<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
THE STRIPPED ('ZERO')
U.S. TREASURY SECURITIES FUND
PROVIDENT MUTUAL SERIES A
A PROVIDENT MUTUAL VARIABLE LIFE ACCOUNT
INVESTMENT
O PORTFOLIO OF 'ZERO COUPON' U.S. TREASURY
SECURITIES
O DESIGNED FOR SAFETY OF CAPITAL AND HIGH YIELD
TO MATURITY
O UNITS SOLD TO SEPARATE INVESTMENT ACCOUNTS OF
PROVIDENT MUTUAL LIFE INSURANCE COMPANY OF
PHILADELPHIA TO FUND BENEFITS UNDER VARIABLE
LIFE INSURANCE POLICIES
-------------------------------------------------
The Securities and Exchange Commission has not
approved or disapproved these Securities or
SPONSOR: passed upon the adequacy of this prospectus. Any
Merrill Lynch, representation to the contrary is a criminal
Pierce, Fenner & Smith offense.
Incorporated Prospectus dated April 30, 1999.
<PAGE>
- --------------------------------------------------------------------------------
CONTENTS
PAGE
-----------
Risk/Return Summary..................................... 3
What You Can Expect From Your Investment................ 5
Distributions........................................ 5
Records and Reports.................................. 5
The Risks You Face...................................... 5
Price Risk........................................... 5
Selling or Exchanging Units............................. 5
Sponsor's Secondary Market........................... 5
Selling Units to the Trustee......................... 5
How The Fund Works...................................... 6
Pricing.............................................. 6
Evaluations.......................................... 6
Income............................................... 6
Expenses............................................. 6
Portfolio Changes.................................... 7
Termination.......................................... 7
Certificates......................................... 7
Trust Indenture...................................... 7
Legal Opinion........................................ 8
Auditors............................................. 8
Sponsor.............................................. 8
Trustee.............................................. 8
Sponsor's Profits.................................... 9
Code of Ethics....................................... 9
Year 2000 Issues..................................... 9
Taxes................................................... 9
Supplemental Information................................ 9
Financial Statements.................................... D-1
2
<PAGE>
- --------------------------------------------------------------------------------
RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks safety of capital and high yield to maturity
by investing primarily in a fixed portfolio of Stripped
U.S. Treasury securities.
Units are currently offered only to Provident Mutual's
Variable Zero Coupon Bond Separate Account to fund the
benefits under variable insurance policies issued by
Provident Mutual. These Accounts invest in units in
accordance with allocation instructions received by
policyowners. Accordingly, the interests of a policyowner
in the units are subject to the terms of the insurance
policy.
The rights of the Accounts as holders of units should be
distinguished from the rights of the policyowners. Please
review the accompanying prospectus for the insurance
policies, which describes the rights of and risks to
policyowners. The term 'you' in this Prospectus refers to
the Accounts (or the Sponsor if it holds units in the
secondary market).
2. WHAT ARE STRIPPED U.S. TREASURY SECURITIES?
These are debt obligations directly issued by the U.S.
Treasury. They do not make any periodic payments of
interest before maturity and are priced at a deep discount
from face amount. They pay a fixed amount of principal at
maturity.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund consists of the 2006 Trust, a unit investment
trust that is designated by the year in which its Stripped
Treasury securities mature. The trust also contains an
interest-bearing U.S. Treasury note to provide income to
pay the trust's expenses.
o Unlike a mutual fund, the portfolio of this unit investment
trust is not managed.
o For each 1,000 units purchased, you will receive a total
distribution of approximately $1,000 for units held until
maturity of the underlying securities in the trust.
o The securities in the Fund but not the Fund or the units
are backed by the full faith and credit of the United
States.
o 100% of the trust's portfolio consists of U.S. Treasury
securities.
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN
FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates can reduce the value of the units.
o Since the portfolio is priced at a deep discount from face
amount, unit prices may be subject to greater fluctuations
in response to changing interest rates. This risk is greater
than on debt securities that pay interest currently and
increases when the time to maturity is longer.
o If units are sold before the underlying securities mature,
the value of your units may decrease, because market prices
of the securities before maturity will vary with changes in
interest rates and other factors.
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want safety of capital with a locked-in yield to
maturity. You benefit from a portfolio of U.S. government
securities with fixed returns and a stated maturity.
The Fund is not appropriate for you if you want current
income or a speculative investment that changes to take
advantage of market movements.
3
<PAGE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses the Account may
pay, directly or indirectly, when it invests in the Fund.
TRANSACTION CHARGES
Provident Mutual initially pays a transaction charge to the
Sponsor on the units sold to the Account, and Provident
Mutual intends to recover this amount through an asset
charge. See the accompanying Prospectus for the insurance
policies for futher information. The transaction charge is
based on the remaining years to maturity of the Stripped
Treasury Security:
PERCENT
OF OFFERING
REMAINING YEARS TO MATURITY PRICE
----------------------------------------------- -----------
Less than 2 years.............................. 0.25%
At least 2 years but less than 3 years......... 0.50
At least 3 years but less than 5 years......... 0.75
At least 5 years but less than 8 years......... 1.00
At least 8 years............................... 1.50
ESTIMATED ANNUAL OPERATING EXPENSES
Trustee's Annual Fee and Expenses
Per $1,000 face amount of the underlying
securities. $0.50
7. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and securities
are not sold because of market changes. To lock in the yield
on the purchase date, a trust holds securities to maturity
unless sales are needed to raise cash for redemptions.
8. HOW DO I BUY UNITS?
Each Account buys units from the Sponsor. There is no
minimum investment.
UNIT PRICE PER 1,000 UNITS
(as of December 31, 1998)
SERIES A
2006
TRUST
-----------
$ 723.57
Net asset value (based on offer
side evaluation of underlying
securities)
$ 7.31
Plus transaction charge
-----------
$ 730.88
Unit price per 1,000 Units
Unit price is based on the net asset value of the Fund plus
the applicable transaction charge shown below. Any principal
cash, and any net accrued but undistributed interest on the
unit is added to the unit price. An independent evaluator
prices the securities at their offer side values at 3:30
p.m. Eastern time each business day. Unit price varies daily
with changes in the prices of the securities in the trust.
9. HOW DO I SELL UNITS?
An Account may sell 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. You will not pay any fee when
you sell your units.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
Stripped Treasury securities do not pay interest until they
mature; consequently, you should not expect any
distributions of interest income. When the Stripped Treasury
security matures, the proceeds will be distributed to the
Accounts. A distribution will be made in cash two business
days following the maturity of the Stripped Treasury
security.
The Accounts (not the policyowners) have significant amounts
of income attributed to them annually as original issue
discount is accrued on the Stripped Treasury securities.
4
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
DISTRIBUTIONS
The trust normally holds any net income and principal received until the
Stripped Treasury security matures. However, the Trustee may distribute any
available balances in the Income and Capital Accounts once a year, as instructed
by the Sponsor.
RECORDS AND REPORTS
The Accounts receive:
o with any distribution, a statement of income and other payments;
o an annual report on Fund transactions; and
o annual tax information. This is also sent to the IRS.
You will receive audited financial statements of the Fund once a year.
THE RISK YOU FACE
PRICE RISK
Investing involves risks, including the risk that your investment before
maturity will decline in value if interest rates rise. Generally, the price of
Stripped Treasury securities fluctuates more widely than prices of debt
securities that pay interest currently. Also, securities with longer maturities
will change in value more than securities with shorter maturities. Of course, we
cannot predict how interest rates may change.
SELLING OR EXCHANGING UNITS
SPONSOR'S SECONDARY MARKET
While we are not obligated to do so, we intend to buy back units at their offer
side value without any fee or charge. We may resell the units to an Account or
to the Trustee.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, an Account can sell units
to the Trustee at any time at a price based on the lower bid side evaluation of
the securities in the trust. It must deliver instructions to the Trustee (with
coordinated delivery or assignment of any outstanding certificates if issued).
Within seven days after receiving a redemption request in proper form, the
Trustee will transmit the proceeds as directed by the redemption instructions.
An Account may opt to receive securities rather than cash. Contact the Trustee
for additional information.
If there is no secondary market, the Trustee may sell your units in the
over-the-counter market for a higher price, but it is not obligated to do so. In
that case, you will receive the net proceeds of the sale.
If the Fund does not have cash available to pay for units redeemed, the Sponsor
will select securities to be sold, based on market and credit factors. These
sales could be made at times when the securities would not otherwise be sold and
may result in receiving less than the unit par value and also reduce the size
and diversity of the trust.
Payments for units could be delayed:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or
5
<PAGE>
that an emergency exists making sale or evaluation of the bonds not
reasonably practicable; and
o for any other period permitted by SEC order.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the securities, less expenses,
up to, but not including, the settlement date, which is usually the business day
after purchase of the unit.
EVALUATIONS
An independent Evaluator values the securities on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas;
and the following federal holidays: Columbus Day and Veterans Day). Values are
based on current offer prices for the securities or comparable bonds.
INCOME
The Trustee credits interest 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 semi-annually. It also benefits when it holds cash for a
trust in non-interest bearing accounts. The Trustee may also receive additional
amounts:
o to reimburse the Trustee for the trust's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsor;
o costs of actions taken to protect a trust and other legal fees and
expenses;
o termination expenses and any governmental charges.
The trust also pays the Evaluator's fees.
The Trustee's and Evaluator's fees may be adjusted for inflation without
investors' approval.
If trust expenses exceed initial estimates, the trust will owe the excess. The
Trustee has a lien on trust assets to secure reimbursement of trust expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsor and Trustee are not liable for any default or defect in a security.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
securities in the portfolio even if adverse financial circumstances occur.
However, we may sell a security in certain cases if we believe that certain
adverse credit or other conditions exist.
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. Units offered in the secondary market may not
represent the same face amount of securities that they did originally.
6
<PAGE>
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
o size of the trust relative to its original size;
o level of trust expenses;
o yield to maturity;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
TERMINATION
Each trust terminates following the stated maturity or sale of the last security
in its portfolio. The trust may also terminate earlier with the consent of
investors holding 51% of the units or its total assets are less than 40% of the
face amount of securities deposited. We will decide whether to terminate a trust
early based on the same factors used in deciding whether or not to offer units
in the secondary market.
When a trust is about to terminate the Account will receive a notice, and it
will be unable to sell units of the trust after that time. On or shortly before
termination, we will sell any remaining securities, and you will receive your
final distribution. Any security that cannot be sold at a reasonable price may
continue to be held by the Trustee in a liquidating trust pending its final
sale.
You will bear your share of the expenses associated with termination, including
costs in selling securities. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. An Account transfer certificates
by complying with the requirements for redeeming certificates, described above.
It can replace lost or mutilated certificates by delivering satisfactory
indemnity and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a trust Indenture, a contract
among the Sponsor, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsor and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o 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 Fund without your written consent.
The Trustee may resign by notifying the Sponsor. The Sponsor may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsor determines that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
7
<PAGE>
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsor and the Trustee without the consent of
investors. The resignation or removal of either 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 or Evaluator may petition a court to appoint
a successor.
If the Sponsor fails to perform its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the trusts; or
o continue to act as Trustee without a Sponsor.
The trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsor and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
special counsel for the Sponsors, 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 Financial Statements 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 companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Departament, 4 New York
Plaza--6th Floor, New York, New York 10004, 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.
SPONSOR'S PROFITS
Upon the sale of units, the Sponsor receives the transaction charge from an
Account (as set out above). The Sponsor also realizes a profit or loss on each
deposit of securities in a trust. Any cash made available by you to the Sponsor
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.
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 it
buys units and the prices at which it resells or redeems those units.
8
<PAGE>
CODE OF ETHICS
Merrill Lynch, as Sponsor, has adopted a code of ethics requiring preclearance
and 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 Fund and to provide reasonable
standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Fund. The Year 2000 Problem may adversely affect the U.S. Treasury, as issuer of
the securities held by a trust, but we cannot predict whether any impact will be
material to the trust.
TAXES
The following discussion relates only to the Accounts as holders of units, and
not to policyowners. The separate prospectus for the insurance policies,
attached, describes tax consequences to policyowners.
In the opinion of our counsel, under existing law:
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each Stripped Treasury
security in the Fund.
The zero coupon bonds will be considered to have been issued at an 'original
issue discount' for federal income tax purposes. As a result, you will be
required to include original issue discount in respect of the zero coupon bonds
as it accrues, in accordance with a constant yield method based on a compounding
of interest.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the securities that may be in the Fund's portfolio and general information
about the structure and operation of the Fund. The supplemental information is
also available from the SEC.
9
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
Report of Independent Accountants
The Sponsor, Trustee and Holders
of The Stripped ("Zero")
U.S. Treasury Securities Fund,
Provident Mutual Series A:
We have audited the accompanying statement of condition of the 2006 Trust of The
Stripped ("Zero") U.S. Treasury Securities Fund, Provident Mutual Series A,
including the portfolio, as of December 31, 1998 and the related statements of
operations and of changes in net assets for the years ended December 31, 1998,
1997 and 1996. These financial statements are the responsibility of the
Trustee. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits 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 statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. Securities owned at
December 31, 1998, as shown in such portfolio, were confirmed to us by The Chase
Manhattan Bank, 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the 2006 Trust of The Stripped
("Zero") U.S. Treasury Securities Fund, Provident Mutual Series A at December
31, 1998 and the results of its operations and changes in its net assets for the
above-stated years in conformity with generally accepted accounting principles.
Deloitte & Touche Llp
New York, N.Y.
March 15, 1999
D-1
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
STATEMENT OF CONDITION
AS OF DECEMBER 31, 1998
2006 TRUST
TRUST PROPERTY:
Investment in marketable securities
(see Portfolio and Note 1) $12,544,291
Other 3,908
Total trust property 12,548,199
LESS LIABILITIES:
Other 719
NET ASSETS (Note 2) $12,547,480
UNITS OUTSTANDING 17,306,267
UNIT VALUE $0.72503
See Notes to Financial Statements.
D-2
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
Statements of Operations
<TABLE>
<CAPTION>
2006 TRUST
Years Ended December 31,
1998 1997 1996
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income $ 7,768 $ 5,944 $ 4,511
Accretion of original issue discount 616,536 455,799 321,283
Trustee's fees and expenses (7,040) (5,806) (4,291)
Net investment income 617,264 455,937 321,503
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain on securities sold or redeemed 32,282
Unrealized appreciation (depreciation) of investments 783,516 356,227 (355,385)
Net realized and unrealized gain (loss) on
investments 783,516 388,509 (355,385)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
OPERATIONS $1,400,780 $844,446 $(33,882)
</TABLE>
See Notes to Financial Statements.
D-3
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
2006 TRUST
Years Ended December 31,
1998 1997 1996
<S> <C> <C> <C>
OPERATIONS:
Net investment income $ 617,264 $ 455,937 $ 321,503
Realized gain on securities sold or redeemed 32,282
Unrealized appreciation (depreciation)
of investments 783,516 356,227 (355,385)
Net increase (decrease) in net assets resulting
from operations 1,400,780 844,446 (33,882)
CAPITAL SHARE TRANSACTIONS (Note 3):
Issuance of units 2,493,669 1,898,370 1,596,441
Redemptions of 562,595 units (310,074)
Net capital share transactions 2,493,669 1,588,296 1,596,441
NET INCREASE IN NET ASSETS 3,894,449 2,432,742 1,562,559
NET ASSETS, BEGINNING OF YEAR 8,653,031 6,220,289 4,657,730
NET ASSETS, END OF YEAR $12,547,480 $8,653,031 $6,220,289
UNIT VALUE, END OF YEAR $ 0.72503 $0.63456 $0.56482
UNITS OUTSTANDING, END OF YEAR 17,306,267 13,636,339 11,012,916
</TABLE>
See Notes to Financial Statements.
D-4
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
Notes to Financial Statements
1. Significant Accounting Policies
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally
accepted accounting principles.
(a) Securities are stated at value as determined by an independent
evaluator based on bid side evaluations for the securities.
(b) Cost of securities is based on offering side evaluations for the
securities at Dates of Deposit. Cost of securities subsequent to
dates of purchase has been adjusted to include the accretion of
original issue discount on the Stripped Treasury Securities. Realized
gain and loss on sales of securities are determined using the first-
in, first-out cost basis.
(c) The Fund is not subject to income taxes. Accordingly, no provision
for such taxes is required.
2. Net Assets, December 31, 1998
Cost of 17,306,267 units at Dates of Deposit $ 9,085,042
Less sales charge 158,989
Net amount applicable to Holders 8,926,053
Redemptions of units - net cost of 2,473,107 units less
redemption amounts 205,899
Realized gain on securities sold or redeemed 85,922
Unrealized appreciation of investments 1,439,794
Undistributed net investment income - accretion of original
issue discount ($1,886,797) plus excess ($3,015) of
interest income over Trustee's fees and expenses 1,889,812
Net assets $12,547,480
3. Capital Share Transactions
Additional units were issued by the Trust during the years ended
December 31, 1998, 1997 and 1996 as follows:
1998 1997 1996
3,669,928 3,186,018 2,877,172
Units may be redeemed at the office of the Trustee upon tender thereof
generally on any business day or, in the case of uncertificated units, upon
delivery of a request for redemption and payment of any relevant tax. The
Trustee will redeem units either in cash or in kind at the option of the
Holder as specified in writing to the Trustee.
D-5
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
Notes to Financial Statements
4. Income Taxes
All Fund items of income received, accretion of original issue discount,
expenses paid, and realized gains and losses on securities sold are
attributable to the Holders, on a pro rata basis, for Federal income tax
purposes in accordance with the grantor trust rules of the United States
Internal Revenue Code.
At December 31, 1998, the cost of investment securities for Federal income
tax purposes was approximately equivalent to the adjusted cost as shown in
the Trust's portfolio.
5. Distributions
It is anticipated that the Trust will not make any distributions until the
first business day following the maturity of its holdings in the Stripped
Treasury Securities which are noninterest-bearing.
D-6
THE STRIPPED ("ZERO") U.S. TREASURY SECURITIES FUND,
PROVIDENT MUTUAL SERIES A
PORTFOLIO
AS OF DECEMBER 31, 1998
Portfolio No. Adjusted
and Title of Interest Face Cost Value
Securities Rate Maturities Amount (Note A) (Note A)
2006 Trust
1. Stripped Treasury 0% 2/15/06 $17,382,000 $10,991,816 $12,425,736
Securities
(Note B)
2. U.S. Treasury
Bonds 9.375 2/15/06 92,666 112,681 118,555
Total $17,474,666 $11,104,497 $12,544,291
Note A - See Note 1 to Financial Statements.
Note B - See "Description of the Fund - Special Characteristics of
Stripped Treasury Securities" in this Prospectus, Part B.
D-7
<PAGE>
HAVE QUESTIONS ? THE STRIPPED ('ZERO') U.S TREASURY
Request the most recent free SECURITIES FUND, PROVIDENT MUTUAL
Information Supplement SERIES A
that gives more details about ---------------------------------------
the Fund, by calling: This Prospectus does not contain
The Chase Manhattan Bank complete information about the
1-800-323-1508 investment company filed with the
Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file number:
33-02455);
o Investment Company Act of 1940 (file
no. 811-2810).
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.
---------------------------------------
14205--4/99
