutual Funds, other sponsored
investment products and private
accounts.
- -------------------------------------------------------------------------------------------
ELECTRONIC COMPONENTS 11%
- -------------------------------------------------------------------------------------------
Intel Corporation INTC World-wide manufacturer and vendor of
micro-computer components and related
products.
- -------------------------------------------------------------------------------------------
Linear Technology LLTC Designs, manufactures and markets
Corporation linear integrated circuits for
telecommunications applications.
- -------------------------------------------------------------------------------------------
Xilinx, Inc. XLNX Largest supplier of programmable logic
devices and computer chips that can be
custom-programmed by the user.
- -------------------------------------------------------------------------------------------
TELECOMMUNICATIONS 11%
- -------------------------------------------------------------------------------------------
Ameritech Corporation AIT Provides a variety of communication
services including local and long
distance telephone, paging and on-line
services.
- -------------------------------------------------------------------------------------------
Plantronics, Inc. PLT Manufactures, markets and provides
communication headset products to
telephone companies and businesses
worldwide.
- -------------------------------------------------------------------------------------------
Tellabs, Inc. TLAB Designs, manufactures, markets and
services data, video and voice signals.
- -------------------------------------------------------------------------------------------
COMPUTER SOFTWARE 9.53%
- -------------------------------------------------------------------------------------------
BMC Software, Inc. BMCS Provides systems management solutions
for host mainframe and distributed
information systems. BMC also sells
and provides maintenance, enhancement
and support services for its products.
- -------------------------------------------------------------------------------------------
Cognos, Inc.(1) COGN Supplies business intelligence software
and develops software tools for
application development.
- -------------------------------------------------------------------------------------------
MEDICAL/HEALTH CARE 7%
- -------------------------------------------------------------------------------------------
Lincare Holdings, Inc. LNCR Operating over 260 centers, Lincare
supplies oxygen and other vital
respiratory therapy services to in-home
patients.
- -------------------------------------------------------------------------------------------
Watson WPI Develops, produces, markets, and
Pharmaceuticals, Inc. distributes off-patient and branded
pharmaceutical products.
- -------------------------------------------------------------------------------------------
PROPERTY/CASUALTY INSURANCE 7%
- -------------------------------------------------------------------------------------------
HSB Group, Inc. HSB This holding company provides
insurance against losses from accidents
to boilers, pressure vessels and
mechanical/electrical equipment.
- -------------------------------------------------------------------------------------------
Mutual Risk MM Provides risk-management services for
Management, Ltd.(2) clients who need an alternative to
commercial insurance for their risk
exposure.
- -------------------------------------------------------------------------------------------
AIRLINES 4%
- -------------------------------------------------------------------------------------------
COMAIR Holdings, Inc. COMR The holding company for COMAIR,
Inc., a regional air carrier that serves
approximately 80 cities.
- -------------------------------------------------------------------------------------------
AUTO MANUFACTURING 4%
- -------------------------------------------------------------------------------------------
Ford Motor Company F Manufactures and sells automobiles,
trucks and related parts and accessories
around the world. Provides financial
services through Ford Motor Credit
Company and car rental services
through Hertz Corporation.
- -------------------------------------------------------------------------------------------
BUILDING PRODUCTS 4%
- -------------------------------------------------------------------------------------------
Lone Star Industries, LCE Produces cement, concrete, sand, gravel
Inc. and precast concrete products.
- -------------------------------------------------------------------------------------------
COMMERCIAL SERVICES 4%
- -------------------------------------------------------------------------------------------
Pre-Paid Legal Services, PPD Develops, underwrites and markets
Inc. legal services plans. The company's
plans provide for or reimburse will
preparation, traffic violation defense
and other legal services across the U.S.
- -------------------------------------------------------------------------------------------
GAMING 4%
- -------------------------------------------------------------------------------------------
Anchor Gaming SLOT Operates and develops gaming
machines and casinos. Develops and
distributes proprietary games and
operates two casinos in Colorado.
- -------------------------------------------------------------------------------------------
METAL PROCESSORS 4%
- -------------------------------------------------------------------------------------------
Kaydon Corporation KDN Designs, manufactures and sells
custom-engineered products including
filters, shaft seals, bearing systems and
components.
- -------------------------------------------------------------------------------------------
PUBLISHING/NEWSPAPERS 4%
- -------------------------------------------------------------------------------------------
Washington Post WPO Diversified media organization whose
Company principal operations include
newspaper/magazine publishing,
broadcasting and cable TV systems.
- -------------------------------------------------------------------------------------------
INSTRUMENTS/SCIENTIFIC 3%
- -------------------------------------------------------------------------------------------
Dionex Corporation DNEX Develops, manufactures, markets and
sells chromatography systems for
chemical analysis. These systems are
used by chemists in major industrial,
research and laboratory settings.
- -------------------------------------------------------------------------------------------
MULTIMEDIA 3%
- -------------------------------------------------------------------------------------------
Gannett Company, Inc. GCI Owns/operates 87 daily newspapers
including USA Today, as well as 20
major market television stations and a
cable division serving five states.
- -------------------------------------------------------------------------------------------
- ------------
(1) This is a Canadian corporation. The current annual dividends, if any,
will be subject to withholding tax.
(2) This is a Bermuda corporation. The current annual dividends per share,
if any, will not be subject to withholding tax.
</TABLE>
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 having above-average price volatility. It may not be
appropriate for investors seeking preservation of capital or current income.
o There can be no assurance that the Portfolio will meet its objectives or
that it will outperform general stock indices, especially during periods of
sharply rising stock prices.
o The value of your investment will fluctuate with the prices of the underlying
stocks. Stock prices can be volatile. There can be no assurance that these
prices will not decrease.
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, 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 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 Amount Per 1,000 Units
Offering Price
- --------------------------------------------------------------------------------
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
=============================================
Maximum Sales Charge 2.75% $27.50
Estimated Annual Expenses 0.204% $2.02
(as a % of net assets)
Estimated Organization Costs $3.60
- --------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------
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%
- -------------------------------------------------------------------------
$1,000,000 or more 1.00%
- -------------------------------------------------------------------------
Select Today!
You can get started with the S&P Intrinsic Value Portfolio for about $250.
Call you financial professional for a free prospectus containing more complete
information, including sales charges, expenses and risks. Please read the
prospectus carefully before you invest or send money.
The information in this brochure is not complete and may not be changed. We
may not sell 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 the 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 Industrial Portfolio
Select Standard & Poor's Industry Turnaround 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 Trusts
[recycle logo] Printed on Recycled Paper 11571BR-4/99
(copyright logo) 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
