Defined Asset Funds
Select Series 1999
Capital Appreciation
Quantitative
B
IRA Ideal!
Institutional Holdings Portfolio
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A Multi-Disciplined Strategy Based on the Amex Institutional Index
[logo] Merrill Lynch
The Amex Institutional Index
When it comes to finding a group of large, well-established companies, the
Amex Institutional Index* can help. It represents the 75 stocks most widely
held among professionally managed institutional portfolios with market values
in excess of $100 million. Its stocks are reviewed quarterly, and the Index
is adjusted as necessary to keep current with institutional investments.
Total Returns Comparison
Year Amex Amex S&P 500
Strategy(1) Index Index*
(not any portfolio)
1984 0.0% 4.9% 6.0%
1985 38.1 31.1 31.4
1986 20.7 19.7 18.4
1987 11.4 6.6 5.7
1988 1.4 13.8 6.6
1989 29.3 33.2 31.1
1990 0.0 0.5 -3.2
1991 33.5 28.4 30.5
1992 4.9 4.1 7.7
1993 24.5 7.5 10.0
1994 -2.1 2.6 1.3
1995 39.9 39.7 37.1
1996 37.2 26.2 22.7
1997 37.5 34.0 33.1
1998 40.5 38.7 28.3
6/30/99 12.5 11.8 12.3
Average 20.2% 18.8% 18.0%
Average Annualized Returns
For periods ending 12/31/98
Year Amex Amex S&P 500
Strategy(1) Index Index*
3 Year 38.1% 32.9% 27.97%
5 Year 29.2 27.5 23.82
10 Year 23.3 20.5 19.03
15 Year 20.0 18.6 17.74
Hypothetical past performance of the Strategy is no assurance of future
results of any Portfolio. 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,
stocks may not be weighted equally.
A quantitative approach to portfolio management can sometimes reveal unseen
investment opportunities. Combining both fundamental and technical
stock-selection techniques can broaden your portfolio. Now, by applying our
Multi-Disciplined Strategy to a large-cap index, Defined Asset Funds SM offers
you a diversified plan for quantitative investing with our new...
Institutional Holdings Portfolio
Nearly Everything Moves in Cycles
o Economies o Industries
o Markets o Investment Styles
Being prepared for life's inevitable transitions can often mean the difference
between a gentle roll and a wild ride. The same holds true for the changes
that affect our investments. Defined Asset Funds' multi-disciplined
investment approach is a strategy based on several stock-
selection methodologies. It selects issues from each and combines them to
produce a 20-stock portfolio with complementary investment style
characteristics.
Financial Success is a Journey, Not a Destination
Defined Asset Funds' view is that achieving financial security is a long-term
process, best accomplished by investing in a consistent and disciplined
manner. We recognize that predicting the market over the short term is almost
impossible. We also recognize that human emotions can interfere with the
execution of a sound and logical investment strategy. The new
Multi-disciplined Strategy is designed to facilitate an ordered and rational
approach to long-
term investing, to help keep you on track toward achieving your financial
goals.
The Selection Model
Using the Amex Institutional Index (excluding utilities) as our universe of
stocks, we selected stocks for the Portfolio by applying a proprietary
screening process that focuses on a combination of fundamental and technical
factors with an emphasis on momentum. The tests consist of:
o Price Momentum o Price/Earnings Ratio
o Recovery o Dividend Yield
We then chose the top-ranked issues from each category and combined them into
a single portfolio. The resulting collection of large-cap stocks benefits
from the balance of fundamental and technical methodologies built into the
selection screens. While there can be no guarantee of results, the objective
of this Multi-Disciplined Strategy is intended to produce a balanced and
diversified portfolio of large-cap stocks -- all components of the Amex
Institutional Index. However, the current portfolio is concentrated in
technology stocks and each screen reflects a momentum element.
Stay with the Strategy
When the Portfolio ends, you can choose to roll your investment into a new
Institutional Holdings Portfolio, if available, or you can redeem your
investment. Although this is a one-
year investment, we suggest you continue with this strategy for at least three
to five years for potentially more consistent results.
If your investment objective should change, Defined Asset Funds offers you the
flexibility to exchange your investment for certain other Defined Asset Funds
Portfolios at a reduced sales charge.
* "Standard & Poor's" and "S&P 500 Index" are trademarks of The McGraw-Hill
Companies, Inc. "Amex" and "Amex Institutional Index" are trademarks of the
American Stock Exchange, LLC, a subsidiary of the NASD, and have been licensed
for use by Defined Asset Funds. The Portfolio is not sponsored, managed, sold
or promoted by Standard & Poor's or the American Stock Exchange. The American
Stock Exchange does not guarantee the accuracy or completeness of the Amex
Institution Index.
(1) Hypothetical returns are net of Portfolio sales charges (2.75% for the first
year, 1.75% for each subsequent year) and estimated expenses.
A MULTI-DISCIPLINED PORTFOLIO
Company Symbol
AlliedSignal, Inc. ALD
America Online, Inc.++ AOL
American Express Co. AXP
Amgen, Inc.++ AMGN
Anheuser-Busch Companies, Inc. BUD
BP Amoco Plc# BPA
Bristol-Myers Squibb Co. BMY
Chase Manhattan Corporation CMB
Citigroup, Inc. C
Hewlett-Packard Co. HWP
Intel Corporation INTC
International Business Machines Corporation IBM
Johnson & Johnson JNJ
Mobil Corporation MOB
Motorola, Inc. MOT
Royal Dutch Petroleum Co.# RD
Schlumberger Limited SLB
Sun Microsystems, Inc.++ SUNW
Texas Instruments, Inc. TXN
United Technologies Corporation UTX
++ These stocks currently pay no dividends.
# The issuer is a foreign corporation; dividends, if any, will be subject to
withholding taxes.
STRATEGY
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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.
Defined Asset Funds
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EQUITY INVESTOR FUNDS
Other Select Series
Select Ten Portfolio (DJIA)
United Kingdom Portfolio
(Financial Times Index)
Select Growth Portfolio
Select Large-Cap Growth Portfolio
Select S&P Industrial Portfolio
Select Standard & Poor's
Industry Turnaround Portfolio
Select Standard & Poor's
Intrinsic Value Portfolio
Concept Series
Baby Boom Economy Portfolios SM
Health Care Trust
Internet 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 Funds
Invest in the Multi-Disciplined Approach Today!
You can get started with about $250 for regular or retirement accounts. 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.
On the Cover: Gyroscopes
A gyroscope is a wheel or disk mounted to spin rapidly about an axis. As it
twirls, it resists shearing forces applied to its axis of rotation. Like a
child's spinning top, a gyroscope seeks to maintain its balance despite
changing external influences.
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.
- - There can be no assurance that the Portfolio will meet its objective.
- - 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.
- - The value of your investment will fluctuate with the prices of the
underlying stocks. Stock prices can be volatile.
- - The Portfolio is concentrated in stocks in the technology sector, which may
involve special risks.
- - Each screen involves an element of momentum, which may result in
underperformance in declining markets.
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%) for individuals.
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 for federal tax purposes
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 1,000 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 Expenses
(as a % of net assets) 0.203% $2.01
Estimated Organization Costs $1.98
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If you sell your units before the termination date, 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 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 or more 1.00%
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The information in this brochure is not complete and may 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 their offer or sale is not permitted.
