DEFINED ASSET FUNDS-REGISTERED TRADEMARK-
----------------------------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--208
(A UNIT INVESTMENT TRUST)
- FLORIDA, MISSOURI, NEW JERSEY, NEW YORK AND OHIO
PORTFOLIOS
- PORTFOLIOS OF LONG-TERM MUNICIPAL BONDS
- DESIGNED TO BE FREE OF REGULAR FEDERAL INCOME TAX
- EXEMPT FROM SOME STATE TAXES
- MONTHLY DISTRIBUTIONS
SPONSORS:
MERRILL LYNCH,
PIERCE, FENNER & SMITH
INCORPORATED -----------------------------------------------------
SALOMON SMITH BARNEY INC. The Securities and Exchange Commission has not
PRUDENTIAL SECURITIES approved or disapproved these Securities or passed
INCORPORATED upon the adequacy of this prospectus. Any
PAINEWEBBER INCORPORATED representation to the contrary is a criminal offense.
DEAN WITTER REYNOLDS INC. Prospectus dated August 31, 2000.
<PAGE>
--------------------------------------------------------------------------------
Defined Asset Funds-Registered Trademark-
Defined Asset Funds-Registered Trademark- is America's oldest and largest family
of unit investment trusts, with over $160 billion sponsored over the last 28
years. Defined Asset Funds has been a leader in unit investment trust research
and product innovation. Our family of Funds helps investors work toward their
financial goals with a full range of quality investments, including municipal,
corporate and government bond portfolios, as well as domestic and international
equity portfolios.
Defined Asset Funds offer a number of advantages:
- A Disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
- Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
- Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
- Professional research: Our dedicated research team seeks out stocks or
bonds appropriate for a particular fund's objectives.
- Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF MAY 31, 2000, THE
EVALUATION DATE.
CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Florida Insured Portfolio--
Risk/Return Summary............................. 3
Missouri Portfolio--
Risk/Return Summary............................. 6
New Jersey Insured Portfolio--
Risk/Return Summary............................. 9
New York Portfolio--
Risk/Return Summary............................. 12
Ohio Insured Portfolio--
Risk/Return Summary............................. 15
What You Can Expect From Your Investment.......... 20
Monthly Income.................................. 20
Return Figures.................................. 20
Records and Reports............................. 20
The Risks You Face................................ 21
Interest Rate Risk.............................. 21
Call Risk....................................... 21
Reduced Diversification Risk.................... 21
Liquidity Risk.................................. 21
Concentration Risk.............................. 21
State Concentration Risk........................ 23
Bond Quality Risk............................... 26
Insurance Related Risk.......................... 26
Litigation and Legislation Risks................ 26
Selling or Exchanging Units....................... 26
Sponsors' Secondary Market...................... 26
Selling Units to the Trustee.................... 26
Exchange Option................................. 27
How The Fund Works................................ 28
Pricing......................................... 28
Evaluations..................................... 28
Income.......................................... 28
Expenses........................................ 28
Portfolio Changes............................... 29
Fund Termination................................ 29
Certificates.................................... 30
Trust Indenture................................. 30
Legal Opinion................................... 31
Auditors........................................ 31
Sponsors........................................ 31
Trustee......................................... 31
Underwriters' and Sponsors' Profits............. 31
Public Distribution............................. 32
Code of Ethics.................................. 32
Year 2000 Issues................................ 32
Taxes............................................. 32
Supplemental Information.......................... 35
Financial Statements.............................. D-1
</TABLE>
2
<PAGE>
--------------------------------------------------------------------------------
FLORIDA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular federal income
taxes and some state and local taxes by investing in a fixed portfolio
consisting primarily of insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states, municipalities and public
authorities to finance the cost of buying, building or improving various
projects intended to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer utilities.
Generally, payments on these bonds depend solely on the revenues generated by
the projects, excise taxes or state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7 long-term tax-exempt municipal bonds
with an aggregate face amount of $2,235,000.
- The Fund is a unit investment trust which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by Standard & Poor's, Moody's or Fitch.
- Many of the bonds can be called at a premium declining over time to par
value. Some bonds may be called earlier at par for extraordinary reasons.
- 100% of the bonds are insured by insurance companies that guarantee timely
payments of principal and interest on the bonds (but not Fund units or the
market value of the bonds before they mature).
The Portfolio consists of municipal bonds of the following types:
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ /General Obligation 4%
/ /Municipal Water/Sewer Utilities 58%
/ /Refunded Bonds 5%
/ /Solid Waste Disposal 13%
/ /Special Tax 20%
</TABLE>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's worsening financial condition or a drop in
bond ratings can reduce the price of your units.
- Because the Fund is concentrated in municipal water/sewer utility bonds,
adverse developments in this sector may affect the value of your units.
- Assuming no changes in interest rates, when you sell your units, they will
generally be worth less than your cost because your cost included a sales
fee.
- The Fund will receive early returns of principal if bonds are called or sold
before they mature. If this happens your income will decline and you may not
be able to reinvest the money you receive at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF FLORIDA SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO RISKS PARTICULAR TO
FLORIDA WHICH ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
3
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will benefit from a
professionally selected and supervised portfolio whose risk is reduced by
investing in insured bonds of several different issuers.
The Fund is NOT appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
<TABLE>
<S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day of
the month):
Regular Monthly Income per unit $4.26
Annual Income per unit: $51.17
THESE FIGURES ARE ESTIMATES DETERMINED ON THE EVALUATION
DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay, directly or indirectly,
when you invest in the Fund.
<TABLE>
<S> <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
</TABLE>
Employees of some of the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least $100,000, as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<S> <C>
Trustee's Fee $0.68
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses) $0.54
Evaluator's Fee $0.54
Organization Costs $0.20
Other Operating Expenses $0.75
-----
TOTAL $2.71
</TABLE>
The Sponsors historically paid organization costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior Florida Portfolios,
which had investment objectives, strategies and types of bonds substantially
similar to this Fund. These prior Series differed in that they charged a
higher sales fee. These prior Florida Series were offered between after 1987
and were outstanding on June 30, 2000. OF COURSE, PAST PERFORMANCE OF PRIOR
SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED 6/30/00.
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
<S> <C> <C> <C> <C>
-------------------------------------------------------------
High 5.40% 5.02% 5.56% 6.20%
Average 0.83 4.32 2.91 5.39
Low -4.46 2.97 -1.58 3.67
-------------------------------------------------------------
Average
Sales fee 2.10% 5.37%
-------------------------------------------------------------
</TABLE>
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are not sold because
of market changes. Rather, experienced Defined Asset Funds financial analysts
regularly review the bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
4
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other broker-dealers. The
Sponsors are listed later in this prospectus. Some banks may offer units for
sale through special arrangements with the Sponsors, although certain legal
restrictions may apply.
<TABLE>
<S> <C>
UNIT PRICE PER UNIT $956.18
(as of May 31, 2000)
</TABLE>
Unit price is based on the net asset value of the Fund plus the sales fee. An
amount equal to any principal cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern time every business day. Unit price
changes every day with changes in the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the Trustee for the net
asset value determined at the close of business on the date of sale. You will
not pay any other fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued, interest on the
bonds in this Fund is generally 100% exempt from regular federal income tax.
Your income may also be exempt from some Florida state and local taxes if you
live in Florida.
You will also receive principal payments if bonds are sold or called or
mature, when the cash available is more than $5.00 per unit. You will be
subject to tax on any gain realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to compound your
income by reinvesting at no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end mutual fund with a
comparable investment objective, but the bonds will generally not be insured.
Income from this program will generally be subject to state and local income
taxes. FOR MORE COMPLETE INFORMATION ABOUT THE PROGRAM, INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR THE PROGRAM'S PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST. THE TRUSTEE MUST RECEIVE YOUR WRITTEN ELECTION TO REINVEST AT
LEAST 10 DAYS BEFORE THE RECORD DAY OF AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
5
<PAGE>
--------------------------------------------------------------------------------
MISSOURI PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular federal income
taxes and some state and local taxes by investing in a fixed portfolio
consisting primarily of long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states, municipalities and public
authorities to finance the cost of buying, building or improving various
projects intended to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer utilities.
Generally, payments on these bonds depend solely on the revenues generated by
the projects, excise taxes or state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7 long-term tax-exempt municipal bonds
with an aggregate face amount of $2,270,000.
- The Fund is a unit investment trust which means that, unlike a mutual fund,
the Portfolio is not managed.
- When the bonds were initially deposited they were rated A or better by
Standard & Poor's, Moody's or Fitch. THE QUALITY OF THE BONDS MAY CURRENTLY
BE LOWER.
- Many of the bonds can be called at a premium declining over time to par
value. Some bonds may be called earlier at par for extraordinary reasons.
- The Fund is concentrated in refunded bonds.
- 59% of the bonds are insured by insurance companies that guarantee timely
payments of principal and interest on the bonds (but not Fund units or the
market value of the bonds before they mature).
The Portfolio consists of municipal bonds of the following types:
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ /Airports/Ports/Highways 9%
/ /Lease Rental 42%
/ /Refunded Bonds 27%
/ /Municipal Electric Utilities 22%
</TABLE>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's worsening financial condition or a drop in
bond ratings can reduce the price of your units.
- Because the Fund is concentrated in lease rental bonds, adverse developments
in this sector may affect the value of your units.
- Assuming no changes in interest rates, when you sell your units, they will
generally be worth less than your cost because your cost included a sales
fee.
- The Fund will receive early returns of principal if bonds are called or sold
before they mature. If this happens your income will decline and you may not
be able to reinvest the money you receive at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF MISSOURI SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO RISKS PARTICULAR TO
MISSOURI WHICH ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
6
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will benefit from a
professionally selected and supervised portfolio whose risk is reduced by
investing in bonds of several different issuers.
The Fund is NOT appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
<TABLE>
<S> <C>
What You May Expect (Payable on the 25th day of
the month to holders of record on the 10th day of
the month):
Regular Monthly Income per unit $4.28
Annual Income per unit: $51.38
THESE FIGURES ARE ESTIMATES DETERMINED ON THE EVALUATION
DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay, directly or indirectly,
when you invest in the Fund.
<TABLE>
<S> <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
</TABLE>
Employees of some of the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least $100,000, as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<S> <C>
Trustee's Fee $0.70
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses) $0.55
Evaluator's Fee $0.48
Organization Costs $0.20
Other Operating Expenses $0.83
-----
TOTAL $2.76
</TABLE>
The Sponsors historically paid organization costs and updating expenses.
7. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are not sold because
of market changes. Rather, experienced Defined Asset Funds financial analysts
regularly review the bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
8. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other broker-dealers. The
Sponsors are listed later in this prospectus. Some banks may offer units for
sale through special arrangements with the Sponsors, although certain legal
restrictions may apply.
<TABLE>
<S> <C>
UNIT PRICE PER UNIT $961.90
(as of May 31, 2000)
</TABLE>
Unit price is based on the net asset value of the Fund plus the sales fee. An
amount equal to any principal cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern time every business day. Unit price
changes every day with changes in the prices of the bonds in the Fund.
9. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the Trustee for the net
asset value determined at the close of business on the date of sale. You will
not pay any other fee when you sell your units.
10. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued, interest on the
bonds in this Fund is generally 100% exempt from regular
7
<PAGE>
federal income tax. Your income may also be exempt from some Missouri state
and local personal income taxes if you live in Missouri.
You will also receive principal payments if bonds are sold or called or
mature, when the cash available is more than $5.00 per unit. You will be
subject to tax on any gain realized by the Fund on the disposition of bonds.
11. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to compound your
income by reinvesting at no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end mutual fund with a
comparable investment objective. Income from this program will generally be
subject to state and local income taxes. FOR MORE COMPLETE INFORMATION ABOUT
THE PROGRAM, INCLUDING CHARGES AND FEES, ASK THE TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST. THE TRUSTEE MUST RECEIVE
YOUR WRITTEN ELECTION TO REINVEST AT LEAST 10 DAYS BEFORE THE RECORD DAY OF
AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
8
<PAGE>
--------------------------------------------------------------------------------
NEW JERSEY INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular federal income
taxes and some state and local taxes by investing in a fixed portfolio
consisting primarily of insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states, municipalities and public
authorities to finance the cost of buying, building or improving various
projects intended to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer utilities.
Generally, payments on these bonds depend solely on the revenues generated by
the projects, excise taxes or state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7 long-term tax-exempt municipal bonds
with an aggregate face amount of $2,300,000.
- The Fund is a unit investment trust which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by Standard & Poor's, Moody's or Fitch.
- Many of the bonds can be called at a premium declining over time to par
value. Some bonds may be called earlier at par for extraordinary reasons.
- 100% of the bonds are insured by insurance companies that guarantee timely
payments of principal and interest on the bonds (but not Fund units or the
market value of the bonds before they mature).
The Portfolio consists of municipal bonds of the following types:
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ /Airports/Ports/Highways 9%
/ /Housing 20%
/ /Industrial Development Revenue 18%
/ /Lease Rental 34%
/ /Refunded Bonds 4%
/ /Universities/Colleges 15%
</TABLE>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's worsening financial condition or a drop in
bond ratings can reduce the price of your units.
- Because the Fund is concentrated in lease rental bonds, adverse developments
in this sector may affect the value of your units.
- Assuming no changes in interest rates, when you sell your units, they will
generally be worth less than your cost because your cost included a sales
fee.
- The Fund will receive early returns of principal if bonds are called or sold
before they mature. If this happens your income will decline and you may not
be able to reinvest the money you receive at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW JERSEY SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO RISKS PARTICULAR TO NEW
JERSEY WHICH ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
9
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will benefit from a
professionally selected and supervised portfolio whose risk is reduced by
investing in insured bonds of several different issuers.
The Fund is NOT appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
<TABLE>
<S> <C>
What You May Expect (Payable on the 25th day of
the month to holders of record on the 10th day of
the month):
Regular Monthly Income per unit $4.49
Annual Income per unit: $53.99
THESE FIGURES ARE ESTIMATES DETERMINED ON THE EVALUATION
DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay, directly or indirectly,
when you invest in the Fund.
<TABLE>
<S> <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
</TABLE>
Employees of some of the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least $100,000, as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<S> <C>
Trustee's Fee $0.69
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses) $0.54
Evaluator's Fee $0.51
Organization Costs $0.20
Other Operating Expenses $0.77
-----
TOTAL $2.71
</TABLE>
The Sponsors historically paid organization costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE OF PRIOR NEW JERSEY
PORTFOLIOS, WHICH HAD INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF BONDS
SUBSTANTIALLY SIMILAR TO THIS FUND. THESE PRIOR SERIES DIFFERED IN THAT THEY
CHARGED A HIGHER SALES FEE. These prior New Jersey Series were offered after
1987 and were outstanding on June 30, 2000. OF COURSE, PAST PERFORMANCE OF
PRIOR SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED 6/30/00.
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
<S> <C> <C> <C> <C>
--------------------------------------------------------
High 3.82% 5.02% 4.72% 6.19%
Average 0.82 4.15 2.80 5.24
Low -2.37 2.38 0.51 3.17
--------------------------------------------------------
Average
Sales fee 2.00% 5.44%
--------------------------------------------------------
</TABLE>
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are not sold because
of market changes. Rather, experienced Defined Asset Funds financial analysts
regularly review the bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
10
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other broker-dealers. The
Sponsors are listed later in this prospectus. Some banks may offer units for
sale through special arrangements with the Sponsors, although certain legal
restrictions may apply.
<TABLE>
<S> <C>
UNIT PRICE PER UNIT $978.79
(as of May 31, 2000)
</TABLE>
Unit price is based on the net asset value of the Fund plus the sales fee. An
amount equal to any principal cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern time every business day. Unit price
changes every day with changes in the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the Trustee for the net
asset value determined at the close of business on the date of sale. You will
not pay any other fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued, interest on the
bonds in this Fund is generally 100% exempt from regular federal income tax.
Your income may also be exempt from some New Jersey state and local personal
income taxes if you live in New Jersey.
You will also receive principal payments if bonds are sold or called or
mature, when the cash available is more than $5.00 per unit. You will be
subject to tax on any gain realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to compound your
income by reinvesting at no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end mutual fund with a
comparable investment objective, but the bonds generally will not be insured.
Income from this program will generally be subject to state and local income
taxes. FOR MORE COMPLETE INFORMATION ABOUT THE PROGRAM, INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR THE PROGRAM'S PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST. THE TRUSTEE MUST RECEIVE YOUR WRITTEN ELECTION TO REINVEST AT
LEAST 10 DAYS BEFORE THE RECORD DAY OF AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
11
<PAGE>
--------------------------------------------------------------------------------
NEW YORK PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular federal income
taxes and some state and local taxes by investing in a fixed portfolio
consisting primarily of long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states, municipalities and public
authorities to finance the cost of buying, building or improving various
projects intended to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer utilities.
Generally, payments on these bonds depend solely on the revenues generated by
the projects, excise taxes or state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7 long-term tax-exempt municipal bonds
with an aggregate face amount of $2,845,000.
- The Fund is a unit investment trust which means that, unlike a mutual fund,
the Portfolio is not managed.
- When the bonds were initially deposited they were rated A or better by
Standard & Poor's, Moody's or Fitch. THE QUALITY OF THE BONDS MAY CURRENTLY
BE LOWER.
- Many of the bonds can be called at a premium declining over time to par
value. Some bonds may be called earlier at par for extraordinary reasons.
- 32% of the bonds are insured by insurance companies that guarantee timely
payments of principal and interest on the bonds (but not Fund units or the
market value of the bonds before they mature).
The Portfolio consists of municipal bonds of the following types:
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ /Hospitals/Health Care 32%
/ /Lease Rental Appropriation 18%
/ /Refunded Bonds 6%
/ /Special Tax 9%
/ /Universities/Colleges 35%
</TABLE>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's worsening financial condition or a drop in
bond ratings can reduce the price of your units.
- Because the Fund is concentrated in hospital/health care and
university/college bonds, adverse developments in these sectors may affect
the value of your units.
- Assuming no changes in interest rates, when you sell your units, they will
generally be worth less than your cost because your cost included a sales
fee.
- The Fund will receive early returns of principal if bonds are called or sold
before they mature. If this happens your income will decline and you may not
be able to reinvest the money you receive at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW YORK SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO RISKS PARTICULAR TO NEW
YORK WHICH ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN
THIS PROSPECTUS.
12
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will benefit from a
professionally selected and supervised portfolio whose risk is reduced by
investing in bonds of several different issuers.
The Fund is NOT appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
<TABLE>
<S> <C>
What You May Expect (Payable on the 25th day of
the month to holders of record on the 10th day of
the month):
Regular Monthly Income per unit $4.49
Annual Income per unit: $53.98
THESE FIGURES ARE ESTIMATES DETERMINED ON THE EVALUATION
DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay, directly or indirectly,
when you invest in the Fund.
<TABLE>
<S> <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
</TABLE>
Employees of some of the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least $100,000, as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<S> <C>
Trustee's Fee $0.70
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses) $0.55
Evaluator's Fee $0.40
Organization Costs $0.20
Other Operating Expenses $0.61
-----
TOTAL $2.46
</TABLE>
The Sponsors historically paid organization costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior New York Portfolios,
which had investment objectives, strategies and types of bonds substantially
similar to this Fund. These prior Series differed in that they charged a
higher sales fee. These prior New York Series were offered after 1987 and
were outstanding on June 30, 2000. OF COURSE, PAST PERFORMANCE OF PRIOR
SERIES IS NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED 6/30/00.
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
High 7.07% 5.27% 6.26% 7.16% 6.45% 6.85%
Average 0.81 4.03 5.80 2.86 5.06 6.38
Low -2.59 2.35 5.52 -0.14 3.22 6.11
----------------------------------------------------------------------------
Average
Sales fee 2.07% 5.11% 5.78%
----------------------------------------------------------------------------
</TABLE>
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are not sold because
of market changes. Rather, experienced Defined Asset Funds financial analysts
regularly review the bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
13
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other broker-dealers. The
Sponsors are listed later in this prospectus. Some banks may offer units for
sale through special arrangements with the Sponsors, although certain legal
restrictions may apply.
<TABLE>
<S> <C>
UNIT PRICE PER UNIT $962.24
(as of May 31, 2000)
</TABLE>
Unit price is based on the net asset value of the Fund plus the sales fee. An
amount equal to any principal cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern time every business day. Unit price
changes every day with changes in the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the Trustee for the net
asset value determined at the close of business on the date of sale. You will
not pay any other fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued, interest on the
bonds in this Fund is generally 100% exempt from regular federal income tax.
Your income may also be exempt from some New York state and local personal
income taxes if you live in New York.
You will also receive principal payments if bonds are sold or called or
mature, when the cash available is more than $5.00 per unit. You will be
subject to tax on any gain realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to compound your
income by reinvesting at no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end mutual fund with a
comparable investment objective. Income from this program will generally be
subject to state and local income taxes. FOR MORE COMPLETE INFORMATION ABOUT
THE PROGRAM, INCLUDING CHARGES AND FEES, ASK THE TRUSTEE FOR THE PROGRAM'S
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST. THE TRUSTEE MUST RECEIVE
YOUR WRITTEN ELECTION TO REINVEST AT LEAST 10 DAYS BEFORE THE RECORD DAY OF
AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
14
<PAGE>
--------------------------------------------------------------------------------
OHIO INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular federal income
taxes and some state and local taxes by investing in a fixed portfolio
consisting primarily of insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states, municipalities and public
authorities to finance the cost of buying, building or improving various
projects intended to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer utilities.
Generally, payments on these bonds depend solely on the revenues generated by
the projects, excise taxes or state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
- The Fund plans to hold to maturity 7 long-term tax-exempt municipal bonds
with an aggregate face amount of $2,565,000.
- The Fund is a unit investment trust which means that, unlike a mutual fund,
the Portfolio is not managed.
- The bonds are rated AAA or Aaa by Standard & Poor's, Moody's or Fitch.
- Many of the bonds can be called at a premium declining over time to par
value. Some bonds may be called earlier at par for extraordinary reasons.
- The Fund is concentrated in refunded bonds.
- 100% of the bonds are insured by insurance companies that guarantee timely
payments of principal and interest on the bonds (but not Fund units or the
market value of the bonds before they mature).
The Portfolio consists of municipal bonds of the following types:
<TABLE>
<CAPTION>
APPROXIMATE
PORTFOLIO
PERCENTAGE
<S> <C>
/ /General Obligation 19%
/ /Hospitals/Health Care 19%
/ /Industrial Development Revenue 22%
/ /Municipal Water/Sewer Utilities 1%
/ /Refunded Bonds 25%
/ /Universities/Colleges 14%
</TABLE>
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN HAPPEN FOR VARIOUS
REASONS, INCLUDING:
- Rising interest rates, an issuer's worsening financial condition or a drop in
bond ratings can reduce the price of your units.
- Assuming no changes in interest rates, when you sell your units, they will
generally be worth less than your cost because your cost included a sales
fee.
- The Fund will receive early returns of principal if bonds are called or sold
before they mature. If this happens your income will decline and you may not
be able to reinvest the money you receive at as high a yield or as long a
maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF OHIO SO IT IS LESS
DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT TO RISKS PARTICULAR TO OHIO
WHICH ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
15
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will benefit from a
professionally selected and supervised portfolio whose risk is reduced by
investing in insured bonds of several different issuers.
The Fund is NOT appropriate for you if you want a speculative investment that
changes to take advantage of market movements, if you do not want a
tax-advantaged investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
<TABLE>
<S> <C>
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day of
the month):
Regular Monthly Income per unit $4.54
Annual Income per unit: $54.55
THESE FIGURES ARE ESTIMATES DETERMINED ON THE EVALUATION
DAY; ACTUAL PAYMENTS MAY VARY.
</TABLE>
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay, directly or indirectly,
when you invest in the Fund.
<TABLE>
<S> <C>
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
</TABLE>
Employees of some of the Sponsors and their affiliates may pay a reduced
sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least $100,000, as follows:
<TABLE>
<CAPTION>
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
-------------- ------------
<S> <C>
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
</TABLE>
ESTIMATED ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
AMOUNT
PER UNIT
--------
<S> <C>
Trustee's Fee $0.69
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses) $0.54
Evaluator's Fee $0.46
Organization Costs $0.20
Other Operating Expenses $0.63
-----
TOTAL $2.52
</TABLE>
The Sponsors historically paid organization costs and updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
IN THE FOLLOWING CHART WE SHOW PAST PERFORMANCE OF PRIOR OHIO PORTFOLIOS,
WHICH HAD INVESTMENT OBJECTIVES, STRATEGIES AND TYPES OF BONDS SUBSTANTIALLY
SIMILAR TO THIS FUND. THESE PRIOR SERIES DIFFERED IN THAT THEY CHARGED A
HIGHER SALES FEE. These prior Ohio Series were offered after 1987 and were
outstanding on June 30, 2000. OF COURSE, PAST PERFORMANCE OF PRIOR SERIES IS
NO GUARANTEE OF FUTURE RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
REFLECTING ALL EXPENSES. FOR PERIODS ENDED 6/30/00.
<TABLE>
<CAPTION>
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------
High 4.14% 4.77% 5.83% 4.32% 5.94% 6.42%
Average 0.96 3.85 5.66 2.72 4.93 6.23
Low -6.21 2.57 5.51 -3.36 3.58 6.10
-----------------------------------------------------------------------------
Average
Sales fee 1.77% 5.38% 5.64%
-----------------------------------------------------------------------------
</TABLE>
NOTE: ALL RETURNS REPRESENT CHANGES IN UNIT PRICE WITH DISTRIBUTIONS REINVESTED
INTO THE MUNICIPAL FUND INVESTMENT ACCUMULATION PROGRAM.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are not sold because
of market changes. Rather, experienced Defined Asset Funds financial analysts
regularly review the bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
16
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other broker-dealers. The
Sponsors are listed later in this prospectus. Some banks may offer units for
sale through special arrangements with the Sponsors, although certain legal
restrictions may apply.
<TABLE>
<S> <C>
UNIT PRICE PER UNIT $1,002.95
(as of May 31, 2000)
</TABLE>
Unit price is based on the net asset value of the Fund plus the sales fee. An
amount equal to any principal cash, as well as net accrued but undistributed
interest on the unit, is added to the unit price. An independent evaluator
prices the bonds at 3:30 p.m. Eastern time every business day. Unit price
changes every day with changes in the prices of the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the Trustee for the net
asset value determined at the close of business on the date of sale. You will
not pay any other fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued, interest on the
bonds in this Fund is generally 100% exempt from regular federal income tax.
Your income may also be exempt from some Ohio state and local personal income
taxes if you live in Ohio.
You will also receive principal payments if bonds are sold or called or
mature, when the cash available is more than $5.00 per unit. You will be
subject to tax on any gain realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to compound your
income by reinvesting at no sales fee in the Municipal Fund Investment
Accumulation Program, Inc. This program is an open-end mutual fund with a
comparable investment objective, but the bonds will generally not be insured.
Income from this program will generally be subject to state and local income
taxes. FOR MORE COMPLETE INFORMATION ABOUT THE PROGRAM, INCLUDING CHARGES AND
FEES, ASK THE TRUSTEE FOR THE PROGRAM'S PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST. THE TRUSTEE MUST RECEIVE YOUR WRITTEN ELECTION TO REINVEST AT
LEAST 10 DAYS BEFORE THE RECORD DAY OF AN INCOME PAYMENT.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain other Defined Asset
Funds. You may also exchange into this Fund from certain other funds. We
charge a reduced sales fee on exchanges.
17
<PAGE>
--------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR FLORIDA RESIDENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ 0- 43,850 15.00 3.53 4.12 4.71 5.29 5.88
$ 26,251- 63,550 $ 43,851-105,950 28.00 4.17 4.86 5.56 6.25 6.94
$ 63,551-132,600 $105,951-161,450 31.00 4.35 5.07 5.80 6.52 7.25
$132,601-288,350 $161,451-288,350 36.00 4.69 5.47 6.25 7.03 7.81
OVER $288,350 OVER $288,350 39.60 4.97 5.79 6.62 7.45 8.28
<CAPTION>
TAXABLE INCOME 2 TAX-FREE YIELD OF
SINGLE RETURN 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C>
----------------
$ 0- 26,250 6.47 7.06 7.65 8.24
$ 26,251- 63,550 7.64 8.33 9.03 9.72
$ 63,551-132,600 7.97 8.70 9.42 10.14
$132,601-288,350 8.59 9.38 10.16 10.94
OVER $288,350 9.11 9.93 10.76 11.59
</TABLE>
FOR MISSOURI RESIDENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ 0- 43,850 19.37 4.96 5.58 6.20 6.82 7.44 8.06 8.68 9.30 9.92
$ 26,251- 63,550 $ 43,851-105,950 31.16 5.81 6.54 7.26 7.99 8.72 9.44 10.17 10.89 11.62
$ 63,551-132,600 $105,951-161,450 33.90 6.05 6.81 7.56 8.32 9.08 9.83 10.59 11.35 12.10
$132,601-288,350 $161,451-288,350 38.50 6.50 7.32 8.13 8.94 9.76 10.57 11.38 12.19 13.01
OVER $283,351 OVER $288,351 41.82 6.88 7.73 8.59 9.45 10.31 11.17 12.03 12.89 13.75
</TABLE>
FOR NEW JERSEY RESIDENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ $0- 43,850 16.49 4.79 5.39 5.99 6.59 7.18 7.78 8.38 8.98 9.58
$ 26,251- 63,550 $ 43,851-105,950 31.98 5.88 6.62 7.35 8.09 8.82 9.56 10.29 11.03 11.76
$ 63,551-132,600 $105,951-161,450 35.40 6.19 6.97 7.74 8.51 9.29 10.06 10.84 11.61 12.38
$132,601-288,350 $161,451-288,350 40.08 6.68 7.51 8.34 9.18 10.01 10.85 11.68 12.52 13.35
OVER $288,350 OVER $288,350 43.45 7.07 7.96 8.84 9.73 10.61 11.49 12.38 13.26 14.15
</TABLE>
FOR OHIO RESIDENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
$ 0- 43,850 19.26 4.95 5.57 6.19 6.81 7.43 8.05 8.67 9.29 9.91
$ 0- 26,250 18.65 4.92 5.53 6.15 6.76 7.38 7.99 8.60 9.22 9.83
$ 43,851-105,950 32.79 5.95 6.70 7.44 8.18 8.93 9.67 10.41 11.16 11.90
$ 26,251- 63,550 31.61 5.85 6.58 7.31 8.04 8.77 9.50 10.24 10.97 11.70
$ 63,551-132,600 $105,951-161,450 35.59 6.21 6.99 7.76 8.54 9.32 10.09 10.87 11.64 12.42
$132,601-288,350 $161,451-288,350 40.63 6.74 7.58 8.42 9.26 10.11 10.95 11.79 12.63 13.47
OVER $288,350 OVER $288,350 43.97 7.14 8.03 8.92 9.82 10.71 11.60 12.49 13.38 14.28
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 2000
federal and applicable State income tax rates and assumes that all income would
otherwise be taxed at the investor's highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, you should consult your own tax advisers in this
regard.
18
<PAGE>
--------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR NEW YORK CITY RESIDENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ 0- 43,850 23.94 5.26 5.92 6.57 7.23 7.89 8.55 9.20 9.86 10.52
$ 26,251- 63,550 $ 43,851-105,950 23.99 5.26 5.92 6.58 7.24 7.89 8.55 9.21 9.87 10.52
$ 26,251- 63,550 $ 43,851-105,950 35.65 6.22 6.99 7.77 8.55 9.32 10.10 10.88 11.66 12.43
$ 63,551-132,600 $105,951-161,450 38.33 6.49 7.30 8.11 8.92 9.73 10.54 11.35 12.16 12.97
$132,601-288,350 $161,451-288,350 42.80 6.99 7.87 8.74 9.62 10.49 11.36 12.24 13.11 13.99
OVER $288,350 OVER $288,350 46.02 7.41 8.34 9.26 10.19 11.12 12.04 12.97 13.89 14.82
</TABLE>
FOR NEW YORK STATE RESIDENTS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 2000* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------
$ 0- 26,250 $ $0- 43,850 20.82 5.05 5.68 6.31 6.95 7.58 8.21 8.84 9.47 10.10
$ 26,251- 63,550 $ 43,851-105,950 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44 11.18 11.93
$ 63,551-132,600 $105,951-161,450 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.89 11.67 12.45
$132,601-288,350 $161,451-288,350 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74 12.58 13.42
OVER $288,350 OVER $288,350 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44 13.33 14.22
</TABLE>
\
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 2000
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
19
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
- elimination of one or more bonds from the Fund's portfolio because of calls,
redemptions or sales;
- a change in the Fund's expenses; or
- the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
ESTIMATED CURRENT RETURN equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
<TABLE>
<S> <C><C>
Estimated Annual Estimated
Interest Income - Annual Expenses
------------------------------------
Unit Price
</TABLE>
ESTIMATED LONG TERM RETURN is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
- a monthly statement of income payments and any principal payments;
- a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
- an annual report on Fund activity; and
- annual tax information. THIS WILL ALSO BE SENT TO THE IRS. YOU MUST REPORT THE
AMOUNT OF TAX-EXEMPT INTEREST RECEIVED DURING THE YEAR.
You may request:
- copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
- audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
20
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or "called" by the issuer before their stated
maturity.
For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
- it no longer needs the money for the original purpose;
- the project is condemned or sold;
- the project is destroyed and insurance proceeds are used to redeem the
bonds;
- any related credit support expires and is not replaced; or
- interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be "concentrated" in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the New York Portfolio's concentration in
hospital and health care bonds.
- payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
- hospitals face increasing competition resulting from hospital mergers and
affiliations;
- hospitals need to reduce costs as HMOs increase market penetration and
21
<PAGE>
hospital supply and drug companies raise prices;
- hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance; and
- many hospitals are aggressively buying physician practices and assuming risk
contracts to gain market share. If revenues do not increase accordingly,
this practice could reduce profits;
- Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many cases,
the providers may receive lower reimbursements and these would have to cut
expenses to maintain profitability; and
- most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Here is what you should know about the New York Portfolio's concentration in
university/college bonds. Payment for these bonds depends on:
- level or amount and diversity of sources of revenue;
- availability of endowments and other funds;
- enrollment;
- financial management;
- reputation; and
- for public institutions, the financial condition of the government and its
educational policies.
Here is what you should know about the Florida Portfolio's concentration in
municipal water and sewer revenue bonds. The payment of interest and principal
of these bonds depends on the rates the utilities may charge, the demand for
their services and the cost of operating their business which includes the
expense of complying with environmental and other energy and licensing laws and
regulations. The operating results of utilities are particularly influenced by:
- increases in operating and construction costs; and
- unpredicability of future usage requirements.
Here is what you should know about the Ohio and Missouri Portfolios'
concentrations in refunded bonds. Refunded bonds are typically:
- backed by direct obligations of the U.S. government; or
- in some cases, backed by obligations guaranteed by the U.S. government and
placed in escrow with an independent trustee;
- noncallable prior to maturity; but
- sometimes called for redemption prior to maturity.
Here is what you should know about the Missouri and New Jersey Portfolios'
concentrations in lease rental bonds. Lease rental bonds are generally issued by
governmental financing authorities that cannot assess a tax to cover the cost of
equipment or construction of buildings that
22
<PAGE>
will be used by a state or local government. The risks associated with these
bonds include:
- the failure of the government to appropriate funds for the leasing rental
payments to service the bonds; and
- rental obligations, and therefore payments, may terminate in the event of
damages to or destruction or condemnation of the of the equipment or
building.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
STATE CONCENTRATION RISK
FLORIDA RISKS
GENERALLY
Florida's financial condition is affected by numerous national, economic, social
and environmental policies and conditions. For example:
- south Florida is heavily involved with foreign tourism, trade and investment
capital. As a result, the region is susceptible to international trade and
currency imbalances and economic problems in Central and South America;
- central and northern Florida are more vulnerable to agricultural problems,
such as crop failures or severe weather conditions, especially in the citrus
and sugar industries; and
- the state as a whole is also very dependent on tourism and construction.
STATE AND LOCAL GOVERNMENT
The state of Florida and its local governments are restricted in their ability
to raise taxes and incur debts. These restrictions limit their ability to
generate revenue, and so could hurt their ability to pay debts.
General obligations of the state are rated Aa2 by Moody's, AA+ by Standard &
Poor's and AA by Fitch.
MISSOURI RISKS
GENERALLY
Defense-related businesses are a significant part of the Missouri economy, and
changes in the industry could hurt the state's economy. Risks specific to
Missouri include the following:
- The Boeing Company's McDonnell Defense Systems, based in St. Louis, is the
state's largest employer; and
- the number of people employed by McDonnell Defense Systems in Missouri has
dropped 30% over the last five years, and any further reductions in defense
spending or the shift of production operations out of Missouri could hurt
Missouri, and St. Louis in particular, more than other areas.
STATE AND LOCAL GOVERNMENT
Certain state and federal laws affect taxation and spending by the state of
Missouri and its local governments. For example:
- the state constitution limits the amount of taxes, licenses and fees that
Missouri and its local governments can impose without voter approval, even
if needed to pay debt obligations; and
23
<PAGE>
- court-mandated funding for school desegregation in St. Louis and Kansas City
accounts for as much as 5% of the state's total spending.
The state's general obligations are rated Aaa by Moody's and AAA by Standard &
Poor's.
NEW JERSEY RISKS
STATE AND LOCAL GOVERNMENT
Certain features of New Jersey law could affect the repayment of debt:
- the State of New Jersey and its agencies and public authorities issue
general obligation bonds, which are secured by the full faith and credit of
the state, backed by its taxing authority, without recourse to specific
sources of revenue, therefore, any liability to increase taxes could impair
the state's ability to repay debt; and
- the state is required by law to maintain a balanced budget, and state
spending for any given municipality or county cannot increase by more than
5% per year. This limit could make it harder for any particular county or
municipality to repay its debts.
In recent years the state budget's main expenditures have been
- elementary and secondary education, and
- state agencies and programs, including police and corrections facilities,
higher education, and environmental protection.
The state's general obligations are rated Aa1 by Moody's and AA+ by Standard &
Poor's.
NEW YORK RISKS
GENERALLY
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
- the high combined state and local tax burden;
- a decline in manufacturing jobs, leading to above-average unemployment;
- sensitivity to the financial services industry; and
- dependence on federal aid.
STATE GOVERNMENT
The State government frequently has difficulty approving budgets on time. Budget
gaps of $3 billion and $5 billion are projected for the next two years. The
State's general obligation bonds are rated A+ by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
NEW YORK CITY GOVERNMENT
Even though the City had budget surpluses each year from 1981, budget gaps of
over $2 billion are projected for the 2002, 2003 and 2004 fiscal years. New York
City faces fiscal pressures from:
- aging public facilities that need repair or replacement;
- welfare and medical costs;
- expiring labor contracts; and
- a high and increasing debt burden.
24
<PAGE>
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A- by
Standard & Poor's and A2 by Moody's. $31.2 billion of combined City, MAC and PBC
debt is outstanding, and the City proposes $25.3 billion of financing over
fiscal 1999-2003. New York City currently expects to reach its constitutional
limits on debt issuance in Fiscal 2003.
OHIO RISKS
GENERALLY
Overall, Ohio's economy is more cyclical than non-industrial states and the
nation as a whole:
- manufacturing is an important part of Ohio's economy.
- agriculture and related industries are also very important.
- recent employment growth has been in non-manufacturing areas.
STATE GOVERNMENT
The Ohio general revenue fund for the current two-year period calls for
expenditures of over $39.8 billion:
- because general fund receipts and payments do not match exactly, temporary
cash-flow deficiencies occur throughout the year. Ohio law permits the state
government to manage this problem by permitting the adjustment of payment
schedules and the use of the total operating fund.
- Ohio's general obligation bonds are currently rated Aa1 by Moody's; AA+ by
Standard & Poor's (except for the State's highway bonds which Standard &
Poor's rates AAA). Fitch rates Ohio's general obligation bonds and its
highway bonds AA+. Other bonds issued by other State agencies may have lower
ratings. Any of these ratings may be changed.
- Ohio voters have authorized the State to incur debt to which taxes or
excises are pledged for payment.
EDUCATION FINANCING
In May, 2000, the Ohio Supreme Court concluded, as it had in 1997, that major
aspects of the State's system of school funding are unconstitutional. The Court
set as general base threshold requirements that every school district have
enough funds to operate, an ample number of teachers, sound and safe buildings,
and equipment sufficient for all students to be afforded an educational
opportunity. The Court maintained continuing jurisdiction and has scheduled a
June, 2001 further review of the State's responses to its ruling. With respect
to funding sources, the Court repeated its 1997 conclusion that property taxes
no longer may be the primary means of school funding in Ohio, noting that recent
efforts to reduce the historic reliance have been laudable but in the Court's
view insufficient. It is not possible at this time to state what further actions
may be taken by the State to effect compliance, or what effect those actions may
have on the State's overall financial condition. In response to the ongoing
litigation, the General Assembly has significantly increased State funding for
public schools.
25
<PAGE>
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
Some bonds are backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
- limiting real property taxes,
- reducing tax rates,
- imposing a flat or other form of tax, or
- exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
- ADDING the value of the bonds, net accrued interest, cash and any other Fund
assets;
- SUBTRACTING accrued but unpaid Fund expenses, unreimbursed Trustee advances,
cash held to buy back units or for distribution to investors and any other
Fund liabilities; and
- DIVIDING the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 28 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible
26
<PAGE>
institution). Sometimes, additional documents are needed such as a trust
document, certificate of corporate authority, certificate of death or
appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee will mail a check to you. Contact the Trustee for additional
information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
If you acquire 25% or more of the outstanding units of the Fund and you sell
units with a value exceeding $250,000, the Trustee may choose to pay you "in
kind" by distributing bonds and cash with a total value equal to the price of
those units. The Trustee will try to distribute bonds in the portfolio pro rata,
but it reserves the right to distribute only one or a few bonds. The Trustee
will act as your agent in an in kind distribution and will either hold the bonds
for your account or sell them as you instruct. You must pay any transaction
costs as well as transfer and ongoing custodial fees on sales of bonds
distributed in kind.
There could be a delay in paying you for your units:
- if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
- if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
- for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. In addition, you may exchange into this Fund from certain other
Defined Asset Funds and unit trusts. To exchange units, you should talk to your
financial professional about what funds are exchangeable, suitable and currently
available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
27
<PAGE>
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
In addition, as with mutual funds, the Fund (and therefore the investors) pay
all or some of the costs of organizing the Fund including:
- cost of initial preparation of legal documents;
- federal and state registration fees;
- initial fees and expenses of the Trustee;
- initial audit; and
- legal expenses and other out-of-pocket expenses.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged from 0.5% of face amount on actively traded
issues to 3.5% on inactively traded issues; the difference has averaged between
1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
- to reimburse the Trustee for the Fund's operating expenses;
- for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
- costs of actions taken to protect the Fund and other legal fees and
expenses;
- expenses for keeping the Fund's registration statement current; and
- Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 55 CENTS per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and
28
<PAGE>
expenses attributable to this Fund, the total of these fees for all Series of
Defined Asset Funds will not exceed the aggregate amount attributable to all of
these Series for any calendar year. The Fund also pays the Evaluator's fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which may affect the
composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
- diversity of the portfolio;
- size of the Fund relative to its original size;
- ratio of Fund expenses to income;
- current and long-term returns;
- degree to which units may be selling at a premium over par; and
- cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
29
<PAGE>
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a "unit investment trust" governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
- to cure ambiguities;
- to correct or supplement any defective or inconsistent provision;
- to make any amendment required by any governmental agency; or
- to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
- it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
- it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign or be removed by the Sponsors and the Trustee without the consent of
investors. The resignation or removal of either becomes effective when a
successor accepts appointment. The Sponsors will try to appoint a successor
promptly; however, if no successor has accepted within 30 days after notice of
resignation, the resigning Trustee or Evaluator may petition a court to appoint
a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
- remove it and appoint a replacement Sponsor;
- liquidate the Fund; or
- continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
30
<PAGE>
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th Floor, New York, New York 10004, is the Trustee. It is supervised by
the Federal Deposit Insurance Corporation, the Board of Governors of the Federal
Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, 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 or redeem them.
31
<PAGE>
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
The Fund and the Agent for the Sponsors have each adopted a code of ethics
requiring reporting of personal securities transactions by its employees with
access to information on Fund transactions. Subject to certain conditions, the
codes permit employees to invest in Fund securities for their own accounts. The
codes are designed to prevent fraud, deception and misconduct against the Fund
and to provide reasonable standards of conduct. These codes are on file with the
Commission and you may obtain a copy by contacting the Commission at the address
listed on the back cover of this prospectus.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the "Year
2000 Problem"). To date we are not aware of any major operational difficulties
resulting from the computer system changes necessary to prepare for the Year
2000. However, there can be no assurance that the Year 2000 Problem will not
adversely affect the issuers of the bonds contained in the Portfolio. We cannot
predict whether any impact will be material to the Fund as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances or subject to
special rules. You should consult your own tax adviser about your particular
circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and may be taken
into account in determining your preference items for alternative minimum tax
purposes. Neither we nor our counsel have reviewed the issuance of the bonds,
related proceedings or the basis for the opinions of counsel for the issuers. We
cannot assure you that the issuers (or other users of bond proceeds) have
complied or will comply with any requirements necessary for a bond to be
tax-exempt. If any of the bonds were determined not to be tax-exempt, you could
be required to pay income tax for current and prior years, and if the Fund were
to sell the bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
32
<PAGE>
GAIN OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued "market
discount". Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term otherwise.
Because the deductibility of capital losses is subject to limitations, you may
not be able to deduct all of your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of "original issue discount," "acquisition premium" and
"bond premium". You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
NEW YORK TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and local taxation.
You should consult your tax adviser in this regard.
FLORIDA TAXES
In the opinion of Greenberg, Traurig, P.A., Miami, Florida, special counsel on
Florida tax matters:
Under the income tax laws of the State of Florida, the Florida Trust will not be
taxed as a corporation. Florida imposes an income tax on corporations but does
not impose a personal income tax. Accordingly, if you are an individual taxpayer
your income from the Trust will not be subject to tax in Florida. However, if
you are an entity that is normally taxed as a corporation, your income from the
fund will not be exempt from tax in Florida and special rules for
33
<PAGE>
taxation apply depending on the type of entity. You should consult your tax
adviser in this regard.
MISSOURI TAXES
In the opinion of Bryan Cave LLP, Kansas City, Missouri, special counsel on
Missouri tax matters:
So long as the Fund is not taxed as a corporation for federal income tax
purposes it will not be taxed as a corporation under the income tax laws of the
State of Missouri. If you are a Missouri income taxpayer, your income from the
Fund will not be tax-exempt in Missouri unless, and only to the extent that,
your share of the interest income of the Fund is derived from bonds the interest
on which is exempt from taxation for Missouri income tax law purposes. Depending
on where you live, your income from the Fund may be subject to other state and
local taxation. You should consult your tax adviser in this regard.
NEW JERSEY TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on New Jersey tax matters:
The Fund will not be taxed as a corporation under the current income tax laws of
the State of New Jersey. Your income from the Fund may be subject to taxation
depending on where you live. If you are a New Jersey taxpayer your income from
the Fund (including gains on sales of bonds by the Fund) and gains on sales of
units by you will be tax-exempt to the extent that income and gains are earned
on bonds that are tax-exempt for New Jersey purposes. You should consult your
tax adviser as to the consequences to you with respect to any investment you
make in the Fund.
OHIO TAXES
In the opinion of Vorys, Sater, Seymour and Pease LLP, Columbus, Ohio, special
counsel on Ohio tax matters:
Under the laws of the State of Ohio, the Ohio Trust will not be subject to the
Ohio corporation franchise tax or the Ohio tax on dealers in intangibles. If you
are an Ohio taxpayer, your interest income from the Ohio Trust will be exempt
from Ohio personal income taxes and Ohio corporation franchise taxes to the
extent it relates to bonds held by the Ohio Trust that are exempt from taxation
under Ohio law. However, any gains and losses which must be recognized for
federal income tax purposes (whether upon the sale of your units in the Ohio
Trust or upon the sale of bonds by the Ohio Trust) also must be recognized for
Ohio personal income and corporation franchise tax purposes, except to the
extent the gains and losses are attributable to the sale of bonds by the Ohio
Trust that are exempt from such taxation under Ohio law. Your interest income
and your gains and losses generally are not subject to municipal income taxation
in Ohio. You should consult your tax adviser concerning the application of Ohio
taxes to you in connection with your investment in the Ohio Trust.
34
<PAGE>
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
35
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA, MISSOURI, NEW JERSEY,
NEW YORK AND OHIO TRUSTS),
DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund,
Multistate Series - 208 (Florida, Missouri, New Jersey, New York and
Ohio Trusts), Defined Asset Funds:
We have audited the accompanying statements of condition of Municipal
Investment Trust Fund, Multistate Series - 208 (Florida, Missouri, New
Jersey, New York and Ohio Trusts), Defined Asset Funds, including the
portfolios, as of May 31, 2000 and the related statements of
operations and of changes in net assets for the years ended May 31,
2000, 1999 and 1998. These financial statements are the responsibility
of the Trustee. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.
Securities owned at May 31, 2000, as shown in such portfolios, were
confirmed to us by The Chase Manhattan Bank, the Trustee. An audit
also includes assessing the accounting principles used and significant
estimates made by the Trustee, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Municipal
Investment Trust Fund, Multistate Series - 208 (Florida, Missouri, New
Jersey, New York and Ohio Trusts), Defined Asset Funds at May 31, 2000
and the results of their operations and changes in their net assets
for the above-stated years in accordance with accounting principles
generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, N.Y.
August 9, 2000
D - 1.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of May 31, 2000
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,093,354)(Note 1) ......... $ 2,123,803
Accrued interest................................ 22,975
Deferred organization cost (Note 5) ............ 728
Cash - principal ............................... 21,368
-------------
Total trust property ......................... 2,168,874
LESS LIABILITIES:
Income advance from Trustee..................... $ 15,504
Accrued Sponsors' fees ......................... 517
Other liabilities (Note 5) ..................... 728 16,749
------------- -------------
NET ASSETS, REPRESENTED BY:
2,287 units of fractional undivided
interest outstanding (Note 3) ............... 2,145,171
Undistributed net investment income ............ 6,954 $ 2,152,125
------------- =============
UNIT VALUE ($ 2,152,125 / 2,287 units)............ $ 941.03
=============
</TABLE>
See Notes to Financial Statements.
D - 2.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 128,315 $ 142,179 $ 155,158
Trustee's fees and expenses ............ (4,995) (5,018) (5,414)
Sponsors' fees ......................... (1,305) (1,196) (1,394)
----------------------------------------------
Net investment income .................. 122,015 135,965 148,350
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 29,096 22,575 26,735
Unrealized appreciation (depreciation)
of investments ....................... (224,935) (5,964) 131,882
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (195,839) 16,611 158,617
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (73,824) $ 152,576 $ 306,967
==============================================
</TABLE>
See Notes to Financial Statements.
D - 3.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 122,015 $ 135,965 $ 148,350
Realized gain on
securities sold or redeemed .......... 29,096 22,575 26,735
Unrealized appreciation (depreciation)
of investments ....................... (224,935) (5,964) 131,882
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (73,824) 152,576 306,967
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (122,163) (136,190) (148,998)
Principal .............................. (14,134) (11,280) (40,667)
----------------------------------------------
Total distributions .................... (136,297) (147,470) (189,665)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (594) (458) (597)
Redemption amounts - principal ......... (263,526) (178,649) (401,689)
----------------------------------------------
Total share transactions ............... (264,120) (179,107) (402,286)
----------------------------------------------
NET DECREASE IN NET ASSETS ............... (474,241) (174,001) (284,984)
NET ASSETS AT BEGINNING OF YEAR .......... 2,626,366 2,800,367 3,085,351
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,152,125 $ 2,626,366 $ 2,800,367
==============================================
PER UNIT:
Income distributions during
year ................................. $ 51.15 $ 51.53 $ 51.84
==============================================
Principal distributions during
year ................................. $ 6.18 $ 4.26 $ 13.77
==============================================
Net asset value at end of
year ................................. $ 941.03 $ 1,026.33 $ 1,025.40
==============================================
TRUST UNITS:
Redeemed during year ................... 272 172 400
Outstanding at end of year ............. 2,287 2,559 2,731
==============================================
</TABLE>
See Notes to Financial Statements.
D - 4.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the United
States of America.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(B) The Fund was not subject to income taxes. Accordingly, no
provision for such taxes was required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,287 units at Date of Deposit ..................... $ 2,253,575
Less sales charge .......................................... 100,468
-----------
Net amount applicable to Holders ........................... 2,153,107
Redemptions of units - net cost of 1,246 units redeemed
less redemption amounts (principal)....................... (60,317)
Realized gain on securities sold or redeemed ............... 88,013
Principal distributions .................................... (66,081)
Unrealized appreciation of investments...................... 30,449
-----------
Net capital applicable to Holders .......................... $ 2,145,171
===========
</TABLE>
4. INCOME TAXES
As of May 31, 2000, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $30,449, all of which
related to appreciated securities. The cost of investment securities
for Federal income tax purposes was $2,093,354 at May 31, 2000.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $728 payable to the Trustee for reimbursement of costs
related to the organization of the Trust.
D - 5.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA TRUST)(INSURED),
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 City of Jacksonville, FL, Cap. Imp. AAA $ 450,000 5.500 % 2019 10/01/04 $ 421,911 $ 427,874
Rev. Bonds (Gator Bowl Proj.), Ser. @ 101.000
1994 (AMBAC Ins.)
2 City of Ocala, FL, Wtr. and Swr. Bonds, AAA 500,000 5.500 2020 10/01/05 468,185 474,185
Ser. 1995 (AMBAC Ins.) @ 102.000
3 Dade Cnty., FL, Wtr. and Swr. Sys. Rev. AAA 500,000 5.500 2025 10/01/05 465,650 466,380
Bonds, Ser. 1995 @ 102.000
(Financial Guaranty Ins.)
4 Indian River Cnty., FL, Wtr. and Swr. AAA 300,000 5.500 2019 09/01/06 281,304 285,279
Rev. Bonds, Ser. 1996 @ 102.000
(Financial Guaranty Ins.)
5 Sarasota Cnty., FL, Solid Waste Sys. AAA 295,000 5.500 2021 10/01/06 275,893 278,371
Rev. Bonds, Ser. 1996 (AMBAC Ins.) @ 102.000
6 State of Florida Bd. of Educ., Pub. AAA 80,000 5.875 2025 06/01/05 78,632 79,019
Educ. Cap. Outlay Bonds, Ser. 1995 B @ 101.000
(MBIA Ins.)
7 The School Bd. of Dade Cnty, FL, AAA 110,000 5.500 2025(6) 05/01/06 101,779 112,695
Certs. of Part., Ser. 1996 A @ 101.000
(AMBAC Ins.)
--------- --------- ---------
$ 2,235,000 $ 2,093,354 $ 2,123,803
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 27.
D - 6.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (MISSOURI TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of May 31, 2000
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,082,088)(Note 1) ......... $ 2,122,719
Accrued interest................................ 39,620
Deferred organization cost (Note 5)............. 676
Cash - principal ............................... 21,445
-------------
Total trust property ......................... 2,184,460
LESS LIABILITIES:
Income advance from Trustee..................... $ 32,334
Accrued Sponsors' fees ......................... 545
Other liabilities (Note 5) ..................... 676 33,555
------------- -------------
NET ASSETS, REPRESENTED BY:
2,268 units of fractional undivided
interest outstanding (Note 3) ............... 2,144,164
Undistributed net investment income ............ 6,741 $ 2,150,905
------------- =============
UNIT VALUE ($ 2,150,905 / 2,268 units)............ $ 948.37
=============
</TABLE>
See Notes to Financial Statements.
D - 7.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (MISSOURI TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 136,485 $ 155,606 $ 177,112
Trustee's fees and expenses ............ (5,304) (5,024) (5,306)
Sponsors' fees ......................... (1,402) (1,336) (1,438)
----------------------------------------------
Net investment income .................. 129,779 149,246 170,368
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 30,233 32,024 15,356
Unrealized appreciation (depreciation)
of investments ....................... (234,440) (44,089) 193,720
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (204,207) (12,065) 209,076
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (74,428) $ 137,181 $ 379,444
==============================================
</TABLE>
See Notes to Financial Statements.
D - 8.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (MISSOURI TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 129,779 $ 149,246 $ 170,368
Realized gain on
securities sold or redeemed .......... 30,233 32,024 15,356
Unrealized appreciation (depreciation)
of investments ....................... (234,440) (44,089) 193,720
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (74,428) 137,181 379,444
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (130,179) (149,644) (170,595)
Principal .............................. (18,765) (14,292) (4,948)
----------------------------------------------
Total distributions .................... (148,944) (163,936) (175,543)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (1,102) (570) (658)
Redemption amounts - principal ......... (442,638) (280,261) (291,066)
----------------------------------------------
Total share transactions ............... (443,740) (280,831) (291,724)
----------------------------------------------
NET DECREASE IN NET ASSETS ............... (667,112) (307,586) (87,823)
NET ASSETS AT BEGINNING OF YEAR .......... 2,818,017 3,125,603 3,213,426
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,150,905 $ 2,818,017 $ 3,125,603
==============================================
PER UNIT:
Income distributions during
year ................................. $ 51.69 $ 52.56 $ 53.27
==============================================
Principal distributions during
year ................................. $ 7.93 $ 5.02 $ 1.56
==============================================
Net asset value at end of
year ................................. $ 948.37 $ 1,033.00 $ 1,043.61
==============================================
TRUST UNITS:
Redeemed during year ................... 460 267 286
Outstanding at end of year ............. 2,268 2,728 2,995
==============================================
</TABLE>
See Notes to Financial Statements.
D - 9.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (MISSOURI TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the United
States of America.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(B) The Fund was not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,268 units at Date of Deposit ..................... $ 2,226,824
Less sales charge .......................................... 99,225
-----------
Net amount applicable to Holders ........................... 2,127,599
Redemptions of units - net cost of 1,013 units redeemed
less redemption amounts (principal)....................... (63,674)
Realized gain on securities sold or redeemed ............... 77,613
Principal distributions .................................... (38,005)
Net unrealized appreciation of investments.................. 40,631
-----------
Net capital applicable to Holders .......................... $ 2,144,164
===========
</TABLE>
4. INCOME TAXES
As of May 31, 2000, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $40,631, of which
$2,355 related to depreciated securities and $42,986 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,082,088 at May 31, 2000.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $676 payable to the Trustee for reimbursement of costs
related to the organization of the Trust.
D - 10.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (MISSOURI TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues (1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 City of Carthage, MO, Wtr. Wks. & NR $ 80,000 6.500 % 2016(6) 07/01/04 $ 81,087 $ 84,336
Sewerage Sys. Rev. Bonds, Ser. 1996 B @ 101.000
2 City of Sikeston, MO, Elec. Sys. Rev. AAA 500,000 5.000 2022 06/01/06 434,600 432,245
Bonds, Ser. 1996 (MBIA Ins.) (5) @ 101.000
3 City of St. Louis, MO, Wtr. Rev. AAA 345,000 6.000 2014(6) 07/01/04 347,574 362,046
Rfdg. & Imp. Bonds, Ser. 1994 @ 102.000
(Financial Guaranty Ins.) (5)
4 Kansas City Mun. Asst. Corp., MO, AAA 500,000 5.000 2020 04/15/06 436,980 437,640
Leasehold Rfdg. Rev. Bonds (H. Roe @ 101.000
Bartle Conv. Ctr. Proj.), Ser. 1996 A
(MBIA Ins.) (5)
5 Puerto Rico Hwy. & Transportation Auth., A 215,000 5.500 2019 07/01/03 197,890 203,805
Hwy. Rev. Rfdg. Bonds, Ser. X @ 101.500
6 Regional Conv. & Sports Complex Auth., AA(f) 455,000 5.500 2021 08/15/03 417,331 421,699
MO, Conv. & Sports Fac. Proj. & Rfdg. @ 102.000
Bonds, Ser. A 1993
7 University Dev. Foundation, MO, Pwr. AAA 175,000 5.750 2018(6) 05/01/03 166,626 180,948
Plant Equip. Leasehold Rev. Rfdg. @ 102.000
Bonds, (The Curators of the Univ. of
Missouri, Lessee), Ser. 1993
--------- --------- ---------
$ 2,270,000 $ 2,082,088 $ 2,122,719
========= ========= =========
</TABLE>
See Notes To Portfolios on page D - 27.
D - 11.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of May 31, 2000
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,222,450)(Note 1) ......... $ 2,229,107
Accrued interest................................ 39,778
Deferred organization cost (Note 5) ............ 676
Cash - principal ............................... 27,491
-------------
Total trust property ......................... 2,297,052
LESS LIABILITIES:
Income advance from Trustee..................... $ 31,821
Accrued Sponsors' fees ......................... 558
Other liabilities (Note 5) ..................... 676 33,055
------------- -------------
NET ASSETS, REPRESENTED BY:
2,345 units of fractional undivided
interest outstanding (Note 3) ............... 2,256,598
Undistributed net investment income ............ 7,399 $ 2,263,997
------------- =============
UNIT VALUE ($ 2,263,997 / 2,345 units)............ $ 965.46
=============
</TABLE>
See Notes to Financial Statements.
D - 12.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 142,159 $ 152,234 $ 176,306
Trustee's fees and expenses ............ (5,227) (4,980) (5,670)
Sponsors' fees ......................... (1,371) (1,285) (1,419)
----------------------------------------------
Net investment income .................. 135,561 145,969 169,217
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 6,615 21,341 29,464
Unrealized appreciation (depreciation)
of investments ....................... (216,626) (12,343) 118,011
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (210,011) 8,998 147,475
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (74,450) $ 154,967 $ 316,692
==============================================
</TABLE>
See Notes to Financial Statements.
D - 13.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 135,561 $ 145,969 $ 169,217
Realized gain on
securities sold or redeemed .......... 6,615 21,341 29,464
Unrealized appreciation (depreciation)
of investments ....................... (216,626) (12,343) 118,011
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (74,450) 154,967 316,692
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (135,924) (146,152) (169,359)
Principal .............................. (4,096) (16,571) (8,099)
----------------------------------------------
Total distributions .................... (140,020) (162,723) (177,458)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (481) (643) (1,304)
Redemption amounts - principal ......... (233,556) (248,284) (480,828)
----------------------------------------------
Total share transactions ............... (234,037) (248,927) (482,132)
----------------------------------------------
NET DECREASE IN NET ASSETS ............... (448,507) (256,683) (342,898)
NET ASSETS AT BEGINNING OF YEAR .......... 2,712,504 2,969,187 3,312,085
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,263,997 $ 2,712,504 $ 2,969,187
==============================================
PER UNIT:
Income distributions during
year ................................. $ 54.05 $ 54.45 $ 54.86
==============================================
Principal distributions during
year ................................. $ 1.60 $ 6.06 $ 2.59
==============================================
Net asset value at end of
year ................................. $ 965.46 $ 1,049.32 $ 1,052.90
==============================================
TRUST UNITS:
Redeemed during year ................... 240 235 462
Outstanding at end of year ............. 2,345 2,585 2,820
==============================================
</TABLE>
See Notes to Financial Statements.
D - 14.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW JERSEY TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the United
States of America.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(B) The Fund was not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,345 units at Date of Deposit ..................... $ 2,381,058
Less sales charge .......................................... 106,111
-----------
Net amount applicable to Holders ........................... 2,274,947
Redemptions of units - net cost of 937 units redeemed
less redemption amounts (principal)....................... (53,660)
Realized gain on securities sold or redeemed ............... 57,420
Principal distributions .................................... (28,766)
Net unrealized appreciation of investments.................. 6,657
-----------
Net capital applicable to Holders .......................... $ 2,256,598
===========
</TABLE>
4. INCOME TAXES
As of May 31, 2000, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $6,657, of which
$10,601 related to depreciated securities and $17,258 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,222,450 at May 31, 2000.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $676 payable to the Trustee for reimbursement of costs
related to the organization of the Trust
D - 15.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW JERSEY TRUST) (INSURED),
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Delaware River Port Auth., Rev. AAA $ 210,000 5.500 % 2026 01/01/06 $ 195,266 $ 197,127
Bonds, Ser. 1995 @ 102.000
(Financial Guaranty Ins.)
2 New Jersey Econ. Dev. Auth., Ins. Rev. AAA 95,000 6.000 2025(6) 05/15/05 95,000 100,052
Bonds (Educl. Testing Svc. Issue), @ 102.000
Ser. 1995 A (MBIA Ins.)
3 New Jersey Educl. Fac. Auth., Rev. AAA 345,000 6.000 2021 07/01/06 346,452 346,953
Bonds (Rowan Coll. of New Jersey @ 101.000
Issue), Ser. 1996 E (AMBAC Ins.)
4 New Jersey Hsg. and Mtge. Fin. Agy., AAA 455,000 6.050 2020 05/01/05 456,697 446,096
Multi-Family Hsg. Rev. Bonds, Ser. @ 102.000
1995 A (AMBAC Ins.)
5 The Essex Cnty. Imp. Auth., NJ, Cnty. AAA 410,000 5.950 2025 12/01/05 407,171 410,295
of Essex G.O. Lease Rev. Bonds @ 102.000
(Gibraltar Bldg. Proj.), Ser. 1995
(MBIA Ins.)
6 The Essex Cnty. Imp. Auth., NJ, Cnty. AAA 360,000 5.350 2024 12/01/06 328,237 329,904
of Essex G.O. Lease Rev. Rfdg. Bonds @ 102.000
(Cnty. Jail and Youth House Projs.),
Ser. 1996 (AMBAC Ins.)
7 The Poll. Ctl. Fin. Auth. of Salem AAA 425,000 5.550 2033 11/01/03 393,627 398,680
Cnty., NJ, Poll. Ctl. Rev. Rfdg. Bonds, @ 102.000
(Pub. Svc. Elec. & Gas Co. Proj.)
1993 Ser. C (MBIA Ins.)
--------- --------- ---------
$ 2,300,000 $ 2,222,450 $ 2,229,107
========= ========= =========
</TABLE>
See Notes To Portfolios on page D - 27.
D - 16.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of May 31, 2000
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,611,489)(Note 1) ......... $ 2,675,748
Accrued interest................................ 53,707
Deferred organization cost (Note 5) ............ 728
Cash - principal ............................... 38,669
-------------
Total trust property ......................... 2,768,852
LESS LIABILITIES:
Income advance from Trustee..................... $ 44,000
Accrued Sponsors' fees ......................... 691
Other liabilities (Note 5) ..................... 728 45,419
------------- -------------
NET ASSETS, REPRESENTED BY:
2,863 units of fractional undivided
interest outstanding (Note 3) ............... 2,714,417
Undistributed net investment income ............ 9,016 $ 2,723,433
------------- =============
UNIT VALUE ($ 2,723,433 / 2,863 units)............ $ 951.25
=============
</TABLE>
See Notes to Financial Statements.
D - 17.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 174,244 $ 185,256 $ 190,003
Trustee's fees and expenses ............ (5,646) (5,468) (5,904)
Sponsors' fees ......................... (1,684) (1,470) (1,529)
----------------------------------------------
Net investment income .................. 166,914 178,318 182,570
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 23,144 11,406 8,820
Unrealized appreciation (depreciation)
of investments ....................... (304,046) (18,283) 229,012
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (280,902) (6,877) 237,832
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (113,988) $ 171,441 $ 420,402
==============================================
</TABLE>
See Notes to Financial Statements.
D - 18.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW YORK TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 166,914 $ 178,318 $ 182,570
Realized gain on
securities sold or redeemed .......... 23,144 11,406 8,820
Unrealized appreciation (depreciation)
of investments ....................... (304,046) (18,283) 229,012
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (113,988) 171,441 420,402
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (167,454) (178,476) (182,273)
Principal .............................. (7,186) (3,728) (6,739)
----------------------------------------------
Total distributions .................... (174,640) (182,204) (189,012)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (703) (207) (834)
Redemption amounts - principal ......... (363,064) (99,730) (195,085)
----------------------------------------------
Total share transactions ............... (363,767) (99,937) (195,919)
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS .... (652,395) (110,700) 35,471
NET ASSETS AT BEGINNING OF YEAR .......... 3,375,828 3,486,528 3,451,057
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,723,433 $ 3,375,828 $ 3,486,528
==============================================
PER UNIT:
Income distributions during
year ................................. $ 54.11 $ 54.45 $ 54.37
==============================================
Principal distributions during
year ................................. $ 2.34 $ 1.15 $ 2.02
==============================================
Net asset value at end of
year ................................. $ 951.25 $ 1,041.28 $ 1,045.12
==============================================
TRUST UNITS:
Redeemed during year ................... 379 94 198
Outstanding at end of year ............. 2,863 3,242 3,336
==============================================
</TABLE>
See Notes to Financial Statements.
D - 19.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW YORK TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the United
States of America.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(B) The Fund was not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,863 units at Date of Deposit ..................... $ 2,783,104
Less sales charge .......................................... 123,997
-----------
Net amount applicable to Holders ........................... 2,659,107
Redemptions of units - net cost of 671 units redeemed
less redemption amounts (principal)....................... (34,666)
Realized gain on securities sold or redeemed ............... 43,370
Principal distributions .................................... (17,653)
Net unrealized appreciation of investments.................. 64,259
-----------
Net capital applicable to Holders .......................... $ 2,714,417
===========
</TABLE>
4. INCOME TAXES
As of May 31, 2000, net unrealized appreciation of investments, based
on cost for Federal income tax purposes, aggregated $64,259, of which
$1,280 related to depreciated securities and $65,539 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,611,489 at May 31, 2000.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $728 payable to the Trustee for reimbursement of costs
related to the organization of the Trust.
D - 20.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (NEW YORK TRUST),
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating Optional
Portfolio No. and Title of of Face Redemption
Securities Issues(1) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Cayuga Cnty. Hosp. Imp. Corp., NY, AA $ 500,000 6.000 % 2021 01/01/04 $ 487,445 $ 486,165
Certs. of Part. (Auburn Mem. Hosp. @ 102.000
Proj.), Ser. 1994
(Asset Guaranty Ins.) (5)
2 Dormitory Auth. of the State of New AAA 405,000 5.750 2025 07/01/06 384,677 384,896
York, Ins. Rev. Bonds (The John T. @ 102.000
Mather Mem. Hosp.), Ser. 1996
(Connie Lee Ins.) (5)
3 Dormitory Auth. of the State of New A(f) 500,000 5.400 2023 05/15/04 433,305 452,825
York, State Univ. Educl. Facs. Rev. @ 102.000
Bonds, Ser. 1993 C
4 Dormitory Auth. of the State of New A 500,000 5.700 2021 07/01/04 450,825 469,550
York, Upstate Cmnty. Coll. Rev. Bonds, @ 102.000
Ser. 1994 A
5 New York City, NY, Mun. Wtr. Fin. AAA 175,000 6.000 2025(6) 06/15/05 170,312 183,831
Auth., Wtr. and Swr. Sys. Rev. Bonds, @ 101.000
Fiscal 1996 Ser. A
6 New York Local Govt. Asst. Corp. (A AA- 265,000 6.000 2024 04/01/05 259,705 260,686
Pub. Benefit Corp. of the State of @ 102.000
New York), Ser. 1995 A Bonds
7 New York State Urban Dev. Corp., Corr. A 500,000 5.250 2021 01/01/04 425,220 437,795
Cap. Fac. Rev. Bonds, Rfdg. Ser. 1993 A @ 102.000
--------- --------- ---------
$ 2,845,000 $ 2,611,489 $ 2,675,748
========= ========= =========
</TABLE>
See Notes To Portfolios on page D - 27.
D - 21.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of May 31, 2000
<TABLE>
<S> <C>
TRUST PROPERTY:
Investment in marketable securities
at value (cost $ 2,493,777)(Note 1) ......... $ 2,547,425
Accrued interest................................ 48,903
Deferred organization cost (Note 5)............. 676
Cash - principal ............................... 28,603
-------------
Total trust property ......................... 2,625,607
LESS LIABILITIES:
Income advance from Trustee..................... $ 39,847
Accrued Sponsors' fees ......................... 611
Other liabilities (Note 5)...................... 676 41,134
------------- -------------
NET ASSETS, REPRESENTED BY:
2,613 units of fractional undivided
interest outstanding (Note 3) ............... 2,576,028
Undistributed net investment income ............ 8,445 $ 2,584,473
------------- =============
UNIT VALUE ($ 2,584,473 / 2,613 units)............ $ 989.08
=============
</TABLE>
See Notes to Financial Statements.
D - 22.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND ,
MULTISTATE SERIES - 208 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income ........................ $ 156,082 $ 167,021 $ 183,108
Trustee's fees and expenses ............ (5,273) (5,104) (5,577)
Sponsors' fees ......................... (1,473) (1,330) (1,432)
----------------------------------------------
Net investment income .................. 149,336 160,587 176,099
----------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 19,767 33,949 11,058
Unrealized appreciation (depreciation)
of investments ....................... (222,468) 2,699 153,154
----------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... (202,701) 36,648 164,212
----------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ (53,365) $ 197,235 $ 340,311
==============================================
</TABLE>
See Notes to Financial Statements.
D - 23.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND ,
MULTISTATE SERIES - 208 (OHIO TRUST),
DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended May 31,
2000 1999 1998
---- ---- ----
<S> <C> <C> <C>
OPERATIONS:
Net investment income .................. $ 149,336 $ 160,587 $ 176,099
Realized gain on
securities sold or redeemed .......... 19,767 33,949 11,058
Unrealized appreciation (depreciation)
of investments ....................... (222,468) 2,699 153,154
----------------------------------------------
Net increase (decrease) in net assets
resulting from operations ............ (53,365) 197,235 340,311
----------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (149,779) (160,981) (175,792)
Principal .............................. (8,503) (9,486) (9,436)
----------------------------------------------
Total distributions .................... (158,282) (170,467) (185,228)
----------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (220) (545) (775)
Redemption amounts - principal ......... (203,396) (292,651) (203,652)
----------------------------------------------
Total share transactions ............... (203,616) (293,196) (204,427)
----------------------------------------------
NET DECREASE IN NET ASSETS ............... (415,263) (266,428) (49,344)
NET ASSETS AT BEGINNING OF YEAR .......... 2,999,736 3,266,164 3,315,508
----------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,584,473 $ 2,999,736 $ 3,266,164
==============================================
PER UNIT:
Income distributions during
year ................................. $ 54.57 $ 54.88 $ 55.07
==============================================
Principal distributions during
year ................................. $ 3.14 $ 3.27 $ 3.01
==============================================
Net asset value at end of
year ................................. $ 989.08 $ 1,065.63 $ 1,058.38
==============================================
TRUST UNITS:
Redeemed during year ................... 202 271 196
Outstanding at end of year ............. 2,613 2,815 3,086
==============================================
</TABLE>
See Notes to Financial Statements.
D - 24.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND ,
MULTISTATE SERIES - 208 (OHIO TRUST),
DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a
Unit Investment Trust. The following is a summary of significant
accounting policies consistently followed by the Fund in the
preparation of its financial statements. The policies are in
accordance with accounting principles generally accepted in the United
States of America.
(A) Securities are stated at value as determined by the Evaluator
based on bid side evaluations for the securities.
(B) The Fund was not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and
applicable expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<S> <C>
Cost of 2,613 units at Date of Deposit ..................... $ 2,653,848
Less sales charge .......................................... 118,290
-----------
Net amount applicable to Holders ........................... 2,535,558
Redemptions of units - net cost of 669 units redeemed
less redemption amounts (principal)....................... (50,527)
Realized gain on securities sold or redeemed ............... 64,774
Principal distributions .................................... (27,425)
Unrealized appreciation of investments...................... 53,648
-----------
Net capital applicable to Holders .......................... $ 2,576,028
===========
</TABLE>
4. INCOME TAXES
As of May 31, 2000, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $53,648, of which
$6,277 related to depreciated securities and $59,925 related to
appreciated securities. The cost of investment securities for Federal
income tax purposes was $2,493,777 at May 31, 2000.
5. DEFERRED ORGANIZATION COSTS
Deferred organization costs are being amortized over a period of five
years. Included in "Other liabilities" in the accompanying Statement
of Condition is $676 payable to the Trustee for reimbursement of costs
related to the organization of the Trust
D - 25.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (OHIO TRUST)(INSURED),
DEFINED ASSET FUNDS
PORTFOLIO
As of May 31, 2000
<TABLE>
<CAPTION>
Rating of Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ----------- ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 Anthony Wayne Local Sch. Dist., Lucas, AAA $ 500,000 5.750 % 2024 12/01/05 $ 486,345 $ 484,060
Wood and Fulton Cntys., OH, Sch. Fac. @ 101.000
Construction and Imp. Bonds (G.O.-
Unltd. Tax) (Financial Guaranty Ins.)
2 City of Cleveland, OH, Wtr. Wks. Imp. AAA 365,000 5.750 2026(6) 01/01/06 352,426 379,542
and Rfdg. First Mtge. Rev. Bonds, @ 102.000
Ser. 1996 H (MBIA Ins.)
10,000 5.750 2026 01/01/06 9,656 9,662
@ 102.000
3 County of Cuyahoga, OH, Hosp. Rfdg. AAA 500,000 5.625 2021 01/15/06 472,950 473,985
Rev. Bonds (Univ. Hosp. Hlth. Sys., @ 102.000
Inc.Proj.), Ser. 1996 A (MBIA Ins.)
4 Ohio Air Quality Dev. Auth., Ctl. Rev. AAA 115,000 5.625 2029 11/15/03 108,017 107,270
Rfdg. Bonds, 1993 Ser. B (Ohio Edison @ 102.000
Co., Proj.) (AMBAC Ins.)
5 Ohio Air Quality Dev. Auth., OH, Poll. AAA 450,000 6.150 2023 08/01/04 455,027 451,782
Ctl. Rev. Rfdg. Bonds (Pennsylvania @ 102.000
Pwr. Co. Proj.), Ser. 1994 (AMBAC Ins.)
6 Ohio Higher Educl. Fac. Comm., Higher AAA 350,000 6.125 2017 11/15/04 353,336 357,739
Educl. Fac. Rev. Bonds (Ohio Wesleyan @ 102.000
Univ. 1994 Proj.) (MBIA Ins.)
7 State of Ohio, Tpke. Rev. Bonds, AAA 275,000 5.500 2026(6) 02/15/06 256,020 283,385
Issued by Ohio Tpke. Comm., Ser. 1996 @ 102.000
A (MBIA Ins.)
--------- --------- ---------
$ 2,565,000 $ 2,493,777 $ 2,547,425
========= ========= =========
</TABLE>
See Notes to Portfolios on page D - 27.
D - 26.
<PAGE>
MUNICIPAL INVESTMENT TRUST FUND,
MULTISTATE SERIES - 208 (FLORIDA, MISSOURI, NEW JERSEY,
NEW YORK AND OHIO TRUSTS),
DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
As of May 31, 2000
(1) The ratings of the bonds are by Standard & Poor's Ratings Group, or by
Moody's Investors Service, Inc. if followed by "(m)", or by Fitch
Investors Service, Inc. if followed by "(f)"; "NR" indicates that this
bond is not currently rated by any of the above-mentioned rating
services. These ratings have been furnished by the Evaluator but not
confirmed with the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in
part, are initially at prices of par plus a premium, then subsequently
at prices declining to par. Certain securities may provide for
redemption at par prior or in addition to any optional or mandatory
redemption dates or maturity, for example, through the operation of a
maintenance and replacement fund, if proceeds are not able to be used
as contemplated, the project is condemned or sold or the project is
destroyed and insurance proceeds are used to redeem the securities.
Many of the securities are also subject to mandatory sinking fund
redemption commencing on dates which may be prior to the date on which
securities may be optionally redeemed. Sinking fund redemptions are at
par and redeem only part of the issue. Some of the securities have
mandatory sinking funds which contain optional provisions permitting
the issuer to increase the principal amount of securities called on a
mandatory redemption date. The sinking fund redemptions with optional
provisions may, and optional refunding redemptions generally will,
occur at times when the redeemed securities have an offering side
evaluation which represents a premium over par. To the extent that the
securities were acquired at a price higher than the redemption price,
this will represent a loss of capital when compared with the Public
Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise
have been paid with respect to redeemed securities and there will be
distributed to Holders any principal amount and premium received on
such redemption after satisfying any redemption requests for Units
received by the Fund. The estimated current return may be affected by
redemptions.
(4) Insured by AAA-rated insurance companies that guarantee timely
payments of principal and interest on the bonds (but not Fund units or
the market value of the bonds before they mature).
(5) Insured by the indicated municipal bond insurance company.
(6) Bonds with an aggregate face amount of $110,000 of the Florida Trust,
$600,000 of the Missouri Trust, $95,000 of the New Jersey Trust,
$175,000 of the New York Trust and $640,000 of the Ohio Trust have
been pre-refunded and are expected to be called for redemption on the
optional redemption provision dates shown.
D - 27.
<PAGE>
Defined
Asset Funds-Registered Trademark-
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<S> <C>
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--208
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
- Securities Act of 1933 (file no.
333-02851) and
- Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
UNITS OF ANY FUTURE SERIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED
UNTIL THAT SERIES HAS BECOME EFFECTIVE
WITH THE SECURITIES AND EXCHANGE
COMMISSION. NO UNITS CAN BE SOLD IN ANY
STATE WHERE A SALE WOULD BE ILLEGAL.
15327--8/00
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