IRA Ideal!
Defined Asset Funds[SM]
Select Series
Defined Technology Portfolio[SM]
Merrill Lynch
100 Technology
Index
[ML Logo] Merrill Lynch
Merrilly Lynch
100 Technology
Index
The Merrill Lynch 100 Technology Index (ML 100 Index) is a
benchmark for technology stocks. It offers a cross-section of 100
highly-capitalized technology stocks, covering important areas of this sector
such as computer services, software, hardware, networking, data processing,
telecommunications and semiconductors. The ML 100 Index also includes
American Depositary Receipts (ADRs) for international exposure. The ML 100
Index follows strict quantitative rules to minimize subjectivity in stock
selection, and only includes stocks that have been tested for liquidity. You
can follow the ML 100 Index on the American Stock Exchange using symbol MLO.
THE TECHNOLOGY SECTOR o IT HAS BEEN CONSIDERED AN INVESTMENT FOR ONLY THOSE
WITH THE MOST ROBUST OF TEMPERAMENTS. THIS SECTOR HAS SHOWN WALL STREET LOFTY
HIGHS, AND HUMBLE LOWS. BUT WE BELIEVE THE TECHNOLOGY SECTOR OFFERS GREAT
POTENTIAL FOR THE FUTURE.
Defined Asset Funds[SM] gives you a convenient way
to invest in the promise of technology with the new
Select Series Defined Technology Portfolio.[SM]
Technology: Rebalanced
The Defined Technology Portfolio offers you capital
appreciation potential with a diversified portfolio of technology stocks. By
applying a Rebalancing Model to the Merrill Lynch 100 Technology Index (ML 100
Index), this one-year Portfolio seeks to outperform the index by reweighting
each stock to increase potential return, without increasing your risk. Each
year Defined Asset Funds intends to apply the Rebalancing Model to the ML 100
Index, to create a new Portfolio.
The Enhanced Index Strategy
The Defined Technology Portfolio follows a disciplined "buy and
hold" Strategy for index enhancement. It rebalances the index to pursue
enhanced returns without increasing risk. You can choose to roll your
investment into the next Defined Technology Portfolio, if available, or you
can redeem your investment. Although this is a one-year investment, we
recommend you view your investment in the Portfolio as a long-term Strategy.
For potentially more consistent results, we suggest you continue with this
Strategy for at least three to five years.
If your view of this industry sector should change, Defined
Asset Funds offers you the flexibility to exchange your investment for another
Select or Focus Series Portfolio, or other Equity Investor Series.
The Rebalancing Model
Bernard V. Tew, Ph.D., Chairman of Q.E.D. Investments designed
his quantitative model as a means for improving returns and controlling risks
in speculative equity sectors. Dr. Tew, as Portfolio Consultant for the
Defined Technology Portfolio, works together with Defined Asset Funds to apply
the following stock selection process:
Define the Universe
We begin by defining the universe of stocks. In this case, the
ML 100 Index is used for its diversification within the technology sector, as
well as its more highly capitalized stocks.
Reweight the Index
Stocks in the ML 100 Index are then analyzed by the Portfolio
Consultant for historical correlation relationships, to identify stocks whose
prices and returns move inversely to one another. These relationships create
a portfolio of stocks that complement each other and minmize the volatility.
Construct an Enhanced Portfolio
The ML 100 Index is then balanced, stock by stock, from most
attractive to least attractive. Stocks that are considered most attractive,
those with the best prices relative to potential performance, are the most
heavily weighted. Stocks with less attractive prices relative to returns are
underweighted. This reweighting is designed to enhance potential return.
Rebalance the Portfolio
Because the Model works best over a one-year period, Defined
Asset Funds and the Portfolio Consultant plan to construct a new Portfolio
each year. The Model will be reapplied to the ML 100 Index to determine the
weightings for a new Defined Technology Portfolio.
Why Technology Now?
Imagine your world without cable TV, a cellular phone or a home
computer. How would your place of business operate without on-line services
and networking capabilities? While technology companies have seen ups and
downs, it's an industry that continues to redefine the way we live. Although,
a number of stocks represented in the index have seen wide variations in
performance over the last several years and others are recent I.P.O.s, this
sector continues to have a long-term and growing impact on our future.
The Merrill Lynch 100 Technology Index
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Name of Issuer Ticker Symbol Name of Issuer Ticker Symbol
<S> <C> <C> <C> <C> <C>
1. 3Com Corporation COMS 51. Intel Corporation INTC
2. Adaptec, Inc. ADPT 52. International Business Machines IBM
Corporation
3. ADC Telecommunications, Inc. ADCT 53. Intuit, Inc. INTU
4. Adobe Systems, Inc. ADBE 54. Iomega Corporation IOM
5. Advanced Fibre Communications, Inc. AFCI 55. Jabil Circuit, Inc. JBL
6. Advanced Micro Devices, Inc. AMD 56. KLA-Tencor Corporation KLAC
7. Alcatel Alsthom(*) ALA 57. Lexmark International Group, Inc. LXK
(Class A)
8. Altera Corporation ALTR 58. Linear Technology Corporation LLTC
9. Amazon.com, Inc. AMZN 59. LSI Logic Corporation LSI
10. America Online, Inc. AOL 60. Lucent Technologies, Inc. LU
11. American Power Conversion Corporation APCC 61. Maxim Integrated Products, Inc. MXIM
12. AMP, Inc. AMP 62. Micron Technology, Inc. MU
13. Analog Devices, Inc. ADI 63. Microsoft Corporation MSFT
14. Andrew Corporation ANDW 64. Molex, Inc. MOLX
15. Apple Computer, Inc. AAPL 65. Motorola, Inc. MOT
16. Applied Materials, Inc. AMAT 66. National Semiconductor Corporation NSM
17. Ascend Communications, Inc. ASND 67. Netscape Communications NSCP
Corporation
18. ASM Lithography Holding N.V.(*) ASMLF 68. Network Associates, Inc. NETA
19. At Home Corporation ATHM 69. Newbridge Networks Corporation(*) NN
20. Atmel Corporation ATML 70. Nextel Communications, Inc. NXTL
(Class A)
21. Autodesk, Inc. ADSK 71. Nokia Corporation(*) NOKA
22. Automatic Data Processing, Inc. AUD 72. Northern Telecom Limited(*) NT
23. Baan Company, N.V.(*) BAANF 73. Novell, Inc. NOVL
24. Bay Networks, Inc. BAY 74. Oracle Corporation ORCL
25. BMC Software, Inc. BMCS 75. Parametric Technology Corporation PMTC
26. Cabletron Systems, Inc. CS 76. Paychex, Inc. PAYX
27. Cadence Design Systems, Inc. CDN 77. PeopleSoft, Inc. PSFT
28. Cambridge Technology Partners, Inc. CATP 78. Philips Electronics N.V.(*) PHG
29. Ceridian Corporation CEN 79. Platinum Technology, Inc. PLAT
30. CIENA Corporation CIEN 80. QUALCOMM, Inc. QCOM
31. Cisco Systems, Inc. CSCO 81. Quantum Corporation QNTM
32. Citrix Systems, Inc. CTXS 82. SCI Systems, Inc. SCI
33. Compaq Computer Corporation CSC 83. Seagate Technology, Inc. SEG
34. Computer Associates International, Inc. CA 84. Security Dynamics Technologies, SDTI
Inc.
35. Computer Sciences Corporation CSC 85. Silicon Graphics, Inc. SGI
36. Compuware Corporation CPWR 86. Solectron Corporation SLR
37. Creative Technology Limited(*) CREAF 87. Storage Technology Corporation STK
38. Dell Computer Corporation DELL 88. Sun Microsystems, Inc. SUNW
39. DSC Communications Corporation DIGI 89. Synopsys, Inc. SNPS
40. ECI Telecommunications Limited(*) ECILF 90. Tech Data Corporation TECD
41. Electronic Arts, Inc. ERTS 91. Telefonaktiebolaget LM Ericsson(*) ERICY
42. Electronic Data Systems Corporation EDS 92. Tellabs, Inc. TLAB
43. EMC Corporation EMC 93. Teradyne, Inc. TER
44. First Data Corporation FDC 94. Texas Instruments, Inc. TXN
45. Fiserv, Inc. FISV 95. Unisys Corporation UIS
46. FORE Systems, Inc. FORE 96. Vitesse Semiconductor Corporation VTSS
47. Gartner Group, Inc. (Class A) GART 97. Western Digital Corporation WDC
48. General Instrument Corporation GIC 98. Xerox Corporation XRX
49. HBO & Company HBOC 99. Xilinx, Inc. XLNX
50. Hewlett-Packard Company HWP 100. Yahoo!, Inc. YHOO
- ------------
(*) American Depositary Receipts (ADRs). This is a foreign corporation;
dividends, if any, will be subject to withholding taxes. Index as of 8/21/98
</TABLE>
Defining Your Risks
The following are important facts to keep in mind when considering this
investment. Please read them carefully. Your Financial Consultant will be
happy to answer any questions you may have.
o There can be no assurance that the Portfolio will meet its
objective.
o The Portfolio is designed for investors who can assume the risks
associated with equity investments, and may not be appropriate for
investors seeking capital preservation or high current income.
U.S. equity markets have been at historically high levels, and no
assurance can be given that these levels will continue.
o The Portfolio is composed of aggressive growth stocks that are
subject to extreme price volatility, therefore, the Portfolio may
be considered speculative.
o The Portfolio consists exclusively of stocks from the technology
sector and should not be considered as a complete investment
program.
o The Portfolio does not reflect any investment recommendations of
the Sponsor.
Tax Reporting
The proceeds received when you sell this investment will reflect the deduction
of the deferred sales charge and, after the initial offering period, the
charge for organization costs. In addition, the annual statement and the
relevant tax reporting forms you receive at year end will be based on the
amount paid to you, net of the deferred sales charge and, after the initial
offering period, the charge for organization costs. Accordingly, you should
not increase the tax basis in your units by these charges.
Generally, dividends and any gains will be subject to tax each year. Capital
gains, if any, on assets held over a year will be taxed up to the maximum
federal tax rate of 20%. However, on rollovers of future Portfolios, if
available, investors will defer recognition of gains and losses on stocks that
are transferred to the new Portfolio.
Defining Your Costs
First-time investors pay an initial sales charge of about 1% when they buy.
In addition, all investors pay a deferred sales charge of $17.50 per 1,000
units, about 1.75%, deducted over the last ten months of the Portfolio.
As a % of Public Amount Per
Offering Price 1,000 Units
Initial Sales Charge 1.00% $10.00
Deferred Sales Charge 1.75% $17.50
Maximum Sales Charge 2.75% $27.50
===================================
Estimated Annual Operating Expenses
(as a % of net assets) 0.17% $1.68
Estimated Organization Costs $2.44
If you sell your units before termination, the remaining balance of your
deferred sales charge will be deducted, along with the estimated costs of
selling Portfolio securities from the proceeds you receive. If you roll over
to a successor Portfolio, if available, the initial charge will be waived.
You will only pay the deferred sales charge and operating expenses.
Volume Purchase Discounts
For larger purchases, the overall sales charges are reduced to put more of
your investment dollars to work for you.
Amount Total Sales Charge as a % of
Purchased Public Offering Price
Less than $50,000 2.75%
$50,000 to $99,999 2.50%
$100,000 to $249,999 2.00%
$250,000 to $999,999 1.75%
$1,000,000 to $4,999,999 1.00%
$5,000,000 or more .60%
Invest in Technology Today!
You can start investing in technology with the Defined Technology Portfolio
for just $250. Call your Financial Consultant for a free prospectus
containing more complete information, including all charges and expenses.
Pleas read the prospectus carefully before you invest.
Information contained herein is subject to amendment. A registration
statement relating to this Portfolio has been filed with the Securities and
Exchange Commission. Units of the Portfolio may not be sold nor may offers to
buy be accepted prior to the time the registration statement becomes
effective. This brochure shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these stocks in
any state in which such an offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
Defined Asset Funds
Buy With Knowledge o Hold With Confidence
Select Series
Select Ten Portfolio (DJIA)
Select S&P Industrial Portfolio
Select Growth Portfolio
Select S&P Intrinsic Value Portfolio
Select S&P Industry Turnaround Portfolio
Principled Values Portfolio
United Kingdom Portfolio (Financial Times Index)
Merrill Lynch Research Funds
Financial Portfolio 2
Health Care Portfolio 3
Year-Ahead Domestic Portfolio
Year-Ahead International Portfolio
Equity Investor Funds Concept Series
Premier American Portfolio
Premier Western Portfolio
Premier World Portfolio
Real Estate Income Fund 2
Tele-Global Trust 3
Utility Portfolio
Equity Investor Funds Index Series
S&P 500 Index Trust 2
S&P MidCap Index Trust
Other Defined Asset Funds
Corporate Income Funds
Government Securities Income Funds
Municipal Investment Trusts
(Recycling logo) Printed on Recycled Paper 70116BR-8/98
[Copyright logo] 1998 Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Member SIPC.
