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DEFINED ASSET FUNDS--REGISTERED TRADEMARK--
----------------------------------------------------
EQUITY INVESTOR FUND
FOCUS SERIES
GLOBAL THEME AND
SECTOR PORTFOLIO 2000
(A UNIT INVESTMENT TRUST)
- CAPITAL APPRECIATION
- PROFESSIONAL SELECTION
- EXPOSURE TO POTENTIAL GROWTH
IN DOMESTIC AND
GLOBAL SECTORS
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The Securities and Exchange Commission has not
SPONSOR: approved or disapproved these Securities or passed
MERRILL LYNCH, upon the adequacy of this prospectus. Any
PIERCE, FENNER & SMITH representation to the contrary is a criminal offense.
INCORPORATED Prospectus dated February 3, 2000.
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Def ined Asset Funds-Registered Trademark-
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, risk tolerance or time horizon, there's
probably a Defined Asset Fund that suits your investment style. Your financial
professional can help you select a Defined Asset Fund that works best for your
investment portfolio.
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CONTENTS
PAGE
--
Risk/Return Summary.................. 3
What You Can Expect From Your
Investment......................... 6
Income............................. 6
Records and Reports................ 6
The Risks You Face................... 6
Concentration Risk................. 6
Litigation Risks................... 8
Selling or Exchanging Units.......... 8
Sponsor's Secondary Market......... 8
Selling Units to the Trustee....... 9
Rollover/Exchange Option........... 9
How The Fund Works................... 10
Pricing............................ 10
Evaluations........................ 10
Income............................. 11
Expenses........................... 11
Portfolio Changes.................. 12
Portfolio Termination.............. 12
No Certificates.................... 12
Trust Indenture.................... 12
Legal Opinion...................... 13
Auditors........................... 13
Sponsor............................ 13
Trustee............................ 14
Underwriters' and Sponsor's
Profits.......................... 14
Public Distribution................ 14
Code of Ethics..................... 15
Advertising and Sales Literature... 15
Taxes................................ 15
Supplemental Information............. 17
Financial Statements................. 18
Report of Independent Accountants.. 18
Statement of Condition............. 18
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RISK/RETURN SUMMARY
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1. WHAT IS THE PORTFOLIO'S OBJECTIVE?
The Portfolio seeks capital appreciation
by investing in a fixed portfolio of 27
common stocks.
You can participate in the Portfolio by
purchasing units. Each unit represents an
equal share of the stocks in the Portfolio
and receives an equal share of income and
principal distributions, if any.
2. WHAT IS THE PORTFOLIO'S INVESTMENT
STRATEGY?
The Portfolio contains 27 stocks primarily
from Japan, Europe and the U.S. in the
cable/wireless and technology/internet
sectors. These stocks and sectors were
highlighted by analysts from the Merrill
Lynch Global Research Group at a Merrill
Lynch Global Teleconference on January 20,
2000. For the following reasons, the
analysts believe these stocks and sectors
have above-average potential for growth,
particularly over the next year.
- The economy has been strong for the last
few years and is expected to continue to
grow over the next year in both the United
States and throughout the world as
spending for technology continues.
E-commerce and restructuring in Japan and
Europe are leading to an increase in price
competition, while inflation is likely to
remain low.
- The European economy recovered in 1999 and
we anticipate growth acceleration this
year. Cross-border mergers are possible as
companies begin to think internationally.
We believe that information technology and
cyclical companies are likely to foster
this economic growth.
- With an increase in both capital spending
and merger and acquisition activities, we
believe the Japanese economy's recovery is
likely to continue. We expect bottom line
profits to improve due to cost cutting and
restructuring. This along with a stable
economic environment have the potential to
contribute to Japan's overall growth.
- We believe favorable regulatory trends,
which have enabled telephone companies and
cable providers to cross their traditional
service boundaries and offer multi-service
packages, as well as the privatization of
government-owned telephone companies are
likely to continue and may have a
favorable impact on the profitability of
some foreign telecommunications companies.
- The rapid evolution of the technology and
Internet industry has led to increased
spending for technology worldwide. Global
usage is multiplying as the industry
continues to evolve. Universal access,
e-Commerce and new Internet appliances
have all contributed to this growth.
The stocks will be held in the Portfolio
for about one year. At the end of the
year, we will liquidate the Portfolio and
apply a similar Strategy to select a new
portfolio, if available.
3. WHAT INDUSTRIES ARE REPRESENTED IN THE
PORTFOLIO?
Based upon the principal business of each
issuer and current market values, the
Portfolio represents the following
industries:
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- Telecommunications Equipment/
Services 26%
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- Internet Software/Content 22
- Miscellaneous 18
- Electronic Components 15
- Cable TV 7
- Computer Software 4
- E-Commerce 4
- Networking Products 4
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Defined Portfolio
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Equity Investor Fund
Focus Series
Global Theme and Sector Portfolio 2000 Series
Defined Asset Funds
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Finland 1. Nokia Corporation+* 3.71% 184.0000 $ 18,400.00
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France 2. Pechiney SA+* 3.71 34.7500 18,417.50
Germany 3. SAP AG+* 3.69 65.3750 18,305.00
Japan 4. KYOCERA Corporation+* 3.45 170.8533 17,085.33
5.Matsushita Communication 4.01 198.7440 19,874.40
Industrial Company Limited+*
6. Mitsubishi Estate Company, 4.17 10.3436 20,687.11
Limited+*
7. The Sakura Bank, Limited+* 3.78 6.2431 18,729.22
8. SOFTBANK Corporation+* 3.84 951.2375 19,024.75
9. Suzuki Motor Corporation+* 3.23 16.0048 16,004.80
Netherlands 10. Philips Electronics N.V.+* 3.75 154.7500 18,570.00
11. Royal Dutch Petroleum Company+* 3.69 55.4375 18,294.38
Sweden 12. Telefonaktiebolaget LM 3.57 80.4375 17,696.25
Ericsson+*
Taiwan 13.Taiwan Semiconductor 3.74 57.9375 18,540.00
Manufacturing Company Limited+
United States 14. Amazon.com, Inc. 3.64 69.4375 18,053.75
15. America Online, Inc. 3.75 60.0000 18,600.00
16. Cablevision Systems Corporation 3.66 79.0000 18,170.00
17. Cisco Systems, Inc. 3.68 113.8750 18,220.00
18. Comcast Corporation 3.63 49.9375 17,977.50
19. Cox Communications, Inc. 3.72 52.7500 18,462.50
20. Exodus Communications, Inc. 3.59 118.5625 17,784.38
21. InfoSpace.com, Inc. 3.49 144.2500 17,310.00
22. Internet Capital Group, Inc. 3.61 112.0000 17,920.00
23. Nextel Communications, Inc. 3.62 112.1875 17,950.00
24. Sprint Corporation (PCS Group) 3.79 110.5625 18,795.63
25. Texas Instruments, Inc.* 3.87 120.0625 19,210.00
26. VoiceStream Wireless 3.64 129.0625 18,068.75
Corporation
27. Yahoo! Inc. 3.97 328.0000 19,680.00
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100.00% $ 495,831.25
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(1) Based on Cost to Portfolio.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on February 2, 2000, the business day prior to the initial
date of deposit. The value of the Securities on any subsequent business day
will vary.
+ The issuer is a foreign corporation; dividends, if any, may be subject to
withholding taxes.
* These stocks currently pay dividends.
--------------------------------
The securities were acquired on February 2, 2000 and are represented entirely by
contracts to purchase the securities. The Sponsor may have acted as underwriter,
manager or co-manager of a public offering of the securities in this Portfolio
during the last three years. Affiliates of the Sponsor may serve as specialists
in the securities in this Portfolio on one or more stock exchanges and may have
a long or short position in any of these securities or options on any of them,
and may be on the opposite side of public orders executed on the floor of an
exchange where the securities are listed. An officer, director or employee of
the Sponsor may be an officer or director of one or more of the issuers of the
securities in the Portfolio. The Sponsor may trade for its own account as an
odd-lot dealer, market maker, block positioner and/or arbitrageur in any of the
securities or in options on them. The Sponsor, its affiliates, directors,
elected officers and employee benefits programs may have either a long or short
position in any securities or in options on them.
--------------------------------
PLEASE NOTE THAT IF THIS PROSPECTUS IS USED AS A PRELIMINARY
PROSPECTUS
FOR A FUTURE FUND IN THIS SERIES, THE PORTFOLIO WILL CONTAIN
DIFFERENT
STOCKS FROM THOSE DESCRIBED ABOVE.
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RISK/RETURN SUMMARY (CONTINUED)
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4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE
PORTFOLIO. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Stock prices can be volatile generally,
and technology stock prices can be
extremely volatile, therefore this
Portfolio may be considered speculative.
Investors should assess their risk
tolerance and investment time horizon
before purchasing units of this
Portfolio.
- Share prices may decline during the life
of the Portfolio.
- Because the Portfolio is concentrated in
the technology/internet and
telecommunications industries, adverse
developments in these industries may
affect the value of your units. The
Portfolio is also concentrated in foreign
issuers. The risks associated with this
type of investment are discussed later in
this prospectus. See Concentration Risk.
- The Portfolio may continue to purchase or
hold the stocks originally selected even
though their market value may have
changed.
- The Portfolio does not reflect any
investment recommendations of the
Sponsor, and any one or more of the
stocks in the Portfolio may, from time to
time, be subject to sell recommendations
from the Sponsor.
5. IS THIS PORTFOLIO APPROPRIATE FOR YOU?
Yes, if you want capital appreciation.
You will benefit from a professionally
selected and supervised portfolio. This
Portfolio should be considered as a
vehicle for investing a portion of your
assets and not as a complete equity
investment program.
The Portfolio is NOT appropriate for you
if you are not comfortable with the
Portfolio or are unwilling to take the
increased risk involved with a growth
equity investment. It may not be
appropriate for you if you are seeking
preservation of capital or current
income.
6. WHAT ARE THE PORTFOLIO'S FEES AND
EXPENSES?
This table shows the costs and expenses
you may pay, directly or indirectly, when
you invest in the Portfolio.
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.091 % $0.90
Trustee's Fee
.071 % $0.70
Portfolio Supervision,
Bookkeeping and
Administrative Fees
<CAPTION>
ESTIMATED ANNUAL OPERATING EXPENSES
AS A % OF AMOUNT
NET PER 1,000
ASSETS UNITS
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.250 % $2.48
Creation and Development Fee
.071 % $0.70
Other Operating Expenses
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.483 % $4.78
TOTAL
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ORGANIZATION COSTS per 1,000 units $2.48
(deducted from Portfolio assets at
the close of the initial offering
period)
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The Creation and Development Fee (estimated
$.00248 per unit) compensates the Sponsor for
the creation and development of the Portfolio
and is computed based on the Portfolio's
average daily net asset value through the date
of collection. This fee historically had been
included in the sales fee.
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INVESTOR FEES
2.50%
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested)
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You will pay an up-front sales fee of
approximately 1.00%. In addition, ten deferred
sales charges of $1.50 per 1,000 units ($15.00
annually) will be deducted from the Portfolio's
net asset value on May 15, 2000, June 1, 2000,
June 15, 2000, and thereafter on the first day
of each month through January 1, 2001.
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EXAMPLE
This example may help you compare the
cost of investing in the Portfolio to the
cost of investing in other funds.
The example assumes that you invest
$10,000 in the Portfolio for the periods
indicated and sell all your units at the
end of those periods. The example also
assumes a 5% return on your investment
each year and that the Portfolio's
operating expenses
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stay the same. Although your actual costs
may be higher or lower, based on these
assumptions your costs would be:
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1 Year 3 Years 5 Years 10 Years
$326 $796 $1,292 $2,657
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7. IS THE PORTFOLIO MANAGED?
Unlike a mutual fund, the Portfolio is
not managed and stocks are not sold
because of market changes. The Sponsor
monitors the Portfolio and may instruct
the Trustee to sell securities under
certain limited circumstances. However,
given the investment philosophy of the
Portfolio, the Sponsor is not likely to
do so.
8. HOW DO I BUY UNITS?
You can buy units from the Sponsor and
other broker-dealers. Some banks may
offer units for sale through special
arrangements with the Sponsor, although
certain legal restrictions may apply.
The minimum investment is $250.
UNIT PRICE PER 1,000 UNITS $999.87
(as of February 2, 2000)
Unit price is based on the net asset
value of the Portfolio plus the up-front
sales fee. Unit price also includes the
estimated organization costs shown on
page 4, to which no sales fee has been
applied.
The Portfolio stocks are valued by the
Trustee on the basis of their closing
prices at 4:00 p.m. Eastern time every
business day. Unit price changes every
day with changes in the prices of the
stocks.
9. HOW DO I SELL UNITS?
You may sell your units at any time to
the Sponsor or the Trustee for the net
asset value determined at the close of
business on the date of sale, less any
remaining deferred sales fee and the
costs of liquidating securities to meet
the redemption.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays distribution of any
dividend income on the 25th day of
December 2000, if you own units on the
10th of that month. Distribution of
ordinary income will be dividends for
federal income tax purposes. Corporate
investors may be eligible for the
dividends-received deduction with respect
to a portion of these distributions.
Distribution to foreign investors will
generally be subject to withholding
taxes. Because some of the income
received by the Portfolio would generally
not be subject to U.S. withholding taxes
if received directly by foreign
investors, an investment in the Portfolio
may be inappropriate for such investors.
11. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT OF DISTRIBUTIONS
If a distribution is made during the
year, you may choose to reinvest it into
additional units of the Portfolio. You
will pay only the deferred sales fee
remaining at the time of reinvestment.
Unless you choose reinvestment, you will
receive your distributions in cash.
EXCHANGE PRIVILEGES
You may exchange units of this Portfolio
for units of certain other Defined Asset
Funds. You may also exchange into this
Portfolio from certain other funds. We
charge a reduced sales fee on designated
exchanges.
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WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
INCOME
The Portfolio will pay to you any income it has received once during its life.
Reasons your income may vary are:
- changes in the Portfolio because of additional securities purchased or sold;
and
- the amount of dividends declared and paid.
There can be no assurance that any dividends will be declared or paid.
RECORDS AND REPORTS
You will receive:
- - a notice from the Trustee if new equity securities are deposited in exchange
or substitution for equity securities originally deposited;
- - annual reports on Portfolio activity; and
- - annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF INCOME RECEIVED DURING THE YEAR. PLEASE CONTACT YOUR TAX ADVISOR IN
THIS REGARD.
You may request audited financial statements of the Portfolio from the Trustee.
You may inspect records of Portfolio transactions at the Trustee's office during
regular business hours.
THE RISKS YOU FACE
CONCENTRATION RISK
When stocks in a particular industry or country make up 25% or more of the
Portfolio, it is said to be "concentrated" in that industry, which makes the
Portfolio less diversified.
Here is what you should know about the Portfolio's concentration in stocks of
foreign issuers:
Investments in securities of foreign issuers involve risks that are different
from investments in securities of domestic issuers.
They may include:
- political and economic developments;
- possibility of withholding taxes;
- exchange controls or other governmental restrictions on the payment of
dividends;
- less publicly available information; and
- absence of uniform accounting, auditing and financial reporting standards,
practices and requirements.
AMERICAN DEPOSITARY SHARES AND RECEIPTS
American depositary shares and receipts are issued by an American bank or trust
company to evidence ownership of underlying common stock issued by a foreign
corporation and deposited in a depositary facility. The terms and conditions of
the depositary facility may result in less liquidity or lower market prices for
the ADRs than for the underlying shares. Certain of the Portfolio Securities
were purchased in ADR form in the United States.
FOREIGN CURRENCY RISK
At the present time the Sponsor does not believe that any of the Portfolio
Securities is subject to exchange control restrictions which would materially
interfere with payment to the Portfolio of amounts due on the Portfolio
Securities. The adoption of exchange control regulations or other legal
restrictions could have an adverse impact on the marketability of intentional
securities in the Portfolio to satisfy redemptions. There can be no assurance
that exchange control regulations might not be adopted in the
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future that would adversely affect payments to the Portfolio.
LIQUIDITY
Sales of foreign securities in United States securities markets are ordinarily
subject to severe restrictions and will generally be made only in foreign
securities markets.
You should know that:
- securities may be traded in foreign countries where the securities markets
are not as developed or efficient and may not be liquid as those in the
United States.
- a foreign market's liquidity might become impaired as a result of economic
or political turmoil, or if relations between the United States and such
foreign country deteriorate.
- the principal trading market for the Portfolio Securities, even if otherwise
listed, may be the over-the-counter market in which liquidity will depend on
whether dealers will make a market in the Portfolio Secuities.
Here is what you should know about the Portfolio's concentration in
technology/internet stocks and telecommunication stocks.
Stocks in the technology and internet industries tend to be relatively volatile
as compared to other types of investments. These kinds of companies:
- are rapidly developing and highly competitive, both domestically and
internationally;
- may be smaller and less seasoned companies with limited product lines,
markets or financial resources and limited management or marketing
personnel; and
- may be adversely affected by
-- worldwide scientific and technological developments (and resulting
product obsolescence);
-- the need for a continued substantial investment in research and
development; and
-- increased government regulation; and
- may have short operating histories and may not have earnings
Other risk factors include:
- short product life cycles;
- aggressive pricing and reduced profit margins;
- dramatic and often unpredictable changes in growth rates;
- frequent new product introduction and the need to enhance existing products;
and
- intense competition from large established companies and potential
competition from small start up companies.
Technology companies are also dependent to a substantial degree upon skilled
professional and technical personnel and there is considerable competition for
the services of qualified personnel in the industry.
Technology and Internet companies often experience intense competition from
large established companies and potential competition from small start up
companies.
Stocks in the telecommunications industry:
- provide local, long-distance, wireless, cable television and internet
services and information systems;
- manufacture of telecommunications products; or
- operate voice, data and video telecommunications networks.
Payment on common stocks of companies in this industry generally depends upon:
- the amount and growth of customer demand;
- the level of rates they are allowed to charge; and
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- the effects of inflation on the cost of providing services and the rate of
technological innovation.
The domestic telecommunications industry is characterized by increasing
competition in all sectors and regulation by the Federal Communications
Commission and various state regulatory authorities. To meet increasing
competition, companies may have to commit substantial capital, particularly in
the formulation of new products and services using new technology.
Telecommunications companies in both developed and emerging countries are
undergoing significant change due to varying and evolving levels of governmental
regulation or deregulation and other factors. As a result, competitive pressures
are intense and the securities of such companies may be subject to significant
price volatility.
In addition, all telecommunications companies in both developed and emerging
countries are subject to the additional risk that technological innovations will
make their products and services obsolete.
While the worldwide market for telecommunications equipment is expected to grow,
we cannot predict the overall effect on the Portfolio of factors such as:
- competing technologies;
- increasing capital requirements;
- protectionist actions by foreign governments; and
- demand for new technologies.
LITIGATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Portfolio.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on their net asset value.
Your net asset value is calculated each business day by:
- ADDING the value of the Portfolio securities, cash and any other Portfolio
assets;
- SUBTRACTING accrued but unpaid Portfolio expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors, and
any other Portfolio liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the Portfolio.
As of the close of the initial offering period, the price you receive will be
reduced to pay the Portfolio's estimated organization costs.
If you sell your units before the final deferred sales fee installment, the
amount of any remaining payments will be deducted from your proceeds.
SPONSOR'S SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
less any remaining deferred sales fee and the cost of liquidating Securities to
meet the redemption. We may resell the units to other buyers or to the Trustee.
We have maintained a secondary market continuously for more than 28 years, but
we could discontinue it without prior notice for any business reason.
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SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by contacting your broker, dealer or financial
institution that holds your units in street name. Sometimes, additional
documents are needed such as a trust document, certificate of corporate
authority, certificate of death or appointment as executor, administrator or
guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee will sell your units in the over-the-counter market if it
believes it can obtain a higher price. In that case, you will receive the net
proceeds of the sale.
If the Portfolio does not have cash available to pay you for the units you are
selling, the Sponsor will select securities to be sold. These sales could be
made at times when the securities would not otherwise be sold and may result in
your receiving less than you paid for your unit and also reduce the size and
diversity of the Portfolio.
If you sell units with a value of at least $250,000, you may choose to receive
your distribution "in kind." If you so choose, you will receive securities and
cash with a total value equal to the price of your units. The Trustee will try
to distribute securities in the portfolio pro rata, but it reserves the right to
distribute only one or a few securities. The Trustee will act as your agent in
an in-kind distribution and will either hold the securities for your account or
transfer them as you instruct. You must pay any transaction costs as well as
transfer and ongoing custodial fees on sales of securities distributed in-kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
securities not reasonably practicable; and
- for any other period permitted by SEC order.
ROLLOVER/EXCHANGE OPTION
When this Portfolio is about to terminate, you may have the option to roll your
proceeds into the next Global Theme and Sector Portfolio if one is available.
If you hold your units with the Sponsor and notify your financial adviser by
February 13, 2001, your units will be redeemed and certain distributed
securities plus the proceeds from the sale of the remaining distributed
securities will be reinvested in units of a new Global Theme and Sector
Portfolio. If you decide not to roll over your proceeds, you will receive a cash
distribution after the Portfolio terminates.
The Portfolio will terminate by March 15, 2001. However, the Sponsors may extend
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the termination date for a period no longer than 30 days without notice to Unit
holders. Of course you can sell your units at any time prior to termination.
If you continue to hold your units, you may exchange units of this Portfolio
anytime before this Portfolio terminates for units of certain other Defined
Asset Funds at a reduced sales fee if your investment goals change. In addition,
you may exchange into this Fund from certain other Defined Asset Funds. To
exchange units, you should talk to your financial professional about what
Portfolios are exchangeable, suitable and currently available.
We may amend or terminate the options to exchange your units or roll your
proceeds at any time without notice.
HOW THE FUND WORKS
PRICING
Units are charged a combination of initial and deferred sales fees.
In addition, during the initial offering period, a portion of the price of a
unit also consists of securities to pay all or some of the costs of organizing
the Portfolio including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
The estimated organization costs will be deducted from the assets of the
Portfolio as of the close of the initial offering period.
The deferred sales fee is generally a charge of $1.50 per 1,000 units ($15.00
annually) and is accrued in ten installments. Units redeemed or repurchased
prior to the accrual of the final deferred sales fee installment will have the
amount of any remaining installments deducted from the redemption or repurchase
proceeds or deducted in calculating an in-kind distribution, however, this
deduction will be waived in the event of the death or disability (as defined in
the Internal Revenue Code of 1986) of an investor. The initial sales fee is
equal to the aggregate sales fee less the aggregate amount of any remaining
installments of the deferred sales fee.
It is anticipated that securities will not be sold to pay the deferred sales fee
until after the date of the last installment. Investors will be at risk for
market price fluctuations in the securities from the several installment accrual
dates to the dates of actual sale of securities to satisfy this liability.
EVALUATIONS
The Trustee values the securities on each business day (i.e., any day other than
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
If the securities are listed on a national securities exchange or the Nasdaq
National Market, evaluations are generally based on closing sales prices on that
exchange or that system or, if closing sales prices are not
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available, at the mean between the closing bid and offer prices.
INCOME
- - The annual income per unit will depend primarily upon the amount of dividends
declared and paid by the issuers of the securities and to a lesser degree,
upon the level of purchases of additional securities and sales of securities.
There is no assurance that dividends on the securities and levels or be
declared at all.
- - Each unit receives an equal share of distributions of dividend income. Because
dividends on the securities are not received at a constant rate throughout the
year, any distribution may be more or less than the amount then credited to
the income account. The Trustee credits dividends received to an Income
Account and other receipts to a Capital Account. The Trustee may establish a
reserve account by withdrawing from these accounts amounts it considers
appropriate to pay any material liability. These accounts do not bear
interest.
EXPENSES
The Trustee is paid a fee monthly. It also benefits when it holds cash for the
Portfolio in non-interest bearing accounts. The Trustee may also receive
additional amounts:
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsor;
- costs of actions taken to protect the Portfolio and other legal fees and
expenses;
- expenses for keeping the Portfolio's registration statement current; and
- Portfolio termination expenses and any governmental charges.
The Sponsor is currently reimbursed up to 70 CENTS per 1,000 units annually for
providing portfolio supervisory, bookkeeping and administrative services and for
any other expenses properly chargeable to the Portfolio. Legal, typesetting,
electronic filing and regulatory filing fees and expenses associated with
updating the Portfolio's registration statement yearly are also now chargeable
to the Portfolio. While this fee may exceed the amount of these costs and
expenses attributable to this Portfolio, the total of these fees for all Series
of Defined Asset Funds will not exceed the aggregate amount attributable to all
of these Series for any calendar year. Certain of these expenses were previously
paid for by the Sponsor.
The Sponsor will receive a Creation and Development Fee of .25% of the
Portfolio's average daily net asset value through the date of collection. This
fee, which has historically been included in the gross sales fee, compensates
the Sponsor for the creation and development of the Portfolio, including
determination of the Portfolio's objective and policies and portfolio
composition and size, selection of service providers and information services.
No portion of the Creation and Development Fee is applied to the payment of
distribution expenses or as compensation for sales efforts.
The Trustee's and Sponsor's fees may be adjusted for inflation without
investors' approval.
The maximum sales fee is 2.50%. If you hold units in certain eligible accounts
offered by the Sponsor, you will pay no sales fee. Employees and non-employee
11
<PAGE>
directors of the Sponsor may be charged a reduced sales fee of no less than
$5.00 per 1,000 Units. If your aggregate sales fee is less than the deferred
sales fee, you will be given additional units which will decrease the effective
maximum sales fee to the amount shown below.
The maximum sales fee is effectively reduced if you invest as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<C> <S> <C>
Less than $50,000 2.50%
$ 50,000 to $99,999 2.25%
$100,000 to $249,999 1.75%
$250,000 to $999,999 1.50%
$1,000,000 or more 0.75%
</TABLE>
The deferred sales fees you owe are paid from the Capital Account. Although we
may collect the deferred sales charge monthly, to keep Units more fully invested
we do not currently plan to pay the deferred sales charge until after the
rollover notification date.
The Sponsor will pay advertising and selling expenses at no charge to the
Portfolio. If Portfolio expenses exceed initial estimates, the Portfolio will
owe the excess. The Trustee has a lien on Portfolio assets to secure
reimbursement of Portfolio expenses and may sell securities if cash is not
available.
PORTFOLIO CHANGES
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio.
We decide whether to offer units for sale that we acquire in the secondary
market after reviewing:
- diversity of the Portfolio;
- size of the Portfolio relative to its original size;
- ratio of Portfolio expenses to income; and
- cost of maintaining a current prospectus.
If a Portfolio is buying or selling a stock actively traded on a national
securities exchange or certain foreign exchanges, it may buy from or sell to
another Defined Asset Fund at the stock's closing sale price (without any
brokerage commissions).
PORTFOLIO TERMINATION
When the Portfolio is about to terminate you will receive a notice, and you will
be unable to sell your units after that time. We will sell any remaining
securities, and you will receive your final distribution in cash.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling securities. This may reduce the amount you receive as
your final distribution.
NO CERTIFICATES
All investors are required to hold their Units in uncertificated form and in
"street name" by their broker, dealer or financial institution at the Depository
Trust Company.
TRUST INDENTURE
The Portfolio is a "unit investment trust" governed by a Trust Indenture, a
contract between the Sponsor and the Trustee, which sets forth their duties and
obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee.
12
<PAGE>
The following summarizes certain provisions of the Indenture.
The Sponsor and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsor).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Portfolio without your written consent.
The Trustee may resign by notifying the Sponsor. The Sponsor may remove the
Trustee without your consent if:
- it fails to perform its duties;
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities; or
- the Sponsor determine that its replacement is in your best interest.
Investors holding 51% of the units may remove the Trustee. The Trustee may
resign or be removed by the Sponsor without the consent of investors. The
resignation or removal of the Trustee becomes effective when a successor accepts
appointment. The Sponsor will try to appoint a successor promptly; however, if
no successor has accepted within 30 days after notice of resignation, the
resigning Trustee may petition a court to appoint a successor.
If there is only one Sponsor and it fails to perform its duties or becomes
bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the Portfolio; or
- continue to act as Trustee without a Sponsor.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee and the Sponsor.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsor, has given an opinion that the units are validly
issued.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statement of Condition included in this
prospectus.
SPONSOR
The Sponsor is:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
The Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer the
Sponsor buys and sells securities (including investment company shares) for
others (including investment
13
<PAGE>
companies) and participates as an underwriter in various selling groups.
TRUSTEE
The Bank of New York, Unit Investment Trust Department, P.O. Box 974, Wall
Street Division, New York, New York 10268-0974, is the Trustee. It is supervised
by the Federal Deposit Insurance Corporation, the Board of Governors of the
Federal Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSOR'S PROFITS
Underwriter receives sales charges when they sell units. The Sponsor also
realize a profit or loss on deposit of the securities shown under Defined
Portfolio. Any cash made available by you to the Sponsors before the settlement
date for those units may be used in the Sponsor's businesses to the extent
permitted by federal law and may benefit the Sponsor.
The Sponsor or Underwriter may realize profits or sustain losses on stocks in
the Portfolio which were acquired from underwriting syndicates of which it was a
member.
The Sponsor will receive a Creation and Development Fee of .25% of the
Portfolio's average daily net asset value through the date of collection. This
fee, which has historically been included in the gross sales fee, compensates
the Sponsor for the creation and development of the Portfolio, including
determination of the Portfolio's objective and policies and portfolio
composition and size, selection of service providers and information services.
No portion of the Creation and Development Fee is applied to the payment of
distribution expenses or as compensation for sales efforts.
During the initial offering period, the Sponsor may realize profits or sustain
losses on units it holds due to fluctuations in the price per unit. The Sponsor
experienced a profit of $38.96 on the initial deposit of the Securities. Any
profit or loss to the Portfolio will be effected by the receipt of applicable
sales fees and a gain or loss on subsequent deposits of securities. In
maintaining a secondary market, the Sponsor will also realize profits or sustain
losses in the amount of any difference between the prices at which they buy
units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
During the initial offering period, units will be distributed to the public by
the Sponsor and dealers who are members of the National Association of
Securities Dealers, Inc.
Dealers will be entitled to the concession stated below on Units sold or
redeemed.
<TABLE>
<CAPTION>
DEALER CONCESSION
AS
A % OF PUBLIC
AMOUNT PURCHASED OFFERING PRICE
---------------- -----------------
<S> <C>
Less than $50,000 2.00%
$50,000 to $99,999 1.80%
$100,000 to $249,999 1.45%
$250,000 to $999,999 1.25%
$1,000,000 and over 0.50%
</TABLE>
The Sponsor does not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
14
<PAGE>
CODE OF ETHICS
Merrill Lynch has adopted a code of ethics requiring reporting of personal
securities transactions by its employees with access to information on portfolio
transactions. The goal of the code is to prevent fraud, deception or misconduct
against the Portfolio and to provide reasonable standards of conduct.
ADVERTISING AND SALES LITERATURE
Advertising and sales literature may include brief descriptions of the principal
businesses of the companies represented in the Portfolio.
Sales material may discuss developing a long-term financial plan, working with
your financial professional; the nature and risks of various investment
strategies and Defined Asset Funds that could help you toward your financial
goals and the importance of discipline; how securities are selected for these
funds, how the funds are created and operated, features such as convenience and
costs, and options available for certain types of funds including automatic
reinvestment, rollover, exchanges and redemption. It may also summarize some
similarities and differences with mutual funds and discuss the philosophy of
spending time in the market rather than trying to time the market, including
probabilities of negative returns over various holding periods.
Sales literature and articles may state research opinions on the economy,
countries and industry sectors and include a list of funds generally appropriate
for pursuing these recommendations.
TAXES
The following summarizes the material income tax consequences of holding Units.
It assumes that you are not a dealer, financial institution, insurance company
or other investor with special circumstances or subject to special rules. You
should consult your own tax adviser about your particular circumstances.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Portfolio intends to quality for special tax treatment as a regulated
investment company so that it will not be subject to federal income tax on the
portion of its taxable income that it distributes to investors in a timely
manner.
DISTRIBUTIONS
Distributions to you of the Portfolio's dividend income and of the Portfolio's
gains from Securities it has held for one year or less will generally be taxed
to you as ordinary income, to the extent of the Portfolio's taxable income not
attributable to the Portfolio's net capital gain. Distributions to you in excess
of the Portfolio's taxable income will be treated as a return of capital and
will reduce your basis in your Units. To the extent such distributions exceed
your basis, they will be treated as gain from the sale of your Units.
Distributions to you that are treated as ordinary income will constitute
dividends for federal income tax purposes. Corporate investors may be eligible
for the 70%
15
<PAGE>
dividends-received deduction with respect to the portion of these distributions
that is attributable to dividends from U.S. distributions. You should consult
your tax adviser in this regard.
Distributions to you of the Portfolio's net capital gain will generally be
taxable to you as long-term capital gain, regardless of how long you have held
your Units.
Dividends received by the Portfolio from foreign issuers will in most cases be
subject to withholding taxes, although these taxes may be reduced by treaties
between the United States and the relevant country. Investors are not expected
to be eligible for foreign tax credits with respect to these withholding taxes.
GAIN OR LOSS UPON DISPOSITION
You will generally recognize capital gain or loss when you dispose of your
Units. If you receive Securities upon redemption of your Units (including
pursuant to the rollover option), you will generally recognize capital gain or
loss equal to the difference between your basis in your Units and the fair
market value of the Securities received in redemption.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain or loss that you recognize upon disposition of your Units will be
long-term if you have held your Units for more than one year and short-term
otherwise. Because the deductibility of capital losses is subject to
limitations, you may not be able to deduct all of your capital losses. You
should consult your tax adviser in this regard.
YOUR BASIS IN THE SECURITIES
Your aggregate basis in the Units will generally be equal to the cost of your
Units, including the initial sales charge and Creation and Development Fee. You
should not increase your basis in your Units by deferred sales charges or
organizational expenses.
FOREIGN INVESTORS
If you are a foreign investor and you are not engaged in a U.S. trade or
business, you generally will be subject to a 30% withholding tax (or a lower
applicable treaty rate) on distributions. Because foreign-source income of the
type received by the Portfolio would generally not be subject to withholding if
received directly by you, an investment in the Portfolio may be inappropriate
for you. You should consult your tax adviser about the possible application of
federal, state and local, and foreign taxes.
RETIREMENT PLANS
You may wish to purchase units for an Individual Retirement Account ("IRAs") or
other retirement plan. Generally, capital gains and income received in each of
these plans are exempt from federal taxation. All distributions from these types
of plans are generally treated as ordinary income but may, in some cases, be
eligible for tax-deferred rollover treatment. You should consult your attorney
or tax adviser about the specific tax rules relating to these plans. These plans
are offered by brokerage firms, including the Sponsor of this Portfolio, and
other financial institutions. Fees and charges with respect to such plans may
vary.
16
<PAGE>
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Portfolio by
calling the Trustee. The supplemental information includes more detailed risk
disclosure and general information about the structure and operation of the
Portfolio. The supplemental information is also available from the SEC.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsor, Trustee and Holders of Equity Investor Fund, Focus Series, Global
Theme and Sector Portfolio 2000 Series, Defined Asset Funds (the "Portfolio"):
We have audited the accompanying statement of condition and the related defined
portfolio included in the prospectus of the Portfolio as of February 3, 2000.
This financial statement is the responsibility of the Trustee. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. Our procedures included
confirmation of an irrevocable letter of credit deposited for the purchase of
securities, as described in the statement of condition, with the Trustee. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the financial position of the Portfolio as of
February 3, 2000 in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
February 3, 2000
STATEMENT OF CONDITION AS OF FEBRUARY 3, 2000
TRUST PROPERTY
<TABLE>
<S> <C>
Investments--Contracts to purchase Securities(1)......... $ 495,831.25
--------------------
Total............................................ $ 495,831.25
====================
LIABILITY AND INTEREST OF HOLDERS
Reimbursement of Sponsor for organization
expenses(2)......................................... $ 1,242.08
--------------------
Subtotal 1,242.08
--------------------
Interest of Holders of 500,839 Units of fractional
undivided interest outstanding:(3)
Cost to investors(4)................................... $ 500,773.89
Gross underwriting commissions and organization
expenses(5)(2)....................................... (6,184.72)
--------------------
Subtotal 494,589.17
--------------------
Total............................................ $ 495,831.25
====================
</TABLE>
- ------------
(1) Aggregate cost to the Portfolio of the securities listed under
Defined Portfolio determined by the Trustee at 4:00 p.m., Eastern time on
February 2, 2000. The contracts to purchase securities are collateralized by an
irrevocable letter of credit which has been issued by DG Bank, New York Branch,
in the amount of $495,792.29 and deposited with the Trustee. The amount of the
letter of credit includes $495,831.25 for the purchase of securities.
(2) A portion of the Unit Price consists of securities in an amount
sufficient to pay all or a portion of the costs incurred in establishing the
Portfolio. These costs have been estimated at $2.48 per 1,000 Units. A
distribution will be made as of the close of the initial offering period to an
account maintained by the Trustee from which the organization expense obligation
of the investors will be satisfied. If the actual organization costs exceed the
estimated aggregate amount shown above, the Sponsor will pay for this excess
amount.
(3) Because the value of securities at the evaluation time on the
Initial Date of Deposit may differ from the amounts shown in this statement of
condition, the number of Units offered on the Initial Date of Deposit will be
adjusted to maintain the $999.87 per 1,000 Units offering price only for that
day. The Unit Price on any subsequent business day will vary.
(4) Aggregate public offering price computed on the basis of the value
of the underlying securities at 4:00 p.m., Eastern time on February 2, 2000.
(5) Assumes the maximum initial sales charge per 1,000 units of 1.00% of
the Unit Price. A deferred sales charge of $1.50 per 1,000 Units is payable on
May 15, 2000, June 1 and 15, 2000 and thereafter on the 1st day of each month
through January 1, 2001. Distributions will be made to an account maintained by
the Trustee from which the deferred sales charge obligation of the investors to
the Sponsor will be satisfied.
18
<PAGE>
Defined
Asset Funds-Registered Trademark-
<TABLE>
<S> <C>
HAVE QUESTIONS ? EQUITY INVESTOR FUND
Request the most FOCUS SERIES
recent free Information GLOBAL THEME AND SECTOR PORTFOLIO 2000
Supplement that gives more SERIES
details about the Fund, (A Unit Investment Trust)
by calling: ---------------------------------------
The Bank of New York This Prospectus does not contain
1-800-221-7771 complete information about the
investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-90149) and
- Investment Company Act of 1940 (file
no. 811-3044).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
100624RR--2/00
</TABLE>
