Defined Asset Funds
The S&P MidCap 400 Trust
Merrill Lynch
A Simple Way to Invest in MidCap Stocks
In the past, index results have often outperformed many money managers.
Investing in a broad representation of the market, or indexing, is an
investment strategy that allows you to own a portfolio of stocks that is
carefully structured to mirror, as closely as possible, the total return of a
market index.
For years, the S&P 500 Index has been used by professional money managers to
measure the performance of a broad portion of the stock market. But as
interest in medium-capitalization (midcap) companies grew, in 1991 Standard &
Poor's created the S&P MidCap 400 Index,* [Footnote text: "S&P MidCap 400
Index" is a trademark of the Standard & Poor's Corporation. The Standard &
Poor's Corporation has not participated in any way in the creation of the
Trust and is not affiliated with any of the Trusts's sponsors.] which provides
a benchmark for MidCap stocks.
The S&P MidCap Trust
Now there's a simple way for you to own MidCap stocks. The Defined Assets
Funds(SM) S&P MidCap Trust was designed to track the stock market performance
of midcap stocks by holding virtually every stock in the index.
Index Investing Offers Several Benefits:
Simplified Decision-Making
When you invest in the S&P MidCap Trust, you don't have to select individual
stocks. You are, in effect, buying a portion of the market represented by the
index.
Risk Reduction with Diversification
One of the best reasons for an indexing approach is the fact that indexing
reduces the volatility of holding individual stocks. By investing in this
Trust, you are instantly diversified among hundreds of companies in four
industry sectors with just one purchase. This way, your exposure to risk is
reduced, especially when compared to buying one, two, or even ten of the
individual stocks.
Increase Total Return with Lower Costs
The true test of performance is the total return--and the price you pay for
it. Low costs are essential if an index fund is going to work efficiently.
After all, an index is just a benchmark and has no expenses of any kind
Fund Performance
One Year Ended
(January 1, 1995 - December 31, 1995)
Total Return* [Footnote text: *Total Return figures represent changes in unit
price plus reinvestment of income and principal distributions (net of all
expenses) but do not reflect sales charges.] 30.14%
Average Annualized Total Return** [Footnote text: **Average annual returns
reflect deduction of maximum applicable sales charges. Past performance is
not indicative of future results.] 27.29%
Since Inception
(February 20, 1992 - December 31, 1995)
Total Return* 49.91%
Average Annualized Total Return** 10.41%
Investment Results
A three dimensional bar graph, entitled "Investment Results," shows that if
you invest $10,000 on February 20, 1992 and hold that capital through December
31, 1995, your investment will reach $14,654. The graph is captioned "If you
had invested $10,000 from inception and held through December 31, 1995, your
investment would have achieved the following results+:" [Footnote text:
+Maximum sales charge was deducted": The x axis reflects dollar amounts,
starting with $0. The first increment is $8,000 and increases in $2,000
increments, until the amount reaches $16,000. The y axis reflects years,
starting with 2/20/92, then 12/31/93, 12/31/94, and 12/31/95. The five
rectangular columns of the bar graph are placed above the dates on the y axis;
the following amounts: $10,000, $10,393, $11,260, $14,654 respectively, are
listed on the top of the columns.
The Trust has no management fees, only a small annual supervisory fee and
operating expenses of about 0.25%. Low cost means more of your money is
invested and working for you.
Defined Portfolio
You are investing in a known, preselected portfolio of companies.
Liquidity
Your investment may be sold at any time at the then-current market-value,
which may be more or less than the original cost.
YOU CAN ALSO TAKE ADVANTAGE OF BENEFITS NOT AVAILABLE THROUGH THE PURCHASE OF
INDIVIDUAL STOCKS:
Monthly Income or Reinvestment
The Trust pays monthly or you can elect to have any dividend income and any
capital gains automatically reinvested into additional units of the same Trust
at net asset value. By reinvesting your income, you not only increase your
holdings, but gain the important benefits that monthly compounding can have on
total return performance.
Convenience
The Trust invests in many stocks, but makes it simple with only one price to
track. For your convenience, you can follow the price of your investment
weekly in Barron's.
Low Minimum Investment
A minimum investment of 1,000 units (about $1,000) is required. There is no
minimum investment for individual retirement or Keogh accounts.
ABOUT THE INDEX
Standard & Poor's MidCap 400 Index.
- - Created June 5, 1991.
- - Measures the performance of 400 mid-sized companies (capitalization
currently ranging from about $118 million to over $7.4 billion).
- - Represents 283 companies traded on the New York Stock Exchange, nine on the
American Stock Exchange, and 108 over the NASDAQ National Market System. The
market sectors included are industrials, utilities, financial and
transportation.
How The S&P MidCap Trust is Calculated
The S&P MidCap Trust is market-value weighted which takes into account two
factors: price per share, and total number of shares outstanding. Therefore,
the larger a company's capitalization, the greater that company's effect will
be on the performance in the index.
TOP TEN WEIGHTED COMPANIES* [Footnote text: As of 2/5/96]
Ticker Name Percentage of Total Market Value
BNET Bay Networks, Inc. 1.292%
WCOM Worldcom, Inc. 1.231%
AOC AON Corp. .993%
FRO Frontier Corp. .829%
TMO Thermo Electric Corp. .807%
FITB Fifth Third Bancorp .793%
CHIR Chiron Corp .788%
HRC Healthsouth Corp. .777%
AFL AFLAC, Inc. .771%
SEG Seagate Tech, Inc. .725%
Volume Purchase Discounts
For larger purchases, the sales charge is reduced to put a greater percentage
of your investment dollars to work for you.
Sales Charge As a Percentage of
Amount Purchased the Public Offering Price
Less than $25,000 2.25%
$25,000 to 49,999 2.00%
$75,000 to 99,999 1.75%
$100,000 to 249,999 1.50%
$250,000 or more 1.25%
Because of sales charges, Trust expenses and commissions, as well as the fact
that the Trust may not own all of the stocks in the index or in the same
proportions, or be fully invested at all times, Trust performances will vary
somewhat from the performance of the index.
Sound Financial Planning
Your financial professional can help you design a financial plan and consider
how the S&P MidCap Trust can help you meet your goals. Contact your financial
professional to request a free prospectus containing more complete information
about the S&P MidCap Trust or any other Defined Asset Fund (including charges
and expenses). Read it carefully before you invest.
[Recycling symbol] Printed on Recycled Paper 14800-2/96
