Defined Asset FundsSM
Performance Summary
2nd Quarter 1999
IRA Ideal!
The Select
S&P Industrial
Portfolio
Take Indexing
to Another Level...
[LOGO] Merrill Lynch
<PAGE>
SELECT S&P INDUSTRIAL PORTFOLIO o PERFORMANCE SUMMARY
2ND QUARTER o 1999
Indexing - it's a strategy to mirror the returns of major indices. Why not take
it to another level?
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 from 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 for high dividend yield and potential value.
Past Performance of Prior Select S&P Industrial Portfolios
Past performance is no guarantee of future results.
Series From Inception Through 6/30/99
(including annual rollovers)
Inception Series Return
1/22/97 A 15.32%
2/24/97 B 15.78
4/21/97 C 18.13
6/9/97 D 11.08
7/21/97 E 11.39
9/8/97 F 15.53
10/20/97 G 9.76
12/2/97 H 8.74
1/8/98 J 8.11
Most Recently Completed Portfolio
Period Series Return
2/9/98-3/19/99 A 5.92%
3/23/98-4/23/99 B 6.13
4/27/98-6/04/99 C 12.29
6/9/97-7/17/98 D 19.39
7/21/97-8/21/98 E 8.25
9/8/97-10/2/98 F 9.95
10/20/97-12/4/98 G 14.22
12/2/97-1/8/99 H 17.47
1/8/98-2/8/99 J 10.13
2
<PAGE>
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.
Hypothetical Past Performance of the Strategy (not any Portfolio)
Growth of $10,000 Invested Over 25 Years -- 1/1/74 Through 6/30/99
Strategy+..............$613,317 S&P 500 Index*...................$347,257
DJIA...................$347,602 S&P Industrial Index.............$345,272
Growth of $10,000 Invested Over 26 Years -- 1/1/73 Through 6/30/99
[A mountain chart, captioned "Growth of $10,000 Invested Over 26 Years
- -- 1/1/73 through 6/30/99" compares the cumulative annual performance from 1973
through 6/30/99 of the Strategy(+) (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 6/30/99. The vertical
or (X) axis reflects DOLLAR AMOUNT value for each index from 1973 ending
6/30/99. The initial value of each investment is $10,000. Throughout the period
from 1973 through June 30, 1999, 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 ($495,109), the ending value of
the S&P 500 Index ($296,349), the ending value of the S&P Industrial Index
($294,828) and the ending value of the DJIA ($301,997).]
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 S&P Industrial Index in 9 of the
last 26 years. The Portfolio does not reflect the research opinions or any buy
or sell recommendations of any of the Sponsers or Standard & Poor's.*
Average Annual Total Returns
3
<PAGE>
For periods ending 12/31/98 3 year 5 year 10 year 15 year 20 year 25 year
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 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.
* "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.
+ Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses.
Annual Total Returns
S&P S&P
500 Industrial
Year Strategy + DJIA Index Index
1973 -20.13% -13.12% -14.66% -14.61%
1974 -5.35 -23.14 -26.47 -26.54
1975 40.63 44.40 36.92 36.78
1976 30.89 22.72 23.53 22.59
1977 -6.53 -12.71 -7.19 -8.20
1978 6.06 2.69 6.39 7.50
1979 26.47 10.52 18.02 18.40
1980 18.23 21.41 31.50 32.98
1981 7.67 -3.40 -4.83 -6.69
1982 25.87 25.79 20.26 20.14
1983 24.72 25.68 22.27 22.79
1984 12.34 1.06 5.95 4.09
1985 29.98 32.78 31.43 30.08
1986 28.78 26.91 18.37 18.54
1987 2.52 6.02 5.67 9.13
1988 42.04 15.95 16.58 15.80
1989 35.40 31.71 31.11 29.30
1990 0.96 -0.57 -3.20 -0.84
1991 27.06 23.93 30.51 30.39
4
<PAGE>
S&P S&P
500 Industrial
Year Strategy + DJIA Index Index
1992 11.50 7.34 7.67 5.63
1993 2.28 16.72 9.97 8.90
1994 11.41 4.95 1.30 3.75
1995 36.68 36.48 37.10 34.26
1996 12.25 28.57 22.69 22.70
1997 33.34 24.78 33.10 30.80
1998 15.10 18.00 28.34 33.43
6/30/99 -0.20 20.37 12.33 12.64
Average 15.86% 13.72% 13.64% 13.62%
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.
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 also in the Dow Jones Industrial Average*
(DJIA).
2. Quality Screen: We only consider 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,
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.
5
<PAGE>
3. Market Capitalization: We then rank the stocks by market capitalization and
eliminate the lowest 25%. This allows the Portfolio to avoid smaller, less
liquid issues.
4. Dividend Yield: Finally, we rank the remaining stocks according to dividend
yield. From this group, we select the 15 highest dividend-yielding stocks
for the Portfolio whose prices might be undervalued.
Go to Another Level!
You can get started today 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.
Defined Asset Funds
Buy With Knowledge - Hold With Confidence
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 or high current income.
o There can be no assurance 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.
6
<PAGE>
o Owning units of the Portfolio may result in annual federal, state and local
taxes, some of which can be deferred by rolling over into the next
Portfolio, if available. Please consult your tax advisor.
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.
[LOGO] Printed on Recycled Paper 70110SJ-7/99
(C) 1999 Merril Lynch, Pierce, Fenner & Smith Incorpotated. Member SIPC.
7
