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Previous: ATP OIL & GAS CORP, S-1/A, EX-23.1, 2001-01-04 |
Next: EQUITY INVESTOR FD SEL TEN PORT 2000 SER 5 DAF, 497, 2001-01-04 |
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In times of market volatility,
a well-balanced portfolio may offer greater stability
as well as peace of mind. One way to add balance in an unsteady environment is
to choose investments that pay relatively high current income as a hedge against
riskier equity holdings. With this in mind, Defined Asset Funds® constructed a
portfolio of attractive real estate industry stocks...
Real Estate Income Fund
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| The
REIT Advantage
REITs own, develop, acquire and manage income-producing properties. n Generally, a REIT specializes in either a specific type of property or geographic area. n REITs can provide a convenient and cost-effective way to add balance to your portfolio. n REITs have shown attractive returns through various economic and market cycles. n Over the long term, REITs tend to be a hedge against inflation. n REITs have historically demonstrated a low correlation to price movements of major indices. n REITs provide attractive dividends and potential for dividend growth. |
Attractive Dividends Over the last few years, the Real Estate Investment Trust (REIT) industry has grown significantly, and has been a stabilizing force in the U.S. real estate market. REITs are a good source of income — each year they must distribute at least 95% of their income to shareholders. Historically, they have often provided investors with attractive total returns through various economic and market cycles, because they have a low correlation with price movements of the general securities markets. We believe REIT stocks are attractively priced at current levels. The Selection Process Working with Portfolio Consultant Cohen & Steers, we select each REIT stock based on research criteria, including risk-adjusted potential returns, performance under varying economic conditions, financial strength and flexibility, cash flow quality and growth potential. We also consider liquidity, yield and diversification by category and geographic location. What's more, in the past four years, many of the stocks in the Fund have increased their dividends. |
The
Portfolio
Real Estate Income Fund stocks are selected
for their current dividend yields as well as
their potential for capital appreciation and
increasing dividends. The Fund is diversified
among different publicly traded REITs
representing nine sectors: Office, Apartment,
Industrial, Office/Industrial, Regional Mall,
Health Care, Shopping Center, Hotel and
Manufactured Home.
The Fund will hold its stocks for about
one year. At that time, you can choose to
either redeem your investment, or roll your
proceeds into the next Fund, if available, at
a reduced sales charge. |
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Past Performance of Prior
Real Estate Income Funds
Past Performance is no guarantee of future results. | ||||||
| Series | Period | Maximum
Sales Charge |
Average Annual
Total Return |
S&P 500
Composite Index* |
Wilshire
Real Estate Securities Index* |
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| RET001 | ||||||
| RET002 | ||||||
| RET003 | ||||||
| RET004 | ||||||
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The chart above shows average annual total returns, which represent price changes plus reinvestment of income and principal distributions, divided by the initial public offering price, and reflect actual Fund expenses and maximum sales charges and durations, which differ from the current Fund. Index performance reflects no sales charges or expenses. The S&P 500 Index is a capitalization-weighted index of 500 stocks selected for market size, liquidity and industry group representation (industrials, utilities, financials and transportation stocks). The Wilshire Real Estate Securities Index, a capitalization-weighted index of 112 companies as of July 31, 2000, is a broad measure of the performance of publicly traded real estate securities, such as Real Estate Investment Trusts (REITs) and Real Estate Operating Companies (REOCs). * The S&P 500 Composite Index is a trademark of
The McGraw-Hill Companies, Inc. and has been licensed
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| A D E F I N E D P O R T F O L I O |
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| Company | Symbol | % of Portfolio | Company | Symbol | % of Portfolio | ||
| Office | 23% | ||||||
| Arden Realty, Inc. | ARI | Spieker Properties, Inc. | SPK | ||||
| This REIT owns, acquires, manages, renovates, operates and leases commercial office properties in Southern California. | This REIT owns and operates suburban commercial property in California and the Pacific Northwest. Its principal objective is to acquire, develop and manage office and industrial properties in selected western U.S. markets. | ||||||
| Regional Mall | 11% | ||||||
| Boston Properties, Inc. | BXP | General Growth Properties, Inc. | GGP | ||||
| Boston Properties has a significant presence in the Massachusetts, Washington, D.C., California, Maryland, New Jersey and Virginia markets. | Owning, operating, leasing, acquiring and expanding enclosed regional shopping mall centers throughout the U.S., General Growth Properties has unconsolidated equity interests in other regional mall companies. | ||||||
| Crescent Real Estate Equities Company | CEI | The Macerich Company | MAC | ||||
| This company owns a diversified portfolio of real estate properties including office complexes, retail centers, hotel properties and single family residential developments mainly in Texas and Colorado. | The Macerich Company acquires, owns, redevelops, manages and leases regional and community shopping centers throughout the U.S. | ||||||
| Equity Office Properties Trust | EOP | Simon Property Group, Inc. | SPG | ||||
| With a portfolio of buildings nationwide, Equity Office owns and manages office properties for local, regional and national customers. | This company is engaged in the operation, management, leasing, acquisition, expansion and development of regional malls and community shopping centers. | ||||||
| Mack-Cali Realty Corporation | CLI | Taubman Centers, Inc. | TCO | ||||
| This self-managed company provides management, leasing, development, construction and other tenant related services primarily in the Northeast. | Through its operating partnership, Taubman Realty Group LP, this REIT holds interests in, owns, develops, acquires and operates regional shopping centers. | ||||||
| Health Care | 9% | ||||||
| Vornado Realty Trust | VNO | Health Care Property Investors, Inc. | HCP | ||||
| A fully-integrated real estate company, Vornado Realty owns, leases, develops and manages retail and industrial properties primarily in the mid-atlantic and northeast regions of the U.S. | Investing in health-care related real estate, this company's properties include long-term care facilities, hospitals, assisted living and congregate-care facilities, medical office buildings and physician group practice clinics. | ||||||
| Apartment | 21% | ||||||
| Apartment Investment & Management Company | AIV | Healthcare Realty Trust, Inc. | HR | ||||
| A self-administered and self-managed REIT, this company owns a geographically diversified portfolio of multifamily apartment properties. | This company purchases and leases investment properties and finances long-term care facilities, hospital management companies, ambulatory and outpatient-care companies. | ||||||
| Archstone Communities Trust | ASN | Nationwide Health Properties, Inc. | NHP | ||||
| Archstone Communities is a self-administered REIT that develops, redevelops, acquires, operates and owns apartment communities across the U.S. | Nationwide Health Properties has investments in long-term, health-care facilities, assisted-living facilities and rehabilitation hospitals. | ||||||
| Shopping Center | 7% | ||||||
| Avalonbay Communities, Inc.# | AVB | Kimco Realty Corporation | KIM | ||||
| This company focuses on the ownership and operation of apartment communities in California and the mid-atlantic, northeast, midwest and pacific northwest regions of the U.S. | This REIT owns and operates neighborhood and community shopping centers, which are generally anchored by supermarkets, department stores or drugstores. It also provides management services. | ||||||
| Charles E. Smith Residential Realty, Inc. | SRW | Pan Pacific Retail Properties, Inc. | PNP | ||||
| This fully integrated real estate company provides development, acquisition, finance, operating and asset management services. Its property portfolio is primarily located in the Washington, D.C. metropolitan area. | This self-managed and self-administered REIT owns and manages community and neighborhood shopping centers located in four key western U.S. markets. | ||||||
| Equity Residential Properties Trust | EQR | Weingarten Realty Investors | WRI | ||||
| Equity Residential Properties owns and operates multifamily properties throughout the U.S. | This REIT has income producing properties primarily in the Southwest including shopping centers, office/service centers, apartment projects and office buildings. | ||||||
| Industrial | 12% | Hotel | 4% | ||||
| AMB Property Corporation | AMB | Host Marriott Corporation | HMT | ||||
| This company acquires and operates industrial properties and community shopping centers throughout the U.S. and provides real estate management services to institutional investors. | Operating under the Marriott, Ritz Carlton, Four Seasons, Hyatt and Swissotel brand names, this real estate company owns or holds controlling interests in upscale and luxury full-service hotel lodging properties. | ||||||
| First Industrial Realty Trust, Inc. | FR | MeriStar Hospitality Corporation | MHX | ||||
| First Industrial Realty Trust owns, manages, acquires and develops bulk warehouses and light industrial properties. | MeriStar owns and manages hotel and resort properties in Canada and the U.S. and manages hotels in the Caribbean. | ||||||
| Manufactured Home | 2% | ||||||
| ProLogis Trust | PLD | Chateau Communities, Inc. | CPJ | ||||
| This REIT acquires, develops, markets and leases industrial distribution facilities and develops master-planned distribution parks and corporate distribution facilities for its customers. | This company owns and manages both manufactured residential homesites and park model/recreational vehicle sites. | ||||||
| Office/Industrial | 11% | ||||||
| Duke-Weeks Realty Corporation | DRE | OUR PORTFOLIO CONSULTANTS | |||||
| Duke-Weeks Realty owns interests in a portfolio of industrial, office and retail properties located in midwestern cities. It also provides leasing, property and asset management, acquisition, development and construction services. | COHEN & STEERS
Founded in 1986, Cohen & Steers Capital Management, Inc. is considered to be a leader in the REIT industry. Cohen & Steers has extensive investment experience, substantial research capabilities and strong trading relationships in the real estate industry. With $4.8 billion in assets under management, its clients include large pension plans, endowment funds and investment companies. |
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| Kilroy Realty Corporation | KRC | ||||||
| This REIT owns, acquires, develops and operates properties located in California, Washington, Nevada and Arizona. | |||||||
| Prentiss Properties Trust | PP | ||||||
| This self-administered and self-managed REIT owns, manages, acquires, leases, develops and builds industrial properties throughout the U.S. | |||||||
| Reckson Associates Realty Corporation | RA | ||||||
| Reckson Associates owns, develops, acquires, leases and manages office and industrial properties in the New York tri-state area. | |||||||
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| 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
FUNDAMENTAL RESEARCH
FIXED INCOME
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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. |
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Tax Efficiency 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, certain individuals may be eligible for favorable federal tax rates on any 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. Please consult your tax advisor concerning state and local taxation. |
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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%.
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a % of Public
Offering Price |
Amount
Per
1,000 Units |
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| Initial Sales Charge | 1.00% | $10.00 | ||
| Deferred Sales Charge | 1.50% | $15.00 | ||
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| 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) |
0.372% | $3.68 | ||
| Estimated Organization Costs | $1.32 | |||
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| If you sell your units before termination, any remaining balance of your deferred sales charge will be deducted, along with the estimated costs of selling Fund securities. If you roll over to a successor Fund, if available, the initial sales charge on that Fund 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. |
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| If You
Invest: |
Your
Maximum Sales Charge
(as a % of Your Investment) Will Be: |
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| Less than $50,000 | 2.25% | ||
| $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 | ||
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| Start
Building Your Portfolio Today!
You can get started with $250. Call your financial professional to learn how the Real Estate Income Fund may help to meet your personal investment goals and how it may be appropriate for your IRA account. You may request a free prospectus containing more complete information, including sales charges, expenses and risks. You may also download a prospectus from our Web site address listed above. Please read it carefully before you invest or send money. |
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Printed on Recycled Paper | 32693BR-10/00 |
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© 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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