Defined Asset Funds [Registered]
Quantitative Research
2000 Series B
The Select Ten Portfolio
A Disciplined Approach to Value Investing...
[Logo] Merrill Lynch
[Logo] Select Ten Portfolio DJIA
THE DOW JONES INDUSTRIAL AVERAGE*(DJIA) - Its 30 companies are known the world
over as giants of global industry. A benchmark for American stock prices, its
gains and losses influence markets around the globe. Defined Asset Funds
[Registered] has a strategy designed to select value stocks from this esteemed
index...
Defined Asset Funds - Our Philosophy
At Defined Asset Funds, we believe that knowledge and discipline are essential
to sound investment planning. For this reason, our unit investment trusts
provide the information to help you invest appropriately, and the discipline to
help you stay on course.
We've found that diversity and drive can be key to uncovering compelling
investments. To this end, our experienced team of research analysts and
securities traders searches Wall Street and beyond, creating portfolios for
strong potential. Our equity funds seek to capitalize on vibrant economic
sectors, innovative quantitative strategies and thorough fundamental analysis.
Our fixed-income funds offer the regular income and stability to help balance
and diversify your investment assets.
At Defined Asset Funds, we set the foundation for each of our portfolios in
this way, because we have a very important goal in mind - yours.
The Select Ten Strategy
The Select Ten Portfolio
The Defined Asset Funds Select Ten Portfolio seeks total return by investing in
ten stocks from the DJIA, based on dividend yield. The Portfolio aims for both
dividend income and capital appreciation by following a value-oriented
strategy.
Dividend Yield
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The Strategy calls for selecting the ten highest dividend-yielding stocks in
the DJIA, and investing approximately equal dollar amounts in each stock. A
higher yield may indicate that a stock is out of favor. As the price of a stock
declines, the dividend yield often increases, indicating a possible buying
opportunity.
The Universe
The stocks were chosen from the DJIA, representing large-cap, industry leaders,
which derive a portion of their revenue from international operations. Their
size, strength and financial stability may give them the resiliency to overcome
adversity. Therefore, these companies may be able to recover from current
under-valuation.
The Strategy Reapplied
The Portfolio will hold its stocks for about one year. At the end of that
period, we intend to reapply the Strategy to select a new Portfolio of the ten
highest dividend-yielding stocks at that time. This annual process makes it
possible for the Strategy to capitalize on new opportunities in the
marketplace.
Discipline
Using dividend yield as a selection criterion eliminates emotion from the
investment decision-making process. This disciplined contrarian approach to
investing selects established stocks that others might be selling. It also
eliminates the need to make buy and sell decisions on individual stocks.
Tax Efficiency
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%). On rollovers to future Portfolios, if available, certain investors
may defer recognition of gains and losses on stocks that are transferred to the
new Portfolio.
Past Performance of Prior Select Ten Portfolios
Past performance is no guarantee of future results.
From Inception Through 3/31/00 Most Recently Completed Portfolio
(including annual rollovers)
Series Inception Date Return Period Return
B 5/17/91 11.99% 6/1/98-7/9/99 6.82%
A 1/3/92 11.02 2/4/99-3/10/00 -15.59
C 9/1/92 13.89 9/28/98-10/29/99 11.44
3 7/22/96 10.87 8/3/98-9/10/99 11.05
5 11/1/96 8.61 11/16/98-12/17/99 2.36
J 1/2/97 4.18 1/11/99-2/11/00 -18.07
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1 2/25/97 1.31 3/2/98-4/9/99 2.65
2 4/28/97 4.25 5/4/98-6/4/99 2.47
4 9/3/97 0.89 9/8/98-10/15/99 8.75
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. Series From Inception
returns differ from Most Recently Completed Portfolio returns because the
former figures reflect different performance periods and a reduced sales charge
on annual rollovers.
* Dow Jones & Company, Inc., owner of the name "Dow Jones Industrial
Average," is unaffiliated with, and did not participate in the creation of
this Portfolio or the selection of its stocks, and has neither reviewed
nor approved any information in this brochure or the prospectus relating
to this Portfolio. "S&P 500" is a trademark of The McGraw-Hill Companies,
Inc.
Select Ten Portfolio 2000 Series B(+)
Name of Issuer Symbol Current Dividend
Yield(++)
1. Philip Morris Companies, Inc. MO 7.11%
2. Caterpillar, Inc. CAT 3.42
3. J.P. Morgan & Company, Inc. JPM 3.11
4. Eastman Kodak Company EK 3.09
5. International Paper Company IP 2.99
6. General Motors Corporation GM 2.92
7. Du Pont (E.I.) De Nemours & Company DD 2.88
8. Minnesota Mining & Manufacturing Company MMM 2.83
9. AT&T Corporation T 2.56
10. SBC Communications, Inc. SBC 2.11
The Portfolio does not reflect the research opinions or any buy or sell
recommendations of any of the Sponsors.
For daily quotes, information on underlying securities and details on
our entire family of funds, visit our Web site at:
definedfunds.com/ml
Hypothetical Past Performance of the Strategy (not any Portfolio)
27-Year Annual Total Returns
Strategy returns are net of sales charges and expenses.(ss)
Year Strategy DJIA S&P 500* Year Strategy DJIA S&P 500*
(ss) Index (ss) Index
1973 -4.08% -13.12% -14.66% 1988 22.44 15.95 16.58
1974 -2.40 -23.14 -26.47 1989 25.65 31.71 31.11
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1975 55.65 44.40 36.92 1990 -10.14 -0.57 -3.20
1976 33.25 22.72 23.53 1991 31.81 23.93 30.51
1977 -2.90 -12.71 -7.19 1992 6.44 7.34 7.67
1978 -1.91 2.69 6.39 1993 25.30 16.72 9.97
1979 10.48 10.52 18.02 1994 1.95 4.95 1.30
1980 24.69 21.41 31.50 1995 34.97 36.48 37.10
1981 5.51 -3.40 -4.83 1996 26.34 28.57 22.69
1982 23.78 25.79 20.26 1997 19.92 24.78 33.10
1983 36.93 25.68 22.27 1998 8.55 18.00 28.34
1984 5.41 1.06 5.95 1999 1.68 27.01 20.89
1985 27.00 32.78 31.43 3/31/00 -10.79 -4.66 2.27
1986 32.96 26.91 18.37
1987 5.06 6.02 5.67 Average 14.75% 13.35% 13.64%
Average Annual Total Returns
For periods
ending 12/31/99 3 year 5 year 10 year 15 year 20 year 25 year
Strategy(ss) 9.49% 17.51% 13.65% 16.47% 17.01% 16.99%
DJIA 23.20 26.83 18.19 19.52 17.95 16.72
S&P 500 Index 27.34 28.28 18.07 18.78 17.64 17.02
Hypothetical past performance of the strategy is no guarantee of future
performance of any Portfolio. There can be no assurance that any Portfolio will
outperform either index. The Strategy would have underperformed the DJIA in 14
and the S&P 500 Index in 13 of the last 27 years.
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 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 and Strategy returns do not reflect
deduction of commissions.
(+) Initial date of deposit June 12, 2000.
(++) Current dividend yield for each security was calculated by annualizing
the last monthly, quarterly or semi-annual ordinary dividend declared
on that security and dividing the result by its market value as of the
close of trading on June 9, 2000. There can be no assurance that
future dividends, if any, will be maintained at the indicated rates.
(ss) Net of Portfolio sales charges (2.50% for the first year, 1.50% for
each subsequent year), creation and development fee and estimated
expenses.
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definedfunds.com/ml
BUY WITH KNOWLEDGE, HOLD WITH CONFIDENCE.
QUANTITATIVE RESEARCH & INDEX
Institutional Holdings Portfolio
S&P Market Cap Plus Portfolio
S&P 500 Trust
S&P MidCap Trust
Select S&P Industrial Portfolio
Select Growth Portfolio
Select Large-Cap Growth Portfolio
Select Ten Portfolio (DJIA)
Standard & Poor's Industry Turnaround Portfolio
Standard & Poor's Intrinsic Value Portfolio
United Kingdom Portfolio (Financial Times Index)
SECTOR
Biotechnology Portfolio
Broadband Portfolio
Energy Portfolio
Financial Services Portfolio
Health Care Trust
Internet Portfolio
Media Portfolio
Real Estate Income Fund
Tele-Global Trust
Utility Portfolio
FUNDAMENTAL RESEARCH
Baby Boom Economy Portfolios [sm]
Earnings Growth Consistency Portfolio
European Growth Portfolio
Premier American Portfolio
Premier World Portfolio
Western Premier Portfolio
FIXED INCOME
Corporate Funds
Government Funds
Municipal Funds
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 this Portfolio will meet its objective, that
dividend rates will be maintained or that unit prices will not decline.
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The value of your investment will fluctuate with the prices of the underlying
stocks. Stock prices can be volatile.
This 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.
These stocks may have higher yields because they or their industries are
experiencing difficulties or are out of favor. There can be no assurance that
the market factors which contributed to these relatively low prices will
change.
Stocks are chosen for characteristics such as quality and value, which may be
at odds with those of the stocks driving the market at any given time.
Taxes
Generally, dividends and any net capital gains will be subject to tax each
year, whether or not reinvested. Please consult your tax advisor concerning
state and local taxation.
Defining Your Costs
You will pay an initial sales charge of about 1% the first time you buy. In
addition, you'll pay a deferred sales charge of $15.00 per 1,000 units, about
1.50%.
As a % of Public Amount Per
Offering Price 1,000 Units
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.50% $15.00
Maximum Sales Charge 2.50% $25.00
Creation and Development Fee
(as a % of net assets) 0.250% $2.48
Estimated Annual Expenses
(as a % of net assets 0.159% $1.57
Estimated Organization Costs $0.72
If you sell your units before the termination date, any 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 Purchased Total Sales Charge as a % of
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Public Offering Price
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
Add Value to your Portfolio!
You can get started today with $250. Call your financial professional to learn
how the Select Ten Portfolio may help to meet your personal investment goals
and how it may be appropriate for your IRA account. You may also request a free
prospectus containing more complete information, including sales charges,
expenses and risks or download a prospectus from our Web site address listed
above. Please read the prospectus carefully before you invest or send money.
The information in this brochure is not complete and may be changed. We may not
sell the securities of the next Portfolio until the registration statement
filed with the Securities and Exchange Commission is effective. This brochure
is not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where their offer or sale is not permitted.
[Logo] Printed on Recycled Paper 11342BR-6/00
[Copyright] 2000 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC. Defined Asset Funds is a registered service mark of
Merrill Lynch & Co., Inc.
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