Defined Asset Funds[SM] Select Series Income & Growth
1999 Quantitative Research
F
IRA Ideal!
The Select
S&P
Portfolio
Taking Indexing
to Another Level ...
Merrill Lynch
<PAGE>
Indexing -- it's a strategy to mirror the returns for major indices. Why not
take a step beyond?
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 capital
appreciation potential and current dividend income.
This value oriented Portfolio seeks total return through a contrarian strategy
of selecting 15 stocks from the Index with high dividend yields.
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.
Select S&P Industrial Portfolio -- 1999 Series F+
Name of Issuer Ticker Current Dividend
Symbol Yield++
1. UST, Inc. UST 5.20%
2. ConAgra, Inc. CAG 2.87
3. Newell Rubbermaid, Inc. NWL 2.55
4. May Department Stores MAY 2.32
Company
5. Air Products and Chemicals, APD 2.23
Inc.
6. Rohm and Haas Company ROH 2.09
7. Emerson Electric Company EMR 2.01
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8. American Home Products AHP 1.97
Corporation
9. Hershey Foods Corporation HSY 1.97
10. Bestfoods BFO 1.93
11. The Clorox Company CLX 1.90
12. ALLTEL Corporation AT 1.79
13. Avery Dennison Corporation AVY 1.72
14. Textron, Inc. TXT 1.72
15. PepsiCo, Inc. PEP 1.60
The Portfolio does not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors or Standard & Poor's.*
+ Initial date of deposit -- September 20, 1999.
++ Current dividend yield for each stock was calculated by annualizing the last
monthly, quarterly or semi- annual ordinary dividend received on that stock
and dividing the result by its market value as of the close of trading on
September 17, 1999. There can be no assurance that future dividends, if any,
will be maintained at the indicated rates.
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Past Performance of Prior Select S&P Industrial Portfolios
Past performance is no guarantee of future results.
Series From Inception Through Most Recently Completed Portfolio
6/30/99
(including annual rollovers)
Inception Series Return Period Series Return
1/22/97 A 15.32% 2/9/98-3/19/99 A 5.92%
2/24/97 B 15.78 3/23/98-4/23/99 B 6.13
4/21/97 C 18.13 4/27/97-6/04/99 C 12.29
6/9/97 D 11.08 6/9/97-7/17/98 D 19.39
7/21/97 E 11.39 7/21/97-8/21/98 E 8.25
9/8/97 F 15.53 9/8/97-10/2/98 F 9.95
10/20/97 G 9.76 10/20/97-12/4/98 G 14.22
12/2/97 H 8.74 12/2/97-1/8/99 H 17.47
1/8/98 J 8.11 1/8/98-2/8/99 J 10.13
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.
Avoid the teachings of speculators whose judgments are not confirmed by
experience.
Leonardo DaVinci
The Selection Process
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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 that are 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 stocks 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.
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 that group we select the 15 highest-dividend yielding stocks for
the Portfolio, whose prices may be undervalued.
* "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.
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
[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 1999 between the Strategy (net of sales charges and expenses)(orange),
the DJIA (pink), the S&P 500 Index (purple), and the S&P Industrial Index
(green). The x axis reflects years in one year increments. The initial value
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of each is $10,000; the ending values are as follows: $495,109
(Strategy); $301,997 (DJIA), $296,349 (S&P 500), $294,828 (S&P Industrial). ]
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 the S&P Industrial Index in 9 of
the last 26 years.
Annual Total Returns
Year Strategy(+) DJIA S&P 500 S&P Industrial 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
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 36.38 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%
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Average Annual Total Returns
For periods 3 year 5 year 10 year 15 year 20 year 25 year
ending
12/31/98
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 28.89% 24.43% 19.09% 17.77% 17.51% 14.67%
Index
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.
(+) Net of Portfolio sales charges (2.75% for the first year, 1.75% for each
subsequent year) and estimated expenses.
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<TABLE>
<S> <C> <C> <C>
Defined Asset Funds Equity Investor Funds Select Standard & Poor's Tele-Global Trust
Buy with Intrinsic Value Portfolio Utility Portfolio
Knowledge - Hold Other Select Series Index Series
With Confidence Select Ten Portfolio Concept Series S&P 500 Trust
(DJIA) Baby Boom Economy S&P MidCap Trust
United Kingdom Portfolios[SM]
Portfolio Financial Portfolio Fixed-Income
(Financial Times Health Care Trust Funds
Index) Internet Portfolio
Institutional Holdings Premier American Corporate Funds
Portfolio Portfolio
Select Growth Portfolio Premier World Portfolio Government Funds
Select Large-Cap Real Estate Income Fund
Growth Portfolio Municipal Funds
Select Standard &
Poor's Industry
Turnaround Portfolio
</TABLE>
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.
Take a Step Beyond!
You can get started 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,
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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.
* 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.
* There can be no assurance that the Portfolio will meet its objective, that
dividend rates will be maintained, that stock or unit prices will not
decrease over the life of the Portfolio or that the Portfolio will
outperform the indices.
* The value of your investment will fluctuate with the prices of the
underlying stocks. Stock prices can be volatile.
* 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 contributed to these relatively low
prices and high yields will change.
* Stocks are chosen for characteristics such as value, which may be at odds
with those of the stocks driving the market at a given time.
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.
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As a % of Public Amounts Per
Offering Price 1,000 Units
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
Maximum Sales Charge 2.75% $27.50
Estimated Annual Expenses .201% $1.99
(as a % of net assets)
Estimated Organization Costs $0.89
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
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%
The information of 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.
11579BR - 9/99
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