Defined Asset FundsSM
Focus Series
Capital Appreciation
Fundamental Research
IRA Ideal!
Pacific Rim Portfolio
Investing in the Potential of Asian Markets
[logo] Merrill Lynch
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Merrill Lynch Research:
A Reputations for Excellence
With more than 500 equity research analysts globally, Merrill Lynch is a world-
class research organization. Its Global Research & Economics Group provides
in-depth coverage of more than 4,000 companies in 53 countries worldwide.
The Focus Series
Like each Portfolio in the Focus Series, the Pacific Rim Portfolio employs a
research-driven "buy and hold" philosophy. Through a proprietary selection
process, Merrill Lynch seeks out attractive stocks for the Portfolio from within
promising Asian countries and industry sectors, and holds them for about two
years. At the end of that time, the selection process may be reapplied, and a
new Portfolio may be selected. At that time, you can either reinvest in the new
Portfolio, if available, exchange your investment for another Focus or Select
Series Portfolio, or redeem your investment.
Asian/Pacific Rim economies have seen their share of tumult, but behind the
negative headlines, we believe the potential exists for attractive investment.
Contrarian investors know that bad news can present special investment
opportunities. At Merrill Lynch, we believe such opportunities can be found
across the Asian/Pacific Rim region.
Defined Asset FundsSM, in conjunction with Merrill Lynch Research, is pleased to
offer you a convenient way to participate in the potential of Pacific Rim
markets with our new...
Pacific Rim Portfolio
Why Asia?
Asian governments and businesses are beginning to acknowledge their fiscal and
monetary shortcomings of the recent past. The result is new economic policies
and more consolidated corporations. We believe that over the long-term, Pacific
Rim markets may show promising up-side potential for several reasons.
Company Balance Sheets Are Under Repair
Many Asian companies are deleveraging--they're paying their debts and selling
off non-core assets. As they clean up their balance sheets, they may increase
their equity value.
Currencies Are Stabilizing And Are Potentially Undervalued
Money and credit creation is down, and the decline in spending has increased
savings. Deficits in certain Pacific Rim countries are already turning toward
surpluses.
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As Liquidity Improves, Interest Rates May Fall
As regional economies deleverage and restructure, there is less borrowing from
banks, which helps to build the economies' liquidity. As liquidity increases and
corporate debt is paid down, interest rates could fall, creating an improved
credit environment.
Capital Markets May Be Upgraded
As the corporate sector deleverages, banks stabilize and earnings volatility
slows, capital markets in the region may be upgraded.
Foreign Direct Investment Is On The Rise
Many foreign companies are choosing to increase their profiles across the
region, which can increase economic growth and consumer confidence.
Savings Rates
High domestic savings rates may be the single most important factor in each
country's ability to turn around economically.
The Portfolio
The Pacific Rim Portfolio highlights 34 stocks from nine Pacific Rim countries
that Merrill Lynch believes may benefit from some of these promising trends. The
stocks are selected by the Merrill Lynch Global Research & Economics Group for
their potential for growth over the two-year life of the Portfolio. Each stock
in the Portfolio is also analyzed for market capitalization and liquidity by the
Defined Asset Funds Research Group.
Portfolio Breakdown by Industry
Telecommunications 22%
Electronic Equipment 20%
Automobiles 10%
Money Center Banks 8%
Medical/Drugs 6%
Brewery 5%
Retail/Diversified 5%
Office Automation & Equipment 4%
Steel 4%
Distribution/Wholesale 3%
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Diversified Operations 3%
Electronic Component/Semiconductor 3%
Construction 2%
Electric-Integrated 2%
Multimedia 2%
Paper Products 1%
A DEFINED PORTFOLIO
Company Symbol
Japan
Bank of Tokyo-Mitsubishi, Ltd. MBK
Through its global subsidiaries, the company offers commercial,
investment and trust banking products and services. It was formed
through the merger of the Bank of Tokyo and the Mitsubishi Bank on
April 1, 1996.
Canon, Inc. CANNY
Canon makes color laser and high-speed copiers, midrange copiers, 35mm
cameras and video equipment, as well as computer peripherals, aligners
for semiconductor chip production, broadcasting lenses and medical
equipment.
DDI Corporation DDICF
DDI provides long distance telephone services and mobile communications
such as the Personal Handy-phone System (PHS) and cellular phone
services.
Hitachi, Ltd. HIT
Hitachi builds communications and electronic equipment, heavy
electronic and industrial machinery and consumer electronics, with
subsidiaries in the chemical, wire and cable, shipbuilding and
aerospace industries.
Honda Motor Company., Ltd. HMC
The company develops, manufactures, distributes and finances
motorcycles, automobiles and power products.
JUSCO Co., Ltd. JUSCY
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JUSCO provides a variety of retail consumer products and services,
including clothing, food, household goods, electric appliances,
furniture, cosmetics, tobacco and firearms.
Kirin Brewery Company, Ltd. KNBWY
Kirin brews beer and produces soft drinks, food products, whiskey and
pharmaceuticals. The company has 15 breweries located throughout Japan.
Its "Kirin" brand beer is sold in more than 30 countries around the
world.
Matsushita Electric Industrial Company, Ltd. MC
This company produces and markets video, audio, home systems,
telecommunications and industrial equipment under the brand names
National, Panasonic, Technics, Quasar, Victor and JVC.
NEC Corporation NIPNY
NEC manufactures and markets computers, telecommunications devices,
electric appliances, circuit boards, instruments and accessories for
medical equipment and aircraft, and serves as an information provider
for computer communication.
Nippon Telegraph & Telephone Corporation NTT
NTT provides a variety of telecommunications services including
telephone, telegraph, leased circuits, data communication, terminal
equipment sales, and local and long-distance telephone services.
Softbank Corporation SFTBF
Wholesaler of PC software and public of PC-related materials. The
company is also engaged in the net-working and satellite broadcasting
business.
Sony Corporation SNE
Sony develops and manufactures a variety of consumer and industrial
electronic equipment and is active in the worldwide music and image-
based software markets.
Suzuki Motor Corporation SZKMF
Manufactures compact cars, motorcycles and related parts. The company
makes automobiles in Canada, India, Pakistan and Spain.
Yamanouchi Pharmaceutical Co., Inc. YNCHF
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Yamanouchi makes and sells pharmaceuticals for both human and
veterinary use, and produces cosmetics and health foods through its
subsidiaries.
Hong Kong
Asia Satellite Telecommunications Holdings, Ltd. SAT
Provides satellite transponder capacity through its subsidiaries in
Asia.
China Telecom (Hong Kong), Ltd. CHL
Provides cellular telecommunications services in the People's Republic
of China.
HSBC Holdings plc HBC
The holding company for the HSBC Group, an international banking and
financial services organization.
Hutchison Whampoa, Ltd. HUWHY
Has extensive interests in shipping, food processing and distribution,
retailing, manufacturing and real estate.
Indonesia
PT Indosat (Persero) Tbk* IT
Provides domestic international telecommunications services.
Taiwan
Asustek Computer, Inc.+ ASUJF
Asustek manufactures and markets computer motherboards, Pentium
II/Pentium Pro, Pentium and 486-based motherboards.
China Steel Corporation+ CEESF
Makes and sells various steel products.
Taiwan Semiconductor Manufacturing Company, Ltd.* TSM
An affiliate of Philips Electronics N.V., Taiwan Semiconductor makes
integrated circuits based on its proprietary designs, offering a
comprehensive set of integrated-circuit fabrication processes.
South Korea
Korea Electric Power Corporation* KEP
KEPCO generates and supplies electric power to industrial and
residential customers. The majority of the company is owned by the
Korean government.
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Pohang Iron & Steel Company, Ltd.* PKX
Pohang manufactures hot and cold rolled steel products, heavy plate and
other steel products for construction and shipbuilding industries.
Samsung Electronics+ SSEKF
Manufactures precision and other electronic parts including TV, audio,
VCR and PC parts, tuners, video head drums and precision motors.
SK Telecom Company, Ltd.* SKM
Provides mobile telecommunications and paging services in Korea and
India. The company offers subscribers digital cellular service and
business features such as wireless fax and data transmission.
Thailand
Advanced Info Service Public Company, Ltd. AVIVF
This company has been granted a 20-year concession, expiring in the
year 2010, to provide cellular phone services. Through its
subsidiaries, it operates paging services.
Siam Cement Public Company, Ltd. SCVPF
Siam Cement manufactures and distributes cement, construction
materials, ceramics, steel, automotive accessories and petrochemicals.
Australia
News Corporation, Ltd. NWS
This international media company's operations include the production
and distribution of motion pictures and television programming,
television, satellite and cable broadcasting and print publications.
Telstra Corporation, Ltd. TLS
A full-service domestic and international telecommunications provider
for Australia.
New Zealand
Telecom Corporation of New Zealand, Ltd. NZT
This company provides telecommunication services throughout New
Zealand, offering local, national and international services to
households and businesses.
Singapore
Asia Pulp & Paper Company, Ltd.* PAP
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Through its subsidiaries, this company produces a variety of printing
and writing paper, including coated and uncoated freesheets, cut-sized
photocopier paper and stationery and carbonless paper.
Datacraft Asia, Ltd. DKKSF
Designs, develops, markets and services data communications systems.
The company builds telecommunications and Internet infrastructure and
corporate information networks across Asia, New Zealand and the U.S.A.
Oversea-Chinese Banking Corporation, Ltd. OVCNF
This company provides banking and finance services, including retail
and wholesale banking, investment management, stockbroking, corporate
finance, venture capital, nominee and trustee services, property
investment and development.
*American Depositary Receipts.
+Global Depositary Receipts.
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Defined Asset FundsSM
Buy With Knowledge o Hold With Confidence
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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.
How to Get Started!
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You can start investing in the potential of the Pacific Rim markets today for
about $250 for regular or retirement accounts. Call your Merrill Lynch Financial
Consultant for a free prospectus containing more complete information including
sales charges, expenses and risks including those associated with investing in
international equities. Please read it carefully before you invest or send
money.
Defining Your Risks
The following are important facts to keep in mind when considering this
investment:
o The Portfolio is designed for investors who want to invest a portion of
their assets in Asian equities. The Portfolio is concentrated in Asian
stocks, particularly in Japanese issuers.
o The Portfolio may be considered speculative, and is appropriate for only
those investors who can assume the increased risks of higher price
volatility and currency fluctuations associated with investments in
international equities. The Portfolio may also be affected by foreign
government regulations, including currency freezes, and political
developments.
o The value of your investment will fluctuate with the prices of the
underlying stocks and with the value of the U.S. dollar relative to the
various foreign currencies represented in the Portfolio. In general, Asian
stocks have suffered significant declines in the last few years. There can
be no assurance that this trend will not continue.
o This investment is not appropriate for investors seeking capital
preservation or high current income.
o There can be no guarantee that the Portfolio will meet its objective or
that Merrill Lynch research analysts will continue to recommend investment
in the Portfolio's stocks.
Tax Reporting
Your taxable income is expected to include foreign withholding taxes. However,
subject to limitations, you may be able to credit these taxes against your U.S.
federal income taxes. This Portfolio may not be appropriate for foreign
investors who would not be subject to U.S. withholding taxes if they directly
owned the securities held by the Portfolio.
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Generally, dividends and any net capital gains will be subject to tax each year,
whether or not invested. By holding this Fund for more than one year, investors
may be eligible for favorable federal tax rates on net long-term capital gains
(currently no more than 20%) for individuals. 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 seven monthly payments of
$2.50 per 1,000 units, deducted from the Portfolio's net asset value each year
of the Portfolio's two-year life ($35.00 total).
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
Year 1
Deferred Sales Charge 1.75% $17.50
Year 2
Maximum Sales Charge 4.50% $45.00
Estimated Annual 0.394% $3.90
Expenses (as a % of net
assets)
Estimated Organization $1.60
Costs
If you sell your investment before the final deferred sales charge installment
in either the first or second year, the remaining deferred sales charges for
that year will be deducted, along with the estimated costs of selling Portfolio
securities. If you roll over to a successor Portfolio, if available, the initial
sales charge on that Portfolio will be waived. You will only pay the deferred
charge.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of your
investment dollars to work for you.
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Amount Purchased Total Two-Year Sales Charge as a %
of Public Offering Price
Less than $50,000 4.50%
$50,000 to $99,999 4.25%
$100,000 to $249,999 3.75%
$250,000 to $999,999 3.50%
$1,000,000 or more 2.75%
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.
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