DEFINED ASSET FUNDS EQUITY INC FD BLUE CHIP STK SER 2, 487, 1995-08-22

DEFINED ASSET FUNDS EQUITY INC FD BLUE CHIP STK SER 2
487, 1995-08-22

Previous: MARIETTA CORP, DFAN14A, 1995-08-22

Next: TRAVEL PORTS OF AMERICA INC, PRE 14A, 1995-08-22

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 22, 1995
REGISTRATION NO. 33-61155

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------------
AMENDMENT NO. 1
TO
FORM S-6
------------------------------------------
FOR REGISTRATION UNDER THE SECURITIES ACT
OF 1933 OF SECURITIES OF UNIT INVESTMENT
TRUSTS REGISTERED ON FORM N-8B-2
------------------------------------------
A. EXACT NAME OF TRUST:

EQUITY INCOME FUND
BLUE CHIP STOCK SERIES 3
PREMIER AMERICAN PORTFOLIO
(FORMERLY CONCEPT SERIES 20)
DEFINED ASSET FUNDS

B. NAMES OF DEPOSITORS:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS INC.
C. COMPLETE ADDRESSES OF DEPOSITORS' PRINCIPAL EXECUTIVE OFFICES:

MERRILL LYNCH, PIERCE, SMITH BARNEY INC.
FENNER & SMITH 388 GREENWICH ST.
INCORPORATED 23RD FLOOR
DEFINED ASSET FUNDS NEW YORK, N.Y. 10013
P.O. BOX 9051
PRINCETON, N.J.
08543-9051

PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES DEAN WITTER REYNOLDS INC.
1285 AVENUE OF THE INCORPORATED TWO WORLD TRADE
AMERICAS ONE SEAPORT PLAZA CENTER--59TH FLOOR
NEW YORK, N.Y. 10019 199 WATER STREET NEW YORK, N.Y. 10048
NEW YORK, N.Y. 10292

D. NAMES AND COMPLETE ADDRESSES OF AGENTS FOR SERVICE:

TERESA KONCICK, ESQ. LAURIE A. HESSLEIN ROBERT E. HOLLEY
P.O. BOX 9051 388 GREENWICH ST. 1285 AVENUE OF THE
PRINCETON, N.J. NEW YORK, N.Y. 10013 AMERICAS
08543-9051 NEW YORK, N.Y. 10019

COPIES TO:
LEE B. SPENCER, JR. DOUGLAS LOWE, ESQ. PIERRE DE SAINT PHALLE,
ONE SEAPORT PLAZA 130 LIBERTY STREET--29TH ESQ.
199 WATER STREET FLOOR 450 LEXINGTON AVENUE
NEW YORK, N.Y. 10292 NEW YORK, N.Y. 10006 NEW YORK, N.Y. 10017

E. TITLE AND AMOUNT OF SECURITIES BEING REGISTERED:
An indefinite number of Units of Beneficial Interest pursuant to Rule 24f-2
promulgated under the Investment Company Act of 1940, as amended.

F. PROPOSED MAXIMUM OFFERING PRICE TO THE PUBLIC OF THE SECURITIES BEING
REGISTERED: Indefinite

G. AMOUNT OF FILING FEE: $500 (as required by Rule 24f-2)

H. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC:

As soon as practicable after the effective date of the Registration Statement.

/ x / Check box if it is proposed that this filing will become effective at 9:30
a.m. on August 22, 1995 pursuant to Rule 487.

EQUITY INCOME FUND The objective of this Defined Fund is total return
BLUE CHIP STOCK through a combination of capital appreciation and,
SERIES 3 to a lesser extent, dividend income by investing
PREMIER AMERICAN for a period of about four years in a diversified
PORTFOLIO portfolio of relatively high-priced common stocks
(A UNIT INVESTMENT issued primarily by leading American corporations
TRUST) having records of uninterrupted dividend payments
- ------------------------------over a relatively long period of time ('blue chip
- -- MONTHLY INCOME stocks'). There is no assurance that the Fund's
- -- PROFESSIONAL SELECTION objectives will be met.
- -- DIVERSIFICATION The value of units will fluctuate with the value
- -- REINVESTMENT OPTION of the common stocks in the Portfolio and no
assurance can be given that the underlying common
stocks will continue to pay dividends or that the
underlying common stocks or the units will
appreciate in value.
Minimum purchase: $1,000.
Minimum purchase for Individual Retirement/Keogh
Accounts: $250.

-------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
SPONSORS: HAS THE COMMISSION OR ANY STATE SECURITIES
Merrill Lynch, COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
Pierce, Fenner & Smith OF THIS DOCUMENT. ANY REPRESENTATION TO THE
Incorporated CONTRARY IS A CRIMINAL OFFENSE.
Smith Barney Inc. Inquiries should be directed to the Trustee at
PaineWebber Incorporated 1-800-323-1508.
Prudential Securities Prospectus dated August 22, 1995.
Incorporated INVESTORS SHOULD READ THIS PROSPECTUS CAREFULLY
Dean Witter Reynolds Inc. AND RETAIN IT FOR FUTURE REFERENCE.

<PAGE>
- --------------------------------------------------------------------------------

Defined Asset FundsSM
Defined Asset Funds is America's oldest and largest family of unit investment
trusts, with over $100 billion sponsored in the last 25 years. Each Defined
Asset Fund is a portfolio of preselected securities. The portfolio is divided
into 'units' representing equal shares of the underlying assets. Each unit
receives an equal share of income and principal distributions.
Defined Asset Funds offer several defined 'distinctives'. You know in advance
what you are investing in and that changes in the portfolio are limited - a
defined portfolio. Most defined bond funds pay interest monthly - defined
income. The portfolio offers a convenient and simple way to invest - simplicity
defined.

Your financial professional can help you select a Defined Asset Fund to meet
your personal investment objectives. Our size and market presence enable us to
offer a wide variety of investments. The Defined Asset Funds family offers:

o Municipal portfolios
o Corporate portfolios
o Government portfolios
o Equity portfolios
o International portfolios

The terms of Defined Funds are as short as one year or as long as 30 years.
Special defined bond funds are available including: insured funds, double and
triple tax-free funds and funds with 'laddered maturities' to help protect
against changing interest rates. Defined Asset Funds are offered by prospectus
only.

- ----------------------------------------------------------------
Defining Your Portfolio
- ----------------------------------------------------------------

The 33 stocks represented in the Fund are issued by companies that are among the
oldest, largest or most profitable American companies in their respective
industries, and have established records of earnings and uninterrupted dividend
payments over a relatively long period of time. These are commonly known as
'blue chip' stocks. One issuer, Berkshire Hathaway Inc., does not pay dividends
but in the opinion of Defined Asset Funds research analysts otherwise qualifies
as a blue chip stock and trades at a price prohibitive to most individual
investors. Investing in the Portfolio, rather than in only one or two of the
underlying common stocks, is a way to diversify your investment. Based upon the
principal business of each issuer and current market values, the following
industries are represented in the Portfolio:

APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Chemical 4.94%
/ / Conglomerate 11.89%
/ / Consumer Products 9.84%
/ / Pharmaceuticals 4.82%
/ / Electronics 17.76%
/ / Insurance 18.87%
/ / Petroleum 3.59%
/ / Publishing/Broadcasting 3.15%
/ / Forest Products & Paper 4.98%
/ / Railroads 5.13%
/ / Other 15.03%

- ----------------------------------------------------------------
Defining Your Risks
- ----------------------------------------------------------------
Unit price fluctuates with the value of the Portfolio, and the value of the
Portfolio could be affected by changes in the financial condition of the
issuers, changes in the various industries represented in the Portfolio,
movements in stock prices generally, the impact of the Sponsors' purchase and
sale of the securities (especially during the primary offering period of units)
and other factors. Therefore, there is no guarantee that the objective of the
Portfolio will be achieved.

Unlike a mutual fund, the Portfolio is not actively managed and the Sponsors
receive no management fee. Therefore, the adverse financial condition of an
issuer or any market movement in the price of a security will not necessarily
require the sale of securities from the Portfolio or mean that the Sponsors will
not continue to purchase the security in order to create additional Units.
Although the Portfolio is regularly reviewed and evaluated and Sponsors may
instruct the Trustee to sell securities under certain limited circumstances,
securities will not be sold to take advantage of market fluctuations or changes
in anticipated rates of appreciation.

A-2
<PAGE>

- ----------------------------------------------------------------
Defining Your Investment
- ----------------------------------------------------------------

PUBLIC OFFERING PRICE PER 1,000 UNITS $1,000.00

The Public Offering Price as of August 21, 1995, the business day prior to the
initial date of deposit, is based on the aggregate value of the underlying
securities ($462,137.50) and any cash held to purchase securities, divided by
the number of units outstanding (475,205) times 1,000, plus the initial sales
charge. The Public Offering Price on any subsequent date will vary. The
underlying securities are valued by the Trustee on the basis of their closing
sale prices at 4:00 p.m. Eastern time on every business day.

SALES CHARGES

The total sales charge for this investment combines an initial up-front sales
charge and a deferred sales charge that will be deducted from the net asset
value of the Portfolio quarterly on the 10th of November, February, May and
August beginning November 10, 1995.

QUARTERLY INCOME DISTRIBUTIONS

Distributions of income, if any, will be paid on the 25th day of March, June,
September and December of each year commencing on the 25th day of December 1995
to Holders of record on the 10th day of March, June, September and December,
respectively. In order to meet certain tax requirements, a special distribution
of income including capital gains, may be paid to holders of record as of a date
in December. Any capital gain net income will generally be distributed after the
end of the year.

REINVESTMENT OPTION

You can elect to automatically reinvest your distributions into additional units
of the Portfolio subject only to the deferred sales charge remaining at the time
of reinvestment. Reinvesting helps to compound your income for a greater total
return.

TAXES

Distributions which are taxable as ordinary income to Holders will constitute
dividends for Federal income tax purposes and may, subject to certain
limitations, be eligible for the dividends-received deduction for certain
corporations (see Taxes in Part B). Foreign holders should be aware that
distributions from the Fund will generally be subject to information reporting
and withholding taxes.

TAX BASIS REPORTING

The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge. In addition, the annual statement and the relevant
tax reporting forms you receive at year-end will be based on the amount paid to
you (not including the deferred sales charge). Accordingly, you should not
increase your basis in your units by the deferred sales charge.

TERMINATION DATE

The Portfolio will terminate by August 31, 1999. The final distribution will be
made within a reasonable time afterward. The Portfolio may be terminated earlier
if its value is less than 40% of the value of the securities when deposited.

SPONSORS' PROFIT OR LOSS

The Sponsors' profit or loss from the Portfolio will include the receipt of
applicable sales charges, fluctuations in the Public Offering Price or secondary
market price of units, a loss of $325.00 on the initial deposit of the
securities and a gain or loss on subsequent deposits of securities (see
Sponsors' and Underwriters' Profits in Part B).

A-3
<PAGE>

- ----------------------------------------------------------------
Defining Your Costs
- ----------------------------------------------------------------

SALES CHARGE

First-time investors pay a 2.75% sales charge when they buy. For example, on a
$1,000 investment, $972.50 is invested in the Portfolio. In addition, a deferred
sales charge of $1.625 per 1,000 units will be deducted from the Portfolio's net
asset value each quarter ($26.00 total). This deferred method of payment keeps
more of your money invested over a longer period of time. Although this is a
unit investment trust rather than a mutual fund, the following information is
presented to permit a comparison of fees and an understanding of the direct or
indirect costs and expenses that you pay.

As a %
of Initial Public Amount per
Offering Price 1,000 Units
----------------- --------------
Maximum Initial Sales Charge 2.75% $ 27.50
Deferred Sales Charge 2.60% 26.00
----------------- --------------
5.35% $ 53.50
----------------- --------------
----------------- --------------
Maximum Sales Charge Imposed on
Reinvested Dividends 2.60% $ 26.00

ESTIMATED ANNUAL FUND OPERATING EXPENSES

As a % Amount per
of Net Assets 1,000 Units
----------------- --------------
Trustee's Fee .087% $ 0.84
Maximum Portfolio Supervision,
Bookkeeping and Administrative
Fees .046% $ 0.45
Organizational Expenses .103% $ 1.00
Other Operating Expenses .078% $ 0.76
----------------- --------------
TOTAL .314% $ 3.05

This Portfolio (and therefore the investors) will bear all or a portion of its
organizational costs--including costs of preparing the registration statement,
the trust indenture and other closing documents, registering units with the SEC
and the states and the initial audit of the Portfolio--as is common for mutual
funds. Historically, the sponsors of unit investment trusts have paid these
costs.

COSTS OVER TIME

You would pay the following cumulative expenses on a $1,000 investment, assuming
5% annual return on the investment throughout the indicated periods and
redemption at the end of the period:

1 Year 2 Years 3 Years 4 Years
$37 $47 $56 $66

The example assumes reinvestment of all dividends and distributions and uses a
5% annual rate of return as mandated by SEC regulations applicable to mutual
funds. For purposes of the example, the deferred sales charge imposed on
reinvestment of dividends is not reflected until the year following payment of
the dividend; the cumulative expenses would be higher if sales charges on
reinvested dividends were reflected in the year of reinvestment.
The example should not be considered a representation of past or future expenses
or annual rates of return; the actual expenses and annual rates of return may be
more or less than the example.

SELLING YOUR INVESTMENT

You may sell or redeem your units at any time prior to the termination of the
Portfolio. Your price will be based on the then current net asset value. The
redemption and secondary market repurchase price as of August 21, 1995 was
$972.50 per 1,000 units. This price reflects deductions of the deferred sales
charge which declines over the life of the Portfolio ($26.00 initially). If you
sell your units before the termination of the Portfolio, you will not pay
remaining deferred sales charges.

A-4
<PAGE>

- --------------------------------------------------------------------------------
Defined Portfolio
- --------------------------------------------------------------------------------
<TABLE><CAPTION>
Equity Income Fund
Blue Chip Stock Series 3
Premier American Portfolio August 22, 1995
PRICE CURRENT
TICKER PERCENTAGE PER SHARE COST DIVIDEND
NAME OF ISSUER SYMBOL OF FUND (1) TO FUND TO FUND (2) YIELD (3)
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1. Alco Standard Corporation ASN 5.19% $ 80.000 $ 24,000.00 1.30%
2. American International Group,
Inc. AIG 3.32 76.750 15,350.00 0.44
3. Berkshire Hathaway, Inc. BRK 10.73 24,800.000 49,600.00 0.00
4. Boeing Company BA 1.40 64.875 6,487.50 1.54
5. Clorox Company CLX 1.43 66.125 6,612.50 3.21
6. Coca-Cola Company KO 5.46 63.125 25,250.00 1.39
7. Colgate-Palmolive Company CL 2.92 67.375 13,475.00 2.79
8. CSX Corporation CSX 3.59 82.875 16,575.00 2.12
9. Du Pont (E.I.) De Nemours &
Company DD 2.82 65.250 13,050.00 3.19
10. Emerson Electric Company EMR 4.59 70.750 21,225.00 2.77
11. Exxon Corporation XON 1.49 68.750 6,875.00 4.36
12. General Re Corporation GRN 3.11 143.500 14,350.00 1.37
13. Hewlett-Packard Company HWP 5.18 79.750 23,925.00 1.00
14. International Paper Company IP 3.57 82.500 16,500.00 2.42
15. J. P. Morgan & Company JPM 1.56 72.000 7,200.00 4.17
16. Johnson & Johnson JNJ 2.93 67.625 13,525.00 1.95
17. Kimberly-Clark Corporation KMB 1.41 65.375 6,537.50 2.75
18. Marsh & McLennan Companies,
Inc. MMC 1.71 78.875 7,887.50 3.68
19. McGraw-Hill Companies, Inc. MHP 1.70 78.625 7,862.50 3.05
20. Medtronic, Inc. MDT 3.95 91.250 18,250.00 0.57
21. Mobil Corporation MOB 2.10 96.875 9,687.50 3.82
22. Monsanto Company MTC 2.12 97.750 9,775.00 2.82
23. Motorola, Inc. MOT 4.80 74.000 22,200.00 0.54
24. Nike, Inc. Class B NKE 4.04 93.250 18,650.00 1.07
25. Norfolk Southern Corporation NSC 1.54 71.250 7,125.00 2.92
26. Procter & Gamble Company PG 1.45 67.000 6,700.00 2.39
27. Texas Instruments, Inc. TXN 3.19 73.750 14,750.00 0.92
28. Textron, Inc. TXT 1.47 68.000 6,800.00 2.29
29. Tribune Company TRB 1.45 67.000 6,700.00 1.67
30. TRW, Inc. TRW 1.68 77.625 7,762.50 2.58
31. United Technologies Corporation UTX 3.55 82.000 16,400.00 2.44
32. Warner-Lambert Company WLA 1.89 87.375 8,737.50 2.98
33. Xerox Corporation XRX 2.66 123.125 12,312.50 2.44
-------------------- -----------------
100.00% $ 462,137.50
-------------------- -----------------
-------------------- -----------------
</TABLE>
DIVIDENDS
NAME OF ISSUER PAID SINCE:
- ----------------------------------------------------
1. Alco Standard Corporation 1965
2. American International Group,
Inc. 1969
3. Berkshire Hathaway, Inc. --
4. Boeing Company 1942
5. Clorox Company 1968
6. Coca-Cola Company 1893
7. Colgate-Palmolive Company 1895
8. CSX Corporation 1922
9. Du Pont (E.I.) De Nemours &
Company 1904
10. Emerson Electric Company 1947
11. Exxon Corporation 1882
12. General Re Corporation 1934
13. Hewlett-Packard Company 1965
14. International Paper Company 1946
15. J. P. Morgan & Company 1892
16. Johnson & Johnson 1905
17. Kimberly-Clark Corporation 1935
18. Marsh & McLennan Companies,
Inc. 1923
19. McGraw-Hill Companies, Inc. 1937
20. Medtronic, Inc. 1977
21. Mobil Corporation 1902
22. Monsanto Company 1925
23. Motorola, Inc. 1942
24. Nike, Inc. Class B 1984
25. Norfolk Southern Corporation 1901
26. Procter & Gamble Company 1891
27. Texas Instruments, Inc. 1962
28. Textron, Inc. 1942
29. Tribune Company 1902
30. TRW, Inc. 1936
31. United Technologies Corporation 1936
32. Warner-Lambert Company 1926
33. Xerox Corporation 1930
- ------------------------------------
(1) Based on Cost to Fund.
(2) Valuation by the Trustee made on the basis of closing sale prices at the
evaluation time on August 21, 1995.
(3) Calculated by annualizing the latest quarterly or semi-annual dividend
declared.
------------------------------------

The securities were acquired on August 21, 1995 and are represented entirely by
contracts to purchase the securities. Any of the Sponsors may have acted as
underwriters, managers or comanagers of a public offering of the securities in
this Fund during the last three years. Affiliates of the Sponsors may serve as
specialists in the securities in this Fund on one or more stock exchanges and
may have a long or short position in any of these securities or in 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 any of the Sponsors may be an officer or director of one or more of
the issuers of the securities in the Fund. A 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. Any 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.

A-5
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

The Sponsors, Trustee and Holders of Equity Income Fund Blue Chip Stock Series
3, Premier American Portfolio, Defined Asset Funds (the 'Fund'):

We have audited the accompanying statement of condition and the defined
portfolio included in the prospectus of the Fund as of August 22, 1995. 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 Fund as of August 22, 1995
in conformity with generally accepted accounting principles.

DELOITTE & TOUCHE LLP

New York, N.Y.
August 22, 1995

STATEMENT OF CONDITION AS OF AUGUST 22, 1995

TRUST PROPERTY

Investments--Contracts to purchase Securities(1).........$ 462,137.50
Organizational Costs(2).................................. 80,000.00
--------------------
Total.........................................$ 542,137.50
--------------------
--------------------
LIABILITY AND INTEREST OF HOLDERS
Accrued Liability(2)...................................$ 80,000.00
Interest of Holders of 475,205 Units of fractional
undivided interest outstanding:
Cost to investors(3)...................................$ 475,205.00
Gross underwriting commissions(4)...................... (13,067.50)
--------------------
Subtotal...............................................$ 462,137.50
--------------------
Total.........................................$ 542,137.50
--------------------
--------------------

- ---------------
(1) Aggregate cost to the Fund of the securities listed under Defined
Portfolio determined by the Trustee at 4:00 p.m., Eastern time on August 21,
1995. The contracts to purchase securities are collateralized by an irrevocable
letter of credit which has been issued by Banca Nazionale Dell' Agricoltura, New
York Branch, in the amount of $462,462.50 and deposited with the Trustee. The
amount of the letter of credit includes $462,137.50 for the purchase of
securities.
(2) This represents a portion of the Fund's organizational costs,
which will be deferred and amortized over the life of the Fund. Organizational
costs have been estimated based on projected total assets of $20 million. To the
extent the Fund is larger or smaller, the estimate may vary.
(3) Aggregate public offering price computed on the basis of the
value of the underlying securities at 4:00 p.m., Eastern time on August 21,
1995, plus an initial sales charge at a rate of 2.75% of the Public Offering
Price (2.828% of the aggregate value of Securities). In addition, Units are
subject to deferred sales charges of $1.625 per 1,000 Units payable quarterly
($6.50 per year). After an investor sells or redeems Units, all future
deductions of deferred sales charges with respect to that investor will be
waived.
(4) Assumes the maximum sales charge per 1,000 units of 2.75% of the
Public Offering Price.

A-6
<PAGE>

DEFINED ASSET FUNDSSM
PROSPECTUS--PART B
EQUITY INCOME FUND
BLUE CHIP STOCK SERIES
PREMIER AMERICAN PORTFOLIO
FURTHER INFORMATION REGARDING THE FUND MAY BE OBTAINED
WITHIN FIVE DAYS OF WRITTEN OR TELEPHONIC REQUEST TO THE TRUSTEE AT THE ADDRESS
AND
TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS PROSPECTUS.
INDEX

PAGE
---------
FUND DESCRIPTION...................................... 1
RISK FACTORS.......................................... 2
HOW TO BUY UNITS...................................... 3
HOW TO SELL UNITS..................................... 4
INCOME, DISTRIBUTIONS AND REINVESTMENT................ 5
FUND EXPENSES......................................... 6
TAXES................................................. 6
RECORDS AND REPORTS................................... 8
TRUST INDENTURE....................................... 8
MISCELLANEOUS......................................... 9
SUPPLEMENTAL INFORMATION.............................. 11

FUND DESCRIPTION

PORTFOLIO SELECTION

Professional buyers and research analysts for Defined Asset Funds, with
access to extensive research, selected the Securities for the Portfolio after
considering the Fund's investment objective as well as the quality of the common
stocks, the position of the issuers as leaders in their fields, the earning and
dividend payment records of the issuers, the capitalization of the issuers and
the prices of the common stocks. The deposit of the Securities in the Portfolio
on the initial date of deposit established a proportionate relationship among
the number of shares of each Security. Following the initial date of deposit the
Sponsors may deposit additional Securities in order to create new Units,
maintaining to the extent possible that original proportionate relationship. The
ability to acquire each Security at the same time will generally depend upon the
Security's availability and any restrictions on the purchase of that Security
under the federal securities laws or otherwise.

Additional Units may also be created by the deposit of cash (including a
letter of credit) with instructions to purchase additional Securities. This
practice could cause both existing and new investors to experience a dilution of
their investments and a reduction in their anticipated income because of price
fluctuations in the Securities between the time of the cash deposit and the
actual purchase of the additional Securities and because the associated
brokerage fees will be an expense of the Fund. To minimize these effects, the
Fund will try to purchase Securities as close to the Evaluation Time or at
prices as close to the evaluated prices as possible.

Because each Defined Asset Fund is a preselected portfolio, you know the
securities before you invest. Of course, the Portfolio will change somewhat over
time, as Securities are purchased upon creation of additional Units, as
securities are sold to meet Unit redemptions or in other limited circumstances.

1
<PAGE>

PORTFOLIO SUPERVISION

The Fund follows a buy and hold investment strategy in contrast to the
frequent portfolio changes of a managed fund based on economic, financial and
market analyses. In the event a public tender offer is made for a Security or a
merger or acquisition is announced affecting a Security, the Sponsors may
instruct the Trustee to tender or sell the Security in the open market when in
its opinion it is in the best interests of investors to do so. Although the
Portfolio is not actively managed, it is regularly reviewed and evaluated and
Securities can be sold in case of certain adverse developments concerning a
Security including the adverse financial condition of the issuer, the
institution of legal proceedings against the issuer, a decline in the price or
the occurrence of other market or credit factors that might otherwise make
retention of the Security detrimental to the interest of investors or if the
disposition of these Securities is necessary in order to enable the Fund to make
distributions of the Fund's capital gain net income or desirable in order to
maintain the qualification of the Fund as a regulated investment company under
the Internal Revenue Code. Securities can also be sold to meet redemption of
Units. The Sponsors are also authorized to direct the reinvestment of the
proceeds of the sale of Securities, as well as moneys held to cover the purchase
of Securities pursuant to contracts which have failed, in Replacement Securities
which satisfy certain conditions specified in the Indenture.

RISK FACTORS

An investment in the Fund entails certain risks, including the risk that
the value of your investment will decline if the financial condition of the
issuers of the Securities becomes impaired or if the general condition of the
stock market worsens and the risk that holders of common stocks have generally
inferior rights to receive payments from the issuer in comparison with the
rights of creditors of, or holders of debt obligations or preferred stocks
issued by, the issuer. Moreover, common stocks do not represent an obligation of
the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital provided by debt securities. Common stocks in
general may be especially susceptible to general stock market movements and to
volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises. The
Sponsors cannot predict the direction or scope of any of these factors.

LIQUIDITY

Whether or not the Securities are listed on a national securities exchange,
the principal trading market for the Securities may be in the over-the-counter
market. As a result, the existence of a liquid trading market for the Securities
may depend on whether dealers will make a market in the Securities. There can be
no assurance that a market will be made for any of the Securities, that any
market for the Securities will be maintained or of the liquidity of the
Securities in any markets made. In addition, the Fund may be restricted under
the Investment Company Act of 1940 from selling Securities to the Sponsors. The
price at which the Securities may be sold to meet redemptions and the value of
the Fund will be adversely affected if trading markets for the Securities are
limited or absent.

LITIGATION AND LEGISLATION

The Sponsors do not know of any pending litigation as of the initial date
of deposit that might reasonably be expected to have a material adverse effect
on the Fund, although pending litigation may have a material adverse effect on
the value of Securities in the Fund. In addition, at any time after the initial
date of deposit, litigation may be initiated on a variety of grounds, or
legislation may be enacted, affecting the Securities in the Portfolio or the
issuers of the Securities. Changing approaches to regulation may have a negative
impact on certain companies represented in the Portfolio. There can be no
assurance that future litigation, legislation, regulation or deregulation will
not have a material adverse effect on the Portfolio or will not impair the
ability of the issuers of the Securities to achieve their business goals. From
time to time Congress considers proposals to reduce the rate of the
dividends-received deduction. This type of legislation, if enacted into law,
would adversely affect the after-tax return to investors who can take advantage
of the deduction. See Taxes.

2
<PAGE>

LIFE OF THE FUND; FUND TERMINATION

The size and composition of the Portfolio will be affected by the level of
redemptions of Units that may occur from time to time. Principally, this will
depend upon the number of investors seeking to sell or redeem their Units. The
Portfolio will be terminated no later than the mandatory termination date
specified in Part A of the Prospectus. It will terminate earlier upon the
disposition of the last Security or upon the consent of investors holding 51% of
the Units. The Portfolio may also be terminated earlier by the Sponsors once its
total assets have fallen below the minimum value specified in Part A of the
Prospectus. A decision by the Sponsors to terminate the Portfolio early will be
based on factors such as the size of the Portfolio relative to its original
size, the ratio of Portfolio expenses to income, and the cost of maintaining a
current prospectus.

Notice of impending termination will be provided to investors and
thereafter units will no longer be redeemable. On or shortly before termination,
the Trustee will seek to dispose of any Securities remaining in the Portfolio
although any Security unable to be sold at a reasonable price may continue to be
held by the Trustee in a liquidating trust pending its final disposition. A
proportional share of the expenses associated with termination, including
brokerage costs in disposing of Securities, will be borne by investors remaining
at that time. This may have the effect of reducing the amount of proceeds those
investors are to receive in any final distribution.

HOW TO BUY UNITS

Units are available from any of the Sponsors, Underwriters and other
broker-dealers at the Public Offering Price. The Public Offering Price varies
each Business Day with changes in the value of the Portfolio and other assets
and liabilities of the Fund.

PUBLIC OFFERING PRICE

Units are charged a combination of Initial and Deferred Sales Charges
equal, in the aggregate, to a maximum charge of 5.35% of the public offering
price or 5.501% of the net asset value of the Fund over its expected four-year
life. The initial portion of the sales charge is equal to 2.75% of the Public
Offering Price (2.828%) of the net amount invested in the Securities) and the
deferred portion of the sales charge is $1.625 per 1,000 Units ($6.50 per year)
payable by the Fund on behalf of the investors out of net asset value of the
Fund quarterly until the Fund terminates. If an investor sells or redeems Units
before a quarterly payment date, all future deductions of deferred sales charges
with respect to that investor will be waived; this will have the effect of
reducing the rate of sales charge as to that investor.

The initial portion of the sales charge is reduced on a graduated scale for
sales to any purchaser of at least $250,000 of Units and will be applied on
whichever basis is more favorable to the purchaser. To qualify for the reduced
initial sales charge and concession applicable to quantity purchasers, the
dealer must confirm that the sale is to a single purchaser as defined below or
is purchased for its own account and not for distribution. The initial portion
of the sales charge will be reduced as follows:
<TABLE><CAPTION>

SALES CHARGE
(GROSS UNDERWRITING PROFIT)
--------------------------------
AS PERCENT OF AS PERCENT OF MAXIMUM DEALER CONCESSION CONCESSION TO
PUBLIC OFFERING NET AMOUNT DOLLAR AMOUNT DEFERRED AS PERCENT OF INTRODUCING
AMOUNT PURCHASED PRICE INVESTED PER 1,000 UNITS PUBLIC OFFERING PRICE DEALERS
- ---------------------------------- ----------------- ------------- ---------------------- --------------------- -------------
<S> <C> <C> <C> <C> <C>
Less than $250,000................ 2.75% 2.828% $ 26.00 1.788% $ 19.80
$250,000 - $499,999............... 2.25 2.302 26.00 1.463 16.20
$500,000 - $749,999............... 1.75 1.781 26.00 1.138 12.60
$750,000 - $999,999............... 1.25 1.266 26.00 0.813 9.00
$1,000,000 and more............... 1.00 1.010 26.00 0.650 7.20
</TABLE>

The above graduated sales charges will apply on all purchases on any one
day by the same purchaser of Units in this Fund only in the amounts stated. For
this purpose purchases during the primary offering period will not be aggregated
with concurrent purchases of any other unit trusts sponsored by the Sponsors.
Purchases in the secondary market of one or more Series sponsored by the
Sponsors which have the same rates of sales charge will be aggregated. Units
held in the name of the spouse of the purchaser or in the name of a child of the
purchaser under 21 years of age are deemed to be registered in the name of the
purchaser. The graduated sales charges are

<PAGE>

also applicable to a trustee or other fiduciary purchasing securities for a
single trust estate or single fiduciary account.

Employees of certain Sponsors and Sponsor affiliates and non-employee
directors of Merrill Lynch & Co. Inc. may purchase Units at a reduced initial
sales charge of not less than $5.00 per 1,000 Units.

EVALUATIONS

Evaluations are determined by the Trustee on each Business Day. This
excludes Saturdays, Sundays and the following holidays as observed by the New
York Stock Exchange: New Year's 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 system,
evaluations are generally based on closing sales prices on that exchange or that
system (unless the Trustee deems these prices inappropriate) or, if closing
sales prices are not

available, at the mean between the closing bid and offer prices. If the
Securities are not listed or if listed but the principal market is elsewhere,
the evaluation is generally determined based on sales prices of the Securities
on the over-the-counter market or, if sales prices in that market are not
available, on the basis of the mean between current bid and offer prices for the
Securities or for comparable securities or by appraisal or by any combination of
these methods. Neither the Sponsors nor the Trustee guarantee the
enforceability, marketability or price of any Securities.

CERTIFICATES

Certificates for Units are issued upon request and may be transferred by
paying any taxes or governmental charges and by complying with the requirements
for redeeming Certificates (see How To Sell Units--Trustee's Redemption of
Units). Certain Sponsors collect additional charges for registering and shipping
Certificates to purchasers. Lost or mutilated Certificates can be replaced upon
delivery of satisfactory indemnity and payment of costs.

HOW TO SELL UNITS

SPONSORS' MARKET FOR UNITS

You can sell your Units at any time without a fee (other than the deduction
after the initial offering period for the costs of liquidating Securities). The
Sponsors (although not obligated to do so) will normally buy any Units offered
for sale at the repurchase price next computed after receipt of the order. The
Sponsors have maintained secondary markets in Defined Asset Funds for over 20
years. Primarily because of the sales charge and fluctuations in the market
value of the Securities, the sale price may be less than the cost of your Units.
You should consult your financial professional for current market prices to
determine if other broker-dealers or banks are offering higher prices for Units.

The Sponsors may discontinue this market without prior notice if the supply
of Units exceeds demand or for other business reasons. The Sponsors may reoffer
or redeem Units repurchased.

TRUSTEE'S REDEMPTION OF UNITS

You may redeem your Units by sending the Trustee a redemption request.
Signatures must be guaranteed by an eligible institution. In certain instances,
additional documents may be required such as a certificate of death, trust
instrument, certificate of corporate authority or appointment as executor,
administrator or guardian. If the Sponsors are maintaining a market for Units,
they will purchase any Units tendered at the repurchase price described above.
If they do not purchase Units tendered, the Trustee is authorized in its
discretion to sell Units in the over-the-counter market if it believes it will
obtain a higher net price for the redeeming investor.

By the seventh calendar day after tender you will be mailed an amount equal
to the Redemption Price per Unit. Because of market movements or changes in the
Portfolio, this price may be more or less than the cost of your Units. The
Redemption Price per Unit is computed each Business Day by adding the value of
the Securities, declared but unpaid dividends on the Securities, cash and the
value of any other Fund assets; deducting unpaid taxes or other governmental
charges, accrued but unpaid Fund expenses and accrued but unpaid Deferred Sales
Charges, unreimbursed Trustee advances, cash held to redeem Units, for purchase
of Securities or for distribution to investors and the value of any other Fund
liabilities; and dividing the result by the number of outstanding Units.

4
<PAGE>

Any investor owning Units with a value of at least $250,000 who redeems
those Units may, in lieu of cash redemption, request distribution in kind of an
amount and value of Securities per Unit equal to the otherwise applicable
Redemption Price per Unit. Whole shares of each Security together with cash from
the Capital Account equal to any fractional shares to which the investor would
be entitled will be paid over to a distribution agent and either held for the
account of the investor or disposed of in accordance with instructions of the
investor. Any brokerage commissions on sales of Securities in connection with
in-kind redemptions will be borne by the redeeming investors. The in-kind
redemption option may be terminated by the Sponsors at any time upon prior
notice to investors.

After the initial offering period, the repurchase and cash redemption
prices will be reduced to reflect the cost to the Fund of liquidating Securities
to meet the redemption.

If cash is not available in the Fund's Income and Capital Accounts to pay
redemptions, the Trustee may sell Securities selected by the Agent for the
Sponsors in a manner designed to maintain, to the extent practicable, the
proportionate relationship among the number of shares of each Security. These
sales are often made at times when the Securities would not otherwise be sold
and may result in lower prices than might be realized otherwise and will also
reduce the size and diversity of the Fund.

Redemptions may be suspended or payment postponed if the New York Stock
Exchange is closed other than for customary weekend and holiday closings, if the
SEC determines that trading on that Exchange is restricted or that an emergency
exists making disposal or evaluation of the Securities not reasonably
practicable, or for any other period permitted by the SEC.

INCOME, DISTRIBUTIONS AND REINVESTMENT

INCOME AND DISTRIBUTIONS

The net annual income per Unit will depend primarily upon the amount of
dividends declared and paid by the issuers of the Securities and changes in the
expenses of the Fund 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 will continue at their current levels or be declared
or paid.

Each Unit receives an equal share of quarterly distributions of dividend
income. Because dividends on the Securities are not received at a constant rate
throughout the year, any income distribution may be more or less than the amount
then credited to the Income Account. Dividends payable to the Fund are credited
to an Income Account, as of the date on which the Fund is entitled to receive
the dividends, and other receipts are credited to a Capital Account. A Reserve
Account may be created by withdrawing from the Income and Capital Accounts
amounts considered appropriate by the Trustee to reserve for any material amount
that may be payable out of the Fund. Funds held by the Trustee in the various
accounts do not bear interest. Subject to the Reinvestment Plan, the Quarterly
Income Distribution for each investor shall consist of an amount, computed
monthly by the Trustee, substantially equal to one-quarter of the investor's pro
rata share of the estimated annual income to the Income Account, after deducting
estimated expenses. There is no assurance that actual distributions will be made
since all dividends received may be used to pay expenses.

An amount equal to any capital gain net income (i.e. the excess of capital
gains over capital losses recognized by the Fund in any taxable year) will be
distributed shortly after the end of the year. In order to meet certain tax
requirements the Fund may make a special distribution of income, including
capital gains, to holders of record as of a date in December. Proceeds received
from the disposition of any of the Securities which are not used to make the
distribution of capital gain net income, for redemption of Units or reinvested
in additional Securities will be held in the Capital Account to be distributed
on the next succeeding distribution day.

REINVESTMENT

Income and principal distributions on Units may be reinvested by
participating in the Fund's reinvestment plan. Under the plan, the Units
acquired for investors will be either Units already held in inventory by the
Sponsors or new Units created by the Sponsors' deposit of additional Securities,
contracts to purchase additional Securities or cash (or a bank letter of credit
in lieu of cash) with instructions to purchase additional Securities. Purchases
made pursuant to the Reinvestment Plan will be made without initial sales charge
at the net asset value for Units of the Fund (but will be subject to
subsequently deducted deferred sales charges). Under the

5
<PAGE>

Reinvestment Plan, the Fund will pay the distributions to the Trustee which in
turn will purchase for the investor full and fractional Units of the Fund at the
price determined as of the close of business on the distribution day and will
add the Units to the investor's account and send the investor an account
statement reflecting the reinvestment. The Sponsors reserve the right to amend,
modify or terminate the reinvestment plan at any time without prior notice.
Investors holding Units in 'street name' should contact their broker, dealer or
financial institution if they wish to participate in the reinvestment plan.

FUND EXPENSES

Estimated annual Fund expenses are listed in Part A of the Prospectus; if
actual expenses exceed the estimate, the excess will be borne by the Fund. The
Trustee's annual fee is payable in monthly installments. The Trustee also
benefits when it holds cash for the Fund in non-interest bearing accounts.
Possible additional charges include Trustee fees and expenses for extraordinary
services, costs of indemnifying the Trustee and the Sponsors, costs of action
taken to protect the Fund and other legal fees and expenses, Fund termination
expenses and any governmental charges. The Trustee has a lien on Fund assets to
secure reimbursement of these amounts and may sell Securities for this purpose
if cash is not available. The Sponsors receive an annual fee of a maximum of
$0.35 per 1,000 Units to reimburse them for the cost of providing Portfolio
supervisory services to the Fund. While the fee may exceed their costs of
providing these services to the Fund, the total supervision fees from all Series
of Equity Income Fund will not exceed their costs for these services to all of
those Series during any calendar year. The Sponsors may also be reimbursed for
their costs of providing bookkeeping and administrative services to the Fund,
currently estimated at $0.10 per 1,000 Units. The Trustee's and Sponsors' fees
may be adjusted for inflation without investors' approval.

Expenses incurred in establishing the Fund, including the cost of the
initial preparation of documents relating to the Fund, Federal and State
registration fees, the initial fees and expenses of the Trustee, legal expenses
and any other out-of-pocket expenses will be paid by the Fund and amortized over
the life of the Fund. Advertising and selling expenses will be paid from the
Underwriting Account at no charge to the Fund. Defined Asset Funds can be a
cost-effective way to purchase and hold investments. Annual operating expenses
are generally lower than for managed funds. Because Defined Asset Funds have no
management fees, limited transaction costs and no ongoing marketing expenses,
operating expenses are generally less than 0.25% a year. When compounded
annually, small differences in expense ratios can make a big difference in your
investment results.

TAXES

TAXATION OF THE FUND

The Fund intends to qualify for and elect the special tax treatment
applicable to 'regulated investment companies' under Section 851-855 of the
Internal Revenue Code of 1986, as amended (the 'Code'). Qualification and
election as a 'regulated investment company' involve no supervision of
investment policy or management by any government agency. If the Fund qualifies
as a 'regulated investment company' and distributes to Holders 90% or more of
its taxable income without regard to its net capital gain (i.e., the excess of
its net long-term capital gain over its net short-term capital loss), it will
not be subject to Federal income tax on any portion of its taxable income
(including any net capital gain) distributed to Holders in a timely manner. In
addition, the Fund will not be subject to the 4% excise tax on certain
undistributed income of 'regulated investment companies' to the extent it
distributes to Holders in a timely manner at least 98% of its taxable income
(including any net capital gain). It is anticipated that the Fund will not be
subject to Federal income tax or the excise tax because the Indenture requires
the distribution of the Fund's taxable income (including any net capital gain)
in a timely manner. Although all or a portion of the Fund's taxable income
(including any net capital gain) for a taxable year may be distributed shortly
after the end of the calendar year, such a distribution will be treated for
Federal income tax purposes as having been received by Holders during the
calendar year.

DISTRIBUTIONS

Distribution to Holders of the Fund's dividend income and net short-term
capital gain in any year will be taxable as ordinary income to Holders to the
extent of the Fund's taxable income (without regard to its net capital gain) for
that year. Any excess will be treated as a return of capital and will reduce the
Holder's basis in his Units and, to the extent that such distributions exceed
his basis, will be treated as a gain from the sale of his Units as

6
<PAGE>

discussed below. It is anticipated that substantially all of the distributions
of the Fund's dividend income and net short-term capital gain will be taxable as
ordinary income to Holders.

Distribution of the Fund's net capital gain (designated as capital gain
dividends by the Fund) will be taxable to Holders as long-term capital gain,
regardless of the length of time the Units have been held by a Holder. A Holder
will recognize a taxable gain or loss if the Holder sells or redeems his Units.
Any gain or loss arising from (or treated as arising from) the sale or
redemption of Units will be a capital gain or loss, except in the case of a
dealer in securities. Capital gains are currently taxed at the same rate as
ordinary income, however, the excess of net long-term capital gains over net
short-term capital losses may be taxed at a lower rate than ordinary income for
certain noncorporate taxpayers. A capital gain or loss is long-term if the asset
is held for more than one year and short-term if held for one year or less.
However, any capital loss on the sale or redemption of a Unit that a Holder has
held for six months or less will be a long-term capital loss to the extent of
any capital gain dividends previously distributed to the Holder by the Fund. The
deduction of capital losses is subject to limitations.

A distribution of Securities to a Holder upon redemption of his Units will
be a taxable event to such Holder, and that Holder will recognize taxable gain
or loss (equal to the difference between such Holder's tax basis in his Units
and the fair market value of Securities received in redemption), which will be
capital gain or loss upon such distribution, except in the case of a dealer in
securities. Holders should consult their own tax advisers in this regard.

Distributions that are taxable as ordinary income to Holders will
constitute dividends for Federal income tax purposes. To the extent that
distributions are appropriately designated by the Fund and are attributable to
dividends received by the Fund from domestic issuers with respect to whose
Securities the Fund satisfies the requirements for the dividends-received
deduction, such distributions will be eligible for the dividends-received
deduction for corporations (other than corporations such as 'S' corporations
which are not eligible for such deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding company tax). The
dividends-received deduction generally is currently 70%. However, Congress from
time to time considers proposals to reduce the rate, and enactment of such a
proposal would adversely affect the after-tax return to investors who can take
advantage of the deduction. Holders are urged to consult their own tax advisers.

Sections 246 and 246A of the Code contain additional limitations on the
eligibility of dividends for the corporate dividends-received deduction.
Depending upon the corporate Holder's circumstances (including whether it has a
45-day holding period for its Units and whether its Units are debt financed),
these limitations may be applicable to dividends received by a Holder from the
Fund which would otherwise qualify for the dividends-received deduction under
the principles discussed above. Accordingly, Holders should consult their own
tax advisers in this regard. A corporate Holder should be aware that the receipt
of dividend income for which the dividends-received deduction is available may
give rise to an alternative minimum tax liability (or increase an existing
liability) because the dividend income will be included in the corporation's
'adjusted current earnings' for purposes of the adjustment to alternative
minimum taxable income required by Section 56(g) of the Code.

Holders will be taxed in the manner described above regardless of whether
distributions from the Fund are actually received by the Holder or are
reinvested pursuant to the Reinvestment Plan.

The Federal tax status of each year's distributions will be reported to
Holders and to the Internal Revenue Service. The foregoing discussion relates
only to the Federal income tax status of the Fund and to the tax treatment of
distributions by the Fund to U.S. Holders. Holders that are not United States
citizens or residents should be aware that distributions from the Fund will
generally be subject to a withholding tax of 30%, or a lower treaty rate, and
should consult their own tax advisers to determine whether investment in the
Fund is appropriate. Distributions may also be subject to state and local
taxation and Holders should consult their own tax advisers in this regard.

RETIREMENT PLANS

This Series of Equity Income Fund may be well suited for purchase by
Individual Retirement Accounts ('IRAs'), Keogh plans, pension funds and other
qualified retirement plans, certain of which are briefly described below.
Generally, capital gains and income received in each of the foregoing plans are
exempt from Federal

7
<PAGE>

taxation. All distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special 5 or 10 year averaging or
tax-deferred rollover treatment. Holders of Units in IRAs, Keogh plans and other
tax-deferred retirement plans should consult their plan custodian as to the
appropriate disposition of distributions. Investors considering participation in
any of these plans should review specific tax laws related thereto and should
consult their attorneys or tax advisors with respect to the establishment and
maintenance of any of these plans. These plans are offered by brokerage firms,
including the Sponsor of this Fund, and other financial institutions. Fees and
charges with respect to such plans may vary.

Retirement Plans for the Self-Employed--Keogh Plans. Units of the Fund may
be purchased by retirement plans established for self-employed individuals,
partnerships or unincorporated companies ('Keogh plans'). The assets of a Keogh
plan must be held in a qualified trust or other arrangement which meets the
requirements of the Code. Keogh plan participants may also establish separate
IRAs (see below) to which they may contribute up to an additional $2,000 per
year ($2,250 in a spousal account).

Individual Retirement Account--IRA, Any individual can make use of a
qualified IRA arrangement for the purchase of Units of the Fund. Any individual
(including one covered by an employer retirement plan) can make a contribution
in an IRA equal to the lesser of $2,000 ($2,250 in a spousal account) or 100% of
earned income; such investment must be made in cash. However, the deductible
amount an individual may contribute will be reduced if the individual's adjusted
gross income exceeds $25,000 (in the case of a single individual), $40,000 (in
the case of married individuals filing a joint return) or $200 (in the case of a
married individual filing a separate return). Certain transactions which are
prohibited under Section 408 of the Code will cause all or a portion of the
amount in an IRA to be deemed to the distributed and subject to tax at that
time. Unless nondeductible contributions were made in 1987 or a later year, all
distributions from an IRA will be treated as ordinary income but generally are
eligible for tax-deferred rollover treatment. Taxable distributions made before
attainment of age 59 1/2, except in the case of the participant's death or
disability or where the amount distributed is part of a series of substantially
equal periodic (at least annual) payments that are to be made over the life
expectancies of the participant and his or her beneficiary, are generally
subject to a surtax in an amount equal to 10% of the distribution.

Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of the Fund.

RECORDS AND REPORTS

The Trustee keeps a register of the names, addresses and holdings of all
investors. The Trustee also keeps records of the transactions of the Fund,
including a current list of the Securities and a copy of the Indenture, which
may be inspected by investors at reasonable times during business hours.

With each distribution, the Trustee includes a statement of the amounts of
income and any other receipts being distributed. Following the termination of
the Fund, the Trustee sends each investor of record a statement summarizing
transactions in the Fund's accounts including amounts distributed from them,
identifying Securities sold and purchased and listing Securities held and the
number of Units outstanding at termination and stating the Redemption Price per
1,000 Units at termination, and the fees and expenses paid by the Fund, among
other matters. Fund accounts may be audited by independent accountants selected
by the Sponsors and any report of the accountants will be available from the
Trustee on request.

TRUST INDENTURE

The Fund is a 'unit investment trust' created under New York law by a Trust
Indenture among the Sponsors and the Trustee. This Prospectus summarizes various
provisions of the Indenture, but each statement is qualified in its entirety by
reference to the Indenture.

The Indenture may be amended by the Sponsors and the Trustee without
consent by investors to cure ambiguities or to correct or supplement any
defective or inconsistent provision, to make any amendment required by the SEC
or other governmental agency or to make any other change not materially adverse
to the interest of investors (as determined in good faith by the Sponsors). The
Indenture may also generally be amended upon consent of investors holding 51% of
the Units. No amendment may reduce the interest of any investor in the Fund
without the investor's consent or reduce the percentage of Units required to
consent to any amendment without unanimous consent of investors. Investors will
be notified of the substance of any amendment.

8
<PAGE>

The Trustee may resign upon notice to the Sponsors. It may be removed by
investors holding 51% of the Units at any time or by the Sponsors without the
consent of investors if it becomes incapable of acting or bankrupt, its affairs
are taken over by public authorities, or if under certain conditions the
Sponsors determine in good faith that its replacement is in the best interest of
the investors. The resignation or removal becomes effective upon acceptance of
appointment by a successor; in this case, the Sponsors will use their best
efforts to appoint a successor promptly; however, if upon resignation no
successor has accepted appointment within 30 days after notification, the
resigning Trustee may apply to a court of competent jurisdiction to appoint a
successor.

Any Sponsor may resign so long as one Sponsor with a net worth of
$2,000,000 remains. A new Sponsor may be appointed by the remaining Sponsors and
the Trustee to assume the duties of the resigning Sponsor. If there is only one
Sponsor and it fails to perform its duties or becomes incapable of acting or
bankrupt or its affairs are taken over by public authorities, the Trustee may
appoint a successor Sponsor at reasonable rates of compensation, terminate the
Indenture and liquidate the Fund or continue to act as Trustee without a
Sponsor. Merrill Lynch, Pierce, Fenner & Smith Incorporated has been appointed
as Agent for the Sponsors by the other Sponsors.

The Sponsors and the Trustee are not liable to investors or any other party
for any act or omission in the conduct of their responsibilities absent bad
faith, willful misfeasance, negligence (gross negligence in the case of a
Sponsor) or reckless disregard of duty. The Indenture contains customary
provisions limitingthe liability of the Trustee.

MISCELLANEOUS

LEGAL OPINION

The legality of the Units has been passed upon by Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017, as special counsel for the
Sponsors.

AUDITORS

The Statement of Condition in Part A of the Prospectus was audited by
Deloitte & Touche LLP, independent accountants, as stated in their opinion. It
is included in reliance upon that opinion given on the authority of that firm as
experts in accounting and auditing.

TRUSTEE

The Trustee and its address are stated on the back cover of the Prospectus.
The Trustee is subject to supervision by the Federal Deposit Insurance
Corporation, the Board of Governors of the Federal Reserve System and either the
Comptroller of the Currency or state banking authorities.

SPONSORS

The Sponsors are listed on the back cover of the Prospectus. They may
include Merrill Lynch, Pierce, Fenner & Smith Incorporated, a wholly-owned
subsidiary of Merrill Lynch Co. Inc.; Smith Barney Inc., an indirect wholly-
owned subsidiary of The Travelers Inc.; Prudential Securities Incorporated, an
indirect wholly-owned subsidiary of the Prudential Insurance Company of America,
and Dean Witter Reynolds, Inc., a principal operating subsidiary of Dean Witter
Discover & Co. Each Sponsor, or one of its predecessor corporations, has acted
as Sponsor of a number of series of unit investment trusts. Each Sponsor has
acted as principal underwriter and managing underwriter of other investment
companies. The Sponsors, in addition to participating as members of various
selling groups or as agents of other investment companies, execute orders on
behalf of investment companies for the purchase and sale of securities of these
companies and sell securities to these companies in their capacities as brokers
or dealers in securities.

PUBLIC DISTRIBUTION

During the initial offering period and thereafter to the extent additional
Units continue to be offered for sale to the public by means of this Prospectus,
Units will be distributed directly to the public by this Prospectus at the
Public Offering Price determined in the manner provided above or to selected
dealers who are members of the National Association of Securities Dealers, Inc.
at a concession not in excess of the maximum sales charge. The

9
<PAGE>

Sponsors intend to qualify Units for sale in all states in which qualification
is deemed necessary through the Underwriting Account and by dealers who are
members of the National Association of Securities Dealers, Inc.. The Sponsors do
not intend to qualify Units for sale in any foreign countries and this
Prospectus does not constitute an offer to sell Units in any country where Units
cannot lawfully be sold.

UNDERWRITERS' AND SPONSORS' PROFITS

Upon sale of the Units, the Underwriters will be entitled to receive sales
charges; each Underwriters' interest in the Underwriting Account will depend on
the number of Units acquired through the issuance of additional Units. The
Sponsors also realize a profit or loss on deposit of the Securities equal to the
difference between the cost of the Securities to the Fund (based on the
aggregate value of the Securities on their date of deposit) and the purchase
price of the Securities to the Sponsors plus commissions payable by the
Sponsors. In addition, a Sponsor or Underwriter may realize profits or sustain
losses on Securities it deposits in the Fund which were acquired from
underwriting syndicates of which it was a member. During the initial offering
period, the Underwriting Account also may realize profits or sustain losses as a
result of fluctuations after the initial date of deposit in the Public Offering
Price of the Units. In maintaining a secondary market for Units, the Sponsors
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
these Units (which include the sales charge) or the prices at which they redeem
the Units. Cash, if any, made available by buyers of Units to the Sponsors prior
to a settlement date for the purchase of Units may be used in the Sponsors'
businesses to the extent permitted by Rule 15c3-3 under the Securities Exchange
Act of 1934 and may be of benefit to the Sponsors.

PERFORMANCE INFORMATION

Information on the performance of the Fund for various periods, on the
basis of changes in Unit price plus the amount of dividends and capital gains
reinvested, may be included from time to time in advertisements, sales
literature, reports and other information furnished to current or prospective
Holders. Total return figures are not averaged, and may not reflect deduction of
the sales charge, which would decrease the return. Average annualized return
figures reflect deduction of the maximum sales charge. No provision is made for
any income taxes payable.

Past performance of any series may not be indicative of results of future
series. Fund performance may be compared to the performance of the DJIA, the S&P
500 Composite Price Stock Index, the S&P MidCap 400 Index, or performance data
from publications such as Lipper Analytical Services, Inc., Morningstar
Publications, Inc., Money Magazine, The New York Times, U.S. News and World
Report, Barron's, Business Week, CDA Investment Technology, Inc., Forbes
Magazine or Fortune Magazine. Performance of the Stocks may be compared in sales
literature to performance of the S&P 500 Stock Price Composite Index, to which
may be added by year various national and international political and economic
events, and certain milestones in price and market indicators and in offerings
of Defined Asset Funds. This performance may also be compared for various
periods with an investment in short-term U.S. Treasury securities; however, the
investor should bear in mind that Treasury securities are fixed income
obligations, having the highest credit characterisitics, while the Stocks
involve greater risk because they have no maturities, and income thereon is
subject to the financial condition of, and declaration by, the issuers. Various
sales material may describe particular characteristics about each company which
makes it a leader in its field.

DEFINED ASSET FUNDS

For decades informed investors have purchased unit investment trusts for
dependability and professional selection of investments. Defined Asset Funds'
philosophy is to allow investors to 'buy with knowledge' (because, unlike
managed funds, the portfolio is relatively fixed) and 'hold with confidence'
(because the portfolio is professionally selected and regularly reviewed).
Defined Asset Funds offers an array of simple and convenient investment choices,
suited to fit a wide variety of personal financial goals--a buy and hold
strategy for capital accumulation, such as for children's education or
retirement, or attractive, regular current income consistent with the
preservation of principal. Unit investment trusts are particularly suited for
the many investors who prefer to seek long-term profits by purchasing sound
investments and holding them, rather than through active trading. Few
individuals have the knowledge, resources or capital to buy and hold a
diversified portfolio on their own; it would generally take a considerable sum
of money to obtain the breadth and diversity that Defined Asset Funds offer.
Your investment objectives may call for a combination of Defined Asset Funds.

10
<PAGE>

One of the most important investment decisions you face may be how to
allocate your investments among asset classes. Diversification among different
kinds of investments can balance the risks and rewards of each one. Most
investment experts recommend stocks for long-term capital growth. Long-term
corporate bonds offer relatively high rates of interest income. By purchasing
both defined equity and defined bond funds, investors can receive attractive
current income, as well as growth potential, offering some protection against
inflation. From time to time various advertisements, sales literature, reports
and other information furnished to current or prospective investors may present
the average annual compounded rate of return of selected asset classes over
various periods of time, compared to the rate of inflation over the same
periods.

SUPPLEMENTAL INFORMATION

Upon written or telephonic request to the Trustee shown on the back cover
of this Prospectus, investors will receive without charge supplemental
information about the Fund, which has been filed with the SEC. The supplemental
information includes more detailed risk factor disclosure about the types of
securities that may be part of the Portfolio and general information about the
structure and operation of the Fund.

11
<PAGE>

Defined
Asset FundsSM

SPONSORS: EQUITY INCOME FUND
Merrill Lynch, BLUE CHIP STOCK SERIES 3
Pierce, Fenner & Smith IncorporatedPREMIER AMERICAN PORTFOLIO
Defined Asset Funds
P.O. Box 9051
Princeton, N.J. 08543-9051 This Prospectus does not contain all of the
(609) 282-8500 information with respect to the investment
Smith Barney Inc. company set forth in its registration
Unit Trust Department statement and exhibits relating thereto which
388 Greenwich Street--23rd Floor have been filed with the Securities and
New York, NY 10013 Exchange Commission, Washington, D.C. under
1-800-223-2532 the Securities Act of 1933 and the Investment
PaineWebber Incorporated Company Act of 1940, and to which reference
1200 Harbor Blvd. is hereby made.
Weehawken, N.J. 07087 ------------------------------
(201) 902-3000 No person is authorized to give any
Prudential Securities Incorporated information or to make any representations
One Seaport Plaza with respect to this investment company not
199 Water Street contained in its registration statement and
New York, N.Y. 10292 exhibits relating thereto; and any
(212) 776-1000 information or representation not contained
Dean Witter Reynolds Inc. therein must not be relied upon as having
Two World Trade Center--59th Floor been authorized.
New York, N.Y. 10048 ------------------------------
(212) 392-2222 When Units of this Fund are no longer
TRUSTEE: available this Prospectus may be used as a
The Chase Manhattan Bank, N.A. preliminary prospectus for a future series,
(a National Banking Association) in which case investors should note the
Unit Trust Department following:
Box 2051 Information contained herein is subject to
New York, NY 10048 amendment. A registration statement relating
1-800-323-1508 to securities of a future series has been
filed with the Securities and Exchange
Commission. These securities may not be sold
nor may offers to buy be accepted prior to
the time the registration statement becomes
effective.
This Prospectus shall not constitute an offer
to sell or the solicitation of an offer to
buy nor shall there be any sale of these
securities in any State in which such offer
solicitation or sale would be unlawful prior
to registration or qualification under the
securities laws of any such State.

15140--8/95

<PAGE>
PART II
ADDITIONAL INFORMATION NOT INCLUDED IN THE PROSPECTUS

A. The following information relating to the Depositors is incorporated by
reference to the SEC filings indicated and made a part of this Registration
Statement.

<TABLE><CAPTION>
SEC FILE OR
IDENTIFICATION DATE
NUMBER FILED
----------------------------------------
<S> <C> <C>
I. Bonding Arrangements and Date of Organization of the
Depositors filed pursuant to Items A and B of
Part II of the Registration Statement on Form
S-6 under the Securities Act of 1933:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2-52691 1/17/95
Smith Barney Inc. .............................. 33-29106 6/29/89
PaineWebber Incorporated ....................... 2-87965 11/18/83
Prudential Securities Incorporated.............. 2-61418 4/26/78
Dean Witter Reynolds Inc. ...................... 2-60599 1/4/78
II. Information as to Officers and Directors of the
Depositors filed pursuant to Schedules A and D
of Form BD under Rules 15b1-1 and 15b3-1 of the
Securities Exchange Act of 1934:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 8-7221 5/26/94, 6/29/92
Smith Barney Inc. .............................. 8-8177 8/29/94, 8/2/93
PaineWebber Incorporated ....................... 8-16267 4/20/94, 7/31/86
Prudential Securities Incorporated.............. 8-27154 6/30/94, 6/20/88
Dean Witter Reynolds Inc. ...................... 8-14172 2/23/94, 4/9/91
III. Charter documents of the Depositors filed as
Exhibits to the Registration Statement on Form
S-6 under the Securities Act of 1933 (Charter,
By-Laws):
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 2-73866, 2-77549 9/22/81, 6/15/82
Smith Barney Inc. .............................. 33-20499 3/30/88
PaineWebber Incorporated ....................... 2-87965 11/18/83
Prudential Securities Incorporated.............. 2-52947 3/4/75
Dean Witter Reynolds Inc. ...................... 2-60599 1/4/78
B. The Internal Revenue Service Employer Identification
Numbers of the Sponsors and Trustee are as follows:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 13-5674085
Smith Barney Inc. .............................. 13-1912900
PaineWebber Incorporated ....................... 13-2638166
Prudential Securities Incorporated.............. 22-2347336
Dean Witter Reynolds Inc. ...................... 94-0899825
The Chase Manhattan Bank, N.A., Trustee......... 13-2633612

</TABLE>

II-1
<PAGE>

SERIES OF EQUITY INCOME FUND
AND DEFINED ASSET FUNDS MUNICIPAL INSURED SERIES
DESIGNATED PURSUANT TO RULE 487 UNDER THE SECURITIES ACT OF 1933

SEC
SERIES NUMBER FILE NUMBER
- --------------------------------------------------------------------------------
Equity Income Fund, Blue Chip Stock Series(1)............... 33-05653
Equity Income Fund, 'Merit' 1987 Series..................... 33-10989
Equity Income Fund, Concept Series Real Estate Income
Fund........................................................ 33-51869
Equity Income Fund, Select Ten Portfolio--1995 Spring
Series...................................................... 33-55807
Defined Asset Funds Municipal Insured Series................ 33-54565

CONTENTS OF REGISTRATION STATEMENT

This Registration Statement on Form S-6 comprises the following papers and
documents:
The facing sheet of Form S-6.
The Cross-Reference Sheet (incorporated by reference from the
Cross-Reference Sheet of the Registration Statement of Defined Asset Funds
Municipal Insured Series, 1933 Act File No. 33-54565).
The Prospectus.
The Signatures.
The following exhibits:

1.1 --Form of Trust Indenture (incorporated by reference to Exhibit 1.1 to
Amendment No. 2 to the Registration Statement on Form S-6 of Equity
Income Fund, Select Growth Portfolio--1995 Series 2, Defined Asset
Funds, Reg. No. 33-58535).
1.1.1 --Form of Standard Terms and Conditions of Trust Effective as of October
21, 1993 (incorporated by reference to Exhibit 1.1.1 to the
Registration Statement of Municipal Investment Trust Fund, Multistate
Series-48, 1933 Act File No. 33-50247).
1.2 --Form of Master Agreement Among Underwriters (incorporated by reference
to Exhibit 1.2 to the Registration Statement under the Securities Act
of 1933 of The Corporate Income Fund, One Hundred Ninety-Fourth
Monthly Payment Series, 1933 Act File No. 2-90925).
3.1 --Opinion of counsel as to the legality of the securities being issued
including their consent to the use of their names under the heading
'Miscellaneous--Legal Opinion' in the Prospectus.
5.1 --Consent of independent accountants.
9.1 --Information Supplement

R-1
<PAGE>

EQUITY INCOME FUND BLUE CHIP STOCK SERIES 3
PREMIER AMERICAN PORTFOLIO
SIGNATURES
The registrant hereby identifies the series numbers of Equity Income Fund
and Defined Asset Funds Municipal Insured Series listed on page R-1 for the
purposes of the representations required by Rule 487 and represents the
following:
1) That the portfolio securities deposited in the series as to which this
registration statement is being filed do not differ materially in type
or quality from those deposited in such previous series;
2) That, except to the extent necessary to identify the specific portfolio
securities deposited in, and to provide essential financial information
for, the series with respect to which this registration statement is
being filed, this registration statement does not contain disclosures
that differ in any material respect from those contained in the
registration statements for such previous series as to which the
effective date was determined by the Commission or the staff; and
3) That it has complied with Rule 460 under the Securities Act of 1933.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT OR AMENDMENT TO THE REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY
AUTHORIZED IN THE CITY OF NEW YORK AND STATE OF NEW YORK ON THE 22ND DAY OF
AUGUST, 1995.
SIGNATURES APPEAR ON PAGE R-3, R-4, R-5, R-6 AND R-7.
A majority of the members of the Board of Directors of Merrill Lynch,
Pierce, Fenner & Smith Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Smith Barney Inc.
has signed this Registration Statement or Amendment to the Registration
Statement pursuant to Powers of Attorney authorizing the person signing this
Registration Statement or Amendment to the Registration Statement to do so on
behalf of such members.
A majority of the members of the Executive Committee of the Board of
Directors of PaineWebber Incorporated has signed this Registration Statement or
Amendment to the Registration Statement pursuant to Powers of Attorney
authorizing the person signing this Registration Statement or Amendment to the
Registration Statement to do so on behalf of such members.
A majority of the members of the Board of Directors of Prudential
Securities Incorporated has signed this Registration Statement or Amendment to
the Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.
A majority of the members of the Board of Directors of Dean Witter
Reynolds Inc. has signed this Registration Statement or Amendment to the
Registration Statement pursuant to Powers of Attorney authorizing the person
signing this Registration Statement or Amendment to the Registration Statement
to do so on behalf of such members.

R-2
<PAGE>
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEPOSITOR

By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Board of Directors of Merrill Form SE and the following 1933 Act
Lynch, Pierce, File
Fenner & Smith Incorporated: Number: 33-43466

HERBERT M. ALLISON, JR.
BARRY S. FREIDBERG
EDWARD L. GOLDBERG
STEPHEN L. HAMMERMAN
JEROME P. KENNEY
DAVID H. KOMANSKY
DANIEL T. NAPOLI
THOMAS H. PATRICK
JOHN L. STEFFENS
DANIEL P. TULLY
ROGER M. VASEY
ARTHUR H. ZEIKEL
By
ERNEST V. FABIO
(As authorized signatory for Merrill Lynch, Pierce,
Fenner & Smith Incorporated and
Attorney-in-fact for the persons listed above)
R-3
<PAGE>

SMITH BARNEY INC.
DEPOSITOR

By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Smith Barney Inc.: have been filed
under the 1933 Act
File Number:
33-49753 and
33-55073

STEVEN D. BLACK
JAMES BOSHART III
ROBERT A. CASE
JAMES DIMON
ROBERT DRUSKIN
ROBERT F. GREENHILL
JEFFREY LANE
JACK L. RIVKIN
By MICHAEL J. BROPHY
(As authorized signatory for
Smith Barney Inc. and
Attorney-in-fact for the persons listed above)

R-4
<PAGE>

PAINEWEBBER INCORPORATED
DEPOSITOR

By the following persons, who constitute Powers of Attorney have been filed
a majority of under
the Executive Committee of the Board the following 1933 Act File
of Directors of PaineWebber Number: 33-55073
Incorporated:

LEE FENSTERSTOCK
JOSEPH J. GRANO, JR.
By
ROBERT E. HOLLEY
(As authorized signatory for
PaineWebber Incorporated
and Attorney-in-fact for the persons listed above)

R-5
<PAGE>

PRUDENTIAL SECURITIES INCORPORATED
DEPOSITOR

By the following persons, who constitute a majority of Powers of Attorney
the Board of Directors of Prudential Securities have been filed
Incorporated: under Form SE and
the following 1933
Act File Number:
33-41631

ALAN D. HOGAN
GEORGE A. MURRAY
LELAND B. PATON
HARDWICK SIMMONS
By
WILLIAM W. HUESTIS
(As authorized signatory for Prudential Securities
Incorporated and Attorney-in-fact for the persons
listed above)

R-6
<PAGE>

DEAN WITTER REYNOLDS INC.
DEPOSITOR

By the following persons, who constitute Powers of Attorney have been filed
a majority of under Form
the Board of Directors of Dean Witter SE and the following 1933 Act File
Reynolds Inc.: Number:
33-17085

NANCY DONOVAN
CHARLES A. FIUMEFREDDO
JAMES F. HIGGINS
STEPHEN R. MILLER
PHILIP J. PURCELL
THOMAS C. SCHNEIDER
WILLIAM B. SMITH
By
MICHAEL D. BROWNE
(As authorized signatory for Dean Witter Reynolds Inc.
and Attorney-in-fact for the persons listed above)

R-7

EXHIBIT 3.1
DAVIS POLK & WARDWELL
450 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017
(212) 450-4000

AUGUST 22, 1995

EQUITY INCOME FUND,
BLUE CHIP STOCK SERIES 3
PREMIER AMERICAN PORTFOLIO
DEFINED ASSET FUNDS
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
SMITH BARNEY INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
DEAN WITTER REYNOLDS, INC.

C/O MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DEFINED ASSET FUNDS
P.O. BOX 9051
PRINCETON, N.J. 08543-9051
(609) 282-8500

Dear Sirs:

We have acted as special counsel for you, as sponsors (the 'Sponsors') of
Equity Income Fund, Blue Chip Stock Series 3, Defined Asset Funds (the 'Fund'),
in connection with the issuance of units of fractional undivided interest in the
Fund (the 'Units') in accordance with the Trust Indenture relating to the Fund
(the 'Indenture').

We have examined and are familiar with originals or copies, certified or
otherwise identified to our satisfaction, of such documents and instruments as
we have deemed necessary or advisable for the purpose of this opinion.

Based upon the foregoing, we are of the opinion that (i) the execution and
delivery of the Indenture and the issuance of the Units have been duly
authorized by the Sponsors and (ii) the Units, when duly issued and delivered by
the Sponsors and the Trustee in accordance with the Indenture, will be legally
issued, fully paid and non-assessable.

We hereby consent to the use of this opinion as Exhibit 3.1 to the
Registration Statement relating to the Units filed under the Securities Act of
1933 and to the use of our name in such Registration Statement and in the
related prospectus under the heading 'Miscellaneous--Legal Opinion.'

Very truly yours,

DAVIS POLK & WARDWELL

EXHIBIT 5.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Sponsors and Trustee of Equity Income Fund,
Blue Chip Stock Series 3, Premier American Portfolio, Defined Asset Funds:

We hereby consent to the use in this Registration Statement No. 33-61155 of our
opinion dated August 22, 1995, relating to the Statement of Condition of Equity
Income Fund Blue Chip Stock Series 3, Premier American Portfolio, Defined Asset
Funds and to the reference to us under the heading 'Auditors' in the Prospectus
which is part of this Registration Statement.

DELOITTE & TOUCHE LLP
New York, N.Y.
August 22, 1995

Exhibit 9.1

DEFINED ASSET FUNDS
-------------------

INFORMATION SUPPLEMENT
EQUITY INCOME FUND

This Information Supplement provides additional information concerning the
structure, operations and risks of trusts (each, a "Portfolio") of Equity Income
Fund-Defined Asset Funds not found in the prospectuses for the Portfolios. This
Information Supplement is not a prospectus and does not include all of the
information that a prospective investor should consider before investing in a
Portfolio. This Information Supplement should be read in conjunction with the
prospectus for the Portfolio in which an investor is considering investing
("Prospectus"). Copies of the Prospectus can be obtained by calling or writing
the Trustee at the telephone number and address indicated on the back cover of
the Prospectus.

This Information Supplement is dated August 15, 1995. Capitalized terms have
been defined in the Prospectus.

TABLE OF CONTENTS
-----------------

Description of Portfolio Investments . . . . . . . . . . . . . . 1
Portfolio Supervision . . . . . . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . 2
Equity Securities . . . . . . . . . . . . . . . . . . . . . . . 2
International Risk Factors (Select Ten Series-United
Kingdom Portfolio and Hong Kong Portfolio only) . . . . . . . 3
Additional Hong Kong Risk Factors (Select Ten
Series-Hong Kong Portfolio only) . . . . . . . . . . . . . . 5
Concentration . . . . . . . . . . . . . . . . . . . . . . . 7
Rollover (Select Ten Series and Select Growth Portfolios only) . 16
Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . 19

DESCRIPTION OF PORTFOLIO INVESTMENTS

Portfolio Supervision

Each Portfolio is a unit investment trust which normally follows a buy and
hold investment strategy. Traditional methods of investment management for
mutual funds typically involve frequent changes in portfolio holdings based on
economic, financial and market analyses. Because a Portfolio is not actively
managed the adverse financial condition of an issuer or its failure to maintain
its current dividend rate will not necessarily require the sale of its
securities from a Portfolio. In the event a public tender offer is made for a
security or a merger or acquisition is announced affecting a security, the
Sponsors may instruct the Trustee to tender or sell the security on the open
market when in its opinion it is in the best interest of investors to do so.
The Sponsors may also instruct a Trustee to sell a security in the following
circumstances: (i) failure to declare or pay a regular dividend on a security
or anticipated dividends generally; (ii) institution of certain legal
proceedings; (iii) other legal questions or impediments affecting the security
or payments on that security; (iv) default under certain documents adversely
affecting the declaration or payment of anticipated dividends on the security,
the issuer's general credit standing or

<PAGE>
the sound investment character of the security, or a default on other
outstanding securities of the same issuer; (v) if a security becomes
inconsistent with a Portfolio's investment objectives; (vi) if the sale is
necessary or advisable to maintain the qualification of the Portfolio as a
Regulated Investment Company under the Internal Revenue Code or to provide funds
to make any distribution for a taxable year as required by the Internal Revenue
Code; or (vii) decline in security price or other market or credit factors
that, in the opinion of Defined Asset Funds research, makes retention of the
security detrimental to the interests of investors. If there is a failure to
declare or pay a regular dividend on a security or anticipated dividends
generally on that security and the Agent for the Sponsors fails to instruct the
Trustee within 30 days after notice of the failure, the Trustee will sell the
security.

Voting rights with respect to the securities will be exercised by the Trustee
in accordance with directions given by the Sponsors.

RISK FACTORS

Equity Securities

An investment in Units of a Portfolio should be made with an understanding of
the risks inherent in an investment in equity securities, including the risk
that the financial condition of the issuers of the securities may become
impaired or that the general condition of the relevant stock market may worsen
(both of which may contribute directly to a decrease in the value of the
securities and thus in the value of the Units) or the risk that holders of
common stocks have a right to receive payments from the issuers of those stocks
that is generally inferior to that of creditors of, or holders of debt
obligations issued by, the issuers and that the rights of holders of common
stocks generally rank inferior to the rights of holders of preferred stock.
Common stocks may be especially susceptible to general stock market movements
and to volatile increases and decreases in value as market confidence in and
perceptions of the issuers change. These perceptions are based on unpredictable
factors including expectations regarding government, economic, monetary and
fiscal policies, inflation and interest rates, economic expansion or
contraction, and global or regional political, economic or banking crises.

Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison with
the rights of creditors of, or holders of debt obligations or preferred stocks
issued by the issuer. Holders of common stocks of the type held by a Portfolio
have a right to receive dividends only when and if, and in the amounts, declared
by the issuer's board of directors and to participate in amounts available for
distribution by the issuer only after all other claims on the issuer have been
paid or provided for. By contrast, holders of preferred stocks have the right
to receive dividends at a fixed rate when and as declared by the issuer's board
of directors, normally on a cumulative basis, but do not participate in other
amounts available for distribution by the issuing corporation. Cumulative
preferred stock dividends must be paid before common stock dividends and any
cumulative preferred stock dividend omitted is added to future dividends payable
to the holders of cumulative preferred stock. Preferred stocks are also
entitled to rights on liquidation which are senior to those of common stocks.
Moreover, common stocks do not represent an obligation of the issuer and
therefore do not offer any assurance of income or provide the degree of
protection of capital provided by debt securities. Indeed, the issuance of debt
securities or even preferred stock will create prior claims for payment of
principal, interest, liquidation preferences and dividends which could adversely
affect the ability and inclination of the issuer to declare or pay dividends on
its common stock or the rights of holders of common stock with respect to assets
of the issuer upon liquidation or bankruptcy. Further, unlike debt securities
which typically have a stated principal amount payable at maturity (whose value,
however, will be subject to market fluctuations prior thereto), common stocks
have neither a fixed principal amount nor a maturity and

<PAGE>
have values which are subject to market fluctuations for as long as the stocks
remain outstanding. The value of the securities in a Portfolio thus may be
expected to fluctuate over the entire life of the Portfolio to values higher or
lower than those prevailing on the Portfolio's initial date of deposit. Any
monies allocated to the purchase of a security will generally be held for the
purchase of the security. However, a Portfolio may not be able to buy each
security at the same time, because of unavailability of the security or because
of any restrictions applicable to the Portfolio relating to the purchase of the
security by reason of the federal securities laws or otherwise.

International Risk Factors (Select Ten Series-United Kingdom Portfolio
and Hong Kong Portfolio only)

Foreign Issuers. Investments in Portfolios consisting partially or entirely
of securities of foreign issuers involve investment risks that are different in
some respects from an investment in a Portfolio that invests partially or
entirely in securities of domestic issuers. Those investment risks include
future political and economic developments and the possible establishment of
exchange controls or other governmental restrictions which might adversely
affect the payment or receipt of payment of dividends on the relevant
securities. In addition, for foreign issuers that are not subject to the
reporting requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer. Also,
foreign issuers are not necessarily subject to uniform accounting, auditing and
financial reporting standards, practices and requirements such as those
applicable to domestic issuers.

Securities issued by non-U.S. issuers generally pay dividends in foreign
currencies, and are principally traded in foreign currencies. Therefore, there
is a risk that the United States dollar value of these securities will vary with
fluctuations in the United States dollar foreign exchange rates for the relevant
currencies.

Foreign Exchange Rates. A Portfolio of securities that are principally
traded in foreign currencies involves investment risks that are substantially
different from an investment in a fund which invests in securities that are
principally traded in United States dollars. This is because the United States
dollar value of a Portfolio (and hence of the Units) and of the distributions
from the Portfolio will vary with fluctuations in the United States dollar
foreign exchange rates for the relevant currencies. Most foreign currencies
have fluctuated widely in value against the United States dollar for many
reasons, including supply and demand of the respective currency, the soundness
of the world economy and the strength of the respective economy as compared to
the economies of the United States and other countries.

The post-World War II international monetary system was, until 1973,
dominated by the Bretton Woods Treaty, which established a system of fixed
exchange rates and the convertibility of the United States dollar into gold
through foreign central banks. Starting in 1971, growing volatility in the
foreign exchange markets caused the United States to abandon gold convertibility
and to effect a small devaluation of the United States dollar. In 1973, the
system of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most Western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily currency
valuations depend on supply and demand in a freely fluctuating international
market. Many smaller or developing countries have continued to "peg" their
currencies to the United States dollar although there has been some interest in
recent years in "pegging" currencies to "baskets" of other currencies or to a
Special Drawing Right administered by the International Monetary Fund. Since
1983, the Hong Kong dollar has been pegged to the U.S. dollar although there is
no guarantee that the Hong Kong dollar will continue to be "pegged" to the U.S.
dollar in the future. In Europe a European Currency Unit ("ECU") has been
developed. Currencies are generally traded by leading international commercial
banks and institutional investors (including corporate treasurers, money
managers, pension funds and insurance companies). From time to time, central
banks in a number of countries also

<PAGE>
are major buyers and sellers of foreign currencies, mostly for the purpose of
preventing or reducing substantial exchange rate fluctuations.

Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual and
proposed government policies on the value of currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling large
amounts of the same currency or currencies. However, over the long term, the
currency of a country with a low rate of inflation and a favorable balance of
trade should increase in value relative to the currency of a country with a high
rate of inflation and deficits in the balance of trade.

The Trustee will estimate current exchange rates for the relevant currencies
based on activity in the various currency exchange markets. However, since
these markets are volatile and are constantly changing, depending on the
activity at any particular time of the large international commercial banks,
various central banks, large multi-national corporations, speculators and other
buyers and sellers of foreign currencies, and since actual foreign currency
transactions may not be instantly reported, the exchange rates estimated by the
Trustee may not be indicative of the amount in United States dollars a Portfolio
would receive had the Trustee sold any particular currency in the market.

The foreign exchange transactions of a Portfolio may be concluded by the
Trustee with foreign exchange dealers acting as principals either on a spot
(i.e., cash) buying basis or on a forward foreign exchange basis on the date a
Portfolio is entitled to receive the applicable foreign currency. These forward
foreign exchange transactions will generally be of as short a duration as
practicable and will generally settle on the date of receipt of the applicable
foreign currency involving specific receivables or payables of the Portfolio
accruing in connection with the purchase and sale of its securities and income
received on the securities or the sale and redemption of Units. These
transactions are accomplished by contracting to purchase or sell a specific
currency at a future date and price set at the time of the contract. The cost
to a Portfolio of engaging in these foreign currency transactions varies with
such factors as the currency involved, the length of the contract period and the
market conditions then prevailing. Since transactions in foreign currency
exchange are usually conducted on a principal basis, fees or commissions are not
normally involved. Although foreign exchange dealers trade on a net basis they
do realize a profit based upon the difference between the price at which they
are willing to buy a particular currency (bid price) and the price at which they
are willing to sell the currency (offer price). The relevant exchange rate used
for evaluations of securities will include the cost of buying or selling, as the
case may be, of any forward foreign exchange contract in the relevant currency
to correspond to the requirement that Units when purchased settle on a regular
basis and that the Trustee settle redemption requests in United States dollars
within seven days.

Exchange Controls. On the basis of the best information available to the
Sponsors at the present time none of the securities, except as otherwise
indicated in a Portfolio's prospectus, is subject to exchange control
restrictions under existing law which would materially interfere with payment to
a Portfolio of amounts due on securities either because the particular
jurisdictions have not adopted any currency regulations of this type or because
the issues qualify for an exemption or the Portfolio, as an extraterritorial
investor, has qualified its purchase of securities as exempt by following
applicable "validation" or similar

<PAGE>
regulatory or exemptive procedures. However, there can be no assurance that
exchange control regulations might not be adopted in the future which might
adversely affect payments to a Portfolio.

In addition, the adoption of exchange control regulations and other legal
restrictions could have an adverse impact on the marketability of international
securities in a Portfolio and on the ability of a Portfolio to satisfy its
obligation to redeem Units tendered to the Trustee for redemption.

Liquidity. Foreign securities generally have not been registered under the
Securities Act of 1933 and may not be exempt from the registration requirements
of the Act. Sales of non-exempt securities by a Portfolio in United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these securities by a Portfolio will
generally be effected only in foreign securities markets. Although the Sponsors
do not believe that a Portfolio will encounter obstacles in disposing of the
securities, investors should realize that the securities may be traded in
foreign countries where the securities markets are not as developed or efficient
and may not be as liquid as those in the United States. To the extent the
liquidity of these markets becomes impaired, however, the value of a Portfolio
when responding to a substantial volume of requests for redemption of Units
(should redemptions be necessary despite the market making activities of the
Sponsors) received at or about the same time could be adversely affected. This
might occur, for example, as a result of economic or political turmoil in a
country in whose currency a Portfolio had a substantial portion of its assets
invested, or should relations between the United States and a foreign country
deteriorate markedly. Even though the securities are listed, the principal
trading market for the securities may be in the over-the-counter market. As a
result, the existence of a liquid trading market for the securities may depend
on whether dealers will make a market in the securities. There can be no
assurance that a market will be made for any of the securities, that any market
for the securities will be maintained or of the liquidity of the securities in
any markets made. In addition, a Portfolio may be restricted under the
Investment Company Act of 1940 from selling securities to any Sponsor. The
price at which the securities may be sold to meet redemptions and the value of a
Portfolio will be adversely affected if trading markets for the securities are
limited or absent.

Additional Hong Kong Risk Factors (Select Ten Series-Hong Kong Portfolio only)

The information set forth below has been extracted from various governmental
and private publications, but no representation can be made as to its accuracy;
furthermore, no representation is made that any correlation exists between the
state of the economy of Hong Kong and the value of any securities held by a Hong
Kong Portfolio.

Hong Kong. The British colony of Hong Kong, established in the 1840's, is
situated on the southern coast of the People's Republic of China ("China"). It
is currently a colony of Great Britain, ruled by the British Government with a
Governor appointed by the Queen on the advice of the British Government. The
Hong Kong government generally follows a laissez-faire policy towards industry.
There are no major import, export or foreign exchange restrictions. Regulation
of business is generally minimal with certain exceptions, including regulated
entry into certain sectors of the economy and a fixed exchange rate regime by
which the Hong Kong dollar has been pegged to the U.S. dollar. Over the ten
year period between 1983 and 1993, Real Gross Domestic Product increased at an
average annual rate of approximately 6%.

Hong Kong Exchange. The Stock Exchange of Hong Kong Ltd. (the "Hong Kong
Exchange"), with a total market capitalization as of December 31, 1993 of
approximately US$385 billion, is the second largest stock market in Asia,
measured by market capitalization, behind that of Japan. As of that date, 477
companies and 891 securities (including ordinary shares, warrants and other
derivative instruments) were listed on the Hong Kong Exchange. The Securities
and Futures Commission, which was established by

<PAGE>
the Hong Kong government in 1989, exercises supervision of the securities,
financial investment and commodities futures industry.

The Hang Seng Index is subject to change and delisting of shares of any
issuers may have an adverse impact on the performance of a Portfolio. Jardine
Matheson Holdings Ltd. ("Jardine Matheson"), Jardine Strategic Holdings Ltd.
("Jardine Strategic"), Lai Sun Garment (International) Ltd. and Windsor
Industrial Corporation Ltd. delisted from the Hong Kong Exchange on November 30,
1994 and three Jardine affiliates (Dairy Farms International Holdings Ltd., Hong
Kong Land Holdings Ltd. and Mandarin Oriental International Ltd. (collectively
with Jardine Matheson and Jardine Strategic, the "Jardine Companies")) delisted
from the Hong Kong Exchange on February 28, 1995. The Jardine Companies
represented almost 10% of total capitalization of the Hang Seng Index. Any
future delisting could have an adverse impact on the performance of a Portfolio.
Such delisting would not necessarily result in the disposal of the stock of
these companies, nor would it prevent a Portfolio from purchasing such
securities in connection with the issuance of additional Units or the purchase
of additional securities.

Volatility of the Hang Seng Index. Securities prices on the Hang Seng Index
can be highly volatile and are sensitive to developments in Hong Kong and China,
as well as other world markets. For example, in 1989, the Hang Seng Index rose
to 3,310 in May from its previous year-end level of 2,687 but fell to 2,094 in
early June 1989. The Hang Seng Index gradually climbed in subsequent months but
fell by 181 points on October 13, 1989 (approximately 6.5%) following a
substantial fall in the U.S. stock markets, and at the year end closed at a
level of 2,837. More recently, during 1994 the Hang Seng Index lost
approximately 31% of its value.

The following table demonstrates the volatility of the Hang Seng Index in
comparison to that of the FT Index and the Dow Jones Industrial Average by
showing for each index, the number of trading days during the period from
January 1, 1989 through March 31, 1994, on which the value of the index in local
currency gained or lost 1%, 2% and 3% of its value as of the previous trading
day.

Number of Trading Days with
Gains or Losses Shown
-------------------------------------
Percentage Gains
or Losses Hang Seng FT Dow Jones
in Value of Index Index Index Industrial Average
----------------- --------- ------------------------

1% . . . . . 532 364251

2% . . . . . 194 3935

3% . . . . . 74 1210

Previous performance is no guarantee of future results; any index may
display more or less volatility in the future.

Hong Kong's Reversion to Chinese Sovereignty. Hong Kong will revert to
Chinese sovereignty effective July 1, 1997 with Hong Kong becoming a Special
Administrative Region ("SAR") of China. Although China has committed by treaty
to preserve for 50 years the economic and social freedoms currently enjoyed in
Hong Kong, the continuation of the economic system in Hong Kong after the
reversion will be dependent on the Chinese government and there can be no
assurances that the commitment made by China regarding Hong Kong will be
maintained. Legislation has recently been enacted in Hong Kong that will extend
democratic voting procedures for Hong Kong's legislature. China has expressed
disagreement with this legislation which it states is in contravention of the
principles evinced in the Basic Law of the Hong Kong SAR. The National People's
Congress of China has passed a resolution to the effect

<PAGE>
that the Legislative Council and certain other councils and boards of the Hong
Kong Government will be terminated on June 30, 1997. It is expected that such
bodies will be subsequently reconstituted in accordance with China's
interpretation of the Basic Law. China and Great Britain have also yet to
resolve their differences on other issues relating to the reversion to
sovereignty including the financing of and construction of a new international
airport on Lantau Island. Any increase in uncertainty as to the future economic
and political status of Hong Kong could have a materially adverse effect on the
value of a Hong Kong Portfolio.

Most Favored Nation Status. China (like most other nations) currently
enjoys a most favored nation status ("MFN Status") from the United States, which
is subject to annual review by the President of the United States. One June 2,
1994, President Clinton signed an executive order which renewed China's MFN
Status for another year. Revocation of the MFN Status would have a severe
effect on China's trade and thus could have a materially adverse effect on the
value of a Hong Kong Portfolio.

Other Economic Factors. The performance of certain companies listed on the
Hong Kong Exchange is linked to the economic climate of China. For example,
between 1985 and 1990, Hong Kong businesses invested US$20 billion in the nearby
Chinese province of Guangdong to take advantage of the lower property and labor
costs than were available in Hong Kong. Recently, however, high economic growth
in this area (industrial production grew at an annual rate of about 20% in 1991,
24% in 1992 and 36.5% in 1993) has been associated with rising inflation and
concerns about the devaluation of the Chinese currency. Any downturn in
economic growth or increase in the rate of inflation in China could have a
materially adverse effect on the value of a Hong Kong Portfolio.

Concentration

A Portfolio may contain or be concentrated in securities of issuers engaged
in the industries discussed below. An investment in a Portfolio should be made
with an understanding of the risks that these securities may entail, certain of
which are described below.
Natural Gas Companies

Stocks of companies engaged in the exploration and production, transmission
or distribution of natural gas may include integrated natural gas companies that
explore for and produce natural gas and transport and deliver it to customers;
natural gas transmission companies, commonly called pipelines, that sell at
wholesale to other pipelines and to distribution companies; natural gas
distribution companies that service residential, commercial and industrial
customers; natural gas exploration and production companies; and drilling
companies that service natural gas exploration and production companies. These
companies derive or are expected to derive at least 25% of their sales and
operating income from the natural gas industry. Factors which the Sponsors
believe may increase demand for natural gas include the encouragement of the use
of natural gas by the recent amendments to the Clean Air Act, the cleanliness of
natural gas as a fuel coupled with the increased concern about the environment,
use by electric utilities of natural gas as a primary fuel source as a result of
the repeal of the Fuel Use Act in 1987 and the increased use of natural gas in
co-generation of electricity. The profitability of natural gas operations could
be enhanced by the 1990 amendments to the Clean Air Act, which should increase
demand for natural gas products by electric utilities and other energy
consumers. The Commerce Department predicts that natural gas will be a growing
source of energy during the 1990s, because of projected higher costs for oil and
because natural gas is a cleaner burning fuel. The transportation industry may
make increased use of natural gas in order to meet more stringent mileage and
emissions requirements. There are significant constraints on increased use of
natural gas however, including a potential need for additional pipelines.
Additionally, companies involved in natural gas processing may experience
difficulties in the long term if product prices do not keep pace with potential
increases in gas costs.

Natural gas utilities are generally subject to extensive regulation by state
utility commissions or by the Federal Energy Regulatory Commission ("FERC"), in
the case of pipeline companies, which, for

<PAGE>
example, establish the rates that may be charged and the appropriate rate of
return on an approved asset base. FERC, through Order 636, unbundles natural gas
services and allows for additional competition. Certain natural gas utilities
have had difficulty from time to time in persuading regulators, who are subject
to political pressures, to grant rate increases necessary to maintain an
adequate return on investment and voters in many states have the ability to
influence limits on rate adjustments (for example, through election of utilities
commissioners, by initiative or by referendum). Any unexpected limitations could
negatively affect the profitability of natural gas utilities. In addition, gas
pipeline and distribution companies have had difficulties in adjusting to short
and surplus energy supplies, enforcing or being required to comply with
long-term contracts and avoiding litigation from their customers, on the one
hand, or suppliers, on the other.

General problems of the natural gas utility industry include difficulty in
obtaining timely and adequate rate increases, recovery of take-or-pay costs, the
uncertainty of transmission service costs for both interstate and intrastate
transactions, changes in tax laws which adversely affect a natural gas utility's
ability to operate profitably, reduced demand for natural gas in certain areas
of the country, competition from electricity and oil in the residential and
commercial markets, restrictions on operations and increased insurance premiums
and other costs and delays attributable to environmental considerations,
uncertain availability and increased cost of capital and availability and cost
of natural gas for resale. Pipeline companies may be subject to increased
competition because of approval by FERC of the construction of new pipelines and
delays because of the need to obtain FERC approval of new gas contracts. The
natural gas utility business is highly seasonal and weather sensitive. In
addition, natural gas competes directly with oil for industrial uses and large
industries have retained the flexibility to switch from natural gas to oil;
consequently, a fall in oil prices could prevent natural gas prices from rising
or result in a loss of customers because of conversions to oil. Natural gas
competes with coal in the utility market as a boiler fuel. Exploration and
production companies could be impacted in a period of declining natural gas
prices. Further, any future scientific advances concerning new sources of energy
and fuels or legislative changes with respect to the energy industry or the
environment could have a negative impact on the natural gas industry. And, while
legislation has recently been enacted to deregulate certain aspects of the
natural gas industry, no assurances can be given that new or additional
regulations will not be adopted. Each of the problems referred to could
adversely affect the financial stability of the issuers of any natural gas
stocks in a Fund.

Petroleum Refining Companies.

According to the U.S. Department of Commerce, the factors which will most
likely shape the petroleum refining and marketing industry to 1996 and beyond
include the price and availability of oil from the Middle East, general economic
conditions, changes in United States regulatory policies, international events
and the continued decline in U.S. production of crude oil. Possible effects of
these factors may be increased U.S. and world dependence on oil from the
Organization of Petroleum Exporting Countries ("OPEC"), highly uncertain and
potentially more volatile oil prices and a higher rate of growth for natural gas
production than for other fuels.

The refining industry is highly competitive with margins sensitive to supply
and demand cycles. Declining U.S. crude oil production will likely lead to
increased dependence on OPEC oil, putting refiners at risk of continued and
unpredictable supply disruption. The existence of surplus crude oil production
capacity and the willingness to adjust production levels are the two principal
requirements for stable crude oil markets. Without excess capacity, supply
disruptions in some countries cannot be compensated for by others.
Although unused capacity can contribute to market stability, it also creates
pressure to overproduce and contributes to market uncertainty. The likely
restoration of a large portion of Kuwait and Iraq's production and export
capacity over the next few years could lead to market disruptions in the absence
of substantial growth in world oil demand. Formerly, OPEC members attempted to
exercise control over production levels in each country through a system of
mandatory production quotas. The mandatory system has since been replaced with
a voluntary system. Production under the new system has had to be curtailed on
at least one occasion as a result of weak prices, even in the absence of
supplies from Iraq. The pressure

<PAGE>
to deviate from mandatory quotas, if they are reimposed, is likely to be
substantial and could lead to a weakening of prices.
Fluctuations in demand for oil-related products could also effect the
profitability of oil companies. If world oil demand increases additional
capacity and production will be required to compensate for expected sharp drops
in U.S. crude oil production and exports from the former Soviet Union. Only a
few OPEC countries, particularly Saudi Arabia, have the petroleum reserves that
will allow the required increase in production capacity to be attained. Given
the large-scale financing that is required, the prospect that such expansion
will occur soon enough to meet the increased demand is uncertain. However, no
assurance can be given that the demand for or the price of oil will increase or
that if either anticipated increase does take place, it will not be marked by
great volatility. Lower consumer demand due to increases in energy efficiency,
gasoline reformulations that call for less crude oil, warmer winters or a
general slowdown in economic growth in this country and abroad, could negatively
affect the price of oil and the profitability of oil companies. Cheaper oil
could also decrease demand for natural gas.

Refiners are subject to extensive federal, state and local environmental
laws and regulations that will pose serious challenges to the industry over the
coming decade. Refiners are likely to be required to commit considerable
resources to plant additions and make major production adjustments in order to
comply with increasingly stringent environmental legislation, such as the 1990
amendments to the Clean Air Act. If the cost of these changes is substantial
enough to cut deeply into profits, smaller refiners may be forced out of the
industry entirely. Additionally, refining operations are hazardous due, in
part, to the highly flammable nature of crude oil, natural gas and refined
products. As a result, refining operations are subject to personal injury and
property damage incidents.

Any future scientific advances concerning new sources of energy and fuels or
legislative changes relating to the energy industry or the environment could
have a negative impact on the petroleum product or natural gas industry. While
legislation has been enacted to deregulate certain aspects of the oil industry,
no assurances can be given that new or additional regulations will not be
adopted. Each of the problems referred to above could adversely affect the
financial stability of the issuers of any petroleum industry stocks in a
Portfolio.

Hong Kong Real Estate Companies.

Certain Hong Kong Portfolios may be considered to be concentrated in common
stocks of companies engaged in real estate asset management, development,
leasing, property sales and other related activities. Investment in securities
issued by these real estate companies should be made with an understanding of
the many factors which may have an adverse impact on the credit quality of the
particular company or industry. Generally, these include economic recession, the
cyclical nature of real estate markets, competitive overbuilding, unusually
adverse weather conditions, changing demographics, changes in governmental
regulations (including tax laws and environmental, building, zoning and sales
regulations), increases in real estate taxes or costs of material and labor, the
inability to secure performance guarantees or insurance as required, the
unavailability of investment capital and the inability to obtain construction
financing or mortgage loans at rates acceptable to builders and purchasers of
real estate. Additional risks include an inability to reduce expenditures
associated with a property (such as mortgage payments and property taxes) when
rental revenue declines, and possible loss upon foreclosure of mortgaged
properties if mortgage payments are not paid when due.

Recently, in the wake of Chinese economic development and reform, certain
Hong Kong real estate companies and other investors began purchasing and
developing real estate in southern China, including Beijing, the Chinese
capital. By 1992, however, southern China began to experience a rise in real
estate prices, increases in construction costs and a tightening of credit
markets. Any worsening of these conditions could affect the profitability and
financial condition of Hong Kong real estate companies and could have a
materially adverse effect on the value of a Hong Kong Portfolio.

<PAGE>
Semiconductor and Electronics Equipment Companies.

A Fund may be concentrated in stocks of issuers that manufacture
semiconductors and electronics equipment. Semiconductor and Electronics
companies present certain risks that may not exist to the same degree in other
industries. The industry is rapidly developing and highly competitive, both
domestically and internationally. Technology stocks, in general, tend to be
relatively volatile as compared to other types of investments. While volatility
may create investment opportunities, it does entail risk. Companies throughout
the technology field include many smaller and less seasoned companies. These
types of companies may present greater opportunities for capital appreciation,
but usually involve greater risks. These companies may have limited product
lines, markets or financial resources, or may have limited management or
marketing personnel. In addition, the securities that have wide institutional
holding are more volatile than the securities with lower institutional holding.
The industry is also strongly affected by worldwide scientific and technological
developments and the products of these companies may rapidly fall into
obsolescence. Certain of these companies may offer products or services that
are subject to (or may become subject to) government regulation and may,
therefore, be affected adversely by government policies. Other factors that
characterize the industry include low barriers to entry, short product life
cycles, aggressive pricing and reduced profit margins, dramatic and often
unpredictable changes in growth rates, a high degree of investment needed to
maintain competitiveness, frequent new product introduction, the need to enhance
existing products, intense competition from large established companies, and
potential competition from small start up companies. In addition, semiconductor
and electronics equipment companies are subject to events that affect
manufacturing companies in general, such as increases in material or labor
costs, changes in distribution channels and the need to manage inventory levels
in line with product demand.

The Semiconductor Industry. The semiconductor industry is characterized by
rapid change in both product and manufacturing process technology. As a result,
companies are required to introduce, on an ongoing basis, more advanced process
technologies in order to respond to customer requirements. Shortages of supplies
for raw materials and equipment could occur in the future in various critical
materials and equipment due to interruption of supply or increased industry
demand. Any such shortages could result in higher costs or production delays
which could have a material adverse effect on an issuer's business and financial
condition. The industry is subject to a variety of governmental regulations
related to the use, discharge and disposal of toxic, volatile or otherwise
hazardous materials used in the manufacturing process. Any failure by a company
to use, discharge or dispose of hazardous materials appropriately could subject
it to substantial liability or could require it to suspend or adversely modify
its manufacturing operations. The semiconductor industry historically has been
characterized by wide fluctuations in product supply and demand. From time to
time, the industry also has experienced significant downturns. These downturns
have been characterized by diminished product demand, production overcapacity
and accelerated erosion of average selling prices of semiconductor products. In
some cases, these downturns have lasted for more than a year. No assurance can
be given that any company's business will not be adversely affected in the
future by cyclical conditions in the semiconductor industry. Furthermore, there
can be no assurance that changes in environmental regulations in the future will
not require companies to make significant capital expenditures to modify,
supplement or replace equipment or to change methods of disposal or discharge or
the manner in which they manufacture products or operate their business. Fixed
costs represent a substantial portion of the total operating costs of a
semiconductor manufacturing operation. As a result, any failure by a company to
operate at near full capacity, whether due to mechanical failure, lack of
orders, fire or natural disaster, or other causes could result in diminished
profitability or losses. The consequences of a fire, natural disaster or
similar occurrence affecting production could be particularly significant for
any company. These 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 semiconductor
industry.

Utilities

The ability of utilities to meet their obligations with respect to revenue
bonds issued on their behalf is dependent on various factors, including the
rates they may charge their customers, the demand for a utility's services and
the cost of providing those services. Utilities, in particular investor-owned
utilities,

<PAGE>
are subject to extensive regulation relating to the rates which they may charge
customers. Utilities can experience regulatory, political and consumer
resistance to rate increases. Utilities engaged in long-term capital projects
are especially sensitive to regulatory lags in granting rate increases. Any
difficulty in obtaining timely and adequate rate increases could adversely
affect a utility's results of operations.

The demand for a utility's services is influenced by, among other factors,
competition, weather conditions and economic conditions. Electric utilities,
for example, have experienced increased competition as a result of the
availability of other energy sources, the effects of conservation on the use of
electricity, self-generation by industrial customers and the generation of
electricity by co-generators and other independent power producers. Also,
increased competition will result if federal regulators determine that utilities
must open their transmission lines to competitors. Utilities which distribute
natural gas also are subject to competition from alternative fuels, including
fuel oil, propane and coal.

The utility industry is an increasing cost business making the cost of
generating electricity more expensive and heightening its sensitivity to
regulation. A utility's costs are influenced by the utility's cost of capital,
the availability and cost of fuel and other factors. In addition, natural gas
pipeline and distribution companies have incurred increased costs as a result of
long-term natural gas purchase contracts containing "take or pay" provisions
which require that they pay for natural gas even if natural gas is not taken by
them. There can be no assurance that a utility will be able to pass on these
increased costs to customers through increased rates. Utilities incur
substantial capital expenditures for plant and equipment. In the future they
will also incur increasing capital and operating expenses to comply with
environmental legislation such as the Clean Air Act of 1990, and other energy,
licensing and other laws and regulations relating to, among other things, air
emissions, the quality of drinking water, waste water discharge, solid and
hazardous substance handling and disposal, and siting and licensing of
facilities. Environmental legislation and regulations are changing rapidly and
are the subject of current public policy debate and legislative proposals. It
is increasingly likely that some or many utilities will be subject to more
stringent environmental standards in the future that could result in significant
capital expenditures. Future legislation and regulation could include, among
other things, regulation of so-called electromagnetic fields associated with
electric transmission and distribution lines as well as emissions of carbon
dioxide and other so-called greenhouse gases associated with the burning of
fossil fuels. Compliance with these requirements may limit a utility's
operations or require substantial investments in new equipment and, as a result,
may adversely affect a utility's results of operations.

The electric utility industry in general is subject to various external
factors including (a) the effects of inflation upon the costs of operation and
construction, (b) substantially increased capital outlays and longer
construction periods for larger and more complex new generating units, (c)
uncertainties in predicting future load requirements, (d) increased financing
requirements coupled with limited availability of capital, (e) exposure to
cancellation and penalty charges on new generating units under construction, (f)
problems of cost and availability of fuel, (g) compliance with rapidly changing
and complex environmental, safety and licensing requirements, (h) litigation and
proposed legislation designed to delay or prevent construction of generating and
other facilities, (i) the uncertain effects of conservation on the use of
electric energy, (j) uncertainties associated with the development of a national
energy policy, (k) regulatory, political and consumer resistance to rate
increases and (l) increased competition as a result of the availability of other
energy sources. These factors may delay the construction and increase the cost
of new facilities, limit the use of, or necessitate costly modifications to,
existing facilities, impair the access of electric utilities to credit markets,
or substantially increase the cost of credit for electric generating facilities.
In addition, there are various proposals for a new energy tax before Congress.
The Sponsors cannot predict at this time the ultimate effect of such factors on
the ability of any issuers to meet their obligations with respect to Debt
Obligations.

The National Energy Policy Act ("NEPA"), which became law in October, 1992,
makes it mandatory for a utility to permit non-utility generators of electricity
access to its transmission system for wholesale customers, thereby increasing
competition for electric utilities. NEPA also mandated demand-side management
policies to be considered by utilities. NEPA prohibits the Federal Energy
Regulatory Commission from mandating electric utilities to engage in retail
wheeling, which is competition among suppliers of electric generation to provide
electricity to retail customers (particularly industrial retail

<PAGE>
customers) of a utility. However, under NEPA, a state can mandate retail
wheeling under certain conditions.
There is concern by the public, the scientific community, and the U.S.
Congress regarding environmental damage resulting from the use of fossil fuels.
Congressional support for the increased regulation of air, water, and soil
contaminants is building and there are a number of pending or recently enacted
legislative proposals which may affect the electric utility industry. In
particular, on November 15, 1990, legislation was signed into law that
substantially revises the Clean Air Act (the "1990 Amendments"). The 1990
Amendments seek to improve the ambient air quality throughout the United States
by the year 2000. A main feature of the 1990 Amendments is the reduction of
sulphur dioxide and nitrogen oxide emissions caused by electric utility power
plants, particularly those fueled by coal. Under the 1990 Amendments the U.S.
Environmental Protection Agency ("EPA") must develop limits for nitrogen oxide
emissions by 1993. The sulphur dioxide reduction will be achieved in two
phases. Phase I addresses specific generating units named in the 1990
Amendments. In Phase II the total U.S. emissions will be capped at 8.9 million
tons by the year 2000. The 1990 Amendments contain provisions for allocating
allowances to power plants based on historical or calculated levels. An
allowance is defined as the authorization to emit one ton of sulphur dioxide.

The 1990 Amendments also provide for possible further regulation of toxic
air emissions from electric generating units pending the results of several
federal government studies to be conducted over the next three to four years
with respect to anticipated hazards to public health, available corrective
technologies, and mercury toxicity.

Electric utilities which own or operate nuclear power plants are exposed to
risks inherent in the nuclear industry. These risks include exposure to new
requirements resulting from extensive federal and state regulatory oversight,
public controversy, decommissioning costs, and spent fuel and radioactive waste
disposal issues. While nuclear power construction risks are no longer of
paramount concern, the emerging issue is radioactive waste disposal. In
addition, nuclear plants typically require substantial capital additions and
modifications throughout their operating lives to meet safety, environmental,
operational and regulatory requirements and to replace and upgrade various plant
systems. The high degree of regulatory monitoring and controls imposed on
nuclear plants could cause a plant to be out of service or on limited service
for long periods. When a nuclear facility owned by an investor-owned utility or
a state or local municipality is out of service or operating on a limited
service basis, the utility operator or its owners may be liable for the recovery
of replacement power costs. Risks of substantial liability also arise from the
operation of nuclear facilities and from the use, handling, and possible
radioactive emissions associated with nuclear fuel. Insurance may not cover all
types or amounts of loss which may be experienced in connection with the
ownership and operation of a nuclear plant and severe financial consequences
could result from a significant accident or occurrence. The Nuclear Regulatory
Commission (the "NRC") has promulgated regulations mandating the establishment
of funded reserves to assure financial capability for the eventual
decommissioning of licensed nuclear facilities. These funds are to be accrued
from revenues in amounts currently estimated to be sufficient to pay for
decommissioning costs.

The Public Utility Holding Company Act of 1935 (the "1935 Act") regulates,
among other things, certain acquisitions of voting securities of electric
utility companies and gas utility companies by anyone who is an "affiliate" of a
public utility company (a person or organized group of persons that directly or
indirectly owns, controls or holds with power to vote 5% or more of the
outstanding voting securities of a public utility company). In addition, the
1935 Act requires a "holding company" (among other categories, a company which
directly or indirectly owns, controls or hold with power to vote 10% or more of
the outstanding voting securities of a public utility company or a "holding
company") to register as such with the Securities and Exchange Commission and be
otherwise subject to certain restrictions on the acquisition of securities and
other interests in public utility companies. The Fund does not intend to make
any investment that would result in its becoming subject to the 1935 Act. If the
Fund were considered to be a member of an organized group of persons, the 1935
Act might limit the Fund's acquisition of the voting securities of public
utility companies by reason of the control by the group of 5% or more of the
voting securities of a public utility company.

<PAGE>

The following illustrates the performance of electric utility stocks
compared to stocks in general and highgrade corporate bonds over the last twenty
years:

COMPARISON OF ANNUAL RETURNS OF UTILITIES, INDUSTRIALS AND
BONDS

Moody's Electric Standard & Poor's Long-Term
Utility Average 500 Index Corporate Bonds
--------------- --------------- ---------------
1974 -24.40% -26.39% -3.06%

1975 47.30% 37.16% 14.64%

1976 28.40% 23.57% 18.65%

1977 11.20% -7.41% 1.71%

1978 -3.90% 6.39% -0.07%

1979 4.80% 18.20% -4.18%

1980 8.10% 32.27% -2.62%

1981 19.70% -5.01% -0.96%

1982 34.90% 21.44% 43.79%

1983 14.50% 22.56% 4.70%

1984 22.70% 6.10% 16.39%

1985 28.10% 31.57% 30.90%

1986 29.90% 18.76% 19.85%

1987 -9.10% 5.10% -0.27%

1988 16.60% 16.33% 10.70%

1989 30.60% 31.47% 16.23%

1990 3.20% -3.27% 6.78%

1991 30.00% 30.41% 19.89%

1992 4.00% 7.67% 9.39%

1993 10.40% 9.97% 13.19%

1994 -16.36% 1.30% -5.76%

1/1/95 to 16.72% 19.98% 16.14%
6/30/95

__________________________
Sources: The Moody's Electric Utility Average represents a market
capitalization weighted average of 24 selected domestic public utility stocks,
published since 1929 by Moody's Investors Service. The S&P 500 Index is
composed of 500 selected common stocks, most of which are listed on the New York
Stock Exchange. It contains a variety of companies with diverse capitalization,
market-value weighted to represent the overall market. Data on long-term
corporate bonds are compiled by Ibbotson Associates, based primarily on the
Salomon Brothers Long-Term High-Grade Corporate Bond Index, which includes
nearly all Aaa- and Aa rated bonds.

<PAGE>

The returns shown in the chart above represent changes in security prices
during each year plus income distributed, divided by the price on the first day
of the year. The average annualized returns for 1972 through 6/30/95 were
15.14% for the Moody's Electric Utility Average, 15.10% for the Standard &
Poor's 500 Index and 11.18% for Ibbotson Associates' corporate bond composite.
For example, $1,000 invested on January 1, 1975 in Moody's Electric utility
average would have been worth $17,992.34 by June 30, 1995; $1,000 invested in
the Standard & Poor's 500 Index would have been worth $17,852.36; $1,000 in long
term corporate bonds would have been worth $8,774.50, by the end of this period.
These represent compounded returns, assuming income distributed during each year
was reinvested on the first day of the succeeding year. They do not reflect any
deduction for commissions or taxes. These figures represent past performance,
and are no guarantee of future results. Of course, an investor in the Fund may
experience somewhat lower returns because of sales charges, commissions and Fund
expenses, as well as the fact that the Fund will hold many stocks different from
the Moody's Electric Utility Average and may not be fully invested at all times.

The Telecommunications Industry

The telecommunications industry is subject to varying degrees of regulatory,
political and economic risk which may affect the price of the stocks of
companies involved in such industry. Such risks depend on a number of factors
including the country in which a company is located. Telecommunications
companies in both developed and emerging countries are undergoing significant
change due to varying and evolving levels of governmental regulation or
deregulation and technological advances as well as other factors. As a result,
competitive pressures are intense and the securities of such companies may be
subject to rapid price volatility. In addition, companies offering telephone
services are experiencing increasing competition from alternate service
providers. The cellular telephone industry also faces increased competition as
the Federal Communications Commission ("FCC") recently sold additional spectrum
to personal communications service providers, doubling the competitors in a
service area. 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.

United States. The Portfolio may be concentrated in stocks of companies that
are engaged in providing local, long-distance and cellular services, in the
manufacture of telecommunications products and in a wide range of other
activities including directory publishing, information systems and the operation
of voice, data and video telecommunications networks. Technological innovations
in fiber optics, cellular products and services, voice messaging, call waiting
and automatic dialing offer additional potential for significant expansion.
Advances like formation of a national cellular grid should also contribute to
the anticipated growth of this industry. The Fund may contain securities of the
Regional Bell Holding Companies ("RBOCs") which were spun off from AT&T in 1984
pursuant to approval of the U.S. District Court for the District of Columbia
(the "Court"), implementing a consent decree relating to antitrust proceedings
brought by the U.S. Department of Justice. The RBOCs include Ameritech
Corporation, Bell Atlantic Corporation, BellSouth Corporation, NYNEX
Corporation, Pacific Telesis Group, SBC and U.S. West, Inc. These companies
provide near monopoly local and intrastate telephone service as well as cellular
and other generally unregulated services. This sector was emphasized in the
Portfolio to obtain the greater yields available relative to the other sectors,
as well as a more predictable but slower earnings growth. The Fund also contains
the securities of certain independent telephone companies which are subject to
regulation by the FCC and state utility commissions but not subject to the
consent decree binding the RBOCs and AT&T and of certain long-distance
telecommunications carriers, certain telecommunications equipment manufacturers
and certain non-U.S. companies which provide telecommunications services or
equipment mainly outside the United States. International communications
facilities in the United States are also subject to the jurisdiction of the FCC,
and the provision of service to foreign countries is subject to the approval of
the FCC and the appropriate foreign governmental agencies.

In accordance with the consent decree, the RBOCs provide local telephone
service, including exchange access for long-distance companies, and may provide
directory advertising and new customer

<PAGE>

equipment. Many of the RBOCs, pursuant to waivers, may also engage in a broad
range of businesses including foreign consulting, servicing computers and
marketing or leasing office equipment. AT&T provides interexchange long distance
telephone service in competition with numerous other providers and certain other
products, services and customer equipment.
The Court's order approving the consent decree provided for periodic reviews
of the restrictions imposed by it. In April 1990, a Federal appeals court
directed the Court to review its ruling that restricts RBOC involvement in the
information services business and to determine whether removal of the
information services restriction would be in the public interest. On July 25,
1991, the Court lifted the information services ban. Other portions of the
consent decree are being litigated. As RBOCs are released from the restrictions
of the 1984 divestiture decree, they and other telephone companies are being
freed to create new products, services and businesses. Telecommunications
legislation is pending in the U.S. House of Representatives and the Senate that
would allow full competition among local exchange companies, long distance
companies and cable television operators.

The independent telephone companies, like the RBOCS, provide local
telecommunications service, but operate in a more limited area. These companies
are not subject to the consent decree and therefore can provide the full range
of telecommunications services including local exchange services, the
installation of business systems, telephone consulting, the manufacture of
telecommunications equipment, operation of voice and data networks and directory
publishing. Cellular service is providing an increasing component of the
revenues of the RBOCs and independent telephone companies. Both the RBOCs and
independents are subject to regulation by the FCC and state regulatory
authorities. The FCC also has the power to regulate the types of
telecommunications equipment which may be used and therefore may affect the
business of companies in the manufacturing of telecommunications equipment.
Long-distance companies which provide long-distance telecommunications services
are subject to regulation by the FCC. The long-distance industry is
consolidating into larger carriers.

Certain telecommunications services have in the past been fairly resistant
to recession with the exception of long-distance carriers. The Sponsors believe
that companies in the telephone business may remain resistant to recession in
the next few years and may experience some growth in access lines and message
units. Cellular telephone service should continue to expand, although at lesser
rates of growth than in the recent past. Also, ongoing technological change has
led to an increase in the development of new services such as voice messaging,
call screening and automatic dialing and the demand for business services such
as the use of fax machines and the movement of data information.

Business conditions of the telecommunications industry may affect the
ability of the issuers of the Securities in the Fund to meet their obligations.
The FCC and certain state utility regulators have introduced certain incentive
plans such as price-cap regulation which apply to certain portions of the
business of certain local exchange carriers. Price-cap regulation offers local
exchange carriers an opportunity to share in higher earnings provided they
become more efficient. These new approaches to regulation by the FCC and various
state or other regulatory agencies result in increased competition, and could
lead to greater risks as well as greater rewards for operating telephone
companies. Technology has tended to offset the effects of inflation and is
expected to continue to do so. Under traditional regulation, continuing cost
increases, to the extent not offset by improved productivity and revenues from
increased volume of business, would result in a decreasing rate of return and a
continuing need for rate increases. Although allowance is generally made in
ratemaking proceedings for cost increases, delays may be experienced in
obtaining the necessary rate increases and there can be no assurance that the
regulatory commissions in the future will grant rate increases adequate to cover
operating and other expenses and debt service requirements. The long-distance
industry has been increasingly opened to competition over the last number of
years. As a result, the major long-distance companies compete actively for
market share. Indeed, to meet increasing competition, telephone companies will
have to commit substantial capital, technological and marketing resources.

<PAGE>

Cellular and cable companies provide wireless services including paging,
dispatch and cellular services throughout the U.S. Most of the RBOCS, as well as
long distance companies, are seeking to increase their share of the cellular
market in view of perceived future growth prospects. It is unclear what effect,
if any, increased competition between wireless and traditional services will
have on the telecommunications industry. Other potential competition for local
service has also developed. The deregulated cellular telephone industry has a
limited operating history and there is significant uncertainty regarding its
future, particularly with regard to increased competition, the continued growth
in the number of customers, the usage and pricing of cellular services, and the
cost of providing cellular services, including the cost of attracting new
customers, developing new technology and the ability to obtain licenses to
provide cellular services. Recent industry developments may provide increased
competition and reduced revenues from cellular service for RBOCs and independent
telephone companies. The uncertain outcomes of future labor agreements and
employee and retiree benefit costs may also have a negative impact on
profitability. Telephone usage, and therefore revenues, could also be adversely
affected by any sustained economic recession. Each of these problems would
adversely affect the profitability of the telecommunications issuers of the
Securities in the Fund and their ability to meet their obligations.

Telecommunications equipment companies design, manufacture, and distribute
telecommunication equipment such as central office switching equipment,
switches, displays, mobile and cellular equipment and systems, network
transmission equipment, PBXS, satellite, microwave, antennas, and digital
communications networks. Growth of these companies may result from telephone
service industry expansion, modernization requirements and possible new
technology such as interactive television. As less developed countries modernize
their telecommunications infrastructure, the demand for these products
increases. This segment of the industry is subject to rapidly changing
technology and the risk of technological obsolescence although it is generally
not subject to regulation as other telecommunications services are.

In addition, the portfolio may contain securities issued by telephone
companies which provide telecommunications services or equipment outside the
United States; these companies are subject to regulation by foreign governments
or governmental authorities which have broad authority regulating the provision
of telecommunications services and the use of certain telecommunication
equipment. Consequently, certain Securities in the Fund may be affected by the
rules and regulations adopted by regulatory agencies in other countries from
time to time.

Foreign Telecommunications Issues. Many European, Latin American and Asian
telephone systems appear to have significant growth potential. The international
sector in the Portfolio consists predominantly of former government-owned
telecommunications systems that have been privatized in stages. Most are similar
to AT&T before 1984 in their dominance of local, long-distance and international
service within their country. As governments privative their systems by selling
stock to the public, telephone service is likely to expand and, as a result of
greater efficiency, potentially become more profitable. On the other hand, the
countries are allowing more companies to compete with the recently privatized
companies. Many of these companies have expanded into other countries. The
Sponsors believe there is significant potential for expansion of telephone
services in foreign countries. Of course, there can be no assurance of whether
or when telephone service in these countries will expand or its effects on the
non-U.S. companies represented in any portfolio.

Real Estate Investment Trusts

In General. REITs are financial vehicles that have as their objective the
pooling of capital from a number of investors in order to participate directly
in real estate ownership or financing. REIT's are generally fully integrated
operating companies that have interests in income-producing real estate. REITs
are differentiated by the types of real estate properties held and the actual
geographic location of properties and fall into two major categories: equity
REITs emphasize direct property investment, holding their invested assets
primarily in the ownership of real estate or other equity interests, while
mortgage REITs

<PAGE>

concentrate on real estate financing, holding their assets primarily in
mortgages secured by real estate. As of the Initial Date of Deposit, the Fund
contains only equity REITs. REITS obtain capital funds for investment in
underlying real estate assets by selling debt or equity securities on the public
or institutional capital markets or by bank borrowings. Thus, the returns on
common equities of the REITs in which the Fund invests will be significantly
affected by changes in costs of capital and, particularly in the case of highly
"leveraged" REIT's, i.e. those with large amounts of borrowings outstanding, by
changes in the level of interest rates. Since all the REITs in the Fund will be
purchased in the secondary market, their purchase price will generally not
reflect high initial sales charges.

The objective of an equity REIT is to purchase income-producing real estate
properties in order to generate high levels of cash flow from rental income and
a gradual asset appreciation, and they typically invest in properties such as
office, retail, industrial, hotel and apartment buildings and health care
facilities.

Overbuilding of commercial real estate projects in the 1980's often resulted
in increased vacancy rates, intense competition for tenants, declining rents and
deteriorating physical conditions. Coupled with the depressed real estate
market, it became more difficult to obtain financing from traditional sources.
Various REITs have acquired substantial established properties at depressed
prices and have renovated existing properties to enhance their potential.
Factory outlets, a new type of retail property, attract shoppers by offering
name-brand merchandise at steep discounts, which can result in higher occupancy
and eventually, higher rents. Expanding store size and diversification, a trend
of the 1990's, has been enhanced by REIT investments, which have supported the
recovering real estate market.

REITs in the Fund are not highly leveraged and derive the majority of their
income from rents on established property. Thus, while there can be no
assurance of future performance, their income tends to be more reliable and less
volatile than more highly leveraged REITs or REITs which invest substantially in
new construction or project lending.

Investment in the Fund should be made with an understanding of the many
factors that may have an adverse impact on the performance of a particular REIT,
its cash available for distribution, the credit quality of a particular REIT or
the real estate industry generally. Risks associated with the direct ownership
of real estate include general and local economic conditions, decline in real
estate values, the financial health of tenants, e.g. consolidation and increased
competition in the retail industry, dependency on the management skill of both
the officers of the REITs and the managers of the underlying properties,
dependency on heavy capital requirements, unpredictability of timing and amount
of cash flow, overbuilding and increased competition for tenants, oversupply of
properties for sale, unusually adverse weather conditions, changing
demographics, changes in interest rates, changes in government regulations
(including tax laws and environmental, building, zoning and sales regulations by
various federal, state and local authorities), increases in real estate taxes,
operating expenses or costs of material and labor, uninsured losses,
environmental clean-up costs, liability to third parties for damages resulting
from environmental problems, casualty or condemnation losses, natural disasters,
limitation on rents, faulty construction, changes in neighborhood values, the
appeal of properties to tenants, the inability to secure performance guarantees
as required and the unavailability of construction financing or mortgage loans
at rates acceptable to developers. Variations in rental income and space
availability and vacancy rates in terms of supply and demand are additional
factors affecting real estate generally and REITs in particular. Potential
conflicts of interest often exist with a founding developer or outside manager.

Performance by individual REIT'S is dependent on the types of real estate
investments held. For example, the effect of interest rate fluctuations will be
less on equity REITs than on mortgage REITs and the nature of the underlying
assets of an equity REIT may be considered more tangible than that of a mortgage
REIT. In addition, equity REITs may be affected by changes in the value of the
underlying property it owns.

<PAGE>

REIT investment managers may concentrate investments in specific geographic
areas, depending on their proximity to and knowledge of local real estate
conditions; the impact of economic conditions on REITs can also be expected to
vary with geographic location. Investors should also be aware that REITs may not
be diversified and are subject to the risks of financing projects. REITs are
also subject to defaults by borrowers, self-liquidation, the maker's perception
of the REIT industry generally, and the possibility of failing to qualify for
tax-free pass-through of income under the Internal Revenue Code of 1986, as
amended (the "Code"), and to maintain exemption from the Investment Company Act
of 1940. In the event of a default by a borrower or lessee, the REIT may
experience delays in enforcing its rights as a mortgagee or lessor and may incur
substantial costs associated with protecting its investments.

REIT Taxation. Each of the REITs in which the Fund invests will generally
state its intention to operate in such manner as to qualify for taxation as a
"real estate investment trust" under Sections 856-860 of the Code, although, of
course, no assurance can be given that each REIT will at all times so qualify.

The REIT provisions of the Code contain three gross income requirements:

1. At least 75% of the REIT gross income must be derived directly or
indirectly from statutorily specified investments in real property or mortgages
on real property.

2. At least 95% of the REIT gross income must be of the type meeting the 75%
requirements or must be derived from dividends, interest, or gains from the sale
or disposition of stock or securities.

3. Short-term gains from the disposition of stock or securities, gains from
the disposition of property where the property was held primarily for sale to
customers in the ordinary course of business, and gains from the disposition of
real property held for less then 4 years must total less than 30% of the REIT's
gross income.

At the close of each quarter of a REIT's taxable year, it also must satisfy
three tests relating to the nature if its assets. First, at least 75% of the
value of its total assets must be represented by real estate assets, cash, cash
items, and government securities. In addition, not more than 25% of this total
assets may be represented by securities (other than those includible in the 75%
asset class). Also, of the investments included in the 25% asset class, the
value of any one issuer's securities owned may not exceed 5% of the value of its
total assets, nor can it own more than 10% of any one issuer's outstanding
voting securities.

So long as an issuer qualifies as a REIT, it will, in general, be subject to
Federal income tax only on income than is not distributed to stockholders. In
order to qualify as a REIT for any taxable year, a REIT must, among other
things, distribute to its stockholders an amount at least equal to the sum of
95% of its taxable income.

Failure to qualify for taxation as a REIT in any taxable year will subject
an issuer to tax on its taxable income at regulate corporate rates.
Distributions to stockholders in any year in which an issuer fails to qualify as
a REIT will not be deductible by the issuer. Unless entitled to relief under
specific statutory provisions, the issuer would not qualify for taxation as a
REIT for the next four taxable years after failing to qualify in any year.
Each REIT may also be subject to state, local or other taxation in various
state, local or other jurisdictions.

ROLLOVER - (Select Ten Series and Select Growth Portfolios only)

It is expected that a special redemption and liquidation will be made of all
Units of a Portfolio held by any investor who affirmatively notifies the Trustee
in writing by the applicable notification date specified in the Portfolio's
prospectus that he elects to participate. It should also be noted that rollover
investors may

<PAGE>

realize taxable capital gains on the rollover but generally will not be entitled
to a deduction for certain capital losses and no cash would be distributed at
that time to pay any taxes.
All Units of rollover investors will be redeemed in kind on the first day of
the rollover period and the underlying securities will be distributed to a
distribution agent on behalf of the rollover investors. During the rollover
period, the distribution agent will be required to sell all of the underlying
securities on behalf of rollover investors. The sale proceeds will be net of
brokerage fees, governmental charges or any expenses involved in the sales.

Rollover investors may purchase units of a new portfolio of the same series,
if available, subject only to the Deferred Sales Charge; provided that rollover
investors who no longer hold their Units in an account maintained with one of
the Sponsors at the time of the rollover may not be eligible to participate in
the direct reinvestment in the new portfolio.

If an investor so specifies by the applicable notification date, his Units
will be redeemed in kind and the securities disposed of during the rollover
period. As long as the investor confirms his interest in purchasing units of a
new portfolio and units are available, the proceeds of the sales (net of
brokerage commissions, stamp taxes, governmental charges and any other selling
expenses or if applicable, costs associated with foreign trading) will be
invested in units of the next portfolio at daily prices over the rollover period
based on the asset value of units of the next portfolio plus the applicable
sales charge. The Sponsors are under no obligation to create a new portfolio,
however, and may modify the terms of the rollover upon notice to investors at
any time.

Depending on the volume of proceeds to be invested in the next portfolio
through the rollover and the volume of other orders for units in the next
portfolio, the Sponsors may purchase large volumes of the securities for the
next portfolio in a short period of time. This concentrated buying may tend to
raise the market prices of these securities. The actual market impact of the
Sponsors' purchases, however, is currently unpredictable because the actual
volume of securities to be purchased and the supply and price of those
securities are unknown. A similar problem may occur in connection with the
Sponsors' sales of securities during the rollover period. Depending on the
volume of sales required, and the prices of and demand for securities, sales by
the Sponsors may tend to depress the market prices and the value of Units, and
thus reduce the proceeds to be credited to rollover investors for investment in
the next portfolio.

The distribution agent will engage the Sponsors as its agents to sell the
distributed securities. The Sponsors will attempt to sell the securities as
quickly as is practicable during the rollover period without in their judgment
materially adversely affecting the market price of the securities, but all of
the securities will in any event be disposed of by the end of the rollover
period. The Sponsors do not anticipate that the period will be longer than 12
business days, although it could be shorter or longer given the varying
liquidity of the Securities. The liquidity of any security depends on the daily
trading volume of the security and the amount that the Sponsors have available
for sale on any particular day.

It is expected (but not required) that the Sponsors will generally follow
the following guidelines in selling the securities: for highly liquid
securities, the Sponsors will generally sell securities on the first day of the
rollover period; for less liquid securities, on each of the first two days of
the rollover period, the Sponsors will generally sell any amount of any
underlying securities at a price no less than 1/2 of one point under the closing
sale price of those securities on the preceding day. Thereafter, the Sponsors
intend to sell without any price restrictions at least a portion of the
remaining underlying securities, the numerator of which is one and the
denominator of which is the total number of days remaining (including that day)
in the rollover period.

Section 17(a) of the Investment Company Act of 1940 restricts purchases and
sales between affiliates of registered investment companies and those companies.
Pursuant to a recent exemptive order, certain Portfolios (and the distribution
agent on behalf of rollover investors) can now sell securities to the next
portfolio if those securities continue to meet the applicable objective or
Strategy. The exemption will enable these portfolios to eliminate commission
costs on these transactions. The price for those securities

<PAGE>

will be the closing sale price on the sale date on the exchange where the
securities are principally traded, as certified by the Agent for the Sponsors
and confirmed by the Trustee of a Portfolio.
The Sponsors intend to create new units of Portfolios as quickly as
possible, depending upon the availability and reasonably favorable price of the
securities included in the new Portfolio, and it is intended that rollover
investors will be given first priority to purchase new units of the new
Portfolio. There can be no assurance, however, as to the exact timing of the
creation of units of new Portfolios or the aggregate number of new units of new
Portfolios which the Sponsors will create. The Sponsors may, in their sole
discretion, stop creating units (whether permanently or temporarily) at any time
they choose, regardless of whether all proceeds of the rollover have been
invested on behalf of rollover investors. Cash which has not been invested on
behalf of the rollover investors in new Portfolios will be distributed at the
end of the rollover period. However, since the Sponsors can create units by
depositing cash (or bank letter of credit) with instructions to buy securities,
the Sponsors anticipate that sufficient units can be created, although moneys in
the new Portfolio may not be fully invested on the next business day.

Any rollover investor may thus be redeemed out of a Portfolio and become a
holder of an entirely different trust with a different portfolio of securities.
The rollover investor's Units will be redeemed in kind and the distributed
securities shall be sold during the rollover period. In accordance with the
rollover investors' offers to purchase units of new Portfolios, the proceeds of
the sales (and any other cash distributed upon redemption), less the amount of
any deferred sales charge still unpaid, will be invested in new units of the
next Portfolio, at the Public Offering Price, including the applicable sales
charge per unit.

This process of redemption, liquidation, and investment in a new trust is
intended to allow for the fact that the portfolios selected by the Sponsors are
chosen on the basis of a strategy for a period of one year, at which point a new
portfolio is chosen. It is contemplated that a similar process of redemption,
liquidation and investment in a new fund will be available for each subsequent
Portfolio, approximately a year after the creation of the prior series.

The Sponsors believe that the gradual redemption, liquidation and investment
in the new Portfolio will help mitigate any negative market price consequences
stemming from the trading of large volumes of securities and of the underlying
securities in the new Portfolio in a short, publicized period of time. The
above procedures may, however, be insufficient or unsuccessful in avoiding such
price consequences. There can be no assurance that the procedures will
effectively mitigate any adverse price consequences of heavy volume trading or
that the procedures will produce a better price for investors than might be
obtained on any given day during the rollover period. In fact, market price
trends may make it advantageous to sell or buy more quickly or more slowly than
permitted by these procedures. Rollover investors could then receive a less
favorable average unit price than if they bought all their units of the new
Portfolio on any given day of the period. Historically, the prices of
securities selected by the Sponsors as good investments have generally risen
over the first few days following the announcement.

It should also be noted that rollover investors may realize taxable capital
gains on the rollover but generally will not be entitled to a deduction for
certain capital losses and, due to the procedures for investing in new
Portfolios, no cash would be distributed at that time to pay any taxes.

In addition, during this period an investor will be at risk to the extent
that securities are not sold and will not have the benefit of any stock
appreciation to the extent that monies have not been invested; for this reason,
the Sponsors will be inclined to sell and purchase the securities in as short a
period as they can without materially adversely affecting the price of the
securities.

Investors who do not inform the Trustee that they wish to have their Units
so redeemed and liquidated will continue to hold Units of a Portfolio until that
Portfolio is terminated. These remaining investors will not realize capital
gains or losses due to the rollover and will not be charged any additional sales
charge. If a large percentage of investors become rollover investors, the
aggregate size of a Portfolio will be sharply reduced. As a consequence,
expenses, if any, in excess of the amount to be borne by the Trustee

<PAGE>

would constitute a higher percentage amount per Unit than prior to the rollover
in the new Portfolio. Also, because of the lesser number of Units in a
Portfolio, and possibly also due to a value reduction, however temporary, in
Units caused by the Sponsors' sales of securities, a Portfolio might also reduce
to the minimum value that would allow the Sponsors to choose to liquidate that
Portfolio without the consent of the remaining investors. The securities
remaining in a Portfolio after the rollover will be sold by the Sponsors as
quickly as possible without, in their judgment, materially adversely affecting
the market price of the securities.

RETIREMENT PLANS

A Portfolio may be well suited for purchase by Individual Retirement
Accounts ("IRAs"), Keogh plans, pension funds and other qualified retirement
plans, certain of which are briefly described below. Generally, capital gains
and income received in each of the foregoing plans are exempt from Federal
taxation. All distributions from such plans are generally treated as ordinary
income but may, in some cases, be eligible for special 5 or 10 year averaging or
tax-deferred rollover treatment. Investors who are also invested in IRAs, Keogh
plans and other tax-deferred retirement plans should consult their plan
custodian as to the appropriate disposition of distributions. Investors
considering participation in any of these plans should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any of these plans. These plans are
offered by brokerage firms, including the Sponsors, and other financial
institutions. Fees and charges with respect to such plans may vary.
Retirement Plans for the Self-Employed-- Keogh Plans. Units of a Portfolio
may be purchased by retirement plans established pursuant to Self-Employed
Individuals Tax Retirement Act of 1962 ("Keogh plans") for self-employed
individuals, partnerships or unincorporated companies. Qualified individuals
may generally make annual tax-deductible contributions up to the lesser of 20%
of annual compensation or $30,000 to Keogh plans. The assets of the plan must
be held in a qualified trust or other arrangement which meets the requirements
of the Code. Generally, there are penalties for premature distributions from a
plan before attainment of age 59 1/2, except in the case of a participant's
death or disability and certain other related circumstances. Keogh plan
participants may also establish separate IRAs (see below) to which they may
contribute up to an additional $2,000 per year ($2,250 in a spousal account).

Individual Retirement Account-- IRA. Any individual (including one covered by
an employer retirement plan) can establish an IRA or make use of a qualified IRA
arrangement set up by an employer or union for the purchase of Units of the
Fund. Any individual can make a contribution in an IRA equal to the lesser of
$2,000 ($2,250 in a spousal account) or 100% of earned income; such investment
must be made in cash. However, the deductible amount an individual may
contribute will be reduced if the individual's adjusted gross income exceeds
$25,000 (in the case of a single individual), $40,000 (in the case of married
individuals filing a joint return) or $200 (in the case of a married individual
filing a separate return). A married individual filing a separate return will
not be entitled to any deduction if the individual is covered by an
employer-maintained retirement plan without regard to whether the individual's
spouse is an active participant in an employer retirement plan. Unless
nondeductible contributions were made in 1987 or a later year, all distributions
from an IRA will be treated as ordinary income but generally are eligible for
tax-deferred rollover treatment. It should be noted that certain transactions
which are prohibited under Section 408 of the Code will cause all or a portion
of the amount in an IRA to be deemed to be distributed and subject to tax at
that time. A participant's entire interest in an IRA must be, or commence to
be, distributed to the participant not later than the April 1 following the
taxable year during which the participant attains age 70 1/2. Taxable
distributions made before attainment of age 59 1/2, except in the case of the
participant's death or disability or where the amount distributed is part of a
series of substantially equal periodic (at least annual) payments that are to be
made over the life expectancies of the participant and his or her beneficiary,
are generally subject to a surtax in an amount equal to 10% of the distribution.

Corporate Pension and Profit-Sharing Plans. A pension or profit-sharing
plan for employees of a corporation may purchase Units of a Portfolio.

<ARTICLE> 6
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> JUL-31-1995
<PERIOD-END> AUG-22-1995
<INVESTMENTS-AT-COST> 462,138
<INVESTMENTS-AT-VALUE> 462,138
<RECEIVABLES> 0
<ASSETS-OTHER> 80,000
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 542,138
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 80,000
<TOTAL-LIABILITIES> 80,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 462,138
<SHARES-COMMON-STOCK> 475,205
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 462,138
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 475,205
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 0
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 0
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>