Defined Asset Funds[SM] Select Series 1999
Capital Appreciation
Quantitative
C
IRA Ideal!
Merrill Lynch
100 Technology
Index
Defined
Technology
Portfolio[SM]
[ML logo] Merrill Lynch
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Merrill Lynch
100 Technology
Index
The Merrill Lynch 100 Technology Index (ML 100 Index) is a benchmark for
technology stocks. It offers a cross section of 100 highly-capitalized
technology stocks, covering important areas of this sector such as computer
software, semiconductors, telecommunications equipment, electronic data
processing and the Internet. The ML 100 Index also includes American
Depositary Receipts (ADRs) for international exposure. The ML 100 Index
follows strict quantitative rules to minimize subjectivity in stock selection,
and only includes stocks that have been tested for liquidity. You can follow
the ML 100 Index on the American Stock Exchange using symbol MLO.
The Technology Sector o It has been considered an investment only for those
with the most robust of temperaments. This sector has shown Wall Street lofty
highs and humble lows, but we believe the technology sector offers great
potential for the future. Defined Asset Funds[SM] gives you a convenient way
to invest in the promise of technology with the . . .
Defined Technology Portfolio[SM]
Why Technology Now?
Imagine your world without cable TV, a cellular phone or a home computer. How
would your place of business operate without on line services and networking
capabilities? While technology companies have seen ups and downs, it's an
industry that continues to redefine the way we live. Although a number of
stocks
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represented in the Index have seen wide variations in performance over the
last several years and others are recent I.P.O.s, this sector continues to
have a long-term and growing impact on our future.
The Enhanced Index Strategy
The Defined Technology Portfolio offers you capital appreciation potential
with a diversified portfolio of technology stocks. By applying a Rebalancing
Model to the Merrill Lynch 100 Technology Index (ML 100 Index), this
Portfolio, which is held for about one year, seeks to out-perform the Index by
reweighting each stock to increase potential return.
The Portfolio follows a disciplined "buy and hold" strategy for index
enhancement. It rebalances the Index to pursue enhanced returns without
increasing risk.
Each year, Defined Asset Funds intends to apply the Rebalancing Model to the
ML 100 Index to create a new Portfolio. You can choose to roll your investment
into a new Defined Technology Portfolio, if available, or you can redeem your
investment. Although this is a one-year investment, we recommend you continue
with this Strategy for at least three to five years for potentially more
consistent results.
If your view of this industry sector should change, Defined Asset Funds offers
you the flexibility to exchange your investment for another Equity Investor
Portfolio at a reduced sales charge.
The Rebalancing Model
Bernard V. Tew, Ph.D., Chairman of Q.E.D. Investments, designed his
quantitative model as a means for improving returns and controlling risks in
speculative equity sectors. Dr. Tew, as Portfolio Consultant for the Defined
Technology Portfolio, works with Defined Asset Funds to apply the following
stock selection process:
Define the Universe
We begin by defining the universe of stocks. In this case, the ML 100 Index is
used for its diversification within the technology sector, as well as its
screening for more highly capitalized stocks.
Reweight the Index
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Stocks in the ML 100 Index are then analyzed by the Portfolio Consultant for
historical correlation relationships, to identify stocks whose prices move
inversely to one another. These relationships create a portfolio of stocks
that complement each other and reduce volatility.
Construct an Enhanced Portfolio
The ML 100 Index is then balanced, stock by stock, from most attractive to
least attractive. Stocks that are considered most attractive, those with the
best prices relative to potential performance, are the most heavily weighted.
Stocks with less attractive prices relative to returns are underweighted. This
reweighting is designed to enhance potential return.
Rebalance the Portfolio
Because the Model works best over a one-year period, Defined Asset Funds and
the Portfolio Consultant plan to construct a new Portfolio each year. The
Model will be reapplied to the ML 100 Index to determine the weightings for a
new Defined Technology Portfolio.
Past Performance of Prior Defined Technology Portfolio
Past Performance is no guarantee of future results.
Series From Inception Through 8/25/99
(including annual rollovers)
-------------------------------------
Inception Series Return
8/25/99 I 74.81%
The chart above shows total return which represents price changes plus
dividends, divided by the initial public offering price, and reflects maximum
sales charges and expenses.
THE MERRILL LYNCH 100 TECHNOLOGY INDEX*
Company Symbol
1 3Com Corporation COMS
2. Adaptec, Inc. ADPT
3. ADC Telecommunications, Inc. ADCT
4. Adobe Systems, Inc. ADBE
5. Advanced Micro Devices, Inc. AMD
6. Alcatel+ ALA
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7. Altera Corporation ALTR
8. Amazon.com, Inc. AMZN
9. America Online, Inc. AOL
10. American Power Conversion Corporation APCC
11. Analog Devices, Inc. ADI
12. Apple Computer, Inc. AAPL
13. Applied Materials, Inc. AMAT
14. ASM Lithography Holding N.V.+ ASML
15. At Home Corporation (Series A) ATHM
16. Autodesk, Inc. ADSK
17. Automatic Data Processing, Inc. AUD
18. Baan Company, N.V.+ BAANF
19. BMC Software, Inc. BMCS
20. Broadcom Corporation (Class A) BRCM
21. Cadence Design Systems, Inc. CDN
22. Ceridian Corporation CEN
23. Cisco Systems, Inc. CSCO
24. Citrix Systems, Inc. CTXS
25. Compaq Computer Corporation CPQ
26. Computer Associates International, Inc. CA
27. Computer Sciences Corporation CSC
28. Compuware Corporation CPWR
29. Dell Computer Corporation DELL
30. eBay, Inc. EBAY
31. E*TRADE Group, Inc. EGRP
32. ECI Telecommunications Limited+ ECIL
33. Electronic Arts, Inc. ERTS
34. Electronic Data Systems Corporation EDS
35. EMC Corporation EMC
36. First Data Corporation FDC
37. Fiserv, Inc. FISV
38. Gartner Group, Inc. (Class A) IT
39. Gateway, Inc. GTW
40. General Instrument Corporation GIC
41. Hewlett-Packard Company HWP
42. Inkotomi Corporation INKT
43. Intel Corporation INTC
44. International Business Machines Corporation IBM
45. Intuit, Inc. INTU
46. Iomega Corporation IOM
47. Jabil Circuit, Inc. JBL
48. J.D. Edwards & Company JDEC
49. JDS Uniphase Corporation JSDU
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50. Keane, Inc. KEA
51. KLA-Tencor Corporation KLAC
52. Lexmark International Group, Inc. (Class A) LXK
53. Linear Technology Corporation LLTC
54. LSI Logic Corporation LSI
55. Lucent Technologies, Inc. LU
56. Maxim Integrated Products, Inc. MXIM
57. Micron Technology, Inc. MU
58. Microsoft Corporation MSFT
59. Molex, Inc. MOLX
60. Motorola, Inc. MOT
61. National Semiconductor Corporation NSM
62. Network Appliance, Inc. NTAP
63. Network Associates, Inc. NETA
64. Newbridge Networks Corporation+ NN
65. Nextel Communications, Inc. NXTL
66. Nokia Corporation+ NOK
67. Nortel Networks Corporation+ NT
68. Novell, Inc. NOVL
69. Oracle Corporation ORCL
70. Parametric Technology Corporation PMTC
71. Paychex, Inc. PAYX
72. PeopleSoft, Inc. PSFT
73. Philips Electronics N.V. PHG
74. QUALCOMM, Inc. QCOM
75. Quantum Corporation - DLT & Storage Systems DSS
76. Rational Software Corporation RATL
77. RealNetworks, Inc. RNWK
78. Sanmina Corporation SANM
79. SAP AG+ SAP
80. SCI Systems, Inc. SCI
81. Seagate Technology, Inc. SEG
82. Siebel Systems, Inc. SEBL
83. Silicon Graphics, Inc. SGI
84. Solectron Corporation SLR
85. Sterling Commerce, Inc. SE
86. STMicroelectronics N.V.+ STM
87. Storage Technology Corporation STK
88. Sun Microsystems, Inc. SUNW
89. Synopsys, Inc. SNPS
90. Tech Data Corporation TECD
91. Telefonaktiebolaget LM Ericsson+ ERICY
92. Tellabs, Inc. TLAB
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93. Teradyne, Inc. TER
94. Texas Instruments, Inc. TXN
95. Unisys Corporation UIS
96. VERITAS Software Corporation VRTS
97. Vitesse Semiconductor Corporation VTSS
98. Xerox Corporation XRX
99. Xilinx, Inc. XLNX
100. Yahoo! Inc. YHOO
* Index as of 8/27/99.
+ The issuer is a foreign corporation; any dividends will be subject to
withholding taxes.
Defined Asset Funds[SM]
Buy with Knowledge o Hold with Confidence
FIXED-INCOME FUNDS
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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.
Invest in Technology Today!
You can get started with the Defined Technology Portfolio for about $250. Call
your Financial Consultant 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.
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o There can be no assurance that the Portfolio will meet its objective.
o The Portfolio is designed for investors who can assume the additional
risks associated with aggressive growth equity investments, and may not be
appropriate for investors seeking capital preservation or high current
income.
o The Portfolio is composed of aggressive growth stocks that are subject to
extreme price volatility; therefore, it may be considered speculative.
o The Portfolio consists exclusively of stocks from the technology sector
and should not be considered a complete investment program.
o The Portfolio does not reflect research opinions or any buy or sell
recommendations from the Sponsor.
Tax Reporting
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 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. However, on rollovers to 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
Offering Price 1,00 Units
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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) 0.187% $ 1.85
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Estimated Organization Costs $ 1.54
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If you sell your units before the termination date, the remaining balance of
your deferred sales charge, along with the estimated costs of selling
Portfolio securities, will be deducted from the proceeds you receive. 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 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
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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 to $4,999,999 1.00%
$5,000,000 or more 0.60%
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The information is 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.
70116BR-8/99
(C)1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated. Member SPIC.
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