Defined Asset Funds Index
Series
1st Quarter
1999
IRA Ideal!
The S&P
MidCap
Trust
400
An Investment Strategy
Seeking Higher
Total Return
[ML logo] Merrill Lynch
A Structured Approach to Investing in Mid-Cap 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
structured to mirror, as closely as possible, the total return of a market
index.
For years, the S&P 500 Index(1) has been used by professional money managers to
measure the performance of a broad portion of the stock market. As interest in
medium-capitalization (mid-cap) companies grew, however, in 1991 Standard &
Poor's created the S&P MidCap 400 Index(*), which provides a benchmark for mid-
cap stocks.
The S&P MidCap Trust
Defined Asset Funds(SM) has a convenient way for you to own a broad portfolio
of mid-cap stocks. The Defined Assets Funds S&P MidCap Trust was designed to
track the performance of mid-cap stocks by holding virtually every stock in
the Index. There can be no assurance that the Trust will achieve its
objective.
Index Investing Offers Several Benefits:
Risk Reduction with Diversification
One of the best reasons for an indexing approach to investing is
diversification. By owning units of this Trust, you participate in a broad
portfolio. Through one purchase, you are instantly diversified among hundreds
of companies in four market sectors.
Simplified Decision-Making
When you invest in the S&P MidCap Trust, you don't have to select individual
stocks or market sectors. You are buying, in effect, the major sectors of the
stock market represented by the Index.
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(1) "Standard & Poor's," "S&P 500 Index" and "S&P Midcap 400 Index" are
trademarks of the McGraw-Hill Companies, Inc. and have been licensed for use
by Defined Asset Funds. The Portfolio is not sponsored, managed, sold or
promoted by Standard & Poor's.
INVESTMENT RESULTS(1)
While past performance is no guarantee of future results, if you had invested
$10,000 at the Trust's inception and held through March 31, 1999, your
investment could have achieved the following results:
[Mountain chart with dates on the x-axis (2/19/92, 12/31/92, 21/31/93,
12/31/94, 12/31/94, 12/31/95, 12/31/96, 12/31/97, 12/31/98, 3/31/99) and
dollar amounts on the y-axis ($10,000, $15,000, $20,000, $25,000, $30,000).
The points on the graph reflect the investment value at the respective date
($10,000, $10,393, $11,716, $11,260, $14,654, $17,392, $23,306, $27,670,
$25,934).]
PAST PERFORMANCE OF THE S&P MID-CAP TRUST
One Year
(March 31, 1998 -- March 31, 1999)
o Total Return(2)..............................................0.31%
o Average Annualized Total Return(3)..........................-1.94%
Five Year
(March 31, 1994 -- March 31, 1999)
o Cumulative Total Return(2).................................126.77%
o Average Annualized Total Return(3)..........................17.25%
Since Inception
(February 19, 1992 -- March 31, 1999)
o Cumulative Total Return(2).................................165.31%
o Average Annualized Total Return(3)..........................14.33%
The S&P MidCap Trust Advantages
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(1) Maximum sales charge and expenses were deducted.
(2) Total return figures represent price changes plus reinvestment of income
and principal distributions (net of all expenses) but do not reflect sales
charges.
(3) Average annual returns reflect deduction of maximum applicable sales
charges.
Cost
The minimum investment is about $250, with discounts available for purchases of
$25,000 or more.
Low Cost May Increase Total Return
The Trust has no management fees, only a small annual supervisory fee and
operating expenses. Low costs are essential in an index fund since an index
is a benchmark without expenses. Low costs mean more of your money is
invested and working for you.
Convenience
There's no need for multiple security purchases. The Trust offers
diversification, with one price you can track weekly in Barron's.
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 Trust at
then-current market value. By reinvesting your income, you not only increase
your holdings, but gain the important benefits that monthly compounding can
have on total return.
Liquidity
Your investment may be sold at any time at the units' then-current market
value, which may be more or less than the original cost.
About the S&P MidCap 400 Index.
o Standard and Poor's MidCap 400 Index was created June 5, 1991.
o The Index measures the performance of 400 mid-sized companies
(capitalization as of March 31, 1999, currently ranging from about
$170 million to over $14 billion).
o It represents 295 companies traded on the New York Stock Exchange,
98 over the NASDAQ National Market System and 7 on the American Stock
Exchange. The market sectors included are industrial, utility, financial
and transportation.(1)
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(1) Source: FactSet
How The S&P MidCap 400 Index is Calculated
The S&P MidCap 400 Index 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 of the Index.
TOP TEN WEIGHTED COMPANIES(1)
Name Ticker % of Total
of Issuer Symbol Market Value
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1. Aflac, Inc. AFL 1.76%
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2. Best Buy Co., Inc. BBY 1.27
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3. Office Depot, Inc. ODP 1.12
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4. Harley-Davidson, Inc. HDI 1.07
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5. QUALCOMM, Inc. QCOM 1.06
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6. Biogen, Inc. BGEN 1.02
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7. Linear Technology Corp. LLTC 0.94
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8. Lexmark Intl. Group, Inc. (Class A) LXK 0.89
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9. Maxim Integrated Products MXIM 0.86
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10. Cintas Corp. CTAS 0.84
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Defined Asset Funds -- Our Philosophy
At Defined Asset Funds, we are ever mindful that behind every investment
dollar lies something infinitely more important -- your investment goal. That
is why we offer a full range of defined investments designed to meet a variety
of objectives.
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(1) Source: FactSet, as of March 31, 1999
We are committed to providing our investors with some of today's most
attractive equity and fixed income investments, within the convenient "buy and
hold" structure of a Unit Investment Trust. For income, for growth or for
total return, we believe that time in the market can be an effective strategy
for growing your portfolio.
At Defined Asset Funds, we set the foundation for all of our portfolios in
this way, because we too have an important goal in mind -- yours.
[logo] Defined Asset Funds
Buy With Knowledge o Hold With Confidence
Defining Your Risks
As with any equity investment, the value of your investment will fluctuate
with the value of the underlying stocks. The Trust may not be appropriate
for investors seeking capital preservation or high current income.
Because of sales charges, expenses and commissions, as well as 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 performance will vary somewhat from the
performance of the Index. Dividends and any net capital gains distributed will
be subject to tax each year, whether or not reinvested. Consult your tax
advisor concerning state and local taxation.
Sales Charge/Volume Purchase Discounts
For larger purchases, the sales charge is reduced to put a greater percentage
of your investment dollars to work for you.
Amount Total Sales Charge as a % of the
Purchased Public Offering Price
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Less than $25,000 2.25%
$25,000 to $49,999 2.00%
$50,000 to $74,999 1.75%
$75,000 to $99,999 1.50%
$100,000 to $249,999 1.25%
$250,000 to $999,999 1.00%
$1,000,000 to $4,999,999 .75%
$5,000,000 or more .50%
Start Indexing Today!
Your financial professional can help you design a financial plan and explain
how the S&P MidCap Trust may help you meet your personal investment goals.
Contact your financial professional to obtain a free prospectus containing
more complete information including sales charges, expenses and risks. Please
read it carefully before you invest or send money.
[recycle logo] Printed on Recycled Paper 32722SJ-4/99
[copyright logo] 1999 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
